Transcripts For CNBC The 20240704

To buying and selling friends across the country. We begin with dom chu with the latest numbers. Its green across the screen, but the tech trade, which has been the leader for the last several days, and even months and quarters and years at this point, is the underperformer in todds trade. Well go through that in a moment. Its the dow up nearly 300 points, three quarters of a 1 gain there. So a laggard is the leader in todays trade. The s p 500, the broader measure, 5170 the last trade there, up about 20 points. At the highs, we were up 23. So near session highs. We were down 18 points at the lows of the session. Up one half of 1 there. And the nasdaq composite up 16,151, up 48 points, roughly 1 3 of 1 . So its the laggard in todays trade. I mentioned the technology trade. Crypto is part of that narrative right now. Bitcoin prices, currently down about 3. 5 , 64,800 and change. Remember, just in the last several days, bitcoin prices were above 73,000. Eit ether prices were above 4,000. Marathon digital, microstrategy, many stocks in that crypto ecosystem are down notably with todays trading. And specifically on technology, check out nvidia. The third biggest stock this the s p 500. Massive weighting over there. Nvidia shares now swinging to the upside. They were down solidly earlier today on the heels of blackwell, their new ai chip. Advanced microis down 4. 5 . But super micro down 9 . Theyll issue more shares. C3 ai, a couple of other ai names. Watch that technology trade. An interesting reversal for nvidia right now. Well see if it sticks. Dom, we cant help but watch nvidia. For a moment, well talk about the feds decision on Interest Rates in just about 24 hours away. We start with Steve Liesman and the latest results from the cnbc fed survey. Steve . Respondents to the survey for march seeing Slower Growth than last year, but showing more confidence in the soft landing, and less concern, of course, about a recession than we have seen in the past two years. Take a look, the recession problem bit has declined to 32 , the lowest since february 2022. Well down from the high of 63 in november 2022. The problem with the soft landing is that 52 , up from 47 in the january survey, and 40 in july. Here are the numbers. Gdp, 1. 61 expected. Slightly below trend. But a lot better, well see in a second, than had been, the forecast before. With the economy going back to whats considered to be potential next year. Cpi comes down over a twoyear period, to just about what the feds target is, because of 2. 5 on the cpi is equivalent to about the 2 on the pce. Theres just 0. 3 of a current uptick of the Unemployment Rate over the next two years. John donald writes well, well see about this. Look at what had been the forecast for this year. It has come up over four separate surveys now. Almost double what it was. Really the first time we havent seen a big slowdown in the forecast over the last two years. Now, the current level, you see it again at 1. 61 . One critical debate for the fed if the recent surge of productivity, 28 hope its the beginning of a longterm shift and 16 call it due to normal volatility. Importantly, the average neutral rate for respondents, 3. 1 , a bit higher than the feds 2. 5 , which is to say respondents dont think the fed is quite as tight as the fed itself believes it to be. All right. Steve, stick with me. Our next guest says the market and the fed are currently aligned on three cuts this year, but says it doesnt take much for the fed to scale back to two. Joining me now is paul mccallie, former chief economist and adjunct professor at georgetown mcdunna school of business. Paul, whats the big open question when we hear tomorrow from the fed . I think there are a number of them, most important will be what the results of the dot plot are. And it drives me nuts to have to say that, because i think the essential message of the fed is pretty clear. And that came clear last december when the fed rhetorically pivoted and put three cuts into the outlook for this year. Between then and now, the marketplace has been all over the place. But theyre in alignment right now, theyre in a really good place of alignment with the fed. So i dont think that the fed needs to change anything really in the dot plot. But because of how it comes together, you do want to have two fed participants move from looking for three to two. It would flip the median to two. But i think that if that happens, chair powell can clean it up in the pressure. The fundamental message from the fed is the same its been since effectively he laid it out to the public in 60 minutes is that tightening is over, easing coming, not too far away. Most likely to start in june, and three cuts this year. And that is, in fact, my base case forecast. Paul, as we get closer to june, though, does the language have to shift at all . If he says the exact same thing, does that feel like, well, maybe its farther out than june . I dont think it will say the exact same thing, but to your point, there will be three sets of inflation data and job data between here and june. And they will need to be a little friendlier, particularly on the inflation side than theyve been so far this year. But that is essentially the path. I think chair powell will note weve got three more looks at this whole thing, so hes not going to pound the table about june. But hes not going to push back against it would be my bottom line. Steve liesman, how much of an issue, a sticky wicket is the Services Inflation that we see being pretty stubborn here . I think its still an issue, still something that hes going cite as part of the reluctance to begin cutting right now. I think thats going to be an issue. And also this level of confidence that it will take to get the Federal Reserve to cut is an interesting question. January and february are almost a complete reset, john. This is a bit like youre trying to pin down a wrestler and the ref says one, two, the guy gets up and you have to start all over again. We have to get three in a row here. We really havent had it weve had a good 2023 when it came to inflation. Things came down. But now were kind of stuck. Theres a couple of really interesting policy questions the fed has to make here. The most interesting to me is this one about the sacrifice ratio. Essentially, how much is the fed willing to give up in terms of economic growth, in terms of unemployment to get to that last part or the last one percentage point we need to get to the 2 target . I think thats a question it might be interesting to hear powell respond to that. Steve, siis it me, a year ana half ago, people were saying the fed doesnt know what theyre doing, soft landing is next to impossible, theyre ruining it. Yet here we are, and it kind of looks like people are coming around to maybe the fed is going to do what they said they were going to do, and maybe they havent botched this whole thing, no . Yeah. And i think that comes down to the question, john, of how much time the fed has to decide here. Youre right, a lot of people were very wrong about the fed last year. They were not open to the idea that things were substantially different in the wake of the pandemic than they had been on previous tightening cycles. But it does remain a question about how much time the fed has to get this right. There are companies that are going to have to refinance. But we still have those decent Growth Numbers built in, in terms of the forecast. But i think its also important to say that some of those forecast jobs are contingent upon rates coming down. Paul, whats the most concerning maybe is too much bias on it, but im looking at some of the consumer numbers, the employment, the labor market numbers and things loosening up a bit. What do you think is the most important thing that the fed is going to have to keep an eye on and consider over the next several weeks . Interesting you said over the next several weeks. I dont think theres anything explosive going on, on the credit side of things. Those are things that we monitor looking out over the next 6 to 12, 18 months. I think looking out in the weeks immediately ahead, the fed very much does want to see in the next couple of series of inflation friendlier data and i think it will, including on the c pmpx i. Because last month, each though it was greater than expected, we finally saw a crack in ownership equivalent rent or o. R. E. That was huge. So i think were going to be tamer on the cpi data going forward, in part because of o. R. E. They will be focused on that from the standpoint of economic wonkery. And they will be focused on just how exuberant risk markets are. They have put in a huge amount of accommodation in the marketplace already. So i dont think they want the marketplace to run away from them again from here. So i think they will be looking at the data and also looking at the environment. But more fundamentally, i think the decision has been made that theyre going to start an easing process this year. In fact, chair powell told congress that. So i think the decision has been made, so there has to be some type of data that would change that core strategic decision that would disturb essentially the path that were on for the cycle to begin here in the second half of this year, most likely starting in june. And if its july, thats okay. Right. Well, were kind of like kids in the back of the car, are we there yet . Are we really going to start cutting . Paul, Steve Liesman, thank you. Following a year of major gains in tech, our next guest is sticking with that trade from here, but doing it in a specific way. For more, were joined by the potomac Wealth Advisers president. Mark, youre trying to get away from some of these companies that have been big tech players and make gone up a little too fast. How do you do that . Well, you use the tried and trued principle of diversification. A lot of investors are not aware if theyre in the s p 500, theyre in the triple qs, they own apple and microsoft and other big games, and theyre massively overweighted. In the xlk, mike crosoft and ap are over 42 of that allegedly diversified tech etf. So we want to offer that same comfort of diversification, get away from the mag seven and use a more equal weight approach. First trust has a nasdaq 100 more than equal weight etf. This way we get exposure to the great industry of our time, not only great within itself, but making techenabled companies great and we allow it to have a less risk profile and move away from the mag seven. How strong a gut do you have to do that, though . Theres this russell 2,000 problem that things that arent big havent been performing well, especially when there are Interest Rate concerns. Great point. These are also large companies, names we know. Theyre just not small and emerging technology. Theyre established Tech Companies that may be a little more overlooked. But on the smallcap trade, if this economy keeps going and the fed has to sit on the sidelines, that typically is a Good Environment for small cap. We think that small cap growth side would be a little better for that, because we are a little concerned about small value and their exposure to community banks. Speaking of community banks, how do you view that and the region al bank issues . We look across multifamily and office, and we see some spots of trouble. Well, we are learned about Small Community banks. Theres a couple of reasons. One is a massive structural disadvantage they have in the kst of deposit gathering. If you talk to Bank President s, they acknowledge a an internet based bank have at least a is00 basis point, if not 150 basis point advantage in gathering deposits. That will crush a profit margin when your coast of goods sold goes up. I think thats simple, people forget about it in banks, but thats how bank profits start. We also think the real estate exposure is a bit of a bubble. Backs have been restructuring qu quietly, and we think small and midsized banks will face the bigger brunt of that pain. Catch out. Showing the kre there. Mark, thank you. Coming up, nvidia trying to continue its record winning streak after the company unveiled its latest generation of ai chips. Up next, when theyre coming to market and speak with the ceo of one company that has a new partnership with nvidia and is on wall streets watch list for a potential ipo. Plus, talking oil and gas. The ceo of slb, normally known as schlumberger. Later on, the cbo will join us from houston. The exchange is back after this. Welcome back to the exchange. Nvidia unveiling its lateest ai chips. Heres what the ceo told jim cramer about the investment behind the announcement. This will cost 30,000, 40,000. How much did you spend to develop snit the very first one, the rnd budget of this generation, is probably Something Like 10 billion. Not million, billion. Billion dollars. Billion with a b. Christina was at the conference for day two in california. Christina . Reporter nvidia is not a chip company, its an algorithm first company. The ceo just finished up a conference down the street. It felt more like he was positioning the company as a Cloud Service provider before all else. He said, weve basically run everything. They provide the prebuilt ai models called nvidia infrens microservice, costing companies around 4500 per year per cpu. It is a reduring source of revenue and shows how they plan to monetize software. Earlier and through the sound bite, jensen said that chip will cost between 30,000 to 40,000. But to follow up on the specific chip and if others would cost more, they wouldnt clarify. So were not sure which chip he was referring to. We should, as said on the recent earnings call, expect supply restraints. Another important takeaway from his comments today was about the 1 trillion total addressable market. Its those were the comments that helped reverse earlier losses in the share price. The stock is still up 82 yeartodate . Yep. Fractionally higher now. This is the message jenson has been trying to hammer home for a couple of quarters. We heard it after earnings most recently, but he has a big stage to do it on now. Its interesting to understand what hes talking about charging customers per gpu, to keep their software and offerings up to date with the latest technology, backward compatible. Its like apples app store, right . You pay to be on it, you pay to remain updated, and its an ongoing stream of revenue, doesnt have to keep on selling chips to make money. Yeah, which makes the switching costs so high, which does not bode well for competitors in the market, which is why you saw the negative reaction in amd stock price. You had nvidia not only with the gpus but the software thats used by a lot of developers. Now this entire package, you know, with prebuilt ai models that theyre offering. The license we just talked about at 4500 per year per gpu. That makes it even more difficult for companies to switch. I thought it really telling that he said today, we run everything. Thats a bold statement, and maybe i guess a rethink when we just refer to this company as a chip company now when really they are claiming theyre more algorithm and software first. Might be a little uncomfortable for aws and microsoft azure. Catch more of jenson haungs interview tonight on mad money at 6 00 p. M. Eastern with jim cramer. Well, nitd is an investor, and my next guest Just Announced an expanded partnership with it at gtc yesterday. The current valuation of arnoun 43 billion. Joining me now to discuss all of this, ceo and cofounder ali. Good to see you. So many nvidia partnerships getting floated around out there. I saw snowflake had one, too. Whats special about yours . Customers are coming to us saying we want to build our own generative ai models. So there are those smart ones out there like chatgbt. But enterprise wants their own to compete with their competitors and have their own ip. So we have built the most number of custom ai models, and we do that on nvidia chips. Were excited about the blackwell 200 coming out and many of the other movements happening in this gpu space. Everybody is interested in building their own ai models today. Are you comfortable that you see the limits of nvidias ambitions here, and where its safe to partner, versus where theyre saying jenson is saying they do it all, are they going to do what you do . I think theyre amazing at that particular thing. They do also many other things, but the time for ai is going to be gigantic. It impacts anything on the planet thats happening. So there will be room for lots of players. If someone should be worried, databricks is not number one on the list. I agree. That makes sense. A couple weeks ago, you were saying that you expect the price of accelerators, just the chips part of whats being used right now to develop a lot of these models, you expect the price of that to come down in the next couple of years. Is that still your expectation . Because it sounds like part of what jensen is saying about nvidia, we do a lot more than just sell chips and people will need this technology for inferencing, as well. I wasnt commenting on how nvidia will do. I think nvidia will do fabulously. Im commenting on the cost of gpus. The supply is increasing because so many vendors are coming to the market with their own variants. Theres just theres been so much demand for these, and supply will increase this year. Were already seeing it when we talk to the folks that sell these. Before, it was you have to commit to me and buy lots of them three years in advance and pay for it in 24 7. Now negotiations are lightening up saying just commit to one year, or buy it for six months and the prices have come down in the negotiations. So that is happening. Now, nvidia is on a tear, and theres no doubt about it. Ali, what industry do you expect well see the needle moving productivity gains in ai show up at the macro level first . Its already happening in customer service. Thats the most obvious one, right . Were also seeing it now start affecting Financial Services. So Financial Services are using this generative ai model to sift through massive amounts of financial documents. S. E. C. Filings and so on and just extracting, you know, is there a signal anywhere . Can we improve alpha . Insurance companies, they want to do underwriting and assess risks. Again, these largelanguage models can sift through massive amounts of documents. Classic ai, its not just generative ai. A customer like rivian figures out how do you optimize the battery of your car, et cetera. So this will impact every industry, but the ones i pensioned are the first ones coming up. I thought about communication in marketing when i saw ibms layoff news. They didnt put it out there, but it got put out there maybe some of the people in those Industries Need to worry if generative ai can generate content. I think people got overexcited. This is like 1999. The markets price in the next ten years of innovation, and they said okay, were creating super job, and all jobs are done by the end of to 23. None of that happened. So whats going on now . So i think this is a little bit of resetting happening in expectations. I think this is going to be amazing, just like the internet was. But it takes years for people to change their jobs, how theyll use this a adopt this technology. Even if we make amazing revolutions in ai, if no human being wants to use it, you have zero impact. So we have to get humans want to use it. Speaking of expectations, could we expect databricks to ipo in 24 or 25 . This is an interesting year, election year, a lot going on around the world. We have Interest Rates. They were supposed to lower them, but i dont know whats going on there. Okay. Dep depends on market conditions. Who knows . Ali, thank you. Still ahead, the countrys housing shortage is going to get worse before it gets better, according to the ceo of one real estate manager and developer. Well ask him why, and what hes doing to take advantage of the trends he sees. Thats when the exchange comes right back after this. Than help you reach your goals. You can make this work. We can make this work. It can help you reach them with confidence. No wonder more than 9 out of 10 of our clients are likely to recommend us. Ameriprise financial. Advice worth talking about. Welcome back to the exchange, everybody. Im Tyler Mathisen with your cnbc news update. The white house said u. S. And israeli officials will meet early next week in washington to discuss israels pending operation in rafah. The meeting comes after joe biden and netanyahu spoke on the phone yesterday where biden urged israel to allow more humanitarian aid into gaza as reports of famine in the area have been growing. Hawaiis attorney general is blaming the delay in the release of a report into the deadly 2023 lahaina wildfire on county agencies in maui. The first part of the investigation is now not expected until april 17th following delays in gathering Key Information needed for the report. The ags office says it had to issue subpoenas to three county agencies over their slow response. And netflix is taking viewers back inside the huddle with a new football docuseries with the perspective of some of the nfls best wide receivers. Receiver will follow several pla players during the 2023 season. Amman st. Brown, hes a lion, i knew that. John . So much easier when it was jerry rice. Tyler, thanks. Coming up, we go live to houston with the ceo of Oil Field Services firm slb. His take on global oil demand, reducing emissions, and the role ai will play in the energy space, next. Theyre waiting for you. Hey, do you have a second . Theyre all expecting more. More efficiency. More benefits. More growth. When you realize you can give your people everything, and more. Thank you very much. [applause] ask, now what . Heres what. You go with prudential to protect, empower and grow. With everything you need to deliver, you guessed it. More. One more thing. Whos your rock . Learn more at prudential. Com wealthchanging question are you keeping as much of your investment gains as possible . High taxes can erode returns quickly, so you need a taxoptimized portfolio. At creative planning, our Money Managers and specialists Work Together to make sure your portfolio and wealth are managed in a taxefficient manner. Its what you keep that really matters. Why not give your wealth a second look . Book your free meeting today at creativeplanning. Com. Creative planning a richer way to wealth. Welcome back to the exchange. Energy prices hovering near fourmonth highs with both west texas and brent crude a little up more than a half percent today. Lets go now to houston with Brian Sullivan who is with the ceo of slb. Brian . Thank you very much. Yeah, the company formally known as schlumberger, the largest oil and gas firm in the world, energy transformation. What is the relationship for your investors watching between the price of oil and your business . Because i would view you as maybe the ultimate leading indicator of the energy economy. I mean, we need to look at the pricing as an indicator of future demand. And our view on the demand of oil and gas is very positive, and it has constructive implications to the longevity, the strength, and i think we benefit from longevity of the cycle, our exposure to the international markets, to fit and to supply this demand that we see. So it can only be indicative of stable Investment Opportunity for our customers being exposed to technology. Even the International Energy agency, they just raised their demand forecast, probably reluctantly, for this year and for next year. So it sounds like youre pretty optimistic about energy, oil and gas demand. I think it has been, for a long time, and for decades, a direct correlation between the economic goal and oil and gas demands. I think this has, over time, transformed our efficiency and there are energy still oil and gas is still the basis for hitting this energy goal and demand growth, and we are very pleased to be working on that. You stole my next question. You know, john, they were talking about nvidia today. Were talking about ai, artificial intelligence, the growth of data centers and the growth of energy demand. Whats amazing is what im learning here, and it sounds like what youre saying, please confirm, Companies Like slb, we think of them as energy, but youre an ai play, i think . We are technology at the core. Our dna is sound technology innovation. And we have a global footprint. So we have these two with a balanced strategy. Coal and gas, then tdigital, an capital efficiency and the next level of transformation, and energy. These are the domains we have invested the last 30 years. I think we have we didnt miss the ai confirmation. This is breaking a new paradigm of digital operation, being autonomously run, automated and setting a new benchmark when we introduce it. You have to do it responsibly, because climate, climate change, net zero, thats a macro theme here. A lot of people just want the hydrocarbon industry to go away, but its not. Nobody is saying it will, and anybody you look at, its only going to grow. How do we do it, growing demand and supply but not damaging the planet more than we are . Our responsibility as an industry is to help accelerate the industry. Today, the oil and gas operation are emitting, and are consuming quite a lot of energy to explore and produce and possess the oil product and the gas product we sell to the market. Our first and bigger possibility is to work in partnership to accelerate. I think we have a more responsible future as an energy industry. I think we will be more balanced the way we pull out the oil and gas product, and at the same time, decarbonize oil and gas, with a net zero foot print for construction and pollution. Everything. This is the most efficient step change. Olivie, ceo of slb, we appreciate you joining us. John, you see what we did there. I know youve been talking about nvidia and ai all day. This too is kind of this is the stuff that makes the stuff that makes the ai work. So we had to were contractually obligated to mention nvidia every block. Brian sullivan, thank you. Coming up, joe biden opposing nippon steels takeover of u. S. Steel. The ceo of one u. S. Based company touting their advantages of getting a deal done. The name that could prevail, next. And i want to draw your attention to kering, expecting revenue to decline about 10 from the previous year, sending softness in the gucci sales in the asia pacific region, expecting revenues to fall 20 year over year. Shares of its unsponsored adr down about 8 on thanet ws. Well be right back. Next. Next. Stop. We got it . No. Keep going. Aga. [ sigh ] next. Next. If you dont pick one. Oh, you have time. Am i keeping you from your job. Next. I dont even know where i am anymore. Stop. Do we finally have it . Lets go back to the beginning. Are you. Your electric future. Customized. The fullyelectric audi q4 etron. You see the dow near session highs. Welcome back to the exchange, everybody. Lets get to some show and tell where we show you a chart and tell you a story. U. S. Steel is down 15 since wednesdays news that joe biden opposed its takeover by nippon steel in japan. The president says its vital to remain an American Steel company. On the other hand, u. S. Steel says the deal would benefit union workers, the American Steel industry and American National security. Cleveland cliffs started all this by making an unso lessis itted buyout offer in august, that was rejected and resulted in a bidding process that japans nippon steel won. But Cleveland Cliffs ceo is Still Holding out for a win here. I have full conviction that this deal between nippon steel and the union will never happen. We have an agreement with the u. S. Government. We have the right to bid on their behalf. We understand the successorship clause. Thats something that nippon steel has no clue about. And we are going to prevail. Well, coming up, Single Family Home Construction rebounded last month as the weather warms up and demand holds steady. But one developer sees more supply issues ahead, even if Mortgage Rates drop. Thats next when the exchange comes right back. vo what does it mean to be rich . Maybe rich is less about reaching a magic number. And more about discovering magic. Rich is being able to keep your loved ones close. And also send them away. Rich is living life your way. And having someone who can help you get there. The key to being rich is knowing what counts. You can make money the hard way as a bullfighter or a human cannonball. Or save money the easy way, with xfinity mobile. Existing customers can get a free line of our most popular unlimited plan for a year not only will you save hundreds but youll also be joining millions who have connected to americas most reliable 5g network. Sure is a lot safer than becoming a stuntman for money. Get a free line of unlimited intro for a year when you buy one unlimited line. Visit xfinitymobile. Com today to learn more. Welcome back to kwts the exchange. The spider home builder etf higher today after the Housing Market shows more signs of resilience. February starts posting their biggest increase in nine months. And diane olic joins me now to look closer at that data. Strong buyer demand pushed Housing Starts higher in february specifically in Single Family, rose to the highest level since april of 2022. Up nearly 12 from january, multifamily up nearly 9 . While Single Family is up 35 from february of last year, multifamily is down about the same amount. And thats because there is an oversupply of rental apartments right now with record new supply coming online. Now, Mortgage Rates were slightly higher in february than they were at the end of the year, but builders have been buying down those rates aggressively so they dont affect new home buyers as much as they do existing home buyers. Building permits, which are an indicator of future construction were up just 1 for Single Family from january and stronger 8 for multifamily. Compared with a year ago, Single Family much higher and multi, much lower. The builders said demand for Single Family was brisk, so it looks like well see stronger starts in the coming months unless theres some dramatic move higher in rates. Jon . Diana, is the incentive that were seeing across different segments in line with those same fluctuations in demand, whether Single Family, multifamily, et cetera . Incentives in terms of what . In terms of paying down the mort gauge rates for people. Yes, absolutely. Right, incentives for Single Family are your bind on the Mortgage Rates, adding amenities to the home and some cases lowering the prices. Rental side, rents are moderating coming down a little bit. Youre not seeing the concessions you used to see maybe one or two years ago. So, again, youre trying youre seeing actually more concessions than you would have one or two years ago. Two years ago there was so much competition that rents were rising and the landlords didnt have to do anything. They might add the parking in for a couple months or free months rent. Were see more concessions on the rental side. That makes sense. I was thinking of condos. That wouldnt fit. Thank you. Despite a strong february for construction, our next guest expects the housing shortage to get worse in the near term, even if Mortgage Rates come down. Joining me is David Oreilly. Howard hughes, develops, owns and operations mixed use real estate and commercial and resid residential. I want to start on incentives. Across different markets an different price points youre on the higher end here. How much are you needing to incentivize . Well, were selling lapd to the Home Builders. Our home builder partners selling the homes really only insent i have theyre putting out there has been a rate buy down. And most of that has been relatively modest. We have seen public Home Builders post margins north of 25 . Some close to 30 for almost two years now. Which is a sign of their strength. And its representative of the supply demand imbalance. We have so much more demand than theres supply. The amount of incentives a home builder needs to offer is not meaningful. What about the labor to develop that land. For a long time especially during the pandemic it was really tough to get the labor and materials needed to get the building done. How has that shifted . Its become a little easier. The labor is more readily available. The materials we need, 16 foot sewer pipes are not off the shelf at home depot or lowes, coming largely from overseas. Were able to get those materials at appropriate pricing these days. Whats the power of cash in this market . I imagine if you need to borrow a lot to get a project done versus if youve got access to capital it makes a big difference. Yeah. We sit on large cash balances at Howard Hughes for that reason. Being able to put more cash of equity helps us achieve loans in a difficult lending market. At much lower rates. You say youre seeing a lot of demand for the higherend amenity communities where you have your pool and your fitness and whatever else right close to you and youre close to work. Thats interesting to me. I dont know if its unique to areas where youre operating because a lot of times in hot real estate markets you see people pushing out to the suburbs to get what they can afford. Demand right now is quality of life largely driven to access to outdoors, access to trail system, Great Schools for their children and short commutes to work. As this return to office is continuing to take hold,having a five or tenminute commute is so much different than an hour train ride is driving a lot of buying decisions. Were seeing more and more folks moving into our communities everyday seeking that quality of life. Is there a flip side to that where there are people who moved farther away when remote work looked like it was more of the future than it is . And now the demand has shifted . Yeah. We have seen a remigration into these walkable urban communities. Bridgeland outside of houston, those live, work, play, learn, discover communities middle of the bullseye for consumer demand right now. There have been some stories out there some months ago about designs changing so that homes were smaller, so people would be able to afford them. Are you not seeing that in the markets where you operate . No, were absolutely seeing that. Over the past five years the average home size has come down 8 to 10 is but still double what it was in the 80s. I dont know how you grew up, i had a bunk bed and shared bathroom down the hall. I think now everybody has their own onsuite bathroom, home office, threecar garage. Consumer demand over the past four years really exploded in terms of the size of the home. The price per square foot of the home hasnt meaningfully outpaced inflation. A lot is consumer demand, not just it costs that much more to build a home. Brown stone and bed sty here, not a mcmansion. I guess it shrunk a little bit from the peaks but not to normal. Its great to have you and your perspective on whats happening in the Housing Market which affects potentially all of us. Thank you, David Oreilly from Howard Hughes. As we look at the markets, there had been quite a rebound in the major averages, starting around 11 00 a. M. Right up into the 1 00 hour. You can see there, the dow Holding Steady near the highs throughout this hour. But not exactly clear how thats going to end up. Thats why you have to keep watching cnbc. That will do it for the exchange. Ill see you back here at overtime 4 00 p. M. Eastern. First, power lunch is next after this quick break. T friends youve been a huge help. At ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. Our neighbors, the garcias, love working with you. Because the advice we give is personalized, hey, john reese, jr. Hows your father doing . To help reach your goals with confidence. My sisters told me so much about you. Thats why its more than advice worth listening to. Its advice worth talking about. Ameriprise financial. Rylee from rylees realty hi this listing sounds incredible. Lets check it out. Says here it gets plenty of light. And this must be the ocean view . Of aruba . Huh. This listing is misleading. 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But lets start with a check on the markets right now. They are higher across the board. The dow getting a boost from home depot, which wa