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tv   The Exchange  CNBC  April 22, 2019 1:00pm-2:01pm EDT

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welcome back let's do final trades. margaret, kick us off. >> apply materials >> diamond offshore. go with the calls. >> xbi >> alphabet and constellation brands >> all right good stuff thanks, all. "the exchange" begins now. thank you, scott hi, everybody. here is what's ahead today more pain at the pump. oil is surging as the administration ends sanction waivers from all countries we'll look at which stocks may benefit and which might be some to avoid also three words that are royaling health care stocks. medicare for all we'll look at whether this is also a potential opportunity to get in plus it's the hottest segment of the ipo market a shuffle button may be coming for netflix. and a celebrated ceo gets ousted dom will join us for that. but first the markets. >> the markets are right now
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stable we'll say they're stable mixed if you look at the overall picture, the dow industrials off just a whopping 0.1% not much going on there. however, we are seeing a bit of green in the s&p 500 it just peaked there in the last hour or two. so where is the activity in the markets right now? well, one of those sectors or industry groups is the home builder side of things you can see the ishares dow jones u.s. home builder ticker, itb, is off by almost 1% worst levels of the day. some worse than expected existing home sales numbers. but remember, this is an etf that's gone up about 33% since the lows we saw back in december so home builders are focused right now. also if you're looking for the stock of the day, kimberly clark behind huggies and clokleenex, o at this. better than expected earnings. better than expected sales they reaffirm their outlook. and that consumer staples trade
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huge procter & gamble coming up tomorrow. >> we're giving huggies a lot of business lately. welcome to "the exchange," everyone the president says herman cain has asked him not to nominate him. meantime, existing home sales down in march. sales fell across all four regions from the company and the nasdaq is now less than 2% from its all-time highs and the big cap tech names have regained almost more than their losses now let's go to bob pisani >> 3300 reports earnings this week only a few reporting today, but all three are reporting earnings well above expectations. and that has been the main story for this earnings season so far. typical earnings beats, they're about 3% a look at kimberly-clark oil services giant halliburton
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beat by 5% maintenance firm ww granger only saw a 1% beat. they affirmed their full year guidance halliburton is off its high at the open and grainger down on weaker revenues. pricing is the key here. kimberly-clark says they were able to raise prices to offset currency costs and halliburton says the worst is now behind us he's also cliekly talking about oil prices as well so the bottom line is this if you have pricing power, you're fine. but if you don't, that means margin erosion and a hit to your bottom line. >> and they're just getting started this week. let's zero in on oil prices a little bit more. they can spiking today with crude and brent both hitting their highest levels in six months
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crude is now 45% this year halliburton and its earnings this morning said it believes the worse is over for the industry joining me to talk more on this is john kilduff and mike kelly welcome to you both. michael, i'll start with you because halliburton's commentary was interesting but it's not clear investors take them at face value they seem to not be convinced at the levels does the sanction level change that >> i think it's a big deal we're already in a market that we're really undersupplied the global market for oil is about $100 billion a day market. if you're going to take that off the market, that's a big deal. we'll iend v to find out that. >> and why is it that we're so tight in terms of the supply picture when we've talked so
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much about how the u.s. has caught up and contributing in a big way to the oil supply picture zm. >> saudi arabia. they've worked hard to cut back to reduce supplies them, the russians, uae. and it's worked. they've also had help from the implosion of venezuela and the fragile producers like nigeria and libya in focus >> why do you think the administration has acted now when they push the gasoline price lower? he knows people are feeling it at the pump. why would they make this action knowing it's going to push up crude prices do you think it's just important enough that we have to take the consequences of it >> i think this is a clear victory for the hard-liners within the administration. he wanted these waivers gone he wanted zero to mean zero. that's what he's getting given where saudi arabia is, though, it's interesting if they've really done the math and the calculus
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saudi arabia has got a ton of sfar capacity. as do the russians they finally figured out that they can take as much iranian oil off the market and saudi arabia if they're willing to can fill the gap. >> do you expect that to happen? again, if we're talking about people filling in the gap, that would seem to keep a cap on the oil prices a lot today are up 3%, 4%. >> yeah, i do expect that to happen i don't think trump makes his move unless he has really assurances from saudi they can take the 9.8 million they produced in march and take that up, you know, at least to the levels that they're taken off the market from iran >> so in that sense halliburton investors are right to shrug this off, right? thinking okay, let's think this through. the barrels coming off will be replaced by other suppliers. maybe the price spike today is short lived, but we have gone up 45% this year. you think that they're right when they say, look. we think this is now, you know,
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we're -- is it going to keep going? >> you know, i think investors right now have seen a lot of carnage over the last five years. so they're a little bit, you know, they're reticent before they claim victory here and pile back into the space. john went over the stats there it is a totally different market than we've seen in some time >> so you're bullish on both the names and the price right? >> i am. the names aren't up at much as oil is year to date. >> so the names can do well even if it doesn't move much from here what's your forecast for the oil price then >> it's touch and go for me. i still don't like the economic data that keeps flowing out of asia they're troubled export numbers keep falling. so that's the head wind i see. whether we like it or not, this
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general haftar who president trump called and has apparently backed now, that could set the table there to stabilize libya and see libya's oil output flow much more regularly than it has over the past five years i think there's bearish arguments. i don't think it's super bearish though and we're certainly vulnerable >> right >> but i think -- you know, i think the worst is over. i also think a different play in the permian right now is the advent of the majors coming. >> guys, thanks. appreciate it. now to shares of tesla down more than 3% this afternoon. company holding an investor day and will highlight autonomous driving. the focus is also on its earnings coming up this wednesday. and all of this is after tesla changed its board late last week and after video surfaced of one of its cars exploding in china
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phil, tesla also got a big share price downgrade this morning >> continue to underwhelm expectations >> i think it's the unknown remains. not just for the model telebut also -- lowered the price target down to $240 essentially their thesis is we're not entirely sure that we're seeing the s and x be cannibalized by the model 3. we believe those vehicles may be under greater pressure over the next year. that's why evercore downgraded them if you put this all together, the main question remains, what is the underlying demand for tesla vehicles worldwide >> sure. charlie, do you get any new data
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points on demand at this stage >> i think on wednesday we might hear how q2 is starting to progress and i think that's a hugely important question i think phil hit the nail right on the head. the final two quarters of 2018 where tesla posted a profit, they had a year's long bag log they were working through. in q1, sales were down while expanding into europe and asia new continents have been tapped already. in the u.s. we're going to start to see tax credits reduced again and more competition at the higher end come online >> what do you think about the autonomous announcement today when lately so many people have been skeptical about this science being ready for primetime. why are they doubling down by making this announcement >> well, it comes really soon after the model y unveil a month ago. that kind of came and went without much of a fervor
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it looks like tesla is on to the new thing. i don't care if they show a flying car in two hours. i think that's matters is the earnings and the focus should be there wednesday night. >> phil, similar question. they've also been restructuring the board since just over the weekend. is that a response to -- what do you think was the catalyst for those changes? >> the timing is curious, kelly. it comes as elon musk's attorneys, tesla's attorneys, and attorneys for the s.e.c. are still discussing how to modify the agreement that calls for his communications whether it's on twitter, facebook, whatever. social media communications or any communications for them to be preapproved by tesla before they are sent out. remember, elon musk is saying if i want to send it out, i'm going to send it out
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the judge said work this out so i find the timing of the board restructuring, the time these board members are going to leave over the next year and a half and the terms are going to be shortened, i find that curious. does that mean we have more independence on the board and you're going to have more influence on elon musk, oversight? i don't think. i think this is elon musk's company. what he says it does and that is not going to change. >> charley, quick last word on that >> i think phil's been reading my notes that's exactly what i would say as well. >> or are you reading his? >> it's elon musk's world and we just live in it. >> i'm looking forward to the flying car thank you, both, very much again, those shares still down more than 3% this afternoon. here's what else is ahead on "the exchange. >> coming up, investors fleeing the health care sector as three little words caused fear medicare for all was the selling overdone
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or could more pain be ahead? twitter, snap, and facebook set to report this week as they all hit a wall in user growth. and could a four-day workweek be the future of work and they've got the numbers to prove it
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welcome back to "the exchange." a news alert for you samsung is formally announcing it's going to delay the release of the highly anticipated folding phone called the phone after getting reviews about malfunctioning you can see our own scott hayze lton had issues with his savm sung saying to fully evaluate the feedback, we have decided to delay the release of the gayle ax laxy fold. the original release date was this friday, april 26th. for now they folded. we'll bring you the updates when we get them. meantime, health care is the only s&p sector in the red this year it just suffered its worst week since christmas. we're curious. is the selloff on overreaction on the campaign trail or will they remain until after the 2020 election let's bring in michael ge and
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les runlighter welcome to you both. les, first of all, to see a name like united health get slammed as hard as it did, why are investors so skittish about bernie sanders' talk about medicare for all >> the reason is i don't think they understand the legislative process and probably should revisit the school house rock. >> these investors are smart enough to know this is campaign rhetoric why are they reacting so severely >> is the other issue is health care has outperformed basically the last decade. i think people have no appetite for sticking around especially when you have other sectors doing better for the non-health care specialist, they don't want to deal -- >> does it make sense to you i'm happy to bayou nieted health down for whatever it is? >> we have lots of dry powder. we're excited about this
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prospect we nibble. i don't know that we'd jump in every second but over the next year this is going to be great. >> so it'll create opportunities for you? >> yes >> michael, let's talk about the pharma, biotech side of this what are people fearing could happen with this talk about medicare for all >> yeah. thanks i mean, i think in the short-term people are obviously thinking about every dooms day scenario whether that's single payer system, whether that's medicare negotiating drug prices which could, you know, match europe, hit revenue earnings a ton. but i think what les alluded to which is how people are taking bets off across the board saying health care had a big run, probably due for some profit taking let's re-evaluate. and i think it's probably by an opportunity if you have a six to nine month time frame. >> are there any parts you think is interesting here? >> we do
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at least we like gilead trading at an all-time historical pe low. super cheap. we like vertex which is the best growth in the next five years. pulled back 25 bucks just in the past month or two on nothing we like those two names in large biotech. >> les, what about you you mentioned you don't think people have to jump in here because there's only going to be a week you think we're talking about a period of many months. >> we do and our preference is companies that don't even -- where reform doesn't matter it's coming to bioscience which a twist in manufacturing a leader in stroke cures even things in emerging markets like a callis which is a long-term care company in chile. things that are not relevant but
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innovative >> where do some have to fall far value oriented investor like yourself >> we already own united so we would be adding at some point in the future, we'll see how fundamentals play out. but there's no reason to do it this second. >> why are you so patient? for anybody right now who thinks this is an opportunity to get in, you're telling them no these are going to be expressed for six to nine months >> you know, six months in the grand scheme of things doesn't really make that much of a difference to us so that's sort of our reason again, it's close to time scale. if you're a trader, you'd probably trade around here and there. we don't do that >> michael, same question to you. do you think we'll see sort of that -- if you say doomsday discount priced in up until we
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have more clarity on 2020? and we assume for them to rally we're talking about a candidate who's president trump or certainly not someone in the sanders profile being elected, right? >> yeah. well, i'll give you the short and the medium long-term the short-term i think is these stocks are probably range bound until at least we get earnings wish kicks off in a few weeks. everyone is scared about q1 earnings i think the stocks rally back some of the recent losses after earnings going into q2 i also think, you know, people are now saying with joe biden announcing his potential presidency, that's a bit of a counter to the bernie sanders camp there's a little bit of rally off that i've seen this time and time again whether it's the hillary tweet or obamacare, there's always this big move down off initial fears. then there's probably a trading bounce from that but i agree over the medium to longer term, we probably need to get some sense about the 2020 election that's going to drive it in the bigger picture for these drug
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names. >> some ideas in the meantime. guys, thank you both for much. coming up, a four-day workweek sounds pretty good. does it actually work? we'll talk to one ceo who's tried it, what it's done to his company and employees. it's part of our series called a closer look. plus how some san francisco real estate agents are identifying their next big clients "the exchange" is back in two. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪
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welcome back to "the exchange." here are some of the movers this hour retail is in the red the xrt etf is on pace for its worst day. dillards now down more than 9% after a downgrade this morning and sticking with retail, bed bath & beyond is changing its board with five independent directors departing and the two founders stepping down as co co-chairmen. this a -- the shares down 4% on that news. and boeing is under pressure after saying production and safety concerns with the boeing dreamliner boeing says the story is skewed and inaccurate now over to courtney reagan for a cnbc news update >> here's what's happening at this hour. people in manila scrambling to evacuate office buildings after a powerful earthquake hit today. the 6.3 magnitude quake was
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centered about 37 miles northwest of manila. government officials say some buildings were damaged no injuries reported medicare and social security facing shaky fiscal futures. according to a report by the government agency that oversees the programs, medicare heading to insolvency by 2026 while social security would become insolvent in 2035. and the white house holding its annual easter egg roll its biggest social event of the year it attracts some 30,000 children and adults president trump welcoming everyone to the festivities. >> this is 141 years that we've been doing this. i don't remember the first one, but last three years we've had an awfully good time and i have to thank our first lady she worked so hard on this event. >> that's the cnbc news update at this hour kel le, back to you. i like the pictures of the kids with the easter bunny.
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at these events. >> i could barely get an easter basket on the table. >> you do what you can >> an easter egg roll for 30,000, god bless. here's what's ahead on "the exchange." >> coming up, the under the radar ipos that you should be watching with a new ceo be enough for kraft? netflix, the romance killer? and big ads on small screens it's all ahead in rapid fire phones down. jusr we need a solution. introducing... smartdogs. the first dogs trained to train humans. stopping drivers from: liking. selfie-ing. and whatever this is. available to the public... never. smartdogs are not the answer. but geico has a simple tip. turn on "do not disturb while driving" mode. brought to you by geico.
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i think we should spare everybody this discussion topic. let's catch up on a few stories that should be on your radar welcome back it is time for rapid fire. here with youric thats are dominic chu, seema mody and robert frank first up, got to talk ipo s. there are lot of under-the-radar names. we saw zoom's huge opening last week how about jumia technologies, pager duty all having megadebuts jumia is up 150% zoom up 77%. guys, i mean, this is a craze for one of the most boring
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sounding parts of the ipo market how did it get so hot? >> they're underperforming not underperforming, undercovered these are gems that you can still find outperforming analysts got to cover them more. these are the ones you can find an out performance in opposed to uber or lyft or pinterest. >> and pinterest has done okay 30% gain is nothing to sneeze at everybody is just burned by what happened with lyft >> to me the lesson here was the opposite i was surprised how many companies were doing so well when you looked at the business models there's one here fut 2 holdings. but the revenue maker is a subcompany that's got a weird relationship and they're under investigatio or inquiry for possible money laundering and the stock is up 27%. so this is the federal reserve creating a whole new wave of
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speculative bubbles because money has nowhere to go. and that's what's boosting all these stocks >> shouldn't we exempt anything -- i know hong kong is not china. but to me, you know them better than anyone. this is where we've seen so many speculative bubbles. they have real businesses and real technology and real customers. >> even if you look at the cloud companies like redhat, it took a lot of time for media and investors to pay attention to the cloud space. now we understand the application of it. but sometimes it takes time. >> and it's everything it's blue jeans. it's software. i mean, everything is getting lifted by the federal reserve. >> to seema's point, though, when people do catch of, that's when companies like ibm buy red hat, right >> totally >> even something like twilio. it's so funny you talked about the cloud, going back seven
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eight years, it's like what was the cloud? now it seems so obvious. >> sometimes we shouldn't just focus on the companies that we can resonate with or have that consumer brand but the engine behind it many times is a cloud service company. >> uber will do fine, but all of the brand names uber and airbnb, the thought is these are not the hot ipos >> some of whom make money >> let's move onto the battle of the consumer staple names. kraft heinz shares are up a little bit after the company anoubsed the ceo is stepping down effective june 30 meanwhile, kimberly-clark today, best stock in the s&p having its best day since october 2008 since reporting a big earnings beat for q137 what do you make of it? >> if anybody wants to see a chart of prospect procter & gamy are like 45 degree angles to
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theup side 23r the last six to nine months. so it trades at 19 times forward earnings that's the same as technology. if you look at communication services, that's 18 times towards earnings and the overall market is 17 times >> how much of that is pricing power and increasing is prices and how long can they continue that >> and how much of it is a defensive play, right? it's late cycle. >> i'm amazed because we've been talking about how they're overvalued for awhile. >> yeah. >> and some like kraft heinz have this massive reset where you go, investors were overly loading the boat they weren't seeing the full story. on the one side you have a complete reset and all the other -- many of the other names have their challenges too. then kimberly-clark is having its best day in 11 years
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>> this is a company specific challenge right? that kraft heinz is dealing with not only weak sales, but the federal investigation into the procurement practices. clearly a management change is in order we'll see if the new guy can get it right >> and what about bernardo that's been a story. this guy was one of the most admired ceo in the world a couple years ago >> and bringing in somebody from anheuser-busch, you had a giant brand that had to adapt to all of these craft beers and everything else. that's what kraft heinz needs to do is adapt to a healthier market >> they want to put the craft beer in kraft heinz. next, is netflix killing your love life? a new study and i don't know what to make of this claims one in four people turn down intimacy in favor of binge watching netflix but first, do we take this survey at face value that netflix is -- i thought it was
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netflix -- it was helping your love life? >> netflix and call. >> i'm going to call fake trend on this one. if you look at the survey they cited in the article which is a survey on american sex life, you find this is a decades' long trend that has more to do with people staying single longer and all kinds of sort of demographic issues going on way before netflix became popular >> this is just part of the story. >> so i just don't think you can pin it on that and they have some good anecdotes in there >> we've heard the ceo say his biggest competitor is sleep. he didn't mention hanky panky. >> i will say this i don't know about whether or not intimacy issues are stemming just from netflix. from a general point of view, people's consumption of media and attention spans have shifted a lot over the course of the past 10 or 20 years. >> i wanted a personal anecdote. >> i'm not sure my wife is going to be want me talking about anything with her and netflix.
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>> the shuffle feature sounds like an idea it says here's a random episode so you don't have to find it yourself shares up 3.4% today let's talk about venmo that app is reportedly set to enter the credit card business it's trying to be a profitable company, guys. also would help parent company paypal, of course, increase market share venmo had launched a debit card with master kard last year is this desperation or a logical next step? >> this seems counterintuitive as a consumer the reason i like venmo is it's an app and i can transfer money to a friend now to launch a credit card, that's the business that they were trying to compete with. it also reminds me of a different industry which is travel airbnb saying if you can't win, join them. maybe this is the natural avenue they have to take in order to be a profitable company but the credit card business is becoming highly competitive. apple and their latest launch event announced a new
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collaboration with goldman sachs. >> tons of perks and it can barely stand out from the pack >> it's a crowded market w, for sure >> it's scary the next big idea is a plastic credit card you're like, really? why am i paying "x" multiple for your earnings if that's your big idea there are so many credit cards i just -- you've failed to innovate when that's your next big idea >> it goes to show you if you are in financial services in any way, shape, or form, you can never get away from the universal model. >> yes. >> amen. especially now that venmo is being copied finally, those tracking maps -- this is a fun story. those maps you see on the screen in your airplane -- >> i use them all the time >> i love them >> the plane is so big that i'm like am i in oklahoma or florida? the plane is like that big. >> these maps are getting a big makeover they're popular. so they're going to start adding
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data about landmarks as you fly past them, what time dinner is being served i assume on the plane. a list of the most popular rides at disney as you fly into orlando. all of this is meant to generate more revenue for the airlines by monetizing ads in the apps >> upgrading the entertainment model, i'm all for it. i remember the days when you had the projection screen at the front of the plane and you had to look over the person in front of you to watch. certainly in-flight entertainment needs to be upgraded but it's showing how important content is i'm looking for the day when i can log into netflix on a plane. >> i like to put it on a zen feature. just show me -- >> and it zooms in and zooms out. >> what if they start adding ads? >> this was the total logical step anybody who's flown on jetblue,
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it's all ad sponsored. you see some of the sponsored content and then all of a sudden there's an ad for some company doing whatever on it this may be just the next logical step >> it was the last place on that screen where you didn't have ads. now it's gone. >> my fear is when you turn it off, now they'll say we'll just roll ads thanks, guys coming up, from open offices to email blackout periods. the way we work is changing. and more companies are taking steps to create a better work/life balance for employees. we're going to talk to the ceo of one company who made a four day work week official that's next. ♪ ♪ ♪
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so some businesses are trying alternatives like the four-day work week to help maximize productivity joining me now is andrew barnes, founder of the new zealand firm perpetual guardian and champion of the four-day workweek thanks for joining me. >> thank you good afternoon. >> how is this experiment going for you? >> it's going very well. i mean, we made it permanent last year. essentially what we do is we pay our people 100% of their salary provided they give us 100% of productivity but only have to work 80% of the hours. they enjoy it and we're finding great productivity out of it >> do you measure four-day workweek as any involvement with e-mail or do you just talk about you have to be physically present in the office four days a week? >> you only have to be physically present in the office for four days but i only expect
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you to work whether you're in the office or outside of the office only for eight hours on four days. so we don't insist on you -- we don't care if you're in or out of the office. it's the amount of time that is critical what we're trying to do is make that a much more smaller amount of time. and people have got more time to be -- to do the other things in life which are important. >> sure. so you're a trustee service company, right you do a lot to provide wills to people is there something about the nature of your work that makes it easier to do it not emailing over the weekend for example, opposed to if you were a 24/7 cable news channel >> no. this is all about working smarter. not working longer and we have this perception that you've got to work, you know, five days a week, 9:00 to 5:00 what we're really talking about is changing how people behavior when they're at the office that uk survey you talked about
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basically says that you've got a big period of time when you're in the office when you're not doing anything really productive or associated with the work. so what we're doing is saying change that behavior and if you change that behavior, you'll get better productivity and with the better productivity, you can give people a day off >> and the pluses are you don't have to commute. you're talking about a longer period at home with your family. but i wonder about that as well. what about childcare, for example? how have people dealt with the fact that, hey, they may have a four-day workweek but the rest of the world does not? >> yeah, but we actually say to our working mothers, if you want to work five days a week but compressed hours so you can drop the kids off or pick them up, and working dads, we're perfectly happy with that too. what this is about is saying to the employee, how do you want to work whatst the best way for you to work some people will want to come in
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five days a week what we're trying to do is say to them you've got to be the best you can be in the office and at home. >> do you complement this with video on fences or chat happens? is there technology that helps with this or why are other companies hesitant to make a similar move like this >> i think they're scared, to be honest we've all been conditioned about the five-day workweek. the 9:00 to 5:00 and actually, what we're saying is that if you engage with your staff, if you give them the opportunity to come up with ideas, if you say to them, hey look you know, if you do things differently, we will gift you this day off a week. what they do is they change how they behave at work. that improves the productivity, and that delivers that much higher output. but at the same time, gives you all the benefits of work/life balance, a healthier, more loyal, more engaged staff. >> well, we'll see if this idea can take off meantime, let us know if you
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have any openings. thank you for joining me andrew barnes is with perpetual guardian out of new zealand. as we said, we'll continue to cover these themes also, facebook, snap, and twitter all facing the same problem. but the fixes look different for each company we'll look at how each of these social media giants are used to boost growth ahead of earnings this week. we're back in two. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.
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facebook, snap and twitter are all and stalled user growth. julia boorstin joins us with the details. what are they looking for in terms of key metrics for each one? >> earnings and revenue numbers, kelly, but interesting to see how all three companies do with their user growth. looking back to fourth quarter numbers. fa facebook had 1.5 billion daily users and twitter 126 million monetizable daily and all making changes to help grow their
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users. mark zuckerberg to focus on stories and making money from ads and stories and now he's been talking about transitioning to that more one-on-one user engagement in messaging and try to make messaging off of that and make that safe for users twitter they talked about cleaning up the service and getting rid of the bots and the fake users and snap oep pening their doors and outside apps and launching a game service for all three of those companies, you want to listen to how those changes are impacting user involvement >> snap is the only one who is down from its ipo price. i think 30% down still do they have the most at stake or in a way is the bar easiest for them to clear? >> well, look, snap is certainly the youngest of these companies. its ad model has been around for the shortest amount of time. but look at the stocks increase since the beginning of the year. snap did beat expectations in
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its fourth quarter earnings that welearned earlier this year, so, even though it may be down from its ipo prices, still has seen significant growth in 2019 and snap is going in a different direction. just at this big partner announcement and the fact that they are opening the doors to integration with apps whether it's like tinder or netflix says to me they really want to move things forward in opening their doors. >> as for facebook and twitter in a way i'm surprised they're focused on user growth isn't montuization more important? >> the reason i put the daily active user number up there for facebook is i think their monthly active users, that company is so saturated, especially in developed markets. but what will be key is showing that people still want to return on a daily basis and that all of these negative headlines haven't impacted how people feel about actually using their products on a daily basis. >> that is a great point
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if they show any loss of daily active users, we know that will be a problem certainly gives us stuff to watch for. julia, thank you very much as we said, all three reporting a little bit later this week the 2019 tech ipo boom could have a huge impact on the san francisco housing market we're going to talk about how real estate agents and the city could handle this new wave of multi-millionaires that's next. smarter. because to be the best, is to never ever stop making it better. there's never been a better time to become part of the mercedes-benz family. visit the mercedes-benz spring event before april 30th for exceptional lease and financing offers on the 2019 c 300.
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welcome back existing home sales weaker than march and sales in the san francisco bay area was down 11%. all of that may change the recent rush of tech ipos is turning san francisco residents into overnight millionaires and the real estate world is taking notice let's bring in catherine clark who wrote about this in "wall street journal." it is amazing the length real estate companies are going to, identifying who will make money and then doing what exactly? >> it's pretty crazy in the last cycle we saw people standing outside the silicon valley company with krispy kremes and renting taco trucks
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and standing in the parking lot of these companies and it looks like this time will be the same again. people are all over social media and tagging their posts, pinterest. > >> face bobook and others. a lot of that was silicon valley centered and a lot of these companies are san francisco centered only about 600 properties currently for sale in san francisco, is that right >> yeah. during previous cycles we saw money dispersed far more widely around the bay area. most of these companies uber, air bnb and pinterest are based in san francisco proper and working under the presumption if you work in san francisco, you may want to live in san francisco. >> especially if you can afford it, which nobody can do these days if you're making multimillions, how are they preparing for this wave i think we saw even the number of listings fall is it because
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everyone is holding back and going to get ready to the list them at once or simply a shortage >> sort of a preemptative, you know, figuring what is going on. the buyers are starting to feel antsy and if they wait, will they be faced with more competition in the market and the sellers are pulling back and asking their agents, should we wait because we don't want to miss the height of the wave. >> and is it possible that everyone is going to miss this because they go, oh, we're sure this is going to happen and, therefore, it must happen. is it possible that, i mean, how do you think this might really play out a lot of people have lock up periods of their stock for six months or hang on to it for longer they'll say, i'll hang on to it for a couple years and go cash it in in omaha or something. >> it is probably along a more prolonged period of time a lot of people saying we're not going to see the bulk of this until 2020 a ucla professor who did a study on ipos in california and they
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said they saw a bump at the time of the filing and then when the lock up period ended but it really goes over quite a long period of time. >> again for san francisco, there's a very small area where they can really, i mean, they can't really build so, what do you think is likely to happen to that market with all this demand and no where to go >> a pretty baffling statistic that came out the real estate company redfin calculated that based on list ipo price which has dropped, but $72 at the time that they listed their employee and former employee pool would be about $1.5 billion, which is actually more than the collective value of every single property currently on the market in san francisco. so, i don't know if that's overstated, but, you know, some hype going on. >> katherine, it's fascinating thank you so much for the piece and thank you for joining me that does it for "the exchange." thanks for joining me. i'll join melissa for "power
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lunch" which begins right now. and thank you, kelly we'll see you in just a minute i'm melissa lee. elon musk set to meet investors at this hour to show off tesla future and the stock is sliding right now. oil meantime is soaring. president trump taking aim at iran's exports are prices headed higher from here bad blood elizabeth holmes back in the spotlight headed to court accused of massive fraud. "power lunch" starts right now and let's get a quick check on the markets right now we have a mixed trading session here with the dow just in the red slightly and the s&p 500 and nasdaq eking out slight gains with just over a week to go, the major average is still on track for solid gains for the month of april. energy is the best performing sector today and check out the consumer staples. that secto


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