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tv   The Exchange  CNBC  September 6, 2022 1:00pm-2:00pm EDT

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joe t. >> i'm glad karen mentioned defense. we talked a little bit about industrials before certainly within industrials, you could own a name like northrop grummen >> josh brown. >> on really bad days like last thursday and friday, i look for what's not going down. uber is on that list the stock's got great relative strength to it >> thank you see you in ot. the change is now. hello, everybody i'm brian sullivan in for kelly evans for a while. she is on maternity leave and here's what's on deck today. could europe's energy crisis fuel a financial crisis or banking crisis it could and we're going to tell you why and who might be the most exposed and why it might be good news for american companies. zbl plus, just 24 hours away from apple's big event. a look at what to expect and how to position your trade and from out of stock to
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overstock. we first spoke with the ceo during the pandemic when they could barely keep up with demand fast forward two years, it's dropping off a cliff we'll check back in with him as he is managing the changes we begin with today's markets and bob pisani at the new york stock exchange what i've seen from your notes is we're kind of in the middle of a nearly historic losing streak for the nasdaq. >> it's a tough situation. hoped we had more energy coming back, more interest. it's just not there. let's take a look at the major indexes. the s&p 500, six of seven sessions time-out downside nasdaq lower for the seventh session. down about 9%. you have to go back to november 2016 to get a bigger losing streak that would be nine days, nothing 2016 so we're in a serious downturn on tech stocks
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there has been moments of leadership today, but it's been very defensive take a look at some of the stocks on the upside mostly utilities like next energy and reits and some pharma stocks doing well. lilly and abbvie another group that's doing well, metals, mining stocks. peabody, arch. a lot of talk about europe's approaching winter over the weekend getting traction there big cap tech down 1 to 2%. we're off of the lows, but again, these are all in down trends apple's down six of the last seven trading sessions it was down 263, look at that, 155. we're down microsoft was 280. now 254. we're down oh, 10% or so in the
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last two, three weeks. amazon, same situation nvidia was 187 just about three weeks ago so we're down 25 to 30% in nvidia. keep an eye on that one. quite a big move to the downside despite this, i don't see panic out there. i call around, what's going on, i don't see heavy volume here's the vix here. 27 earlier today this is not panic territory. this is elevated, but not panic. i'd say 35 or so is where it gets panicky, where it was in mid june i wish there would be a little more buying interest just don't see it now. >> it's there in coal. the big tech stocks are down 40%. coal stocks have doubled what a year. thank you very much. if you think europe's energy crisis could not get more chaotic or confusing, think again. there have been a flurry of headlines and comments in the past 48 hours that add even more layers to the story.
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first, putin launching another salvo. his energy war with europe cutting off all natural gas to germany to the western sanctions on his oil end now keep in mind there's not only no timeline for those sanctions to end, but more stringent sanctions on russian oil will go into effect on december 5th european spot natural gas prices up 1600% in two years and electricity prices today are at records. headline number two. opec and russia agreeing to effectively cut oil production by 100,000 barrels next month. that is something we reported may happen over a week ago on "power lunch." story three. it's a big one could the energy crisis turn into a financial or even a banking problem? listen to this an executive at the massive norwegian energy company saying today at a conference in italy that as much as $1.5 trillion in
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margin calls over energy trading could require some kind of backstop or bailout or energy trading itself may be at risk and that 1.5 trillion would be on top of that goldman sachs could be an additional 2 trillion in energy bills this winter for europeans that's 3.5 trillion by our math. let's try to figure out how this plays out. dan pickering and bob mcnally, president of rapidan energy group. bob, i'm going to start with you. i don't want to make too much of this it was an op-ed from the iea, respect him very much, and the financial times today saying basically fear mongering, germany's going to be just fine. but when i see $3.5 trillion in numbers thrown around, i see electric and heating bills up 2 and 300% in the fourth biggest economy in the world with many banks exposed, how big does this get or is this as bad as it gets
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right now? >> you're right to make something of it. i think historians are going to look back at the last few days and call it the inauguration of not an energy war in europe, but a world energy war germany gets over half its gas f from nord stream one and they ripped the pretense off. the russian minister said we're not playing games. these sanctions aren't coming off for a long time. they're getting worse. it's hard to see how germany and central europe, slovakia, hungary, aren't going to have rationing and gas outs this winter >> let me ask you, bob, let me jump in. sorry to interrupt, but i want to ask you a follow up i think it's important we're satarting to see some leaders on the margins in the chueck check rub czech rc
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say we need to rethink the sanctions because they don't appear to be working and our people are suffering do you think there's a chance that on december 5th those sanctions do not get enforced? >> that's always that chance, but then you raise the real way this gets ugly is it shatters eu unity. that's what putin wants to do. i don't think you'll see france and germany backing off of sanctions and going ahead with the embargo. but could it fall apart in the u.k., in italy, in other places? absolutely, but that's a worst case scenario long-term for global peace and energy stability and a big win for putin if he shatters e.u unity and germany could decide this winter not to send gas to austria. so there's other manifestations of this as well, but the threat to e.u. unity is the biggest
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take here. >> effectively spain has said to germany, these are your problems, not ours france is probably sitting fine with nuclear now that the river levels have come up. a couple of weeks ago, jennifer granholm sending out a letter to oil and gas companies saying let's rethink exporting so much of our problem in other words, even the u.s. to bob's point, may be saying we need to keep what's ours do you feel like there could be some kind of a dangerous hoarding or anti globalization movem movement even happening here >> brian, i think things would have to get worse before we start hoarding, but a crisis is unavailability of supply that's what we're afraid of in europe and we've got a financial problem there that could turn into a physical problem. you were in germany recently you know that they're taking this very seriously. i doubt that we're going to see
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hord hoarding or changing dramatically of how u.s. players work, but a crazy winter and things could change. i think it's unlikely. >> unlikely, but to your point, dan, the people are going to be the ones who make the decisions and i don't mean by people tech o techno technocrats. they want russia out they want putin gone everybody wants him away but you wonder how far the populations are willing to go in the situation and how bad could it get when i hear natural gas prices are up 1600% in two years. do you see them going potentially any higher >> it could. i think it's a fwam of chicken this is maximum leverage point for the putin. it's about price, now freezing and people being cold. i think my expectation is that the gas starts to flow again
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when it's physically cold and i don't think putin's going to kill europeans that's too dangerous for what he's trying to accomplish in ukraine. his maximum leverage is now. so price price has been higher than it is now. it's moderated somewhat. we saw negative gas prices, negative oil prices in the u.s price can do anything in the near term. i think this may be as bad as it gets here in the next four weeks. >> there is this narrative out there, bob, which i don't like which is oh, putin's winning because they're selling a lot of oil. they could be making those up. they lied about the pipeline the biden administration, very smart, rational guy, said this is going to be the end of russia's run as a reliable producer to the west not just now, but forever. how much damage is putin doing to his own people? >> so, longer term, enormous
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damage i think what you said is right long-term, and let's see how long this lasts. i hope dan's right that it ends this winter. you're not going to see russian companies going back into russia as long as putin's there, it's going to be north korea, south korea. and russia's capacity will go down and reputation as a reliable producer will be damaged. however, near term, i think we see the oil, they're making more money on the oil you can see the ships going on the gas they sell under long-term contracts at lower prices the question is as you said, will europe go ahead with this embargo on crude and products. if so, how much more oil will go off from russia and will putin respond add he did sort of arbitrarily, just cutting off supply earlier >> so many questions
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so long to go. storage levels are good, but have never run just on storage alone in germany by the way, u.k. is probably in a worse spot dan and bob, thank you very much quick programming note, the ceo of oil filled services firm, liberty energy, will join "power lunch" at the top of the hour with more on what this means for the american oil and gas industry we may actually benefit because we need to export more tonight, we're going to have a special look at the energy emergency. why it matters to america and to the world with an all-star guest lineup including ceo of the country's largest nat gas producer, eqt. why the boston area warned it may not have enough power to give you heat and light in the years ahead. plus, the ceo of american light and power. that is tonight, 6:00 p.m. eastern time tie it all together to why it matters to you, your family and the united states. we have a big news alert on the
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housing market mortgage rates are on the move and not on the way down. >> no, they are not, brian after a really volatile week last week, here we go again. the average rate on a 30-year fixed jumped to 6.25%. we saw some very wide sprwings last week, but this jump up today would seem to indicate that the 6% range is now the new normal the last time we were this high was back on june 14th, but rates came back down into the 5s quickly in august. it was the jump in june that put the first brakes on the housing market, which has been weakening ever since rates did fall back to just about 5% but recent word from the fed it's going to be more aggressive on putting the brakes on inflation is pushing bond yields higher and consequently, mortgage rates higher. the 30-year fixed was at 2.95% one year ago today so if you're putting 20% down on a $400,000
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home, your monthly payment today is $680 more than it would have been a year ago and that is not even factoring that the same home today is much more expensive. >> and try to heat that because now you've got more on your heating. >> you do. >> 680 plus 200. 880. luckily there's zero percent inflation. this summer's rally turning into a september swoon stocks have sunk you're supposed to buy low, right? your next guest has three picks. plus, the battle for your privacy. heating up tech giants watching one bill that goes far beyond your privacy law and would have devastating effects on google and meta the details ahead. as we head to break, here are your numbers today nasdaq down again. in fact, the loss is accelerating off 1%. dow is off 246 nasdaq down what, eight days in a row now?
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next year and brought some ideas ahead of him he is jeff crumpleman. it's kind of funny, jeff it's like everybody's trying to pick the day the bottom only one person has ever done that and that is the late, great mark haines it's a fool 's errand to try to figure out a day when a market bottoms. you're long-term optimistic, why? >> i think what we have now is when we look at the market, three areas of analysis. one is fundamentals. valuation, the other is technical. i think on the fundamental front, you actually after the presser, we've gotten good news from the employment front, the inflation front, on the manufacturing activities front so i think that we're getting better than feared or less worse data folks expected. so fundamentals are still solid.
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valuations come in and we move back towards that bottom that we hoped, you know, and still hope will hold back in june, and from a technical standpoint, we're starting to look a little oversold again so we mix that all together and i think you have a fairly good cocktail longer term knowing that folks are still going to fret about all these transitions going on with fed policy and inflation. i think it's a wonderful time for active management though because many stocks are down 40, 50%. it's a stock picker's market at this point in time >> largely been flushed. you think about a company like a starbucks. you like the name. also andrew ross sorkin will be live tomorrow on squawk box. i know people that will sacrifice a lot of stuff, jeff, but if they are addicted, and i mean, addicted to starbucks, they go. whether it's 4 or 5 bucks for that small, whatever they call
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it >> yeah, and you see that in sales growth in the united states you've got double digit comp store sales at starbucks so i think if you want to bet on anything in america, vanity, caffeine those are two areas and themes that you can play that are simple and quite frankly, brian, for me, if we went through covid, all of a sudden we were looking at stocks that had great business models with no earnings and it was all built around remote access and that type of thing. it's kind of a wonderful time to look back at high quality, what might be considered boring growth stocks again. it's cool to do that again and i think starbucks at 24 times earnings, which is kind of hard to find at those low 20 levels in terms of you know, pes, it's a great time to own a high quality dividend growth stock and china can be a boone for them as well as people going
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back to work and addicted to caffeine like you said >> hopefully we'll be addicted to some infrastructure improvements we can talk about this for a couple of years. finally waiting to pass, a name like a vulcan materials or united rentals is there going to be an infrastructure boom here >> i think there can be an infrastructure pick up, if you will, and that is a catalyst, but also just recovery from this kind of concern about recession. we're seeing that whether it's multifamily housing, not necessarily residential, or just general industrial construction as we reonshore and do those things this is a play on domestic capital investment and yeah, if you look at united rental as the most broad, diversitied provider of rental equipment, it's just a place
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where you want to be and vulcan benefits as an aggregate provider from those trends i guess a short answer is yes. >> crews will be fixing the roads, sipping the starbucks because hopefully they got a raise, they deserve it be well. >> thank you >> i'm not prone to understatement, but here you go. the future of work is in flux some say some employers bringing everybody back and some saying stay home as long as you want. you're going to work remote forever. but what is the real read on america's workforce? we'll dig into that with steve liesman and demand for things like outdoor decks, it's fallen off a cliff. trex makes them. that stock down 70%. we'll speak with the ceo about whether the home improvement boom is now bust exchange is back aerhi ft ts. ♪♪ this... is the planning effect.
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♪ heat makes it last. so you'll never sit this one out. icy hot pro with 2 max-strength pain relievers. welcome back welcome to the exchange. let's get a check on your markets and if you don't like red, you might want to look away dow down 227 nasdaq down nearly 1%. at the high of the day, we were up 145 futures were up. looked like a good tuesday after labor day. the weather's trash, but other than that, it's been pretty good 380 off the top. and the nasdaq is on pace for i believe the eighth straight down day, which is approaching its record nine-day losing streak of like 15 years ago. what would have thunk it here's some of the movers this hour energy dominating the headlines today. look at the names. some of the solar names.
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the battery company. solaredge tech, the tan etf all doing well green there. atd is on pace for its best day in two years, securing a $1.2 billion investment from state farm google is putting in 150 million bucks for product development. remember, the search giant took a 6% stake in adt in 2020. shares down about 4% since then, but hey. trying to find a good news stock on a tuesday, there it is. adt up 15% here now are some names hitting new 52-week lows match group falling to a new all-time low anybody dating anymore media names like charter and our parent company, comcast, warner brothers and discovery intel, its lowest levels since may of 2016. ouch let's get a cnbc news update for that, let's go to tyler
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mathisen. britain's new prime minister, liz truss, says she will make the u.k. an aspiration nation >> now is the time to tackle the issues that are holding britain back we need to build roads, homes, and broad band faster. we need more investment and great jobs in every town and city across our country. >> in south korea, the death toll has now risen to six from the most powerful typhoon to hit the country in years officials say the casualties would have been far worse if it weren't for days of warnings before the storm came ashore the typhoon dropped more 3 feet of rain in some areas. look at that and the white house says preside preside president biden has made a final decision against designating russia as a state sponsor of terror ukraine has pushed for that. a white house spokesperson said
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the move could delay food exports and jeopardize deals to move food through the black sea. good to see you. >> you as well we have a lot more to do on the exchange still ahead, new iphones, new watches. what to expect at the apple event. how much is it going to set you back and what else might be unveiled we'll get you ready for the event and what it means for the stock, next. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. only at vanguard, you're more than just
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apple's big fall event is tomorrow four new iphones and three new apple watches expected to be announced in cupertino, california shares of apple had become within striking distance of their all-time high last month, but they've fallen nearly 7% over the past two weeks. you just wonder, angelo, is apple just getting caught up in the selling of everything else we talked about starbucks being
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addictive. your phone is the most addictive thing you've got >> you're absolutely right as far as kind of how people get apple, we view it as more of a consumer staples oriented product. a lot of those investors out there may think the stock is overly expensive we tend to think otherwise a plus two-year basis, they're looking at about 23 times earnings that's a very reasonable kind of must have type of product out there. not to mention the opportunities out there as well as their buyback opportunities in place we continue to like the stock despite the recent selling pressure >> but the incremental gains have really come down. every year when the iphone was born, it like doubled in computing power. it was twice as big. twice as awesome now is the iphone 14 going to be that much better than somebody's 11 or se >> i think answer to your
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question is probably not especially after two unbe unbelievable cycles we had after the 12 and 13 cycles driven by you know, 5g adoption and of course kind of some issues out there but when we kind of think about apple here and really what the story is going tforward, it's really on the pricing side of things but as far as looking at apple and what they've done here over the last 15 years since the initial iphone, you're looking at a $500 price tag back then. you're looking at north of $800 today and that only continues to go higher we think as future cycles go on because of what they're able to continue to throw. >> i wonder if the best innovation apple ever made had nothing to do with technology and everything to do with the monthly payment? you didn't have to buy the phone anymore and cough up 5 or 600
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bills. oh, it's $29 a month so you wonder why not stretch to three years. the iphone turns into a car. at what point do we have a $1500 phone? >> i think you're going to see more of that going forward potentially listen if you think about some buckling strategies out there, maybe they bundle more and more stuff together maybe they extend your monthly payments out there from two to three years, but at the most of the day where most of the revenue comes from continues to be from those teleco companies when you look at their strategy, they continue to be very aggressive on the promotional side of things which is why we continue to see good adoption as far as iphones are concerned >> angelo, get pumped. you're not going to sleep tonight. i can feel it. cfra, 175 target it is not just iphones that
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apple is going to be pushing it's also gaining momentum in digital ads, but regulators growing push for privacy has the internet ad giants on their toes julia? >> brian, ireland's data privacy regulator levied a record $400 million fine against instagram following an investigation into its handling of children's data. meta saying quote, this inquiry focused on old settings we updated over a year ago. we've since released new features to help keep teens safe and their information private. all this comes as the privacy and protection act got further along in congress than any bill in decades, though not expected to pass. plus, the ftc is hosting a forum thursday to help it craft new rules on what they call commercial surveillance and lax data security practices. the biggest pressure is coming from apple on the heels of ios's
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privacy update, its business is growing. according to a new study out today with the adoption of its search ads while meta's share of ad has declined. there's another near term headache for these ad giants that's the growing patch of estate privacy laws such as california's act that could make doing business more difficult even if the federal law fails. be back to you. >> joining us now to talk about who is going to win the digital ad game and he's a big hint. he says it's not apple mark douglas founder and ceo of mountain. mark, love having you back on the show i was hoping that ryan reynolds guy might show up, but he's probably too busy selling gin or cell phones. let's talk about who's going to win this digital ad game and
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why. >> the reason i said it's not going to be apple is because when you wake up in the morning and think of what you want to search for, you don't go to the app store. you go to google and when you discover things on the internet, you discover them on instagram, tiktok, on television. so apple's app store is really, people who spend there, they're spending to protect their position in the app store so some other app is not advertising against their brand. so apple's share that is growing, it's kind of a tax on app developers, but it's not the same kind of business google has. >> how much, download a new app and our viewers and listeners know what we're talking about. the first you get is a button. allow or ask app not to track. would that, i almost said stupid little invention, but that invention gave apple the keys to the mote, did it not
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how powerful is that button? >> basically what it did is it made it difficult for companies like snap and meta to attribute the ads, what they were doing to their customer's business and the kind of revenue they were generating because a lot of times you might discover something in an app, but you buy it on your computer. so without that tracking that id that apple was sharing, that makes it very difficult and as a result, both meta and snap have taken a hit in their ads business, but it doesn't make consumers then want to go to the app store. that's the point there so it definitely hindered some people, but it doesn't enable apple in any way to steal market share. they're taking their market share from the app developers themselves >> does apple want to be in the digital ad market? it seems like a tough business apple likes to make share own thing. they're the fleetwood mac. going to go their own way. >> until apple decides what
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they're going to do with apple tv, they have this huge tv business they don't offer ads on when they decide they're going to go ape, they're going to have television ads against the on tent on tv, that's when they enter the ad game and they haven't done that yet. >> i've been using apple tv since they had that, the first box slightly smaller than a shoe box. you know the one i'm talking about? the silver one you had to download i tried out roku and i thought wow, this is a better user experience roku what's wrong with apple? they're such a good company. i'm trying to understand why their apple tv product, while neat, is not maybe worth five times what a roku or fire stick is >> i think when they first introduced apple tv, people thought it would be an apple television turned out to be a device you
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attached to your television. it's the most expensive device so i think in that game what's called ott devices, the devices that allow you to stream into your television, they're number four or five so they decided to invest in content so they have a lot of catching up to do on television but they also are investing a lot so there's a lot of potential. >> let's see what i like about it, does have the ethernet port so you can hard wire the apple tv box and not have in i any kind of a lag. appreciate your views. thank you. coming up, goldman says get back to the office jpmorgan says you can still work from home a few days a week and all that may not matter whatsoever given covid is still keeping people out of work we're going to take a look at how the return to office is shaping up and the economic impact of it all before we do that, dow down 175.
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steve liesman has a look at the impact that covid is still having on work absences and what that means for the economy i heard you on squawk this morning. i was like, the number of people calling in sick is just unbelievable >> huge. it's huge. and i did some sort of unique comparison we'll get to those in a second first, let me tell you, americans are slowly returning
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to the office, but hundreds of thousands more, they're calling out sick and remaining out sick. the august jobs numbers showed us that 10.3 americans working from home during the pandemic. that's down from nearly 50 million in may 2020 when they first started gathering data down almost a million from july. the decline together with the news we heard earlier, more companies are ringing the bell, calling the workers back to the office suggests there may be further to go at the same time, you can ring the bell all you want. a large number of workers are still going to be calling out stick. 1.5 million americans called out sick due to the illness in august that's a half million more if you took an average january or february from 2009 to 2019, it's a half million more. during the height of normal flu season and almost the double ten-year average for august so while there may not be
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lockdowns, we're living with a permanent flu and that's not to mention an estimate from a paper from brookings that from 2 to 4 million may be out of the workforce due to long covid, all of which is a challenge to get inflation down and the u.s. economy back to potential growth >> any advice for ceos out there dealing with this, steve where do we go from here >> you know, i want to start to report, brian, and you can help me with this the other side of this equation. you know, years ago one of our desk producer, ellen eagen, reminded me that your company doesn't give you vacation. your colleagues give you vacation i think that's also true for sick leave so that does mean you have to start planning for an additional outage it depends on how this virus progresses you know what the number of illness or out due to illness this past january was 3.3 million. that was triple a normal january. i don't know if this continues
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so it means you have to have more people backed up in terms of if somebody calls out sick, you still need to get the work done or work your existing workforce harder i think it's something hr folks to going to have to come up with solutions for. >> case numbers and hospitalization data is pretty much the same it was a year ago and everybody just kind of moved on it's weird in a way. >> there is one upside to this brian, which i don't know if it's an upside at all. if you call out sick with the sniffles or whatever, by the way, that is the new protocol. if you have sniffles, whether or not you have covid, you're pretty much going to stay home these days, but for some percentage, it's 44% of the workforce, they can stay home and they can work from home while they're sick whereas they may not have been able to do before so it's not a complete loss. >> good, by the way. used to be the days of people
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sneezing and snotting all over everything and you still came to work >> brian, no more snow days, man. >> it may never snow again, i'm told thank you. up next, shares of trex off by about 70% of their all-time high that was during the pandemic panic fix your home up last year december we spoke with the ceo when the company was out of stock today, we're going to face some of the biggest challenges they've got. stick around you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find
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tech upgrades for your changing wifi needs. and advanced security at home and on the go to block millions of threats. only from us... xfinity. welcome back the pandemic-fueled home improvement boom was certainly kind to many companies including trucks that makes shares of composite decking, and their stock surged 61% to all times last year. everybody was home fixing up their home times have changed shares are down 66% as demand has cooled and the company warned its commercial partners are overstocked with product for more with how they're navigating the market, let's welcome back in brian fairbanks. i don't know if you know this,
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but i know where you are and you look out your window out that hill and you see james wood high school i graduated from james wood, and i know exactly -- i want texas rex to do well because my folks still live in winchester, virginia, go colonels, by the way. how is business, and how do you navigate through this time >> yeah, so for our last earnings, we reported that we expected to see the second half of the year decline by about $300 million 200 million of that is related to destocking in the channel our channel had expected to grow much in line with the way they had the past couple of years, and rather than growing what they've seen is more of a flat type sales now, this sounds pretty negative of its face. that's coming off of 60% growth over the past two years. so we're still very satisfied with the sell-through that's in the channel. we just need to get inventory right sized. >> was there ever a time -- you might not admit this that during
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the peak of the pandemic when everybody was just fixing up their home that you and your team and your board got together and said, man, this pace can't last >> we sure knew that growing at 40% type revenue, which is what we grew last year wasn't going to continue, but we're still in the early stages of the wood conversion marketplace today about 25% of decks installed are composite. we've been converting 200 basis points of share on an annual basis, so we see a long runway ahead of us. >> how much are you exposed to new home construction versus people who have lived in a home for ten years and say, you know what they live in apple pie ridge right around the corner and i want to throw a new deck on. >> a smaller portion of our business is related to new construction over 90% is related to repair and remodel. today with higher home prices, higher interest rates, we expect that people will be staying in their homes longer, which will continue to drive the repair and remodel. there's about 50 million wood
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decks out in the marketplace, and all of those decks will need to be replaced in the coming years. they will all be part of the target market. >> so you -- is it possible you're sort of counter housing cyclical you don't want people to sell their home you want people to stay put. >> either staying put or selling their home does tend to drive the remodeling spend, but the economic changes that we're seeing this time may drive a few more people to stay in their homes because of the affordability issues of moving out. >> what about materials costs? you seen any decline in your input costs, brian >> we're fortunate in that we buy materials that go into our composite tdecking is about 95% recycle. what we've seen is moderation in the polyethylene cost as well as wood at this point we've not seen a significant decline, but we've also seen a moderate, not seeing those significant increases like we saw in '21.
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>> brian fairbanks, ceo of trex, maybe i'll see you at the apple blossom festival next year brian, fairbanks thank you very much appreciate that. still ahead, if everything goes to plan with vw spinoff, you'll soon be able to buy shares of porsche. maybe you can't afford the car, but maybe you can afford the stock. but with ferrari's stock down this year, will there be enough juice to juice up portia's ipo robert frank is up next with that go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson.
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welcome back, are the red lights flashing for that luxury listing. robert frank joining us with a look at a cool ipo, if anything for the cars. >> porsche aiming for a valuation of $84 billion, that would equal the entire market cap of volkswagen, twice the market cap of ferrari. the bull case is that porsche
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like ferrari is a luxury brand and should get a luxury multiple porsche margins of over 25%. that is massive in the car world. makes about 300,000 cars a year, profits were up 22% just in the first half now, several big investors like the qatar investment authority already pledging to buy big blocks of stock. that bodes well for demand, but there are governance concerns. it's a complicated ownership structure with a porsche family keeping voting control through a special class of shares, public investors will get non-voting shares on top of, that the ceo of volkswagen, oliver bluma, he's going to remain the ceo of porsche. many shareholders opposing those dual roles you've got recession fears, the energy crisis in europe, all those questions hanging over the stock. ferrari was seen as the model here that stock up three and a half
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times since it went public in 2016 ferrari struggling down 26%. brian. >> how much of this is an issue with the porsche family and what is the sales mix between cars and like the -- i call it an suv, but it's just a car that's jacked up really. >> yeah, exactly well, their switch to evs has been successful although early you know, right now evs the tie con makes up about 18% of sales. they hope that it will account for 50% of sales in the next three years. the macon goes electric in about two years. so you know, they've got a good road ahead of them it's still a lot of unknowns in terms of investments right now suvs are more than half of their sales. that's going to be a huge shift for them and the investors in this company. >> charges fast, looks great, all you got to do is have like $130,000 and you can get one robert frank. >> exactly
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>> that's it thank you very much. that does it for "the exchange." do not forget you can catch us tonight. we're talking more about energy 6:00 p.m. for our cnbc special, energy emergency, check it out for now i'll send it over to "power lunch." >> thank you, brian, welcome to "power lunch." i'm seema mody in for kelly evans. here is what's ahead stocks are falling today as the september swoon continues. all three major averages are lower right now. if the nasdaq stays in the red, that would mark seven losing sessions in a row. that is the longest losing streak in six years. is there more downside ahead and risk for stocks? we're going to talk about that. we'll also be joined by a power player tillman fertita will be here to tell us what he's seeing in his businesses, inflation, the labor shortage, consumer spending. we'll cover it all. >> thank you very much welcome to "power lunch," i'm tyler mathisen


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