tv The Exchange CNBC December 23, 2021 1:00pm-2:00pm EST
be positive catalyst for the stock in 2022. >> jim >> viacom cbs. this is one of those tax loss harvesting stocks i was talking about. it's ready to come back. >> josh? >> welcome to the team, john so, gm, i'm watching tesla make this ridiculous two-day move, and it occurs to me that general motors probably should catch up here stock is too cheap in the 50s. i think it's going higher. >> all right, that's it. happy holidays, investment committee. "the exchange" begins right now. >> thank you very much, frank holland. i am in for kelly evans today on "the exchange. stocks are rising once again today for the third day in a row. but there are still some major concerns out there first off, inflation, and the fed's reaction to it a look at what it call means for the markets in 2022. plus, omicron continues to
surge. this has people get ready to celebrate the holidays with all their friends and family will the outbreak get even worse to start the new year off? we'll ask. and coming up in rebecca patterso "rapid fire. we begin with today's markets overall and they are very much in the green right now if you take a look at what's happening we are generally positive, three-day winning sessions here for the major indices. the dow industrial's up about 225 points 4730 the last said there, the s&p. and the nasdaq composite 15,666. nearly one percentage point to the upside there the s&p 500, the nasdaq, dow industrials all, again, taking near peaks close to those record-high levels that we've seen over the course of this year one thing to keep a close eye on over the course of the last month we've seen a resurgence in that so-called value cyclical
trade. however, on a year-to-date basis, it has been those growth stocks outperforming overall the white line is growth, the orange line is value and you can see there that gap is kind of closing up a little bit, but still over the last several months you've seen a big kind of change in that general theme. of course, one to watch there. will and then of course the big cap, mega cap technology names over the course of the last week check out what's happening with these companies. you can see generally after the volatility we've risen over the course of the last five to seven trading days since the lows that each of these stocks has seen, they are now each roughly 5 to 6% higher than the recent lows over the course of the last week. so something to keep an eye on for sure let's talk about how you should position as we head into the new year here with some key themes and trades to watch in 2022, gina sanchez, chantico.
thank you both for being with us here i'd like to maybe start with the macro picture ironside's macro, barry knapp. is the market supposed to be where it is right now given the plethora of economic data that we've seen over the course of the last several weeks >> yes, i think so we're ending the year on a good note, as well we should be if you think about the macro factors that have come into play over the last month or so, in general they're fundamental positives, not always positives in terms of liquidity and dynamics, and i'll get back to that what i mean by that in a minute but omicron looks like it could very well be the end of the pandemic i don't want to opine on that too much but it truly looks like the way these things are supposed to progress the collapse of the build back better plan for me is very good news for equity investors.
one of our big concerns through the course of this year was that, pardon me, that the biden tax plan that he campaigned on would really roll back the tax cuts and jobs act and impair the possibility or probability, i would say, of a big capital spending boom in 2022 and then beyond and, so, whatever you think about the social aspects of build back better, spending money on social services paid for with corporate tax hikes is not a net plus for equity investors. so if that indeed is collapsed that means higher earnings growth and a greater propensity to build up our capital stock. so that's a net positive and then, listen, monetary policy is going to make the liquidity environment much more difficult in the first half of next year, so i don't think we're going to have the first half of 2022 look anything like the first half of 2021 but from a fundamental
perspective, withdrawing this liquidity is actually a fundamental net positive when you think about it from the banking system perspective, banks from a trillion dollars in cash to $3 trillion in cash. that cash is certaining, in a lot of cases, five basis points to positive on the fed as you draw that liquidity out it will increase bank profitability. you're crowding out first-time buyers with financial buyers in the housing market you want the fed to tighten up and crowd them out a little bit, crowd the financial buyers out that's a net positive. so i don't see these things as being fundamental net negatives. on balance, these are positives. >> gina sanchez, this is a fairly bullish case that barry is laying out here do you feel quite as optimistic? are you positioned that way? how exactly then do you navigate a market like this or should we all just be career long in the market because it's going to be a nice tailwind for
the foreseeable future >> look, i agree that there are certainly tailwinds. and if you look at the inflationary impact, while they have certainly crimped margins, there are a lot of companies that have shown their ability to pass pricing through straight to their customers even more so than they're experiencing on the actual labor front or the raw goods pricing. and if you look at a company like fedex that is managing to pass prices through and then some so we're looking for names that can defend in inflation because inflation ultimately a little bit of inflation is very, very good for equities. >> all right so, i'm going to go back to you, gina we've got some time left i'd like to know what your big call is. what do you think we should be buying right now heading into 2022 >> well, look, i agree with barry that we're going into a situation where we're going to start to see liquidity recede.
and that's going to put the crimp on valuations. so you're looking for stocks that can either defend an inflation or defend their valuation. so i mentioned fedex but we're also owning caterpillar right now. caterpillar is a very fairly valued stock with excellent dividends. but tremendous demand that i don't think is really being priced into its price yet. so those are two stocks that we see as, you know, stocks that can defend when value rears its ugly head but that can also do well in inflationary environments >> barry, last word to you, your top trends or picks for 2022 >> yeah, i'm sticking with the inflation beneficiaries. as you pointed out in your lead into this, dom, they did struggle a little bit towards the latter half of the year, but, for me, the story for financials is very compelling. industrials is a very good story as well.
materials and energy are really like those reflationry sectors inflation will come down in 2022, but it's not coming down all that much. and valuation should be under pressure as the fed and treasury withdraw liquidity >> i feel so christmas-y right now seeing the ski slopes behind barry and the christmas tree behind gina right now. thank you both so much enjoy the holiday weekend. we'll see you in the next year and happy holidays november's durable goods climbing by the most in six months new home sales rose to a seven-month high, but personal spending stagnated as inflation hit purchasing power your next guest says that the key to watch is that and the focus should be on the pce index in particular. that's the fed's preferred gauge of inflation, it jumped 5.7% over the fast year that is the fastest pace in 39 years, indicating the fed will remain hawkish heading into 2022 joining me now is david zervos
this notion that the economy can be running as well as it is, it's despite the fact that we've had this kind of data coming out with regard to pricing pressures in the economy building up is there anything that we should be confused about with regard to whether or not the economy can sustain its upward trajectory in the face of things like pricing pressures? >> well, dom, i think it is reasonably confusing i think the story line on the inflation has been difficult for many of us to digest over the course of this year. we've seen q2 numbers that were consistent with what we got in the 1970s for inflation. then we had a reprieve in q3, and the monthly number started to come in very normal and then again the last two prints both pc and cpi have been back in that kind of scary range again. i'm sticking to my guns. i think a lot of this has to do with supply disruptions and
continues to be related to supply disruptions i think the demand side of the story is really a difficult one to tell with the job market still four or 5 million jobs where we were below 2020 i'm willing to learn that maybe there's something a little bit more persistent in this inflation. and that's what domtold you at the last press conference, he said that risk is small, but that risk is there and they're watching it. and i think that's the important thing for the markets next year is really much more about how this inflation handcuffs the fed a little bit and something we haven't really seen in the past decade or so is a handcuffed fed. we've seen a fed that really has to come to the rescue more often than not >> i'm curious, based upon what you talked about with regard to supply disruptions being a big part of this kind of proximate
cost, does that mean that you are calling inflation, dare i use that word, transitory, and that this is all going to work out and things are going to get better down the line and that the if ed is going to have options? or do you think that there is a handcuff situation that the fed is going to have to do something with regard to this or face the wrath of the markets and the economy overall? >> look, the lexicon of transitory and persistent got very heated last year. i think there's no question in my mind that the inflation numbers will be coming down. the question is when i think the fed has put in their sep forecast a pretty significant dropoff in inflation, a disinflationary forecast over the course of next year and the year after. so it's in there, the question timing and the ugly bit is actually really q1. because if you look at, say,
core cpi, the numbers that are going to drop out in january, february, and march are basically flat monthly readings. so, the year-over-year in core cpi as well as the year over year in core pce are likely to look even worse in q1, and that would be no matter what happens, that would mean even if growth were to disappoint or there was another variant and the like, it's just kind of baked in the data for q1. it's not until q2 that we get those big jumpy numbers starting to drop out of the year over year figure. so the optics just look really bad. and i think that's what jane reacted to jane reacted to everybody saying, hey, there's a 6.8% headline cpi you aren't doing anything, you really should be doing something. and i think that's where they reacted. they did a very good job of pivoting hawkish, taking a little punch away from the bowl and not disrupting the market. we got 10-year notes at 1.5. we got record highs in the s&p the market's not predicting a
big change in long-term inflation expectations five-year, five-year are basically break even and they're not going to be able to do anything kind of nice and friendly if things get messy and i think that puts structure, as i wrote today for our clients, that has normally been there in a risk-off event for whatever reason. it could be geopolitical, it could be virus related it's just not there, it's not there the way it's been in the past that makes 2022 a pretty tricky place. >> it is a tricky place for sure and you're not the only one that feels that way there are numerous people who are constructive-ish on 2022 but still think that there is confusion in there david zenk rvos, thank you very much happy holidays, sir. coming up, the fda clears the way for merck's covid antiviral pill, making it the second one, following pfizer's approval we'll look at all the covid
drugs and treatments now on the market and the difference they could make as cases continue to surge for covid. plus, there is one driver that could throw everything on its head in housing, and it will impact builders and buyers alike. we'll tell you what it is. and as we head out to break, take a look at the dow heat map right now. caterpillar, we just heard about that, your biggest gainer in the blue chip index as of this moment "the exchange" is back after this ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪
welcome back to "the exchange." merck's covid antiviral drug getting fda approval today as cases continue to surge across the country. that makes it the second antiviral drug along with pfizer's to get authorization that marks another step in the fight against covid-19 so now we have vaccines, we have antivirals, we have antibody treatments, et cetera, et cetera, from astrazeneca and others but how effective are these tools to beat back the virus joining me now is an immunologist and vaccine researcher at nyu's langone. i wonder, doctor, if you take a look at the portfolio of weapons that have been developed in a relatively short amount of time, this is a battle that we should be able to win in relatively short order. is it not? >> yes, absolutely and we're in a significantly better place than we were at
this time last winter, given that point it was just the start of the vaccine rollout now we have many vaccinated individuals, and this whole battery of other tools to fight against the virus. >> all right so, doctor, if you take a look, let's talk about the news of the day. we've got this new pill from merck getting authorization. we've got a pill from pfizer can you take us through the differences between those particular pills with each other and then how they defer from some of the other treatments that are available to the market right now? >> yes, absolutely so, merck's pill does vary in efficacy from pfizer's so, for example, merck's was found to be 30% effective in decreasing hospitalizations and deaths if given in that first three to five days of onset of symptoms whereas pfizer is close to almost 90% efficacious at reducing hospitalizations and death. the other difference is in who they're approved for so, for example, merck currently
is only approved for 18 and up, and not for children or pregnant women due to some concerns with its mechanism of action playing a role in childhood growth development or fetus development, whereas pfizer is approved for age 12 and up as long as that child is at least 88 pounds. but there are some drawbacks of pfizer, too. you do have to take six pills a day, almost three morning and night for five days. and it can interact with other medications and may not be suitable for certain individuals who might have, let's say, liver disease or other issues. so that's why it's important and then their mechanism of action is very different the way merck works is it actually interferes with the virus's rna and ability to replicate. whereas the pfizer antiviral, again, stops replication as well, but also has another antiviral combined with it called retonivir which keeps it
in your blood circulating longer >> you're a medical doctor, you specialize in these types of situations with the human body based upon everything you just explained and laid out, it almost seems like there are more concerns about taking some satisfy these antivirals than just getting the shot, the vaccine. what exactly then is the right or proper or recommended course of action from somebody like you with regard to how you best prepare yourself to battle covid-19 as a person >> listen, in all things medicine, prevention is still number one prevention is key. nothing replaces not getting sick at all, even mild and moderate cases of covid-19 have proven to have already long-term consequences that we're seeing nearly two years later we don't know how long these will last. and given the side effect profiles of these two antivirals i just went through, it's not an easy walk in the park taking these pills either but now the benefit is let's say
you are vaccinated and you do happen to get sick and you're a high-risk individual, elderly, heart disease, diabetes or immunocompromised where you can't respond to the vaccines as effectively as everyone else, now we have a backup plan to keep you out of the hospital, to keep you from passing away and that's huge. we didn't have these options even a few months ago. >> all right and before we let you go, we've talked a lot about is this the transition season year that it goes from covid pandemic to covid more endemic is this going to be a situation where hopefully by the winter of 2022 we're treating this like the common cold and/or the flu >> yes well, fingers crossed. and this is what many experts are predicting, given that omicron, although very highly contagious, not to be taken lightly, it is a milder form of the previous variant luckily we're not seeing that spike in hospitalizations and deaths as we did with delta. fingers crossed that this is the beginning of the tend, as they
say, in terms of the virus losing its strength and virulence. and hopefully it does turn from pandemic to endemic because it's been quite a long time >> and, doctor, one more because it is the holiday season, and i myself am going to go see family members soon after i leave here today. what does it look like do we see a peak for omicron shortly after the new year do we kind of have any travel plans being disruptive are you traveling this holiday season to see friends and family and loved ones >> right so, you know, if we look at what happened in south africa, the virus did peak and then kind of plateau, and now it's decreasing, the new variant. so we're hoping that the u.s. will follow suit again, if you're fully vaccinated you're in far better shape to travel, gather with your friends and family members than if you're not but, still, you need to exercise caution because even these mild cases are having impacts on our healthcare system. so, again, make sure you're
fully vaccinated, test yourself before traveling, before gathering with friends and family members and please mask, bring back masking even amongst friends and family that you don't normally live with. keep washing your hands, distancing i myself have decided to alter our travel plans, still will be gathering with family, but, again, in a safe way so, again, the devil is in the details. so, please, we have all these tools, use them, especially masks, hand washing. and it's not too late to get your shots this viral season will go on past the holidays for sure >> all right, doctor over at nyu langone, happy holidays and safe travels for you coming up on the show, this stock is up more than 20% in the past six months but is losing big today, down 17% in one session. the name and what's behind the declines for that mystery chart coming up. plus, venture capital betting big on going green a look at the record amount of
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welcome back to "the exchange." markets right now are holding onto gains you can see the dow is still up about 208 points 31-point gain for the s&p 500. and nearly 1% gains or 144 points for the nasdaq composite. we've added about a thousand points over the course of this past three-day rally for the dow, and here are some of the movers you will see this hour. ups and fedex are both higher after bernstein analysts upgraded those stocks. they also raised their target prices there as well plus, ups is the number one pick of jim cramer's investing club,
by the way go to cnbc.com/investingclub for more on that quidel has gotten a lot of attention recently for its covid tests, down about 17% right now. and crocs also falling on a deal of its own it's paying $2.5 billion for hey dude, it's a shoe brand. croc's ceo is joining "power lunch" in the next hour. so tune into that interview in the next hour. now let's send it over to leslie picker who's got a cnbc news update good afternoon, leslie >> hey, dom, here's what's happening at this hour in minneapolis the jury at the kim potter trial has reached an outcome according to court officers it will be read into the record at least an hour from now. the white house says it is still hammering out contracts to order
hundreds of millions of at-home covid tests. press secretary jen psaki says she has no doubt the deals will be struck. she expects the first batch of covid tests in early january in wisconsin, dangerously icy roads causing multiple crashes in the closure of an interstate highway freezing rain created the hazardous conditions one pile-up involved about 40 vehicles on "the news," traveling for the holiday. how americans are dealing with rising covid cases and surging prices for hotels and car rentals. that's tonight at 7:00 eastern and a giant of american literature has died. joan didian was a key critique of turbulent times her work ranged from novels to essays she succumbed to complications from parkinson's disease at the age of 87. i'll send it back over to you, dom. >> leslie picker, thank you very much for the news update there
the teflon travel stocks and spidey saves the box office this season, all that and more in today's edition of "rapid fire." that is coming up next "the exchange" will be right back digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us. unleash your potential. uipath. reboot work. i've spent centuries evolving with the world. some changes made me stronger. others, weaker. that's the nature of being the economy. i've observed investors navigating the unexpected,
2022." watch or listen live on the cnbc app. let's catch you up on a few stories that should be on your radar. it is time for "rapid fire." here to break down the headlines are cnbc's bob pisani. also seema mody and julia boorstin that is quite the trifecta for "rapid fire" today first up, we've got electric vehiclemaker nikola. this stock is, you can understand, soaring today, it's up, like 19% right now but the company has had a tough year amid aongoing production delays they paid a $125 million settlement the stock is down nearly 27% on the year as a result this used to be bob pisani, the kind of poster child for the
nontesla evs at one point, and then kind of things unraveled. what exactly is the case to be made for owning nikola right now? >> well, the case to be made is they've got a tremendous product potentially out there and in some particular areas like commercial evs where they may be able to be really important. the problem is very simple one, they're not going to make any money this year and not next year it's all based on the idea they're going to have an enormous ram-up in business. i think they're going to pull in 2 million this year. there's hopes they'll have 150, $200 million in revenues next year, maybe. but that's all a prayer right now. you mentioned that fine. they're not only the poster child for ev, they're poster child for inadequate disclosures or not correct disclosures i was on the call with the sec this week on that. they said we don't care if
nikola communicated with their people, with their investors on twitter or on an sec filing. we don't care if they're a spac or an ipo, we don't care you have to be 100% accurate and they were making claims that they weren't in that so there's a little bit of a poster child for disclosure in here as well >> i'm from california, you're out there right now, evs are like the thing out there i could see evs everywhere the last time i was out there visiting my parents. do you think names like pfisterer, lucid and all the other chinese ones we haven't talked about, is tesla giving up market share in the coming years? >> it's just amazing looking at the valuation of these pre-revenue, you know, ev names. dom, these are companies that -- if you look at rivian and lucid together, together they were valued at $150 billion despite
having no revenue. but i think going forward the real question is not just going to be which one of these new names can steal market share but what about the traditional automakers that already have the trust of consumers and maybe they're going to be able to introduce the new models that are going to get people to convert over to ev dos. >> everyone talks about that ford f-150 lightning that has so many orders already right now. next up it's the resilience of the travel industry and travel stocks in particular we've got data out today showing a slight decrease in hotel occupancy rates for the weekending december 18th, falling 3% from the previous week at this point but despite omicron fears, major hotel chains like hyatt, hilton, marriott, wyndham, they're all up around 10%. airlines, cruise lines, casino operators all outperforming as well seema, you've got one of the best gigs in this building right over here. you cover travel and leisure
it's a fun beat to cover tell us about what the travel state is right now, and are we on track to get back to pre-pandemic levels in 2022? >> well, dom, as you just showed right there, the average hotel occupancy across the u.s. fell just by around three percentage points week over week at around 54%. the top decimations right now even amid omicron fears, new york city as well as a couple others there you'll see on the list, weakest markets, new jersey shore, myrtle beach what that tells you is that travelers are becoming more discerning and selective as to where they want to travel. this week what really happened in terms of the outperformance in travel stocks is you had new findings suggesting that omicron is less severe, this pfizer covid pill get agproved. travel executives have often told me that as you see vaccination rates rise and once these drugs are introduced to the market, that will allow travel behavior to return to
pros pre-pandemic combined with carnival ceo telling cnbc that bookings for the second half of next year look strong. that really helps sentiment sort of lift. and that's why a number of these stocks are sitting on double-digit percentage gains for the week dom? >> bob pisani, you're a world traveler and i got to imagine that the covid pandemic really put a dent on much of the travel you've been doing here. are you planning to do more robust travel? and if so, do you think that's going to be something that many americans do and will that provide fuel for more upside in these travel and leisure stocks >> i am planning and i'm planning a lot of travel in 2022. i was just over thanksgiving in northern florida on the georgia border traveling, and, my heavens, every hotel was full. and i'm talking from budget hotels to the top luxury hotels in northern florida in the jacksonville area were full. and you can just see this even in the bookings. i'm sure there's been a bit of a dent, as seema noted, in some of
the travel recently. but, overall, the bookings are way, way up. and if you look, dow jones has a hotel index, believe it or not it's not in a public way, but you can track it it's outperforming the s&p 500 this year. now, this happened because of this recent push, but it's up about 30% this year. the s&p's only up 25%. so, if you look at most of the big names, the marriotts of the world that are out there they're all doing really well. wynn and las vegas sands are not but that's because of the china exposure look at hyatt and everybody else, they're having a great year so far. >> to bob pisani's point, i want to give a shoutout to everybody at emilia island, one of the more underrated, i think, hotel and leisure areas. love them. >> that's where i was. >> and finally here,
"spider-man: no way home" is on pace to hit a billion dollars in box office sales the only movie to hit that milestone in 2021. spidey is already three-quarters of the way there-crossing the $750 million market just on tuesday. and its success is boosting movie theater stocks all up more than 5% on the week. amc entertainment leading the pack, up more than 13% meme stock, fundamentals are in place. julia boorstin, navigate this for us here. is the box office back and will it be so in 2022 as well >> well, look, we don't know what's going to happen in this last week of the year. it'll be really interesting to see not only does spider-man continue soaring, but what happens with these other movies that are coming to the market? traditionally the holiday season is a time when maybe people would see multiple movies or if they went to the theater thinking they were going to see spider-man or others
there are a couple of other really big titles including "kingsman. the question is what happens with these other names because i think the industry is trying to figure out is the theatrical experience really going to be primarily about big franchises, big characters like spider-man or are you going to able to see a range of themes do well at the box office we still don't know. but there certainly is a lot of demand and i have to wonder if maybe some people who canceled their travel plans just to bo go backo the last conversation, do they feel comfortable >> what a great point. i didn't even think about it that way the "matrix" movie is out right now out on hbo max treaming. that would ordinarily be a movie i would go watch in theaters how high is the bar for you to go out in theaters >> i just started "matrix, we with one of my favorites and i will finish it tonight so, to your point, content is king if there is great content, people will go back to the
theater. but if it's also available on one of these streaming platforms, i'll take it. >> bob, you've got a couple seconds left here. please tell you why are you shaking your head? >> because, go to the movies i went to hollywood boulevard and i saw "no time to die" a couple of months ago it is an earth-splattering series my pants are vibrating from the base lines in the movie. it was so over the top a sensory experience i had forgotten 20 months of not being in a movie theater i went to see "dune" again i'm going back to the movies >> i'm a james bond and a marvel fan and all those blockbuster fans thank you all. have a great holiday weekend, guys coming up on the show, despite esg investing taking off this year, clean energy stocks have had a rough go of it, but that's not stopping venture capital investors. at nt.th'sex "the exchange" is back in two.
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welcome back clean energy stocks have gotten beaten up this year, but private capital's pouring into the sector at a record rate. good afternoon, pippa. >> hey, dom. a rough year for renewable energy stocks. clean energy fund invesco down 30% for 2021 but investors are still betting big on the space global venture capital funding for clean tech hit $43 billion this year, across nearly 1,900 deals, according to pitch book that's more than double last year's 20 billion, which was then a record. in total, 14% of this funding now goes into climate tech and private equity, total funding in the first half of the year jumped 2 # 0%, according to pwc.
they're going to need a new tech to follow through. that's where private capital comes in these investors can typically be more patient rather than focusing on a quarterly improvements the hottest area's been mobility and transport, capturing 60% of the total funding. the explosion in spacs also a key source of capital for the industry with more than 25 just this year. this includes names like solid power, volta, hyzon motors and evgo these stocks are down sharply from their high. maybe because these companies are just going public too early. dom? >> is there such a thing as too early? how is 2022 looking then, pippa? can we expect the same kind of activity, the levels of investing that we've seen in 2021 >> well,we have seen a slowdow in the spac market for clean tech but in the private market 2022 is shaping up to be another very strong year. we might see a pivot away from
some of the more crowded areas including electric vehicles and into some of the more hard-to-decarbonize sectors like the grid so certainly a lot of things to watch here >> pippa stevens, thank you very much for that report on clean energy coming up on the show, the real estate market has been red hot over the past two years, but with higher interest rates looming on the horizon, will the momentum continue into next year we've got your 2022 housing playbook, coming up next
welcome back homes remaining strong in 2021 as mortgage rates remain historically low but what will next year bring in diana olick joins us now with her 2022 housing playbook. diana? >> well, dom, front and center for 2022 will be rising mortgage rates. the fed has made it clear it will pull back on buying mortgage-backed bonds, and that'll mean higher rates. the average on the 30-year fixed is already about 40 basis points higher than it was a year ago. the realtors are now saying that will result in fewer sales next year but home prices, they will continue to go up because supply is just so lean. the home builders are trying to ramp up production, but they continue to face higher cost for
materials, the price of lumber is rising again off its high of last spring, but now twice the price it was in mid-november and well above pre-pandemic levels steal, wallboard and other material prices also considerably higher. that'll keep prices for newly built holds rising home buyers could also face even stiffer competition from investors as the single-family rental market soars. the number of homes built for rent hit a record high, and investors continue to pile in. >> the rental market is stronger than the for sale market the rent increases are something like i have never seen before in my life. we are definitely pulling forward a lot of household formation. >> single family rents are now up nearly 11% from a year ago as potential buyers who are getting priced out of the market continue to rent dom? >> diana olick, thank you very much for the 2022 housing
playbook for more on what he expects in the next year for real estate i am joined by ryan gorman he's the coldwell banker ceo ryan, thank you for joining us >> thanks for having me. >> you are oneof the biggest brokerage companies out there. tell me whether the market will be as hot in 2022 as it has been in 2021 and 2020 >> certainly we have a lot the fundamentals working in our favor i thought diana covered tremendously well in a hurry and added good context from john which is great you have pressures continuing to build, buyers continue informing look to buy and often rotate where they are living. one survey has 50% of young people and those living in higher cost areas willing to take a pay cut to move to a more affordable area. that's keeping buying strong and hopefully brings more listings on in 2022 across the market not just the high market locations.
you have also got the investor interest i will say there is another investor interest which is going to work in our favor, investors looking a the private mortgage backed securities bringing downward pressure as they look to buy 2022 is shaping up to be a strong seller's market again not as strong in some ways as 2021 but we are seeing a lot of strong fundamentals. >> it is interesting diana brought up two rising points key for home buyers out there, myself included over the past several years higher prices, a ding pour the i better, also higher interest rates, lass ding for the buyer both likely to persist in 2022 how do buyers navigate that kind of market is this we know sellers will be in a good position what happens if you are a buyer? should you be buying >> everyone should be buying if it is right for their lifestyle. hopefully it was for yours and hopefully we can connect with you another coldwell agent if
you are in the market. buyers today are benefitted by a lot of different things, one of which is those who are able to work remotely part of the came are able to increase their search radius. we are seeing affordable increasing as real wage growth inskprees people are looking into areas that are more affordable that might be two train stops out from the city or two steps away where they can get a bigger more affordable home for them. there is a lot moving in that favor. >> you mentioned investor appetite for homes there is fear from a policy standpoint, from a housing market standpoint that single-family buyers are getting priced out of the market because investors, hedge funds or real estate people looking to buy investor homes to rent out -- is it something where this housing structure is going to be different going forward because of the arrival of investor money. >> the structure is always going
to evolve. certainly we have seen investors piling into the single family rental sector in a way they haven't before but it hasn't made an enormous impact most of the single-family homes that were rentable were owned by mom and pop. a few million more added to that coming out of the great recession. and some have been built typically, investors want to turn high quality assets we are seeing first-time buyers down to a quarter of the market as opposed to a third. on the new home purchase side we have seen a lot of new home construction where now you have got a smaller portion of the population of new homes below $300,000 we have got a he have very small portion of overall new homes that's not typically an entry point for new buyers i think the biologicalers will be rotating into the new home segment that appeals to first-time buyers. i think people are going to see
the overall appreciation of their home when they connect with a good agent stepping onto the market with inventory that will be atrangtive to first-time buyers and they will be able to take advantage of historically low interest rates. >> thank you for the insights on the housing market appreciate it. have a happy holiday weekend. >> you as well. >> all right. still ahead, gblstaming ocks getting a boost today. the names, and why that's coming up next. let's open your binders to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.
welcome back the casino stocks are climbing today, despite the rapid spread of the omicron covid variant contessa brewer joins us with what is driving that action. >> i really want to talk about the casinos, dom, that are macao facing it's requiring very little news to move these stocks significantly. let's first look at melco, up more than 7% -- now it dropped back down to 6% today. las vegas sands up 475%, wynn up
3.5, and mgm resorts which relies of those four the least heavily on macao it is the public comment period where the citizens of macao got to put in their twop cents about what should happen with the casino concessions up for renewal. generally, people think there should be more local control, more government oversight and more promotion of non-gaming aspects of the business. a majority said they would like to have six or more concessions, which the industry insiders say largely lines up with the expectations for giving subconcession airs full status a bernstein analyst says he anticipates the government will move to amend the gaming law in january and then wrap up those concession renewals before the june expiration. sands told me today it's looking forward to the next step in the process. again, this is not the government embracing this, this is just a public comment period. covid is a much bigger headache in the near term the resurgence in cases has been
a problem. but i am just hearing that high-level conversations have been going on, dom, for reopening that bridge between hong kong and macao. that would open the way for visitation there. >> gaming all over the world thank you for the update on the casino stocks. that does it for "the exchange." "power lunch" begins right now have a happy holidays. and we will see new 2022 -- and we will see new 2022. >> thank you, dom. welcome to "power lunch. i'm rahel solomon in for kelly evans. and tyler mathisen the ceo of cue health we will ask him about ramping up covid tests. and the ceo of crocs, the company making it is biggest acquisition to bolster growth. but stock is falling as investors question the move. an