if lennar sells off on the quarter, you can probably bet that kb home will go down too. that said, this one has the best land bank in california, toll brothers would probably argue with me about that. but i've been on the lookout to buy the stock, not sell it ahead of the quarter if it does go down in sympathy with something that lennar says. i don't think that a quarter point increase in the fed funds rate should dissuade people from buying homes. finally on friday, finish line reports. now, we know finish line sells a lot of nikes, but it's falling way behind foot locker as a way to invest in the retail side of sneakers. i suggest that rather than buying finish line, i'd wait to see if finish line disappoints again and then buy the stock of foot locker on a dip. remember, foot locker is one of only two mall-based retailers we favor, the other being children's place. here's the bottom line. neither the rate hike earlier this week nor the merkel/trump get together could give the bears the kind of brutal selloff they've been waiting for. let's see what next week brings. b

try to literally go to lennar and threatened and buy one share of lennar corporation stock and advise them as a shareholder i will go to their audit committee at the corporate headquarters, with the complaint and i will instigate an investigation. guess what lennar did in san francisco? they backed off very very quickly. they went to their general counsel and they got advice on how to structure this deal where not one dollar will go to the nonprofit organization, or to a member the board of supervisors. in this case hillary ronen. thank you. thank you for your service, both in particular commissioner kopp two i remember in the early days on the board of supervisors with barbara gelato. two key people in the history of san francisco that served the citizens well. and thank you mr. keane collier public service. i just hope your legacy here in san francisco will be to bring campaign finance back to a status where we can trust the process. i hope you build the enforcement and that you don't have to rely on public numbers-public citizens in san francisco to basically take up the enforcemen

try to literally go to lennar and threatened and buy one share of lennar corporation stock and advise them as a shareholder i will go to their audit committee at the corporate headquarters, with the complaint and i will instigate an investigation. guess what lennar did in san francisco? they backed off very very quickly. they went to their general counsel and they got advice on how to structure this deal where not one dollar will go to the nonprofit organization, or to a member the board of supervisors. in this case hillary ronen. thank you. thank you for your service, both in particular commissioner kopp two i remember in the early days on the board of supervisors with barbara gelato. two key people in the history of san francisco that served the citizens well. and thank you mr. keane collier public service. i just hope your legacy here in san francisco will be to bring campaign finance back to a status where we can trust the process. i hope you build the enforcement and that you don't have to rely on public numbers-public citizens in san francisco to basically take up the enforcemen

. >>> home builder lennar says renewed optimism leads to more orders. >> the company said the pick-up in job growth has buyers more confident and that led to better than expected profit. higher hope prices and deliveries helped out. but they did post revenue that missed estimates. it caused the margin tosses decline. shares fell more than 2% to 51.57. sales fell for the seventh straight quarter. it did top expect sxagss it repeated for the year. shares fell just slightly. >>> lockheed martin said it is more optimistic than ever regarding its growth prospects under a trump administration. it pointed to the call of increased spending by members of nato. this could result in lockheed martin getting more international orders. but shares still fell. a u.s. representative has called for the department of defense to launch an investigation into the aerospace components. they expressed concerns the company was operating as a monopolyist and may be engaging in fraud and abuse. transdime down more than 5% following this report to 224.79. >> a controversial revision is unlikely to go away. that'

and they do more rental but pretty much a carbon copy of lennar. strong balance sheet. you have to like they will. >> and the last one is sort of a step up in terms of the house price point chat they do business. and that's toll brothers. why do you like them? >> well, toll brothers is for the upper end buyer. they are big in country clubs and high end communities. you have to like toll brothers because that's one of the fastest growing segments. as we see babyboomers retire and those that have earned substantial money over time. they like the toll brothers communities and therefore attracted to the high end. although a smaller segment. >> how do you view the housing market itself? we hear that there's a shortage of first time buyer or entrance level homes out there. but demand is pretty good, from what we've been hearing. what do you say? >> there is no question the first time home buyer sort of sets the market. but this is one place where they want to see the public private partnership. so i think you will see inthe centives and stimulations for what you would conside

try to literally go to lennar and threatened and buy one share of lennar corporation stock and advise them as a shareholder i will go to their audit committee at the corporate headquarters, with the complaint and i will instigate an investigation. guess what lennar did in san francisco? they backed off very very quickly. they went to their general counsel and they got advice on how to structure this deal where not one dollar will go to the nonprofit organization, or to a member the board of supervisors. in this case hillary ronen. thank you. thank you for your service, both in particular commissioner kopp two i remember in the early days on the board of supervisors with barbara gelato. two key people in the history of san francisco that served the citizens well. and thank you mr. keane collier public service. i just hope your legacy here in san francisco will be to bring campaign finance back to a status where we can trust the process. i hope you build the enforcement and that you don't have to rely on public numbers-public citizens in san francisco to basically take up the enforcemen

lennar and dh horton more affordable, are absolutely in the sweet spot. if you want to create jobs, i think they will be pushed from a policy point of view. i like them for that reason, those three particularly. >> ken, to take off on that point, just exactly how scaleable are a lot of these home builders' businesses? how much could they ramp up production. you already mentioned constraints obviously with acquisition of land and potential for labor shortages or the costs going up. >> right. from the demand perspective we have generally been seeing seasonal trends. it looks to be -- they're adding communities. what are the constraints for the builders? their gross margin expansion. it's been coming down call it 50 to 100 bips per annum for several years. that's a big head-wind leveraging ebit, covering stocks. we care about the ebit margins. i think they can continue the high single-digit growth which benefits the high profit companies but any gross margin declines need to be matched which is trickier as inflation embeds itself into the economy. more jobs,

repeated references to business sentiment, guys for lennar.s i said on twitter, the challenge may be finding electricians and contractors. >> yeah. actually making the deliveries because of the labor shortages everywhere. i do think that sentiment is leading the market here in housing. also, with the kind of continued felt meltdown in retail, investors are looking at other things. housing looks like it has a good supply and demand story. the entire home builder group, all the companies are something like 55 or $60 billion in market cap. moment depot is three times that. it is a high leverage way to play the comeback but had a good run. >> i noticed that usa today money section took out the health care stocks and looked at the relative position of strength given everything going on on capitol hill. the president there to talk about the new health care legislation. it's the second best performing s&p sector so far this year, just behind technology. you can look at the hospitals and the insurers, but interestingly, investors are looking at this o

lennar. we like this? >> for the same reason as gm. purchases of housing has to go up. >> rogers.ic is coming into the age bracket where they'll start household formations. >> you don't care about interest rates? >> not yet. you heard me tubing to steve. i'm thinking about it. >> great weekend, everybody. "power" starts now. >> it does. a perfect ten, what the white house is calling today's job report. east german judge found one scary stat inside an overall good report. we'll let you know had an that is, straight ahead. plus, you'll hear exclusively from one of the most powerful men in washington right now, house ways & means committee chairman kevin brady, the man responsible for writing the tax laws, will join us. >>> and we found for you one of the most beautiful market comebacks ever. you want to know more? i'm sure you do. i'm brian sullivan a

bit, i think and i think we've done a good job of making sure that the developers, whether it be lennar, five point whatever name they want to use, or even mbs, that was about really making sure that it was a lifting everybody up. now if there's an issue about how people are being paid and how smaller contractors are being treated than that something we need to have a serious discussion about once again with confidence that our interim director could help us do something like that is i think it's something that's serious. he did not push to have it so that small businesses go bankrupt. that was not our intention at all. let me finish. our intention was to make sure that we lift up the community that it's a win-win for everybody. but if there still issues going on that i think we need to take a look at that in a very serious way and bring in our attorneys, bringing other folks to say let's take a look because it's not the spirit, it's not part of the spirit of what we were trying to do here as a commission. the latter part of reed obama wins existing to now ocii. so going back to the pro

bit, i think and i think we've done a good job of making sure that the developers, whether it be lennar, five point whatever name they want to use, or even mbs, that was about really making sure that it was a lifting everybody up. now if there's an issue about how people are being paid and how smaller contractors are being treated than that something we need to have a serious discussion about once again with confidence that our interim director could help us do something like that is i think it's something that's serious. he did not push to have it so that small businesses go bankrupt. that was not our intention at all. let me finish. our intention was to make sure that we lift up the community that it's a win-win for everybody. but if there still issues going on that i think we need to take a look at that in a very serious way and bring in our attorneys, bringing other folks to say let's take a look because it's not the spirit, it's not part of the spirit of what we were trying to do here as a commission. the latter part of reed obama wins existing to now ocii. so going back to the pro

san francisco chronicle, the [inaudible] committee counsel [inaudible] came to an agreement with lennar multifamily communities project that also sits in the latino cultural district. i am hopeful that the parties can reach a similar agreement here and believe given some more time to sit down with one another would help with that process good so colleagues whom i would ask that you would support this continuous. >> supervisor ronen has made a motion to continue as to the meeting of april 18 27 and it was seconded by supervisor cohen. colleagues, before we vote on this continuous, we do need to take public comment specifically on the continuance. so if there's a members of the public would like to speak as a relates to the continuance, please, come forward. first speaker, you have 2 min. >> hello. laura clark with [inaudible] action. i knew you couldn't continue this but this is why we don't have the housing we need. it's because we play games with it. if you want to get developers out of politics, it's time to take the politics out of developments. if you want to get rid of a page play

horton, pultegroup, lennar and kb home gaining 1% or more, though starting to come off the morning highsme-building etf and fhb up as builder confidence has strengthened on hopes that deregulation will cut construction costs. so, with that, i'll send it back over to carl and the gang to start "squawk alley." carl? >> morgan, thank you very much. good morning. it is 8:00 a.m. at yahoo headquarters in sunnyvale, california, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ >>> good wednesday morning. welcome to "squawk alley." i'm carl quintanilla with sara eisen, jon fortt here at post 9. market treading water ahead of the fed decision this afternoon. our top story for this hour, the president is about to depart for michigan, where he will be meeting with auto ceos and union leaders to discuss his

the first to commit to prop c i was mistaken the first developer was 1515 south van ness and the lennar go multiple family months ago committed to building 25 percent of affordable housing onsite complying with prop c without up zoning he, he we know that developers can do that given the overwhelm percentage of voters that voted for prop c that we keep to our promise to voters and maintaining the max feasibility that is possible will take into account go not only that but the feasibility of our families and san franciscans to stay in san francisco that's the balance when we look forward in negotiating with the inclusionary proposal inclusionary housing proposal before you here today finally before i bring up and co-sponsor supervisor peskin i do want to recognize a number of the community groups that helped draft this ordinance with us over the last couple of months and recognize the community housing a human rights committee, bill housing program mission economic development and chinatown development center and tenderloin corporation and united educators of san francisco, co-the car an

lennar had great numbers and nike had some disappointment on the guidance and the stock went down, butood on the reported numbers. we see revenue gains of 6, 7, 8% on average. there's only a dozen but the early signs at least are pretty decent for earnings. the hope is that once the market understands it's not just the trump agenda we're high priced because the numbers are going up even independent of tax cuts adding to things the market hope here among the bulls is that that will stabilize things. can better earnings commentary help move the market? we'll find out in the next couple of weeks. there's a lot of damage to the market. look at your etf leaders. some of this is fundamental. you know about the problems with retailers. the retailers had highs in november and december and straight down ever since then. the exploration companies moving towards a 55 to $60 oil if not $54 oil. another fundamental problem there. regional banks we were supposed to be moving up on interest rates, that's not happening. the s&p only 3% from the highs but still notable damage in some important sectors

lennar, d.r. horton, pulte all up over 15% since the start of the year.ce the election. for more on the trump bump and the housing market we're joined by the ceo of kb home, jeff mezger nice to have you here. 60 years, building homes a long time. >> a great legacy. >> put this in perspective this market if you can. >> right now it's very good and as we shared on our earnings call there is momentum. things are getting better, so a lot of demand and not a lot of supply. >> for quite some time we're hearing of people having difficulty obtaining mortgages, too tough credit from the banks. has that changed? >> a little bit. it's still pretty tight. i saw the report that came out this week that projected it would have been an additional $300 billion in gdp if they loosen up underwriting a little bit. debris wi i agree with that. >> the longer term trend since the housing collapse the in the earlier, that we'll have more renters and never get back to 70% home ownership. are we seeing a reversal of trend, people moving out of their parents' basements? >> we are.

shareholders as is community you use the q and a that's an acronym for the church asks you to stand for the lennar flow from january to june the river to give back to mother nature to save what is the damaged eco system this is a moral issue as it is an economic or human health issue the irrational eco system has been degraded by us and you must be returned to height by us your commission decisions are critical the water quality control plan amendment to have the last can change to right the wrong we owe it to say future the q and a impolars you to apply the data available to your thought process that data shows that people in our jurisdiction are replaced their water by thirty percent just to confirming measures our communities are on the trajectory to continue this program consider this safe water directly applicable to the water in the river flow in closing we offer you the unitarian 7 principle quote replace for the interdid not have all existence we're a part we appreciate all that you're doing. >> thank you. is that part of our record have you sent it to us. >> i'll be happy to provide it. >

that the numbers in aggregate should be viewed by representative companies that are talking, like lennaru know, large home builders saying things are quite strong. let's not lose sight of that and not just decide that bank of america is done, stick a fork in it because of the ten-year is where it is. i do think when i was in europe, the european markets are very strong. and a lot of them, uk is the strongest. i think uk next week will begin to have some turbulence and there's a lot of inflation there, but i look at the stocks that were down yesterday and i say to myself, okay, we've been due. this was the -- this is more of a sense that maybe some volatility's coming back because we do not have a president who could come out today and say big win. i mean he's a big win guy. he does say big day for health care working hard in tweet, what i want is big win for health care. thank you. and if that tweet gets -- if we see that tweet, then you're going to say why didn't i use this market to buy the airlines or whatever else i sold on. >> the president, our kayla tausche reports, will meet with

then you've got home builders and some consumer discretionary stocks like pulte and lennar.ne and you get staples like dr pepper and food stocks doing well. there's enough leadership to hold things up overall, but as i mentioned a lot of technical damage in certain key sectors here. keep an eye on those health care names, particularly the managed medicare names, there's been a lot of damage in the molina and centene, and hospitals we've talked about, tennant, they're not doing much here. and this is another group that's had a lot of damage here. this is just this month. down on concerns they would be impacted by changes in the obamacare legislation or the repeal of the obamacare legislation. as i mentioned a lot of efforts to handicap this health care vote today. completely just informal vote on the floor of how this might parse out here. if you get a pass on this, market would rally. this is the general consensus. the people i've talked to down here and on the trading desk. if you get a fail and leadership says we're going to keep trying and not move onto other things, that

shareholders as is community you use the q and a that's an acronym for the church asks you to stand for the lennarlow from january to june the river to give back to mother nature to save what is the damaged eco system this is a moral issue as it is an economic or human health issue the irrational eco system has been degraded by us and you must be returned to height by us your commission decisions are critical the water quality control plan amendment to have the last can change to right the wrong we owe it to say future the q and a impolars you to apply the data available to your thought process that data shows that people in our jurisdiction are replaced their water by thirty percent just to confirming measures our communities are on the trajectory to continue this program consider this safe water directly applicable to the water in the river flow in closing we offer you the unitarian 7 principle quote replace for the interdid not have all existence we're a part we appreciate all that you're doing. >> thank you. is that part of our record have you sent it to us. >> i'll be happy to provide it. >>

. >>> and a mixed quarter from home builder lennar.ofit of 56 cents a share, one cent above expectations. revenue missed forecasts. new home orders were up by 12% in volume and up by 16% in terms of sales. stock is up by about 20 cents. >> that's a big story. >>> to politics now. house republicans releasing a package of amendments last night to their bill they hope will repeal and replace obamacare. the two key alterations accelerate the expiration of the affordable care act's taxes and further restrict the medicaid program. at a rally in louisville, kentucky, president trump saying the goal of those changes is to bring down costs. >> we're going to have a great competitive bidding process. medicine prices will be coming way down. way, way, way down. that's going to happen fast. we're just adding that to the bill. i said, we got to add that to the bill. we're going to do a bill later. we're trying to add it to this bill. if we can't, we're going to have it right after. you have some crazy archean laws. >> the house bill will be voted o

among names to watch, general mills, lennar, fedex, nike, winnebago. joe. >> stock to watch.ump another 10%. barron cites growth in service and new iphone model. unilever preparing for sale, flora margarine and stork butter brand. private equity working on offers. deutsche bank kicking off capital raising to shore up books. the firm hopes to raise over 8 billion euros by selling shares at a 35% discount. >>> president trump will head to louisville, kentucky. that's where he's expected to pitch gop plan to repeal and replace obamacare. the house is expected to vote on the republican bill on thursday. our guest host this morning former u.s. senator former governor of nebraska. senator, glad to have you with us today. >> nice to be with you. nice to be with both of you. >> i've given you high praise already, in the makeup room. i don't know why they bother with you, perfect before hand. guilding the lilly. say go easy on it. >> no. full on. >> in washington, it is seeming like it is going to be difficult to get some of this legislation passed. it seems like the sides have kind o

san francisco chronicle, the [inaudible] committee counsel [inaudible] came to an agreement with lennar multifamily communities project that also sits in the latino cultural district. i am hopeful that the parties can reach a similar agreement here and believe given some more time to sit down with one another would help with that process good so colleagues whom i would ask that you would support this continuous. >> supervisor ronen has made a motion to continue as to the meeting of april 18 27 and it was seconded by supervisor cohen. colleagues, before we vote on this continuous, we do need to take public comment specifically on the continuance. so if there's a members of the public would like to speak as a relates to the continuance, please, come forward. first speaker, you have 2 min. >> hello. laura clark with [inaudible] action. i knew you couldn't continue this but this is why we don't have the housing we need. it's because we play games with it. if you want to get developers out of politics, it's time to take the politics out of developments. if you want to get rid of a page play

san francisco chronicle, the [inaudible] committee counsel [inaudible] came to an agreement with lennar multifamily communities project that also sits in the latino cultural district. i am hopeful that the parties can reach a similar agreement here and believe given some more time to sit down with one another would help with that process good so colleagues whom i would ask that you would support this continuous. >> supervisor ronen has made a motion to continue as to the meeting of april 18 27 and it was seconded by supervisor cohen. colleagues, before we vote on this continuous, we do need to take public comment specifically on the continuance. so if there's a members of the public would like to speak as a relates to the continuance, please, come forward. first speaker, you have 2 min. >> hello. laura clark with [inaudible] action. i knew you couldn't continue this but this is why we don't have the housing we need. it's because we play games with it. if you want to get developers out of politics, it's time to take the politics out of developments. if you want to get rid of a page play

bit, i think and i think we've done a good job of making sure that the developers, whether it be lennartever name they want to use, or even mbs, that was about really making sure that it was a lifting everybody up. now if there's an issue about how people are being paid and how smaller contractors are being treated than that something we need to have a serious discussion about once again with confidence that our interim director could help us do something like that is i think it's something that's serious. he did not push to have it so that small businesses go bankrupt. that was not our intention at all. let me finish. our intention was to make sure that we lift up the community that it's a win-win for everybody. but if there still issues going on that i think we need to take a look at that in a very serious way and bring in our attorneys, bringing other folks to say let's take a look because it's not the spirit, it's not part of the spirit of what we were trying to do here as a commission. the latter part of reed obama wins existing to now ocii. so going back to the project, this parti