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tv   Worldwide Exchange  CNBC  July 31, 2018 5:00am-6:00am EDT

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it's 5:00 a.m., here are your top five. it's all about the central banks today. three of the world's four are meeting. chipotle closing one of its ohio locations after reports of customers getting sick cbs appointing an outside counsel to investigate sexual misconduct claims. bp shares jump after the company reported a 300% jump in profit and jamie dimon tells cnbc what he thinks is the biggest risk to
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your money it's tuesday, july p31st, "worldwide exchange" begins right now. ♪ we're not perfect, but we try. great song good morning, good afternoon, good evening from wherever in the world you may be watching. so glad you're with us to start your tuesday here's how your money and the global marketing are setting up their day. this is after yesterday's big losses for big tech stocks the f.a.n.g.s down again for the most part. the dow down 144 points. futures this morning are holding up better today. they're flat to slightly higher. the dow is up 18 these are tiny moves we have a long way to go there's been a lot of nervousness out there because the nasdaq has fallen more than 1% for three sessions in a row people are wondering is that massive run for the f.a.n.g.s and a few tech stocks finally coming to a multi-year close
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we'll have to wait and see let's check on how those names are trading. they are higher mildly facebook which was down 22% in a couple days, losing over 125 billion in market value, it's up a quarter percent. am ason up a half percent. netflix and alphabet, google, they're up these four stocks along with intel, twitter, a couple others are the ones to watch today. we'll update you all day long on how those stocks are doing in the bond market, ten-year yields back up a bit we keep trying to get to that 3% level. we hit it a few months ago, came off it every time we seem to get close, we pull back 2.95%. why do we care we're in the media, we like the round numbers and we're watching the to-yewo-year and ten-year
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spread. eurozone growth coming in at 2.1%, that's just shy of consensus forecasts that we surveyed eurozone gdp not a big miss but not coming in as strong as our number of 4.1. europe in their central bank quantitative easing cycle, a couple years behind us it looks like a couple years behind us in the recovery as well let's get the reaction now euro/dollar at 117.17. a mild reaction. these stocks were like that before the number came out let's turn our attention to asia the big news coming out of the bank of japan. policymakers keeping rates there unchanged. but signaling it would make its policy more flexible as you can see the asian markets are mixed. japan flat shanghai and korea up.
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hang seng is down. outside of stocks, here's global look at commodities. we're seeing the oil markets down a bit, 0.7% bitcoin is the big decliner. that's down over 1%. bitcoin has been moving either up 1%, down 1% nearly every day. been very, very volatile down 98 to 8,062 on the coin base exchange. gold not moving much as well one of the biggest minds on wall street sounding off on what he thinks are the biggest risks to the economy and your money. here's what jamie dimon told us in an exclusive interview. >> it's trade if the skirmish becomes more of a war. i would say the reversal of qe, we never had qe, never had the reversal regulations are different. monetary transmission is different. governments borrowed too much deposition people panic when things change. it's changing. we tell you it's changing. we know it will change
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but it might have some effects that people don't expect i think it is bad policies bad policies lead to bad outcomes >> let's get reaction to that, the gdp number and everything else with peter boockvar from bleakly advisory group first off, big comments by jamie dimon. well get to those in a minute. eurozone gdp, 2.1. where are they in their cycle? >> it's great growth for them. it is moderation from last year where growth was north of 2.5% unsustainable last year. if they can continue the 2% for that region, that's good growth. >> they have the -- like we did years ago, they had the adrenalin needle into their economy more last year, did they not. >> right when the ecb at the peak was printing 80 billion euros a month, now it's down to 30, and in two months down to 15 the key question is how do european interest rates respond to the ecb essentially leaving
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the room in terms of asset purchases. a lot of viewers may say why i do care about the european economy? you might care because if you put money into the equities, you made a lot of money. is the european market a good investment now for five years from now like we were five years ago? >> you care a lot because the european economy is the size of the u.s. economy it matters a lot since we do a lot of business there, we have to pay attention. the question is where do european bond yields go when the ecb walks away from qe the german ten-year, i find it hard to believe it's at 40 basis points if it goes to 1%, 1.5%, how does the european economy handle a jump in interest rates, which i think is in the cards next year. >> how does it handle it >> considering how i would say addicted we've become to very low interest rates, i think the adjustment could be rather jarring, particularly for those companies overindebted
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>> what do you make of jamie dimon's comments people do not like change, but upbeat tone from, i would say, one of the two or three ceos that the world seems to listen to most. >> absolutely. he did state the obvious, that the longer tariffs go the longer the risk it is qe is a bad policy that leads to bad outcomes, now we see a reversal in the fed's balance sheet that ramps up in q4. how this turns out, we don't know because we never experienced it >> we have a two-day u.s. meeting today and tomorrow what would you like to hear from our central bank >> they'll want to make it a nonevent they want to tell markets they'll continue to go through with the gradual policy, which means a hike in september and a maybe in december. >> sounds like a tom hanks movie. peter boockvar, thank you very much all right.
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today's top corporate story, shares of chipotle are tumbling after reports of customers once again getting sick at one of its restaurants. this time in ohio. jackie has more on that story. >> that's right. chipotle closing down one of its restaurants in a suburb of columbus, ohio at least two customers posted on the food safety website i was pois that they experienced nausea, vomiting and fever after eating there in a statement a chipotle spokesperson said we acted quickly and closed this single restaurant out of an abundance of caution business insider reporting during an inspection last week that the local health department found the restaurant was not storing lettuce and beans at the proper temperatures. food safety is a top priority for brian niccol who took over in march a series of high-profile incidents in 2015 bruised the chain's reputation and stock
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price. last year they retrained kitchen crews after identifying a sick employee as the cause of a nur nu nurovirus outbreak >> that stock is down just under 2% now cmg a name we're watching all day. jackie, see you in a bit cbs appointing an outside law firm to handle an investigation into misconduct, allegations against les moonves. the board is leaving moonves in his current role for now it's not clear if he will remain ceo for the duration of the investigation. this comes after moonves was questioned about sexually harassing several women in 2005 and 2006 the other big individual stock stories now include credit suisse shares of the bank are higher. second quarter profits more than
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doubled gapes for the company's three-year overall that offset weakness in the wealth management business sony's first quarter profit tripled on network gains and the video game business and sony is lifting the full-year guidance for its gaming yune. the upcoming title marvel's spider-man could boost profit more. and samsung reporting its slowest profit growth in nearly a year in the second quarter shales of the s9 smartphone missed targets samsung giving little hope of a turnaround, lagging stiffer competition in the second half of the year. we are just getting started on a busy tuesday. on deck what do you think about a 300% profit pop? one energy giant just had that kind of a monster quarter. we'll tell you how that stock is reacting and starbucks is looking to deliver. what the chain is doing in asia
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higher today what about the price of oil? that's something else to watch we're seeing a lift in the price of oil today excuse me a decline. crude is down 0. % brent crude down 0.40% oil prices are still up 15% this year that price jump has given a pop to bp. they reported a 300% surge in profits last quarter oil giant's boosted production bp is hiking its dividend for the first time in four years as well big profit jump, a hike in the dividend the stock is up 0.7% joining us now is jackie deangelis. we have a guest on hold as well waiting. we are starting to see the
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higher oil prices really trickle through in the results these are big numbers from some big companies like bp, chevron, exxon. >> bp and conoco did well. i thinkthese are companies tha are managing costs and they were able to take advantage of the high oil prices. chevron and exxon, not so much >> costs >> costs are the issue that signals the oil market still has a ways to go we may not stay at $70 a bar rem. barrel the companies may struggle as we go forward when it comes to price, yes, the market is rebalancing. we had that conversation supply and demand are in a better place any kind of geopolitical disruption, any issues coming out of iran. even last week, we saw disruption with the rebels from yemen and the saudis you can see those prices spike back up. that's what could change the market >> so we're dancing on that
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razor's edge let's bring in richard mallison from energy aspects. you just heard jackie's summation here where do you guys see global energy supply and demand shaping up >> i think the biggest thing on the horizon is the iran sanctions. we think by the end of this year, iranian exports will have fallen by 1.5 million barrels a day. that's a huge loss for a market that's more evenly balanced. you take that much oil out, that's a problem there is more crude on the market now, but it won't be sufficient to offset the disruption entirely when we come to year end. we see demand holding up well. there was a weak patch in q2, but we don't think demand is struggling we think it will be decent from
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here so, balances look tight towards the end of the year, and we had a short period of weakness with more opec supply before iranian production starts to fall. that sent some nervousness through the market >> sounds like you are suggesting that the amount of oil currently in the world is a temporary push and demand will remain strong. so correct me if i'm wrong, you're making a case for higher oil prices >> that's right. we see oil prices resuming that upward trend as we get into q4 and through 2019 jackie's point, if you have geopolitical disruptions on top of the ones we know about, that sets us up for a spike we're not seeing enough investment in new production to offset the declines, that growth in oil demand, and the disruptions that we're already seeing plus the disrpuptions coming down the line in the form
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of sanctions >> i want to go back to those iranian sanctions. the market at first spiked on the news that we might see more barrels coming offline perhaps 1 million or more than that then the u.s. seemed to back offer and say we may grant some of those waivers, we may give companies time to back off from the iranian oil. maybe at the end of the day it's not as big of an event for the market what do you think? >> i think unspruzi iunsurprisiy everyone is looking closely and trying to dissect any statement coming out of the trump administration last night trump himself saying he would be willing to meet with president rouhani without implications, but very quickly secretary pompeo came out and said all the conditions they already set out in terms of iran scaling back regional activities, its ballistic
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missile program, things like that would have to change before any kind of new deal or easing of the sanctions when you look at the comments in context, the u.s. said we know some buyers of iranian crude will ask for waivers, we will look at those and not rule them out, but the big message is they want to squeeze iran they want to squeeze iran's revenues and that means reducing oil exports. though i don't think it will go down to zero, i think we'll see bigger disruptions >> richard, appreciate your insight. thank you very much. jackie, see you in about three minutes. coming up, record breaking real estate. we'll show you an exclusive look at america's first ever billion dollar real estate listing. and speaking of billions,
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happy birthday shout-out to mark cuban. he turned 60 years old today worth just under $4 billion great guy, successful guy. friend of cnbc mark, if you're getting up or more likely still up, pphay birthday lping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony. what are you working forward to?
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pay pompeo is issuing a warning for a bailout of pakistan that would aid china. >> also new leadership in pakistan we welcome engagement with them in a way that we think will benefit each of our two countries. make no mistake, we'll watch what the imf does. there's no rational for imf tax dollars and american dollars, for those to go bail out chinese bond holders or china itself >> pompeo also discussed all things from the transpacific partnership to relations with north korea. for more head to president trump headed to florida today. he will talk jobs. all of this as the immigration debate takes center stage once again in nbc let's get more from tracie potts in washington. >> good morning. the president making it clear that he is willing to shut down the federal government
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if you didn't get it from the tweet, he said it directly to reporters speaking to congress as well. not that this is imminent. there's time here, but the president is making it clear this is part of his negotiation. >> reporter: president trump doubling down on his threat to shut down the federal government over immigration >> i would have no problem doing a shutdown it's time we had proper border security >> reporter: like a border wall? not necessarily, the president says, but this shutdown threat is not sitting well on capitol hill >> i think it would be a mistake. it's not necessary >> no one wins the american people expect us to do our job. >> reporter: part of that job is keeping america safe after an escalating war of words with iran, mr. trump now says he is willing to sit down with the country's president.
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>> no preconditions, no. if they want to meet, i'll meet. >> reporter: discussions to end the nuclear threat and perhaps getting rid of sanctions if iran cooperates brian? >> tracie potts in washington, we'll see if iran comes to the table. i think we'll see more of you as well in washington then, thank you very much. let's check on the other top headlines. frances rivera has that in new york good morning over a dozen wildfires are scorching california leaving resources stretched thin the california department of finance says 1$150 million have already been spent on emergency firefighting, which is about a quarter of the state's annual emergency button the dangerous carr fire exploded to 103,000 acres and destroyed 1,000 homes.
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a wrongful death lawsuit is seeking 1$100 million in the missouri deck boat tragedy that killed 17 tourists it was filed on behalf of the family who lost nine members in the incident the lawsuit alleges the owner and operator put passengers lives at risk. lebron james is expanding his legacy off the court with a public school in ohio for kids with challenged backgrounds. james says opening the school is one of the greatest moments in his life the school only takes third and fourth graders but will expand in coming years. for those who are still upset that he's headed to l.a., there you go >> always good like that they need to remember he came back he came back he's doing good work let him live his basketball life in l.a. still ahead, we'll give you a housing pulse check. we're digging in on the health
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of the real estate industry. why are we playing this music? alex trebek hinting his jeopardy career could be coming to an end. he has some ideas on who should replace him
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the federal reserve, the bank of japan and the bank of england all front and center wall street pointing to a higher open global policymakers getting ready to kick off a bunch of meetings. chipotle shares under
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pressure following reports that some customers apparently got sick at one of its restaurants in ohio. america's priciest property just hit the market. cnbc has access to a listing that is listed at $1 billion what do you get for a billion? we'll show it to you as "worldwide exchange" rolls on. ♪ welcome back thank you for being with us. i'm brian sullivan we have a lot to get to today. let's kick it off with jackie deangelis who has the top headlines. >> here's what's happening now chipotle closing down one of its restaurants in a suburb of columbus, ohio this after at least two customers said they got sick after eating there in a statement to cnbc, a chipotle spokesperson says we acted quickly and closed this single restaurant out of an
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abundance of caution chipotle planned to reopen the restaurant today conditional on approval by health officials. cbs is appointing an outside law firm to handle an allegation of sexual misconduct le les moonves is staying in his role for the moment. and starbucks reportedly teaming up with alibaba. the coffee chain set to link up with alibaba's food delivery unit to offer snack and coffee delivery in china. the deal is set to be announced later this week. >> jackie, see you in a bit. there are two things to focus on in the stock market one is the outcome of the f.a.n.g. stocks. nasdaq is down 1%. facebook lost over to% number two is our fed and the global central banks let's bring in jeffrey kleintop
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from charles schwab. good morning things were going so well. four or five stocks were over half the s&p weighting everybody bought them. there was no problem now two of them are down 20% are you and your team starting to get nervous about the fate of the f.a.n.g.s? >> no. this reminds everybody why it's so important to be diversified that's a hard story to tell for years. it's coming back to reality. even in the tech sector there are opportunities. we like more the business spending, the capex side the consumer side is where the action has been lately we like this theme it's durable moving into the technology sector. we see more attractive areas of value rather than growth over the longer term here i don't think this is a sign that the overall market is turning down just a rotation within the market that may give it longer
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life >> is it a permanent rotation? >> it might be if we look over the longer term we are at a position of tech and financials or growth and value where we have seen extremes in the past we've seen a reversal of a shift to value we have hit that point again it's hard to pinpoint that to a day, but we may be seeing that transition >> i think you're answering an important question a lot of viewers are sitting there saying facebook is a buy it's dropped it's cheaper valuations have come down. these stocks, i'm waiting, i'll buy them again do you think these stocks may not have a big reversal? that there's better opportunities somewhere else >> i think that's right. other ports of the portfolio may be important areas to deploy cash into. >> such as where >> you look at value parts of the market financials have been lagging global central banks, as they
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begin to raise rates and have an effect across the world, not just the fed we heard from the bank of japan this morning probably getting a rate hike from the bank of england above 50 basis points. this is helping the financials that could be an area of opportunity. also looking outside the u.s looking at industrials, financials, more value oriented sectors might lead you outside the u.s. u.s. has been the place to be ten years. it may be beginning to turn. >> we have to come up with a catchy acronym for the european markets. we'll come up with something are you suggestingthat european, british or japanese equities are a bigger bargain for hard-earned money than the f.a.n.g. stocks? >> certainly from a valuation perspective they would look that way. from a longer term perspective,
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looking at these cycles, we know they recur we don't always see tech leading the market it's not always about growth and the u.s. we could be at a turning point this often happens late in an economic cycle i put out a report earlier this year called how to avoid a shark attack when you get the jaws stretched between the leaders and lagers, it's usually time to make a shift in your portfolio. >> how do avoid a shark attack, which is interesting, because we have a shark tease coming up jeffrey, thank you very much >> good to see you. still ahead, the billion dollar listing an exclusive look at america's first ever listing that begins with a "b. it's bigger than disneyland. details straight ahead and for some reason people stole a shark from an aqriuaum we'll bring that to you coming up cor even trouble with recall.
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what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back stock futures indicating a little turnaround. not a lot. but we are in the green. we're seeing a 5 point move on the nasdaq futures 5 points at least we're in the green. time for the top trending stories. jackie deangelis is back first this-- >> i'll take retirement rumors for 200. the host of jeopardy hinting at
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his eventual departure from the show trebek saying there's less than a 50/50 chance that he will return once his contract expires in 2020. he did drop a few recommendations for his possible replacement including l.a. kings play by play man, alex foss and laura coates. and soon you may be able to express your passion for white wine in emoji form unicode has been asked to add a white wine emoji to its lineup currently there's only a red wine emoji and some visitors at a texas aquarium took shark week a little too far three suspects stole a two-foot shark from a san antonio aquarium tank over the weekend the thieves pulled the animal from the tank, wrapped it in a blanket and smuggled it from the
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building in a baby stroller. the trio was hoping to sell the shark on facebook. this story has a happy ending. the shark was recovered last night and returned to the aquari aquarium seemingly unharmed >> you know, i heard this story, i thought if they're animal activis activists, taking a fish out of watd s water is not ideal what is the secondary value for that kind of shark >> i'm not sure. we'll have to look that up >> maybe we'll have to go on shark tank. a residential property hitting the market in beverly hills that could take sticker shock to a new level this listing has a $1 billion price tag. robert frank has the details ♪ >> reporter: up this private
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drive is the first ever $1 billion residential listing in america. it's called the mountain of beverly hills. the 157-acre propcy is bigger than disneyland, but there's no castle up here in fact, there's not even a house. this plot of land is being sold by secure capital partners, and it's listed by super broker aaron kerman for $1 billion kerman says there are 4 reasons why the mountain is a record breaker. first the property sits on the highest point of one of the most expensive zip codes in the world, 90210 second the land is zoned for a 1.5 million square foot residential mega compound. >> that means the billionaire who buys this could build the biggest house in the world on top of beverly hills >> third, the views are some of the best in l.a. fourth, privacy. this long private roads puts
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your closest neighbor a half mile away. the bottom line is location, sheer size and views like this are what billionaires love the truth is no matter how rich you are that billion dollar asking price is a tough sell and the property hadden before shoppsho -- had been shopped around in 2014 also for a billion dollars >> for more on america's only -- not first, billion dollar listing, check out all right. still ahead, the rising risks in real estate. big cities getting hit big time by wicked weather. it's weighing on housing what this could mean for you and your money when "worldwide exchange" returns. why did i want a crest 3d white smile? dinner date...meeting his parents dinner date.
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woman: stelara® may lower the ability of your immune system to fight infections and may increase your risk of infections and cancer. some serious infections require hospitalization. before treatment, get tested for tuberculosis. before or during treatment, always tell your doctor if you think you have an infection or have flu-like symptoms or sores, have had cancer, or develop any new skin growths, or if anyone in your house needs or recently had a vaccine. alert your doctor of new or worsening problems, including headaches, seizures, confusion and vision problems. these may be signs of a rare, potentially fatal brain condition. some serious allergic reactions can occur. do not take stelara® if you are allergic to any of its ingredients. man: are you fed up with crohn's symptoms following you? talk to your doctor today, and learn how janssen can help you explore cost support options. remission can start with stelara®. over the past week heavy rain has been wreaking havoc all over the northeast they had more rain last night and more is likely on the way. flooding even closed down hershey park in pennsylvania for
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a few days if you think flash floods have become more commonplace, you're right. the danger is increasinincreasis not just because of heavier rains, it's also because of heavier real estate development. diana has more on her continuing series of the rising risks of extreme weather. >> horrific scenes from a deadly flash flood over memorial day weekend drew national attention. but now the cameras are gone and the locals have to figure out what to do next. their problem is their river, a combination of increasingly heavy rain and too much real estate development has turned water from an asset to a liability. ♪ >> reporter: it would have been called a thousand-year flood if the same destructive deluge had not crashed through ellicot city, maryland two years before. the first time around in 2016, on the city's nearly
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250-year-old main street shop olders like doowners like sanger worked to rebuild >> we tried to rebuild >> but this time -- this is more like a funeral >> reporter: now they feel these floods are the new normal. because this historic town is a blueprint for developing disaster real estate development in the face of increasingly wet weather. joe sexton is a scientist who uses satellite images to map changes in ecosystems. >> you had two 1,000-year floods within two years of each other how did that happen? the overwhelming factor was intense rain storms. climate change due to warming oceans, changing atmospheric patterns more water is falling and we're clearing natural vegetation and replacing it with concrete, asphalt, through which water
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doesnot penetrate. >> reporter: ellicott city was built north of the river several tributaries run through the town to the river. nose water currents were the energy for this town built around a mill in 1772. but since 1991, real estate around the popular main street exploded, developers submitted more than 100 plans to build residential and commercial buildings in about three square miles around the city. most were approved >> we have flood maps that were drawn based on conditions that are no longer true. >> reporter: in the most recent storm nearly 8 inches of rain fell in three hours. intense water with nowhere to go sexton's maps show how development increased the intensity of the flooding by up to 30% and ellicott city is just one example. he maps closely 8,000 square miles between washington, d.c. and baltimore and measured
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changes. the amount of land or dirt illustrated in red that has been covered with streets, sidewalks and buildings is about equal to the size of the entire city of baltimore. when we think of the destructive power of rivers, we tend to focus on the amount of water heavy rains causing tributaries to overflow. it's also the speed of that water rushing through towns like a bulldozer. how do you control that speed? you can't tell a river what to do, but you can give it new options for where to go. alan kittelman has been the county executive for the area for the last four years. >> we will not lose this town. we need to realize how we can co-exist with the river. >> reporter: the answer may be in a transformative vision taking down some of the historic buildings by the river to give the water more space
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>> this is gorgeous historic real estate. you think you have to pull some of it down >> we have to think of the best way to save this town. the river runs under all these buildings. >> reporter: one of those billings houses tom shoe mmaker family furniture business. he barely escaped the floodwaters. >> all of a sudden, boom, it broke the doors. >> reporter: he lived in the area for 50 years but leases this space now he will move his business uphill >> being down here in the flood zone is not fun. >> reporter: on the other hand and the other side of the street, the change could benefit other businesses, like donna sanger's she owns her building and is invested in what the town decides. that's why she's rebuilding. >> if we can get through that period of time, it's an opportunity, too >> reporter: because taking down the opposite buildings means her
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property would overlook a valuable new green space, a river walk, mitigating water and attracting business to her and her neighbors. >> they know if they hold on, they bring the buildings back, the county does what we think they'll do, in the long run they'll have valuable real estate last friday the county for ellicott city approved a one-year freeze on development in the area where storm water runs into the river under its historic main street about 600 housing units would be put on hold according to county estimates. i've seen a lot of disasters in my time, it was stunning >> it's terrible and it's hammed twice now. does ellicott city believe if they tear down the buildings on the opposite side of the street, and build a park, will that solve the problem? >> they believe so that will give the water an area
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to go. >> so there's nowhere for the water to go. >> exactly there's nowhere for the water to go that's what happened in development as they build over these supposed flood areas >> this is a hard transition let's change the focus to sales. the health of the overall market pending home sales coming in better th better than expected but overall the spring selling season was rough home sales at a five-month low let's bring in mark fleming from first american mark, thank you very much for joining us we're seeing more inventory. you can't sell a home that doesn't exist. so more inventory coming on to the market do you think the market will improve for the next couple of months >> it may a bit.
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inventory and sales are seasonal so it may be an upward tick. so many homeowners don't have the incentive to want to sell. so you don't see sales because you don't see people wanting to mov move >> what about prices mortgage rates have increased this past year do you hit a wall on prices? or if there's so much demand and so little supply do prices continue to go higher? >> when you have a lack of supply relative to demand, we have strong demand in the form of a millennial first-time home buyer, police prices do go up even though rates have gone up a bit and we reduced affordability, when you look back, even a mortgage rate at 4%, 4.5% allows you to buy an awful lot of home. what's why we continue to see the purchases we see and prices
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risin rising >> you look at trends all the time we talk about millennials always wanting to be near the city. we have so many more single family rentals now do you think this desire to rent will continue in the home buying years? >> there's two points there. one, the move out to suburbia is driven by lifestyle choices. like every other generation, maybe later that generations, that desire for suburbia and what it provides when you raise a family is alluring about a third of the houses in the housing stock are traditionally rentals. so we always had a large rental share of houses out there. if there's demand, there's incentive to turn those homes into owner occupied. >> 88 million millennials. we have this massive generation
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coming out number one age is 27 they're about ready to enter that time in their life what will happen to housing prices if we don't build more housing stock? where will they go we have a ten-year tailwind ahead of us. we already formed 8 million new households in the united states since the great recession, we only built 5 million housing units. that's a larger issue. we need to build more. that's not easy. in we don't, prices will continue to rise and people will not be able to afford homes. we already see that in some markets. san francisco is a classic market most people in san francisco cannot afford to buy the homes for sales. >> builders say they cannot build the affordable homes now because of the price for land,
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tariffs, canadian lumber, steel tariffs, aluminum tariffs, they claim all they can build is the move up and the luxury home. where do you get that entry level housing stock? >> that's a huge challenge the fixed costs going into homes are quite expensive. the higher production costs are there, too the home construction industry is on the verge of a potential increase we always built homes the same way. many larger home builders are look into modular, manufactured portions to reduce costs and help to make the micks work at the lower price points >> are they going to improve >> i hope so >> 88 million people at some
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point. >> once someone hits the early 30s, two important things for homeownership are buying a home and having kid mark and diana, thank you. >> thank you let's wrap it up with your morning rbi. this sport is called football. not the soccer kind. jets quarterback sam darnold just signed his rookie deal, four million for $30 million. 20 million of that is a signing bonus and guaranteed and that 20 million is guaranteed to be paid within the next two weeks the jets first preseason game is august 10th. on your ride to work, you're sitting in traffic, sam darnold
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will get his $20 million with one preseason game under his belt good for you, sam. [phone ringing] need a change of scenery? the kayak price forecast tool tells you whether to wait or book your flight now. so you can be confident you're getting the best price. giddyup! kayak. search one and done. with tough food, your dentures may slip and fall. new fixodent ultra-max hold gives you the strongest hold ever to lock your dentures. so now you can eat tough food without worry. fixodent and forget it.
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good morning central banks in focus we'll tell you what the bank of japan said that moved currentlies. we'll get you ready for the u.s. fed decision. more problems for chipotle the restaurant chain closing an ohio location after reports of people getting sick. and bp shares jumping after reporting a 2300% rise in profi. we'll hear from pfizer and procter & gamble in the next hour it's tuesday, july 31, 2018. "squawk box" begins now.
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live from new york where business never sleeps, it's "squawk box. good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm michelle caruso-cabrera along with andrew ross sorkin and mike santoli u.s. equity futures a flat open. the s&p would open up by 2 the dow jones flat, and nasdaq up by 4. overnight in asia, big news out of the bank of japan policymakers kept their rates unchanged but signaled they would allow more flexibility when it comes to a key interest rate it would go to 0.2 rather than 0.1? >>


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