>> bill lng, cheniere. >> natural gas is starting to wake up. and cheniere topped out when trump made the back off those those exports. this thing fell off 20%. this thing is bottoming out. i really like it here. it's up to date with natural gas off. okay. we'll check the final hour of today's trade on closing bell. i'll see you at 3:00. the exchange is now. >> thank you very much, scott. and welcome. to the exchange. i'm kelly evans, and here's what's ahead. consumer concerns. tariff uncertainty, of course. and geopolitics. it's all weighing on markets today. that gets us to where we see with the dow down 639 points. walmart's weaker than expected guidance a big piece of that. in fact we're looking at one of the dow's worst days of the year so far. plus yields lower as well with fed officials also expressing some concern about the economy. atlanta fed's raphael bostic warning that policy changes could lead to a material slowdown. chicago's austan goolsbee saying tariffs could

rival the economic shock of covid, he said could. plus, housing set for another soggy spring selling season. we'll talk to the ceo of tripoint homes about that, with shares down 16% since earnings earlier this week. but first, before all of that great news. let's get over to dom chu on today's market front. >> dom. >> all right. so the great. >> news is. >> we did hit a record high in yesterday's session 6147 for the. s&p 500. so i'll put that number right up here right now. for context 6095 is currently where we're at. we're down about maybe three quarters of 1%. that's 50 points to the downside right now. that's tilting towards the low end of the session. >> at the highs. >> we were still down about ten points but down about 60 points at the low. so there is. >> your. >> range so. >> far tilting towards the negative side of things. the dow industrials off 627 points. that's a 1.5% decline 44,000 on the number right now just about the nasdaq composite down about three quarters of 1% as well 165 points to 19,008 90. and kelly alluded to walmart as the big

drag for the dow. we'll get to that in just one second. another place to keep a close eye on is other places in the market that are big drags as well. among the worst. performers so far today, palantir continuing that downward move after a massive downward move yesterday on concerns about possible defense department cuts. palantir is a big defense contractor, so we're seeing it follow through today. a momentum name. royal caribbean down $23, or about 9%. on comments from commerce secretary howard lutnick that they maybe want to crack down on some of the tax advantages or the nonpayment by some of these cruise operators because of foreign flagged vessels. royal caribbean among the cruise line operators, all of them down in the news today. epam systems on the heels of earnings better than expected quarterly report. but their outlook is a little bit concerning given the fact that they're going to ramp up paying employees to retain them. also accelerate some investments in ai so that this this company which provides it services can stay competitive. big decliners.

and then of course, the notable one today dow component walmart, which is at about 6.5%, about almost $7 to the downside, you call it roughly 40 or 50 points in the dow is just walmart alone. so when you have a result like this, quarterly results that are better than expected, but that the growth forecast in the coming months may not be as as robust as it has been. that's the reason why walmart is there. remember, kelly, we had talked about this over the last couple of days. walmart. it's very rare to see a mega-cap company on a retail side of things trade at almost 40 times next year's expected earnings. that's what the forward p e was entering this report. so maybe not out of the realm of reason to see a 6% drop on a better than expected report. but growth may be slowing this year. i'll send things back. >> over to tom quickly. >> sorry to circle back, but on the cruise lines, did you was it the comments from nick that are the problem or is there something. >> no, no that was that was it was the comments from nick. and that's the reason why you're seeing carnival. you're seeing

royal caribbean, you're seeing norwegian all lower on that bit of news here. although some analysts, i will point out, are saying that it might be a bit of an overreaction and that you should still keep an eye on those cruise line operators. >> the comment was that they don't pay enough in taxes, i think. >> correct? >> yes. okay, tom, thanks very much. you got you. meantime, this morning, walmart's miss wasn't in isolation. remember those disappointing retail sales we got for january last week? is all of this because of wildfires? is it unusually cold weather or is it something more? let's bring in steve liesman with a closer look for us. >> yeah, i want to get back to that to talk about what the fed has been talking about this morning. there's been a lot of fed talk, kelly. and from yesterday's minutes to three speeches today, it's clear that uncertainty over fiscal policy from the trump administration have taken a central role in the minds of central bankers. fed officials seem more willing to muse publicly about the potential negative economic effects over what policies will be enacted, and of certain policy choices. atlanta fed president raphael bostic saying this morning that pervasive ambiguity calls for caution and humility when setting rate policy. bostic said he still

sees two cuts this year, but that uncertainty around that call is, quote, pretty significant. chicago fed president austan goolsbee this morning saying the more tariffs look like a covid size shock, the more nervous you should be, and that if there are big deportations, it does have direct implications for the number of jobs created. finally, saint louis, alberta muslim saying immigration policy and higher tariffs are a potential source of higher inflation. he continues that it could be appropriate for the fed to become more restrictive if inflation is sustained and expectations become unanchored. musallam said the fed could potentially look through high prices from tariffs, but that the stakes are higher now because inflation is above target. bostic added some policies under discussion could boost growth, while others could be contractionary. what's clear, kelly, is that the administration's policy path is looming large in the fed's thinking about its monetary policy path. >> what do you make of the sort of consumer or macro signals, if any, from walmart? you know, some say, look, it's just competition. there's a little opening near me, for instance.

and the shares have been on a crazy run. but we did get that retail sales report last month. >> everything i know about the covering the economy is to be careful from a single company's report. be really careful about that. also, you want to be a little bit careful about january. it's a squirrely month in terms of measuring the seasonals there. consumers done well. unemployment remains relatively low. wages have been rising at least above inflation, for quite some time now. so i'm not ready yet to be that concerned. there's this talk about the delinquencies you want to watch. if you have some credit stress. that's where you could have a problem but not ready yet off of those two things, which you're right to mark. >> we need a third. >> but i think you need a third. and you need to see this sustained. >> and into feb. and i take your point about the january numbers sometimes. all right. let's bring in our market guest who is de-risking his portfolios as doubts grow about the strength of the consumer and with inflation remaining sticky. max wasserman is senior portfolio manager at miramar capital. so, max, what's your strategy and take on all of this?

>> it's good to see you again. >> i think. >> we have. >> to take a step back and say, look. >> at the multiples in this market and look at all the uncertainty we're facing with fiscal policy and potential monetary policy. i mean, you just mentioned walmart. you're looking at a company that was trading at 40 times earnings, even though it's done a wonderful job. i mean, how much more can these things grow. and we're priced for perfection. so we think if you look at the market trade at roughly 26 times earnings, with a ten year at 4.5%, that could go easily up to 5%. and you have a fed policy that's telling you we're not ready to keep cutting at this point. we're concerned about everything. we think people are paying too much for these higher multiple stocks and paying way too much for momentum, and it could turn in a heartbeat. >> i thought it was interesting. so, max, a lot of what investors are trying to do is look for opportunity. you know, is it risk from a lot of the trump stuff? is it opportunity. and you see opportunity in the defense stocks? >> i do because i'm looking more than 3 to 6 months out. i mean again we're dividend growth investors. if you can buy a

company like lockheed martin train at 1617 times earnings with a 3% dividend yield growing, and with stocks trading near its 52 week low, we look out a year or two. can we make 20 or 30% on this stock from here? and we can. we also look at some of you know like general dynamics. these stocks have been hit because the potential cutback from doge and what elon musk may or may not do. if you look long term, does anyone believe that the world's going to easily get safer and that we're not going to need defense spending? i disagree with that, but everybody's overreacting. so if you look more than 3 to 6 months, we think there's a lot of good value here, especially when the market is trading so high. >> and i should mention the lockheed ceo is going to be on next hour with morgan. we're very much looking forward to that. but in the meantime, the flip side of your point is that the cuts aren't going to be that real or substantial. so that makes me want to, you know, be careful with bonds. that makes me worry about the deficit, right? that makes you think about high interest rates. it makes you think about the fallout from all of that. >> correct. so we think, you

know, we say de-risking by you know, we're again, we're we're looking for companies that are trained 15, 1617 times earnings. now we have investments in the large cap growth stocks the broadcom the apple and microsoft. we just think the valuations here are so rich. and we made so much money. this may not be the time to continue piling into these stocks. look for those companies that are still growing that have the potential to give you total return by the dividends. and we like that. so but we think people should shorten their duration on their bond portfolios. keep it short term because you could see the ten year pop right to 5% in a heartbeat. well, we still like energy as you as you look on the screen as you put it up there. eog we like the pipelines and we like some of the industrials here. >> i was only going to say that we're hearing kind of similar comments from the treasury secretary. he's also not turning up the debt yet. i was in some remarks in an interview today. steve, would you add any context then around this conversation where it seems half of the world is worried that these cuts are going too far and the other half is brushing them off and investors are kind of caught in the middle. >> i'm still waiting for some evidence that there have been

actual cuts. i read a lot of stuff on twitter. >> workforce cuts. >> layoffs, layoffs. >> i don't believe any of it yet. until i see it all. i don't suspect the cuts themselves. the labor cuts will be meaningful macroeconomically the spending could be, especially where it might show up. but kelly, i've been trying to think about a thought experiment here. maybe you could play play this game with me. happy to. okay. what would happen? i think about the impact of tariffs on the market. what would happen if in the next five minutes, president trump tweeted out, i decided not to do any tariffs? >> maybe i would say we pop one 1.5%. >> i think that's good for quite a bit on the on the, on on the stock market. now the other thing though, the other side of this, which is so perplexing and i think gets at the uncertainty here, and this comes from our good friend john malloy, who's a smart guy. he says, well, but if he said i was going to do 50% tariffs, the market may not move because they kind of don't know what to do with it anymore. they don't know to believe it or not to believe it. so it's not

trading negatively on it. but i think there's a pretty good chance it would trade very positively if we had a clear sign he was backing off of it. >> max, what's your take? >> well, i think you can't judge from day to day, but look what the fed is saying. the fed basically came out and gave you 100 basis points in cuts. and they were anticipating 4 to 5 this year. now they pulled it way back. now they're saying inflation is very stubborn. right now they're saying and there's really talk. it's potential. not saying there is but you could see a rate increase if inflation happens. we don't know what fiscal policy is going to look like. but we do know monetary policy is basically taking a set back because they don't know. and the fed's pretty smart. and if they can't figure out which way to go and you're trading at these high multiples, i think you have to be caution in the momentum area. but you're right. i think steve is correct. you haven't seen anything done, but you have seen multiples keep trading higher. and that makes me nervous. and when you see a company as great as walmart saying, wait a second, we do see a slowdown and

we do see uncertainty, and you're trading at 3540 times earnings. that's dangerous. and we see some of that in the market here. and that's why we look in the other areas that are giving us better yields than training a much cheaper valuation. >> and like my costco it's probably at 50 times still. steve a quick, quick final. >> very quickly. we'll talk about this more tomorrow. but the question becomes does look, the politicians have a right to go through their process to come up with their policies. the question is, does the uncertainty, in the meantime, have a macroeconomic effect of causing people to pause on critical things that would matter for the economy? >> yeah, we look forward to more evidence as we do. gentlemen, thanks for now. appreciate it. max wasserman of miramar today and of course, our own steve liesman. and sometimes when the market's down, well, that's just because there are more sellers than buyers, as the saying goes. as our dear bill griffith used to say. my next guest is tracking the options flows and does see some bearish signs in retail and in homebuilders. chris murphy is co-head of derivative strategy at susquehanna. chris, good to see you. sort of tell us the world

how it looks from your point of view. >> sure. >> i mean, specifically. >> on. >> the retail. >> the x-art. >> is a retail etf. >> and we. saw an outsized bearish trade yesterday. >> a march put. >> spread buyer i agree that. >> you know one. >> earnings miss. >> you know doesn't. >> you. >> know tell. >> the. >> story for a sector. >> however 70%. >> of the. >> underlying by market cap for. >> this retail etf reports by march. >> so you know. >> this is a clear bet that we're going to continue to see earnings. >> misses or earnings. that just. >> aren't good enough if they're priced to perfection. so that was the trade yesterday that we saw that had a lot of information in it already with what we're seeing in walmart, carvana etc. >> well that's a warning note to investors right now who want to jump in and maybe pick up some of these stocks in the near term. any particular jump out at you? any particular names? >> you know we're seeing ulta is

a name that got hit on warren buffett coming out of it. we're continuing to see bearish flow there. the homebuilders have been faring even worse. so you know of course when we see this xrt trade we're going to go comb through the individual names for bearish trades there. and that was one that stuck out. not as many as you would think. there still is somewhat of a buy the dip mentality in the options even in walmart today. some opening put sellers taking advantage of the weakness. so you know, if you don't necessarily want to pick a stock, you think that the consumer is slowing down a bit. you know, why not look at that xrt etf and get the basket of the stocks, hoping that more of them trade lower than trade higher. >> yeah. so that's again a way to kind of think about what the next few weeks could look like. what about on the market more broadly, which to dom's point we

were at record highs just yesterday. >> yeah. i wouldn't get too concerned with the sell off today on the broader market level. the biggest takeaway is low correlation in s&p components. so different sectors are moving in different directions depending on what trump says or their individual earnings or whatever else. the s&p itself really isn't moving too much. and we're seeing much more of our client focus on sector level trades as well as individual stock trades. and as long as this low correlation remains sure there might be a negative for the retail sector and that sells off. but you know, other sectors, you know move higher on different reasons. so we're still you know, so far this year surprisingly low macro volatility. >> i thought well haha which is a good a good kind of nugget to end on there. but i just wanted to ask as well about small caps, which kind of echo the way that some of us have been feeling about them. you say it looks

like investors are giving up. >> yeah. you know, you can look at the options. you can see the bid to the upside options compared to the bid to the downside options. and we have been seeing previous previously investors looking for that small cap pop. and sure we've seen a couple of head fakes. but the setup in the options now is pointing towards not a lot of people looking for that small cap pop anymore. >> all right well we'll see. you know it's always interesting to go. are these going to end up being contrarian signs. or is this telling us kind of the performance that we should expect. and often it's a little bit of both. chris, for now thanks. appreciate it. thank you. chris murphy from susquehanna. and still to come, two takes on real estate tri point homes. we just heard about the pressure on the homebuilders. tri point saw its worst day in more than two and a half years this week, warning that rising insurance costs in california will be a headwind for buyers there. and on the commercial real estate front, empire state falling to a more than one year low after guidance was shy of the street's expectations. we'll hear from both ceos ahead, but first canceled at the last minute. a

news conference between ukraine's zelensky and america's envoy to ukraine, reportedly at the request of the u.s. former russia ambassador michael mcfaul joins us next. stay with us. >> this is the exchange on cnbc. >> my clients deserve someone who understands their world, someone who listens, who has their best financial interests at the center of every decision. our business is built around being responsive to our client's ever changing needs as an advisor, as there are a custody services provider, i see my client's success as my own because when they grow, we grow with them. for over 25 years, we've been committed to. >> arias. >> and that's why i chose tradepmr. >> home, the place where you create those special moments. we celebrate the. home and the way you live in it. at three de

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u.s. it comes after president trump called zelensky a dictator and blamed ukraine for the russian invasion. my next guest says we're seeing a big reset in u.s. foreign policy with some far reaching implications. joining us now is former u.s. ambassador to russia michael mcfaul is a there's so much going on. ambassador, give me the sympathetic take to trump on all of this. and then the not so sympathetic take. >> there's no sympathetic. >> take to president trump. >> on any of this. all he's doing is offering putin concessions. >> he's undermining ukraine. >> he's saying they have. >> to give territory. >> they can't join nato. we won't. participate in any. peacekeeping situation. oh, and he's also shutting down u.s. assistance to independent media working outside of russia. this is complete capitulation. so i don't see anything sympathetic. about it. >> my hope. >> is that. >> after a rough start. >> that the negotiating team will reset and will rethink. and

begin. >> to be serious. >> about negotiations, negotiations and diplomacy, i don't think are very different than they are in business. >> you don't just hand the person on the other side of the table everything they want. at the beginning. you negotiate during a process, you give and take and they're not doing that yet. it's not too late, but they need to regroup, rethink their strategy, and get serious about trying to negotiate an enduring peace in ukraine. >> the more sympathetic take that i've heard and i don't know, you know, if it would make sense to you is that trump is trying to do all of this to wake europe up, and that it's been very hard to get the european leaders to really do more. i mean, they've made many promises, but in terms of their own spending, that this is meant to be a giant wake up call. and i saw that denmark, i think, is increasing its defense spending. but it was by, you know, 3% of its gdp was was $5 billion, i think. >> well, i just disagree with that analysis. >> i was at the. >> munich security conference

four days ago. the europeans. >> are woke up. >> they are spending significantly more. mr. trump needs to check his facts before he speaks. >> just like. >> he said ukraine started the war. just like he said, zelenskyy is a dictator. these just are not true things. 23 countries now have made the 2% threshold that president trump himself agreed to. and if we want to go to 3% or 4%, that's great. but the idea that europe is not spending more on its defense in the last several years is just incorrect. >> so that being the case, why are the europeans so concerned like so european defense stocks just last week started breaking out on the idea that the europeans are going to have to spend more. so it seems as if the market is telling us they expect a lot more than what we've seen already to be the case. >> yes, because president trump and his administration has signaled sometimes publicly, but also privately, that we're pulling out of europe, that

we're not no longer going to be there, that we're even going to send our soldiers back. and so they're reacting to that. they're getting, you know, they're saying, okay, now security is will have to be on our own. but i want to underscore this is not in america's national interest. we cannot go it alone. if we pull out of nato and we keep berating our allies and saying we're going to take their land as we did with mr. trump did with greenland, they're not going to be with us on other security matters that that we care about, such as china. so i just think this short term, you know, direction and lecturing them about their democracy might feel good in the short term, but i think it will have catastrophic consequences for america's place in the world, including america's place in the economic world. >> another area where people are kind of jumping ahead, ambassador, is in the future of russia. so many firms. there's a lot of investors behind the scenes who are looking at this, looking at the cheapness of the

russian stock market, looking at weather and asking companies like carlsbad is one example. would you go back into russia? and talking about, i guess, putin's experience in the 90s, where he felt like those western brands were ended up being anathema to russian culture. so do you like the logic in the question for them is whether they should kind of say, look, things are going to normalize. russia is going to open back up to the west and there's a market opportunity there or not. >> well, there will be market opportunities there. putin understands president trump very specifically when it comes to these issues. at the meeting that they had in saudi arabia, for instance, with secretary rubio and foreign minister lavrov, one of the members of the delegation was the head of the russian sovereign wealth fund. dmitriev. i used to work with him when i was ambassador. that was on purpose, because they understand when you talk about deals and opportunities. that's the way you get president trump attention. my caution would be to people thinking

about that is property rights in russia are guaranteed by one person, vladimir putin. and if you're comfortable with that and your shareholders are comfortable with that, you should look at those investment opportunities. but if you don't want to hold your or your entire investment based on one guy's whims, you might think twice about going back in. >> and for sure, there's not a rush yet. but a lot of people are wondering and speculating about what this might look like given the path that we're on. ambassador, thanks for your time today. appreciate it. >> thank you. >> michael mcfaul. and in terms of major changes to u.s. defense, it's not just those cuts making some investors here nervous. defense secretary hegseth has also reportedly ordered pentagon leaders to cut their defense budget. plus that, plus a new stock sale from ceo alex karp, has shares of palantir down nearly 20% in two days. that said, we're coming off a four fold increase over the past year. let's bring in robert frank for all of the details. >> robert kelly, good to.

>> see you. >> a lot. >> of confusion and debate over these numbers. so let's. >> break them down. >> sec filings showing. >> that alex karp of palantir. has a new plan to. sell about 10. >> million shares. >> this year that. >> would be worth. >> just under $1 billion. >> at today's price. he had about. >> 8 million. >> shares left. >> to sell. >> under a. >> previous plan. so this just means he's going to sell an additional 1.8 million shares. beyond that. previous plan. but last year. karp sold $2 billion. >> worth of shares. >> some of that was. >> to pay withholding taxes on restricted shares. but a lot of other insiders have also been selling. you take chairman. peter thiel. he cashed out $1 billion worth of shares last year, and several top executives have sales plans that are still in effect. so the chief technology officer sold $400 million. worth of shares last year. and the president and co-founder, steven cohen, he cashed out 130 million last year. but many of these executive plans were actually reduced last year. so they

lowered the number of shares they planned to sell. but there's been quite a bit of insider selling here. and i think just the idea that that karp is adding to. >> his. >> existing plan with this additional sort of 2 million shares is one of the reasons we're seeing this stock under pressure, kelly. >> sure. what does the company say about why all these sales are taking place? is it on schedule or do they have any explanation? >> they're not commenting. but it's also worth noting that when karp. sold those shares last year, around $2 billion, he sold at an average price of around $48 this year. so if as an investor, you took that as a signal to get out, you would have missed most of the run over the past year. so i think this is not necessarily a signal to sell. if we take last year as an example. >> good point. and the shares around 103 today even after the sell off. robert. thanks. appreciate it robert frank. speaking of defense, don't miss our exclusive interview with lockheed martin ceo jim taiclet next hour on power lunch. that's

around 2:45 p.m. eastern. and still to come, it's not just palantir defense stocks across the board are getting hit on possible budget cuts. the ishares aerospace and defense etf having its worst day of the year. the dow is at session lows, but gold prices are continuing to march higher, hitting a record high just below $3,000 as the president says he plans to audit the u.s. gold reserves kept at fort knox. here's what former treasury secretary steven mnuchin told us this morning about his trip to the facility. >> the gold. >> was there when i. >> visited it. >> i hope nobody's moved it. i'm sure they haven't. i was the first. treasury secretary to go there, and i think over 50 years. >> there's very. >> serious security protocols in place, obviously to protect the gold that i can't talk about. but we went. >> we saw it. >> and i. if president trump wants it to be audited, that's obviously. obviously. >> something that can be easily. at&t has a new guarantee. because most things in business are not guaranteed.

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>> here's a sock that fits every leg size effortlessly via socks. easy stretch socks stretch up to 30in, making them easy to put on and take off. no more settling and take off. no more settling for socks (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com contessa brewer with your cnbc news update. kash patel's nomination for fbi director is headed to a final vote in about 15 minutes, after the senate pushed forward his nomination

earlier this afternoon. senator susan collins was the only republican to vote no. amid president trump's vow to make drastic cuts to the federal workforce, the associated press reports. the irs will lay off about 7000 employees starting today. those layoffs reportedly will affect probationary employees and mostly will be from the compliance department, which handles work such as making sure americans file and pay their taxes. and a major setback for the defense in the idaho quadruple murder case. a judge has denied several defense motions from brian kohberger's team to suppress key evidence. that evidence led to him being charged for the murders of four students in 2022 at an off campus residence near the university of idaho. the ruling means that dna evidence, surveillance footage, and his cell phone and email records can be used in trial that is set to begin in august. >> kelly podesta. >> thank you very much, contessa brewer. coming up, two c-suite views on the state of real estate. after the break, we'll

hear from the of tripoint homes on the headwinds facing homebuyers. and the owner of the iconic empire state building joins us to talk the health of office properties in manhattan. i am definitely asking him about congestion pricing as we head to break. here's a check on the dow hovering near session lows down 643 points. walmart is just a piece of that. we'll be right back. >> the number of public companies is shrinking while the number of private companies is increasing. at franklin templeton we're expanding access to the growing opportunity in private markets, offering the potential for greater diversification and enhanced returns. through our world class specialist investment managers. we are empowering advisors with solutions to build the portfolios of the future. today, alternatives by franklin templeton, your trusted partner for what's ahead. >> my oldest. >> daughter, camila. >> she came out. >> fighting two. >> days old. she had to have open heart surgery. all of a

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to your brokerage accounts. become a smarter investor with the power of cnbc pro, go to cnbc.com now. >> welcome back. between higher rates and tariff uncertainty it's been a rough week for real estate. just this week we had builder sentiment at its lowest level in five months. january housing starts were down more than 8%. quarterly reports not helping either. toll brothers missed. yesterday, tripoint warned on its earnings call that political uncertainties are impacting consumer confidence and market stability, while return to office has commercial real estate showing some signs of life, particularly in new york city. manhattan's commercial property sales volume is now back to pre-pandemic levels, according to new data, while blackstone is reportedly planning to take out a loan of about $800 million for a stake in a 50 story office building. so we've got the c-suite view on both. joining us now is doug bower. he's the ceo of tripoint homes, and tony malkin, the ceo of empire state realty trust. welcome to both of you. doug, it's great to have you here. and, you know, there's so many

things to unpack, but more broadly, it was the best of times for the homebuilders just a year or two ago. and now i don't want to say it's the worst of times, but the mood has certainly shifted. >> yeah. >> kelly. >> thanks for having me on. you know, let me just break it down. into two components. three components supply, demand and the consumer. when you think about the. supply demand of housing, we've been under supply for years. there's an argument that we're millions of homes under built, and we still have the lingering effect of the locked in resale market, which is trading about roughly over a million homes a year. on the demand side, we have the millennial and gen zs, which are undisputed early innings, a lot of demand there. so that's kind of the supply demand. then you flip to the consumer and the consumer sentiment. and if you go back to 24, the beginning of 24, the consumer was told rates

were going down. the fed was going to adjust the discount rate and other rates would go down. but what happened? obviously we know discount rate went down about 100 bips and mortgage rates went up 100 bips. so the consumer felt a lot of angst in the back half of the year. now, as we've kind of trended into the first month and a half of this year, they've reengaged and it's not as strong as it was last year. but sales have definitely picked up. but the consumer is still dealing with a lot of hesitancy about the political climate and other things that could be going on in this world. so even though there's these imbalances with supply and demand and the consumer sentiment, the long term facts for housing look really good and to plug tripoint, you know, tripoint trading below book value. so it's probably a good time to buy

tripoint. >> well and it's interesting 70% of your buyers are millennial and gen z. so i, you know, take your point about kind of the pressures that that they may be under. also thought it was interesting. doug, you've got exposure in california and you guys are one of the first to really mention the rising cost of home insurance is a deterrent. wedbush said they think it's the first time this issue has been called out. so it's obvious to any of us, you know, out here in the real world that of course, these rising insurance costs are going to be a factor. is it california specific or is it broader? >> well. >> i think with the weather events that have happened and the fires and the hurricanes and so forth on the east coast and florida all the way to the west coast with the fires? insurance has gotten a lot of attention. and so we with our tripoint insurance agency, we have the ability to help our consumers get to the right insurance needs. so it is a big focus of ours because the cost per month has gone up. but but it's still

very much available to our consumer. >> yeah. and you have a lot of pockets of strength that you've talked about. even austin. you know, we're always curious about some of those markets that were really hot in the pandemic and then have cooled down somewhat. i was curious if you're seeing any impact in washington where, you know, social media is filled with reports that the housing market is weakening because of some of the cuts from the new administration. >> you know, that's a great question. and we were just talking about that at our board meeting, and i was talking to our division president, d.c. metro. you know, we build more of a move up product in that is really catered to that professional services worker. and with this current administration, one would gather that as the hopefully the government does shrink and then there's probably some contractual arrangements that are done with professional workers that are really are buyer profile. so we have not felt any effect from what is going on with doge. >> interesting at least so far. but that, you know, i had a feel. i mean, listen, it's

pretty early on in this effort, so we'll see what direction that goes. but i was just curious. san diego inland. but there's some of us sitting here after this weather season doug, and going what can i get in san diego? what price? what kind of square footage? how far am i from major work areas? just tell me more about the dynamics of that. that part of the country. >> well, i would tell you all, california has been a bright spot for us in 24, and it will continue to be a bright spot. and in 25, the one thing that california has unfortunately done is really shrunk the supply of housing. the supply of raw land to build more housing. so i pricing is very expensive and in california, but it still provides that consumer some great opportunities with our product from san diego all the way up to sacramento. >> and austin, raleigh, las vegas, i noticed a lot of these strong metros for you are are nicer weather. finally, do you need more? what kind of clarity

do you or do your customers need? you mentioned kind of washington uncertainty. >> well, i think, you know, when you you're making the largest purchase that you're ever going to make in buying a home, it really comes down to that consumer confidence, consumer sentiment. and frankly, i believe we've seen this many times. it's kind of a short term consumer psychology event. our salespeople become financial therapists and help them come across the goal line because the demand is there. it's just this short term phenomenon that's going on. that's that's definitely gotten the investors kind of viewpoint on on the sector as well. but but it's still a very strong market long term. and, and we're in it for the long term. when you look out the next three years. housing is very undersupplied and the demand is there. >> well i don't think the

uncertainty is going away from the washington front. so we'll look to those larger demand trends as drivers. >> you know, i will i will add kelly just to one point. the what's going on with the administration though i think is going to be a real positive long term for the for the nation, and especially if they can cut down the fiscal deficit and give some clarity to rates. so that will help the consumer as well. >> oh, absolutely. if mortgage rates come down significantly, that's a huge factor if these efforts pay off. doug, thanks so much. appreciate your time today. >> thank you. >> doug bauer from tripoint. let's turn now to the commercial side of things with tony malkin. he's the empire state realty trust ceo. tony, it's great to see you. i just have to say, what do you guys make of. are they still charging congestion pricing right now or. no? >> my understanding is that the charges for congestion. >> pricing continue. >> and we'll just have to watch how that plays between. >> new. >> york state and. >> and the federal government. >> what's the impact been so far? is it you know, i've heard it's a lot easier, quicker to

get into the city for those who do. but it has cut down on traffic. is it cutting down on business? >> it's unquestionably. >> made it an easier way to get in and. out of new york, out. of those those zones and traffic times and traffic travel times have gone down. and we just we'll just have to. >> see how it plays. >> it's a department of. transportation new york state issue right now. >> and it only been in effect for about six weeks. so we're just getting a sense of the impact. what about the broader kind of return to office move? how how big a deal is that? >> you know, that. >> story i think is written. >> already just by the. leasing momentum in. >> manhattan. >> which is. >> super strong. so the market's really told the story for itself. and the need to provide good workspace is a great boon for us. in the other halves. in new york city, as you and i have spoken, the haves and the have nots are building or haves top of tier modernized amenities located near mass transit. >> sustainability leaders and. >> a terrific benefit of our financial. >> stability as a landlord.

>> so the better credit tenants increasingly lease with us. and the fact is that there is very strong demand. january is super strong for leasing. we put up a $1.3 million, 1.3 million, excuse me, square feet of leases in 2024. so our our that's a that's our best year since 2019. so we're three years in a row now of increased lease percentage and positive rent spreads. so we anticipate more good in 2025. >> your core your guidance was slightly below where the market was. what's the explanation for that? >> so what we explained, first of all, as we have taken down cash, interest rates on cash have also gone down as the discussion just had the rates on which our interest is paid has actually gone down, but the cost of money over the longer term have gone up. and we've redeployed cash and, and we've

taken a conservative view towards what we'll see in the observatory as we go forward. it's early in the year, so it's as the year develops. we'll update as we go. >> so maybe some yield curve challenges. what would you say you're watching in terms of how to get those longer term borrowing costs down? or do we know. >> oh gosh. you know my view is that the story continues to unfold on what we can expect out of washington. and i think that the good news for us in new york city is the strong popular desire for, for, for, for safe, clean cities, law and order. as, as congressman ritchie torres has said, there's a recognition that defund the police from the river to the sea. latin x et cetera is not in the forefront of americans and american businesses minds. we're really focused on the rubber meets the road quality of life, and let's move forward. and i think that hopefully tt will be beneficial with, with with the new change in tone and the business and social world today. >> so you don't want me to ask

about what's going on with the mayor right now? i just saw some headlines from local saying she's not going to try to remove him. there's been plenty of drama closer to you, and not just in washington. >> i got to be honest. what really worries me is i think we've taken our eyes off the importance of electricity supply and energy efficiency and your your former just prior guest referenced increased costs. i center centers, data centers, huge drivers, increased energy consumption. the grid and energy generation is not ramped up to meet demand. electricity prices nationwide are going up as base load is taken up by these 24 over seven operators of data centers. and if we don't get the grid and power improvements now, and we don't focus on greater energy efficiency within our our buildings where we are leaders as we are right now, we're we're just going to see a lot of cost. >> is driving up your cost. tony. >> so we have fortunately across our portfolio since we began our

energy efficiency reduction work back in 2009, reduced energy consumption by 40% at the empire state building by 45%. and i think the biggest thing is we've got to stop adding to load and this it's time to stop this electrification of everything movement. you're certainly not. >> how can we would there's no way we're going to stop the electrification of everything. these data i people listening to you are going. there is no way that's going to happen. but you're absolutely right about the consumer and the pocketbook pushback. >> well, i just think that we have to look at the whole cost of the supply necessary to replace things like gas fired stoves and, and gas heating. when i say electrification of everything, what i mean is that the replacement of fossil fuels, where it makes sense over time to transition, but the grid and energy generation has got to ramp up to meet the demand. and by the way, the consumer is going to bear the cost. the consumer in offices and

hospitals and residences and stores is going to bear the cost of the higher cost of the variable load, which will be charged because the base load is going to 24 over seven users. >> i think, as you said, work from home, that that story is kind of written. i think this next story that you're talking about is the one we're about to live through. so i appreciate you raising the issue. tony, always good to see you. >> thanks so much. tony malkin here from new york. >> with empire state realty trust. glad to hear it. coming up, robin hood in the red for a third straight day, on pace for its worst week in nearly three years, and on track to snap a five week win streak. the shares are still up fourfold over the past year. kind of an echo to what we're seeing with palantir this week as well. we're back right after this. >> individually, each of us is great, but from here you can see we're one big team. at atlassian, we believe real progress takes all of us working together on new sources of energy, cars that drive to the future, even pizza deliveries. together, we can go beyond where

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amazing and is something that we get to use every day. >> welcome back. so much competition in the world of ai. but openai just announced massive user growth numbers today. even though i've been using grok three kate and it's pretty good. kate rooney is here for tech check. >> kelly, we know you're testing all the models. i love your updates on the latest, but yes, openai telling us it saw 400 million weekly active users in february. that was up about 33% from 300 million back in early december. the ceo telling me it was a natural progression as the technology becomes more useful, more familiar to a broader group of people. says people hear about it through word of mouth, see the utility of it, see their friends using it. and he says that is spurring a lot of the growth that they saw. and that dynamic is spilling over to their enterprise business. openai now has 2 million paying

users. that's roughly double what it saw back in september. over about six months, lightcap says there is a tailwind from that consumer adoption, where people in businesses already have this familiarity with the product. but the growth curve, if you look at enterprise, is a lot slower. they count uber, morgan stanley, moderna as some of their biggest enterprise customers. that growth came amid deep seek and that shakeup, which had investors really worried about the future profitability of ai companies. it also reignited this debate about ai models becoming a commodity. david faber asked openai's cfo, sarah friar, about that earlier. >> every single week we release a new feature or a new product, and that's what keeps you far away from being a commodity. the other piece here that i think keeps you well away from being a commodity is just not that many companies, in the end, are going to be able to invest to keep up the scale and the pace of innovation. we have managed to punch well above our weight to become effectively a hyperscaler, both in terms of the compute that we're buying

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