Skip to main content

tv   Worldwide Exchange  CNBC  February 16, 2018 5:00am-6:00am EST

5:00 am
>> mark market alert the s&p 500 tries for its best week in nearly five years. your full market setup straight ahead. no deal, the scc rejecting a chinese takeover of the chicago stock exchange a crypto comeback, the bitcoins next big move after another wild week. friday, february 16th, 2018. "worldwide exchange" begins right now. ♪
5:01 am
>> good morning. welcome to "worldwide exchange." i'm courtney reagan. >> i'm dominic chu we've had a huge run for the stock markets. we are seeing green on the screen for the u.s. futures picture. take a look at this. the dow will open up by about 130 plus points. the s&p 500 by just around 14. the nasdaq also up by about 48, 49 points. a green picture yet gep. take a look at the ten-year treasury note yield after a big week of inflation data the ten-year treasury note yield is moving slightly lower we are off of some of the highs we have seen as things stand, 2.89% is where the u.s. ten-year treasury note yield stand.
5:02 am
we went above the 2.9 mark over the last couple of days. a big focus in interest rates still. we are showing at least for right now some signs of stability. >> the ten-year hitting that highest market yesterday most asian markets are closed for the chinese new year japan, the market closed higher for the nikkei, 1.19%. the bank of japan governor rea pointed for another five-year term australia, down marginally europe, a strong week there for those indices. the german dax up 2% france's main index, up 3% for the week green arrows almost all across the board. it looks like spain and italy among the leaders for europe right now. >> let's check on the broader
5:03 am
markets. the macro picture, oil has been a huge focus we are seeing movement in oil prices $61.68 the last trade for crude prices that's about .5% to the up side. brent crude, 64.69 that's about .5% to the up side as well. let's check out what's happening with the dollar. $1.2525 is what it will cost you to buy a euro. a general theme of a little bit of dollar weakness in the trading. we will turn our attention to gold prices. this has been a focal point. we haven't seen a lot of safety bid for gold over the course of the market selloff over the last couple of weeks. you can see $1,363.10.
5:04 am
we have seen this for comex gold we will see if that continues given some of the dollar weakness >> let's talk more about the early market action. joining us on the cnbc news line is "fast money" trader, guy adami. he works days, nights, thanks for being with us. the s&p 500 setting up for almost the best week in years. >> unbelievable. thanks for having me on. nocturnal, i'm always around this could be the fakeout day. i am not going to pretend to say that i thought this bounce would happen the all-time high was a few weeks ago. we traded down it 25, 30 or so where you are seeing the s&p right now, this 27, 30 level is a correction of that range
5:05 am
i would suggest we might have an opportunity to fail this morning or sometime today and close lower. i don't think this volatility is going away i can't believe we have had that much of a text book correction to the 200 day moving average. this is just going to go on. if you are asking me what i think is going to happen i think today is going to be the head fake day and we will wind up closing lower >> let's talk about why you think it is that way you mentioned a number of different items here what will you be looking for that will give you some sign that it will happen the way you think it is going to go? are we looking at certain parts of the interest rate or certain sectors in the market? what's going to tell you whether or not this will be that kind of a head fake day? >> including today, it was three fridays ago that we had that big jobs numbers what we really got was the wage growth number. that's what sort of spooked people that's what set off this volatility trade that's been
5:06 am
happening. my view is that you can't correct seven years of complacency measured in the vix and people's willingness to continue to buy the dip. you can't fix that in three weeks. i think that's a long cycle thing. i think the moves you have seen, although obviously exaggerated to the up side over the last week and a half are not nearly over in terms of the moves we are going to see in terms of the down side. some of the biggest rallies take place in markets reverses an going lower. quite frankly, that's what you are seeing now i'm wrong all the time i could be wrong on this one as well i'd be shocked if, in fact, the last week and a half was all we are going to see to the down side in this market for the beginning of the year. >> if your scenario plays out real quickly to end this up, do you think you have any suggestions for investors to hedge against a drop today going into the long weekend, by the
5:07 am
way? >> exactly, courtney obviously, you saw that big move to the down side in volatility earlier this week. yesterday, big move to the up side the vol didn't sell off that much there is an opportunity to be able to buy back that insurance that was so expensive a week and a half ago the market is giving you another shot what would i do? i would dip my toe back into the put protections of a portfolio you guys, you get up at 3:00 in the morning. it is amazing. >> it is only 5:00 for me. i didn't have to put my makeup on you guys are the best. >> thanks so much. we'll see you later. >> it was exactly two weeks ago today that volatility came
5:08 am
roaring back on wall street. on that day, a familiar face to cnbc viewers came on airand made this very bold call about interest rates >> we are looking at a parabolic shift in bonds we could be touching 4%, 3.5% by the second, third quarter this year because -- >> by the second or third quarter of this year, we could touch 4% of the ten-year yield >> it would be a cup of coffee up there it wouldn't be long. definitely, 3.5% >> the ten-year u.s. treasury was yielding 2.895%. when larry mcdonald made that call it has cracked beyond 2.9%. let's bring larry back what's changed in the market or are things still on the upward trajectory for interest rates, the likes of which we haven't
5:09 am
seen in years? >> the bear's sentiment on bonds is off the charts. i'm a bond bear but i'm also a short-term tactical trader if you look at the capitulation in utilities and the bond market and the amount of bear positions in the commodity trading futures data, it is a very crowded trade here we probably rally for a little bit, maybe a month then, we are going to have the big one. we just had the tremor the big quake is coming later this year. >> what's the reason, larry? why the need to go to 4% why do you see we are really going to get there do you believe it is going to be a cup of coffee? we are going to get there for a second and come back down. >> think about it, courtney. two years ago, right about today, the world was inflamed. the dollar had ripped higher
5:10 am
you had emerging markets suffering. oil was at $26 it was a real global credit crisis in oil and emerging markets. janet yellen to save her legacy pulled out the fire hose with the help of the ecb. she basically turned 12 to 15 rate hikes into five that crushed the dollar. that crushed the dollar lower. we have a new fed governor coming in, mr. powell. he has a very important testimony next week. if he leans dovish, she has used all the dovish soft dollar gas in the tank. the serpent in the market, the beast in the market, is expecting him to be hawkish. if he leans dovish, you are going to get a weaker dollar, weaker commodities that global growth feeds back to
5:11 am
the u.s. and gets you higher rates. it is a real problem for the fed. janet yellen has essentially used all the weak dollar gas in the tank >> larry, one of the things we talked about on wednesday was the idea we saw a market movement that a lot of people weren't expecting. we saw inflation data slightly hotter than expected stock futures were up. they sold off. they rallied back and closed higher positioning wise, i have been go yo your rates, how are you advising clients? >> commodities are going to destroy stocks over the next year etfs like the natural gas, agriculture commodities, stocks like mosaic, if you look back in
5:12 am
history, when you have large deficits at the same time a weakening dollar and higher yield, those three things, commodities do great, agriculture, natural gas, and even the oil space and shale those names are going to do very well relative to equities. >> it is going to be a very interesting trade to watch develop. larry mcdonald, thank you so much for joining us lear this morning. >> bitcoin dipping back below the $10,000 mark the digital currency has had a monster week that's a key psychological level. >> specially for retail investors. bitcoin got back to 10,000, something that caught the attention of traders it send the crypto currency
5:13 am
lower. commen tation ov commentary seems to be adding confidence yesterday, they issued a customer protection advisory that avoids customers to avoid pump-and-dump schemes that can occur thinly traded or new alternative virtual currencies, digital coins or tokens. investors are trying to carve out a regulatory framework and get rid of the bad actors versus completely shutting down the crypto coin market in last week's senate hearing, cftc's chairman defended the bitcoin value. they have seen this as encouraging. this is one of the reasons we have seen this outperformance in the currency it did lose two-thirds of its record high after hitting that in mid-december.
5:14 am
volatility is the name of the game >> it is still a volatile currency, commodity. when things move by 5, 7, 9 percent in a day, it is massive. we are not talking about the kinds of volatility that we saw, say, between mid-december, into mid-january. >> that's a good point >> a lot of investors say the move in the equity market has had an impact on bitcoin investors. it has moved in tandem with stocks in this rebound we have seen on wall street. >> very interesting. >> another big story we are following this morning u.s. regulators blocking the sale of the shock stotock excha. >> the two-year battle was criticized by both lawmakers the deal would have been worth
5:15 am
an estimated $25 million >> we are just getting started here on worldwide exchange for this friday. still ahead, some mall madness big name retailers like macy's, jcpenney's and kohl's. >> the crude comeback, what's next for the ergney market we are drilling down when "worldwide exchange" returns your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall.
5:16 am
thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.
5:17 am
sure. mom,what's up son?alk? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] seems a bit long, but okay. set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around.
5:18 am
welcome back retail stocks have been on a terror jcpenneys up 10% nordstrom, kohl's and target solidly higher since monday. check out the retail xrt it has been a strong week. that's stronger. let's bring in jan nivens. what do you think you can attribute these moves to the most the retail sales number was weak but when you drill down the numbers, department stores, clothing, those were strong. >> nothing has been better than where the consumer has been over the last couple of months. sales through christmas was fabulous in january, no discounting, nothing to mark down there was nothing left to sell in january usually, january is all
5:19 am
clearance. that affected the cpi number it is all full price, because it is new stuff nothing is really going on other than the consumer is very strong retailers are doing very well. that's going to continue through 2018 as this new tax law kicks into people's paychecks. >> retailers in general, online or brick-and-mortar, are controlling inventory much better than in the past or does that bode well for a future earning season about profit margins? >> i have been doing this for 50 years. the stores have never looks better than today. everything you like about a store, they have never looked better does that keep all the business from going online gradually. they are going to have a pretty decent 2018 relatively speaking.
5:20 am
last year set a record in both of those all of that still happening. the business is still going to be going online. the online is going to grow 20% a year, stores aren't. all that is still happening. big secular changes are still happening. retailers are getting smarter and doing better >> we have heard from some of the brands a lot of the big retailers, still to come for earnings what are the big themes investors should be watching do you think some of the good news is already priced in? we have seen the retail stocks run pretty well here not just last week. >> i think beating expectations will be difficult. we all know what happened. we all know that clearance was low in january that word is all out there it may well be priced in it doesn't change the fact that i think 2018 is going to be a pretty darn good year for the
5:21 am
consumer it is a question of who gets the business it is not all retailers that are going to do well it is too touch. there is too much competition. that hasn't changed. people executing well are going to have a good year. the underlying consumer is really quite strong. they are not levered up. they can buy on credit if they want to. that's a great combination i think i have a job i am going to keep my job. i am willing to spend on credit. >> is there a part of the retail industry, a port of the overall consumer discretionary thing that you look to as being the most important to the health of the overall industry >> what i watch for the consumer is what they look like on their credit when they have any nervousness, they quit spending when they are confident, business goes well levered retailers are still going broke. that's not going to change interest rates are probably going to go up it is probably going to be
5:22 am
harder to borrow money, not easier as the tax law kicks in and people like walmart start give teeing back giveing it back to the consumer, these people are going to hammer everybody that didn't get a break, with price, customer service, with all the things you can do with that extra money we are going to see bad retailers go broke faster, not slower and a lot of pressure on the online guys. >> stay close. don't go too far away. we know you are going to be close to us as a contributor thanks for being with us very early this morning >> coming up next on the show, we are talking rate shock and the housing market what the big move in bonds could mean for your mortgage another check on futures are we going to have another update in the market after five
5:23 am
straight dow enops higher by 129 points stick around we'll be right back.
5:24 am
today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit
5:25 am
welcome back to "worldwide exchange." i'm courtney reagan. looks like we are in for another green day. futures are indicating a higher open by 135 points s&p 500 and nasdaq, a higher open let's get a quick check on wti
5:26 am
crude oil, up by 0.41% holding steady, above $61 a barrel americans consume 5 billion pounds of seafood a year with 90% of that imported it is a big business a new cnbc documentary reports, it is often an illegal business. ted kemp joins us live from singapore with that story. what can you tell us >> human rights activists have been saying for years that slavery and other crimes are rampant in the global seafood industry cnbc spent about two years investigating this story we found quite a bit of evidence of wrongdoing. is that similar to the vessels you used to fish on? min mang is a former slave he says he spent more than five
5:27 am
years trapped and abused on thai fishing groups we met him in myanmar. >> translator: whenever we were in port, they shackled me. i had to unload the fish and got chained on the front end of the boat >> reporter: he shows us scars, one where he says a captain stabbed him with a stingray tail >> so the global seafood industry and the thai government and others have been saying that any have taken steps to curb these abuses i don't think there is anybody out there that would say this problem is completely fixed. >> ted, it is certainly a fascinating story and one that many of us will be paying close attention to thanks to our ted kemp out in singapore. be sure to catch the cnbc documentary, "oceans of crime" airing tomorrow night right here on cnbc. a big story and a big business
5:28 am
as well. still ahead on "worldwide exchange," another check on your global markers the >> crude realities, oil surging above $60 a barrel one market prosays says he is watching another key numbers what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers)
5:29 am
what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley ♪ show me the olympic winter games ♪ ♪ like i've never seen before. ♪ ♪ xfinity x1, yeah, i always know the score. ♪ ♪ medal count updates, keep up with the standings. ♪ ♪ my boy "red gerard" always sticks the landing. ♪
5:30 am
♪ stream it live on every screen, ♪ every medal, every slope. ♪ ♪ hockey hair never looked so dope. ♪ ♪ triple corks so majestic in 4k resolutions. ♪ ♪ skiers spinning, rewind, count the revolutions. ♪ ♪ alpine, freestyle, dang, what's next? amazing outfits? ♪ ♪ sequins and spandex. ♪ like curling? daily highlights keep you up to date. ♪ ♪ restart a live broadcast when you're running kinda late. ♪ ♪ 2000 hours of coverage, get your mind blown. ♪ ♪ 50 olympic channels, yup, you're in the zone. ♪ ♪ and if there's something that you want to see, ♪ ♪ pick up that voice remote and just say "show me..." ♪ whoa. experience nbcuniversal's coverage of the olympic winter games like never before with xfinity. proud partner of team usa. wall street pointing to another higher open, the dow has
5:31 am
its sixth positive session >> the sec rejecting a chinese takeover of the chicago stock exchange >> what the big move in bonds could mean to your mortgage? it is friday, february 16th, 2018 you are watching "worldwide exchange" right here on cnbc ♪ worldwide exchange on cnbc i am courtney reagan i'm still getting used to the 2018 thing >> willford and sara are off today. the idea we could have 2018. >> that's where we are let's get a check on the global markets in to 18 futures are pointing us higher we could be in for another session higher that would mark six. we haven't done that in quite a while. the dow is indicated higher by
5:32 am
100 points the nasdaq at 47 points if we were to open things right here let's get a look at the ten-year note we were just below 2.9 we are still there at 2.895% we want to watch this very closely and see if the yields continue to march higher let's get a quick check on the price of wti crude holding above $61 a barrel, adding about 0.31% to about $61.5. >> let's drill down on oil's big move higher. see what i did there joining us now, matt maley, managi managing equity strategist there have been a lot of fundamental drivers over the last few weeks and months. tell us how the crude setup looks to you and whether or not we could see support for prices or if this breakdown short-term lasts. >> we look at this one thing we have to remember, crude oil rallied 48% in just
5:33 am
seven months so it was getting overbought anyway on a near-term basis. the fact that it pulled back a little bit doesn't surprise me we did see some inventory data that takes it below $60. this week's eia number kind of calmed things down we look at production. yes, we have seen a pickup in the u.s. look at opec they have held the line. a lot of people didn't think they would they have held the line for very many months. how much can they increase production they have really underspent on the investment on infrastructure and production and equipment they haven't spent much at all i don't think that they can ramp up even if they wanted to the way some people think they could. we have another deal coming up with the saudis.
5:34 am
they don't have as big of an influence as they used to have but they still have a lot of influence. i don't see the big slide in oil continuing i think it was a pullback from an overbought condition. actually, the $58 level is the more important support level $60 is a round number. i understand why people are looking at it. on a technical basis, that was the old high we saw 13 months ago back at the very beginning of 2017. it pulled back from that level and bounced back up. it finally broke above it. it shot up strongly. sure enough, when it came back down, this past week, it got back down to that $58 level. in the old technical analysis, old resistance becomes key new support. we bounce strongly at that level. that's going to be the key level i'm looking at, more than $60. >> matt, what do you think about the years of chronic underinvestment in infrastructure when it comes to the crude oil complex? will that hurt the idea of the
5:35 am
entire energy industry and something that we should be anticipate sng. >> well, like anything else, once they decided they want to reinvest and we have situations with venezuela, which has got its own problems brazil seems to be stabilizing and maybe they can do things it takes time for that to all revamp you can't just do that in a couple of months this actually is going to be something that will take not just months but years to come back online. it helps the u.s. companies because they can ramp up production on a much quicker basis. it doesn't create a supply issue that has the oil crash back down in a weird way, even though it might hurt some certain countries, i think it helps our d domestic oil companies >> let's talk about the implications for the companies that operate in this industry.
5:36 am
we have seen a little bit of lag from these type of companies, oil and gas and services, over the course of the past year. what can we expect to see out of the oil industry in terms of those company stocks in 2018 when the whole group rolled over, before the rest of the stock market did, when we had this kind of mini crash last week with forced selling, a lot of stocks got thrown out, the baby with the bath water this group even more it felch mol much more than the underlying commodity for specific names, our research partners at concentric securities, they like the stocks with the good exposure one is diamondback that symbol is fang, d
5:37 am
distinguishing from the stocks on a technical side, one i like is apc here is a stock that hasn't come down it has seen higher highs and higher lows. it saw a key higher low this week it is going to rally further it is going to attract a lot of attention and momentum money on a fundamental basis, it is a great stock. >> that's actually the second time this week i have heard someone recommend or look at diamond bang, that fang, not the other fang, ticker symbol fang thank you so much, matt maley. courtney, we got to thinking, because of all the stocks of these streaks, the six-day winning streak, if there is still a negative side, we know in stocks and bonds, every
5:38 am
time there is a buyer, there has to be a seller we wanted to balance things out a little bit by taking a look at some of the companies that have not participated as much in the rally that we have seen since the lows of the current market selloff. it turns out three-fifths of the stocks in the s&p 500 have hit highs in 2018. of those, 71 have still fallen by 10% or more some people call that correction territory. other people say bear market for a bigger decline let's take a look at some of these names that we know very well mcdonald's, still sits about 10% below its high that we hit just so far this year also, home depot, a huge trade during the course of the last couple of years with arguably as home improvement and the housing market did much better, delta
5:39 am
airlines, still 13% below its 52-week high ups, 20% a 20% pullback as well ford is down 20% as well again, some of the big names to watch that are still underperforming for the time being in this overall rally off the lows, courtney back over to you >> very interesting. some other stocks for us to watch today beyond those that dom just brought up. allianz's fourth quarter profit fell on a hit from the u.s. tax law, the weak dollar and impact of natural disaster. the results, on a positive result, they say they posted up for a sixth straight quarter walmart is reportedly in talks to buy a more than 40% stake in an indian commerce firm called flipkart shares of walmart slightly
5:40 am
higher this morning as well and roche is buying cancer data start-up flat iron it taps into multiple data points in cancer cases to help doctors choose promising outcomes for patients. >> cbs providing fourth quarter growth they see it in the high single digits this year with earnings in the high teens. those shares up fractionally shake shack's fourth quarter revenue ended and beat forecasts thanks to a rise in same store sales. the burger chain plans to open up to 35 new locations this year the largest number of openings in its history those shares down 4.5%
5:41 am
avis budget investor seeks board shake-up they are controlled through derivatives. >> to celebrate shake shack earnings, i ate dinner there last year. another big story, u.s. regulators block the sale to china-based investors. the move ends a two-year battle over the proposed sale which was criticized by lawmakers from both parties the deal would have been worth an estimated $25 million week one of the. >> ali we are to pyeongchang for a look at the lineup. we have given back some of the gains that we have seen. the dow slated to open up by 95
5:42 am
lileit b11 s&py a tt b off the best levels "worldwide exchange" continues after this commercial break.
5:43 am
5:44 am
welcome back week one of the winter games is winding down the competition is just starting to heat up let's get to carl quintanilla with the latest. we talk so much about mikaela shiffrin yesterday and that big
5:45 am
gold medal what happened this time around with the slalom? >> reporter: it has been a rough day for team usa after a series of strong days on the snowboard, this was a day in which some of our marquee hopefuls barely missed the podium mikaela shiffrin, as you point out, failed to defend her gold medal in the women's slalom. she missed the podium by .08 she told nbc she had been sick before she started it was unclear whether it was a virus or simply nerves >> i don't know. i had a terrible feeling all of the sudden right before my start. it was not great going into the first run. i have dealt with that before. i thought maybe it might have been a virus, but i'm feeling fine now i think it was just nerves >> reporter: the other tough result is lindsey jacobellis
5:46 am
coming in fourth in snowboard cross. she is considered the best snowboarder of her time. back in torino, she was in the lead on the final jump, tried a stylish jump and crashed and ended up taking silver at 32 years old, she is still in the hunt for the gold that has alluded her. the medal board, norway, 19, germany, 15, canada 13, netherlands, 12, and the u.s. with 8 we haven't been able to add too much to our tally. there is always the weekend and next week. a series of disappointments in skiing, dom and courtney, and even figure skating. we are still trying to finish the men's singles program. >> i saw micaylakaela shiffrin's first run and had to go to bed we are talking rate shock in the housing market the big move in bonds could mean
5:47 am
for your mortgage when worldwide exchange returns . it's great to finally meet you. nice to meet you too. your parents have been talking about you for years. sorry about that. they're all about me saving for a house, or starting a college fund for my son. actually, i want to know what you're thinking. have a seat. yeah. knowing that the most important goals are yours. with 15,000 financial advisors, it's a big deal. and it's how edward jones makes sense of investing. your privacy makes you myt number 1 place to go number 2. i love you, but sometimes you stink. febreze air effects doesn't just mask, it cleans away odors. because the things you love the most can stink. and try febreze small spaces to clean away odors for up to 30 days.
5:48 am
breathe happy with febreze. and the nx hybrid with a class beating 31 mpg combined estimate. lease the 2018 nx 300 for $339 a month for 36 months. experience amazing at your lexus dealer.
5:49 am
welcome back to "worldwide exchange." i'm dominic chu. let's get you up to speed. earlier this hour, you may recall the dow would have opened by 130 to 140 points as things stood. as things stand right now, the dow would open up by 88, 90 points the s&p around ten and the nasdaq by 38, 39 points. checking on treasuries, the move a little bit lower in the ten-year u.s. treasury yield two-year treasury notes are yielding 2.19% the ten-year, down a little bit at 2.89% the 30-year long bond, 3.15% >> what impact are the big moves in bond land having on the housing market
5:50 am
>> let's get to cnbc's diane in olick. this affects so many people. >> everybody that owns or wants to own a home. mortgage rates are now at their highest level in over four years moving higher this week along with bond yields mortgage rates loosely follow the yield on the ten-year treasury the average rate on a 30-year fix jumped after the presidential election and fell back a little bit for much of last year. back in the 3s at the end of last year. only to start climbing this year it is all about inflation and the potential for the fed to raise more it is now up more than .5 of a percentage point since the start of this year it could not have come at a worst time this. weekend is the unofficial start of the spring housing market and buyers are already facing red hot home prices because of the steep competition for a record low price of homes for sale. you may say, we are still in the 4% range, which is historically
5:51 am
higher buyers lose purchasing power for every bump higher. lenders are strict on the debt to income levels this is new rules called the ability to repay lenders have to show that a b abarroabar barrower has that. >> how will this be with regards to home builders >> housing starts, single family, still historically low that's because they cannot find the labor. they would love to give lots of people construction jobs they can't find the people to give those jobs. that's holding them back the high cost of material.
5:52 am
material cost, construction costs have been rising by 1% per month for the last 36 months so costs are incredible for builders, which means they can't start with that entry-level product anymore, get those lower priced homes as mortgage rates go up and existing homes get more pricey affordability is out the window. >> diana hit on a lot of those points thank you very much for that let's talk about some of the labor that goes into things and some of the input costs. how about all the effects of the economy and housing. we have the chief economist for the mortgage bankers associate mike, diana talked about the idea that there aren't as many people out there that can find jobs for construction. what is the dynamic m housiin hg could it derail things we have seen so far? >> i have to agree with diana, the real issue in the market right now is the record low
5:53 am
levels of inventory. we have seen home prices go up 6% last year that reflects both strong demand, strong household formation and really a lack of supply supply comes from lack of construction labor as well as additional factors we do see some sunshine on the horizon. our latest report from our builders application survey showed that new home sales are likely to go up 18% year-on-year in january >> i was just going to ask when it comes to this inventory situation, if you are a home buyer and you are looking and you can't find one, what do you do what's typical are you move noing into a renta unit are you turning to try to do new construction >> for existing owners, we are seeing mobility be quite low typically, you would expect with the job market so strong, you
5:54 am
would expect people moving at a faster rate. there is just a little bit of a lock-in right now. people are weary of listing their home for fear of not being able to find a new one the answer really is to put up some new additional units. if we are growing households at 1.5 million per year and only building 1.2 million units, very low rental vacancy rates and home prices going up at twice the rate of income >> let's bottom line this for our viewers. let's talk about the rate picture. i'm looking at freddie mac's survey every week. it says the average 30-year fixed rate mortgage is 4.38% where can people expect to see rates at the end of this year, maybe even next year for the 30-year fixed rate mortgage? >> our forecast has that 30-year rate going to 4.8% by the end of 2018 and getting close to 5.5% by 2019. that's going to erode affordability a little bit again, as we highlighted,
5:55 am
really, it is the lack of supply that's been draining this market, not mortgage rates, in my opinion >> we'll leave the conversation right there. housing, a big focus for many. >> it has been a big week. we still have a big day left to go we want to set you up for the day ahead. we have three big things for you to watch we are keeping an eye on the consumer campbell's soup and smucker's report results today, whether it is crock pots, jam or north face, we have you covered. >> another company to watch today is coca-cola pepsico and dr. pepper and snapple are in the books let's see if coca-cola has anything to see with regard to the keurig/dr. pepper deal we'll see if coke addresses that >> we'll see where we close out the week two weeks ago today that that market selloff began traders will be looking for where we are headed earlier in
5:56 am
the show we are a little worried about what could happen today. >> it is the chinese new year. i want to show you a picture it is the year of the dog, the earth dog. those are my two puppies viewers will often hear me refer to them. that's lucy on the left, a haba in e and bogey i wanted to show a picture of my dogs, because it is the year of the dog. >> when it is the year of the dog, what does that signify? is there anything to be on the lookout for? >> i just tweeted out, clsa, puts out a feng shui index tied to the year of whatever it is. it will give you some tongue and cheek ideas for how some may want to invest >> let's get you a quick check
5:57 am
of the futures we have definitely lost some steam as the hours progress. dow jones is iicedndat to open higher by 91 points. that's it for "worldwide exchange." have a great friday! >> happy new year. so you're looking for male customers, ages 25-54, who live within five miles of your business? like these two... and that guy. or maybe you want to reach women, ages 18 to 34, who are interested in fitness... namaste. whichever audience you're looking for, we'll find them we're the finders. we work here at comcast spotlight, and we have the best tools for getting your advertising message out there.
5:58 am
anywhere, any way your audience watches. consider them found. sure. mom,what's up son?alk? i can't be your it guy anymore. what? you guys have xfinity. you can do this. what's a good wifi password, mom? you still have to visit us. i will. no. make that the password: "you_stillóhave_toóvisit_us." that's a good one. [ chuckles ] seems a bit long, but okay. set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around.
5:59 am
good morning it kind of felt like january this week, didn't it again today, wall street pointing to another higher opening. the s&p 500 tries for its best week in nearly five years. i think it is in the dow, 1200, 1300 points. the futures indicating the dow up about 90 so far higher earlier no deal. the sec rejecting a chinese takeover of the chicago stock exchange details straight ahead >> passing the torch, we'll get a live update from south korea
6:00 am
where carl quintanilla is preparing to hand over the olympic coverage duties to andrew ross sorkin "squawk box" begins right now. live from new york, this is "squawk box. >> good morning, welcome to "squawk box" here on cnb we are live at the nasdaq marketsite in times square i'm kelly evans. as you just heard, andrew is on his way to south korea our guest host is steve grasso, director of sales at stuart frankle. we just saw you but it is a new day. >> i am just on this side of you versus that side of you just to the switch it up >> let's see what's happening in the markets here u.s. equ


info Stream Only

Uploaded by TV Archive on