10AM Hour: Exclusive: Airbnb CEO, Compass CEO on Housing Affordability, Reaction to Apple’s Product Event 9/10/26

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0:54Make amazing happen. Learn more at cdw.com slash Lenovo. Good Thursday morning. Welcome to Squawk on the Street. I'm Sarah Eisen with Carl Quintanilla. We are live, as always, from Post 9 of the New York Stock Exchange. David Fabers on assignment. Coming up this hour, big exclusive interview with Airbnb CEO Brian Chesky, including his advice for Sam Altman and Dario Amode as existential AI fears build on Wall Street and beyond. Plus, as high rates remain in sharp focus, we'll talk to the CEO of Compass Real Estate about how it's all impacting the housing market. And we'll get to the street's reaction to Apple's big product launch and whether the foldable iPhone will move the needle for investors.

1:34Let's get some wholesale inventories crossing. Rick Santelli's got it. Morning, Rick. Good morning, Carl. Indeed. Now, on the inventory front, this is a final July read, meaning we take the mid-month read and we update it. The mid-month read was 1.3 percent. It remains at 1.3 percent, And that would be the loftiest inventory bill going back to March when it was up 1.5%. Now, if you look at the sales side of the equation, this is a fresh July number, up eight-tenths. And that is followed or preceded by minus 2.9%. And up eight-tenths would be the best bill that we've had going back to, well, two months ago when it was up 3.5%.

2:18And this is the interesting part. So if you look at the up three and a half percent in May, it was followed by June, which you see the revision there from three percent to two point nine. So those lofty numbers negated each other. We're back on track here on the positive side of sales. The big news this morning, PPI was well, well above on its year over years, the two percent target of Fed. But it is the wholesale side. And if you looked at expectations, it matched up pretty well. that doesn't dismiss the fact that it was lofty. And of course, claims were well-behaved. Hey, there's one more number out, existing home sales for August.

2:55And for that, we go to Diana Olick. Diana? Well, Rick, existing home sales in August fell 2 % to a seasonally adjusted annualized rate of 3.98 million units. That's pretty close to expectations. The street was looking for 3.97 million, but that's the slowest in over a year. Sales were down 1.2 % year over year. and they fell hardest month to month in the Northeast and the Midwest. Now, this count is based on closings. So that's contracts likely signed in June and July when mortgage rates were on the higher side, but not quite as high as they are today. There were 1.62 million homes for sale at the end of August.

3:33That's up 3.2 % from July and up 5.9 % from the year before. That's the highest level in over a decade because the current sales pace puts that at a 4.9 month supply. Now, despite higher supply, prices continue to rise. The median price of a home sold in August was$429 ,100. That's up 1.6 % year over year. Homes are sitting longer, 31 days compared with 29 in July, but the same as August of last year. All cash at 27%. That's down slightly from last year. First-time buyers, though, made up 30 % of sales. That's up from both July and from August of last year. And just a note on mortgage rates. We don't have the number for today yet, but my source at Mortgage News Daily, who runs that survey number, says he is forecasting that we'll see the 30-year fixed over 7 % today.

4:24It was at 6.97 yesterday, Sarah. Yeah, makes sense, following those market rates higher. Thank you, Diana. Diana Oleg. Just to add to some of the data, we did hear in the last 24 hours from some big bank CEOs. Charlie Sharp was with me at the Wells Fargo conference. I mean, this is one of the biggest lenders in the country. and pretty positive commentary around what he's seeing from the consumer right now. Listen to what he said about how credit's doing. We think about credit on the consumer side. Delinquencies are actually improving from very, very healthy levels already. We don't expect that to continue.

5:01It's not going to go on forever. But the health of the consumer from a credit perspective is really strong. Their spending, their savings levels are sustainable. And then I followed up Carl and asked him why. because, you know, there's all this angst about high oil prices and higher prices at the pump and consumer confidence surveys down. And he said, look, as long, you know, we're trying to figure out, too, but as long as people have jobs and we have continued evidence today that jobless claims remain low, there's no mass layoffs, and wages are rising, you know, enough, then people are out there spending.

5:32We just showed the delinquency chart. And what it tells you, this is just on credit card delinquencies in particular, but basically there's no big alarm bells or warning signs. You know, the numbers are a little bit elevated. They're certainly off the high. You can see the all-time high was second quarter of 2009, right, crisis level. But the recent high was in 2024 in the second quarter. It was about 3.22. So we are below that. We're under three. That's good news. He also said, I don't know if you heard this, like the K-shaped economy was very much real when gas prices first started going up.

6:07But then there's been an improvement as gas prices came down. The lower income started improving. So that's something to be on the lookout now as gas prices have risen again. But ultimately, you know, I thought it was a very positive read. Yeah, he said the same thing. Remember the day Besant said that the K-shaped economy was over? Charlie was on this desk that same morning and he agreed. I think it was BlackRock last week that called it the gator jaw economy, where the upper income cohort is continuing to improve. The lower is essentially steady. So it's not a K. The bottom line is flat. It's a gator.

6:43Yeah. OK, that's one way. I mean, everyone will find their shape. Here's some recent data from card spending from Bank of America, which shows, I mean, in the last week, it was really good, 7.8%. It might have been skewed a little bit by Labor Day timing and also the rebound in gas prices because that's reflected in that higher spending. But pretty good spending. Brian Moynihan was also on, echoing what Charlie Scharf said about how well consumers are doing. He was on with Jim. Listen to what he said. They're borrowing. They're using the lines. The credit quality is good. They figured out in a world where a lot of things are changing, they figured out a path forward pretty much.

7:20They still worry about gas prices and how it affects product prices. But everything we see is fine. It will be interesting because some of the higher oil prices, it does show up more in confidence surveys and polls. I mean, it'll be interesting to see what happens into the midterms because both of these CEOs with really good views into consumer behavior and spending and lending say that things are really good. So, you know, that's why I always say watch what they do, not what they say. I do wonder how it shows up politically. I know. I mean, we had a long conversation with Jim about TJ Maxx and Tapestry and Walmart and RH and a lot of consumer discretionary, small part of the market, so it's not showing up in the headlines.

8:02But is the market sniffing out weakness that the banks are not willing to tell us about us yet? And also Staples. I mean, as a counterpoint, I have some commentary from the Barclays Back to School Consumer Staples Conference is also going on. And it's not as rosy there. I mean, we know Kraft Heinz has talked about consumer weakness, consumer in the U.S. and around the world, still despite some competing headlines about great job growth and other things, is under pressure. McCormick, the spice maker, the consumer backdrop, particularly in the U.S., is increasingly challenging. Kimberly Clark says middle to lower income households are under increased pressure.

8:34Mondalee, COO at the conference, said there are some challenges. So I do think it matters where you sit. These are sort of the premium brands. We haven't heard much about trading down, for instance, to private label. But that is one area where we continue to hear like the consumer is not all that great. Yeah, yeah. Procter, Procter's been in trouble. Nestle guidance today, definitely. Right, that's the spot. That's kind of the weak spot. For more on the markets this morning, let's bring in the JPMorgan Wealth Management Chief Investment Strategist, Phil Camparelli, joins us here at Post 9 in Philly.

9:07Good to have you, as always. What do you make of this? Is it a matter of time before these energy pressures show up in consumer? Yeah, good question. It's like another day of oil prices having a stranglehold on capital markets. It's the yield curve. European Central Bank just raised rates on the back of this. What we're trying to do, though, Carl, is kind of look through what I don't want to underestimate. It's the biggest near-term risk that we have, right? Continuing tightening of financial conditions. But how do we look through it? I think taking a dashboard of financial conditions. Tenure note is getting all the attention, right?

9:384.9 this morning, a whisker away from the October 2023 high of 5%. But what are the other things? Back then, Carl, the federal funds rate was 200 basis points higher than where it is today. That's 825 basis point rate hikes. Barring rates, I think investment grade barring is tighter by about 60 or 70 basis points today versus where it was back then. And the stock market is almost 90 % higher than where it was back then. So I think your last segment about the consumer is really important. And one of the things we continue to go back to, top 20 percent of earners in this country do 60 percent of the spending.

10:14And they only spend about two and a half percent of their disposable income on gas, oil and electric. So somewhat insulated for that very important cohort, which, again, brings you all back to, Sarah, I think what you were saying, stable labor market, trend growth. And we'll see tomorrow. I mean, tomorrow, if we had a consensus core CPI number tomorrow, that brings you back to 2.4 percent. Last time we were at 2.4 percent on core prices. 2021. Not 2 percent. And this is a Fed chair that says he's going to be more vigilant about inflation. Yeah. And the rest of the world is, I mean, Europe raised rates today.

10:49Japan is expected to raise rates. Does it become increasingly hard for them not to? Yeah, I think that's right. I think there is a lot of pressure. But I think the Humphrey, I'm sorry, the Jackson Hole testimony. I mean, that was like the mulligan on the July FOMC press conference. He had to go back the other way. I think Chris Waller, what he said, I think was really telling, right? that if you continue to see the momentum and disinflation in core prices, that they could be patient. So I think tomorrow is going to be a big day for that. But, Sarah, I agree. European Central Bank is moving. Bank of Japan is moving.

11:17We have two and a half hikes priced in. There's an irony here. If they do move rates, that might stabilize the long end, right? I mean, it's like Bizarro World. That's what Joe Labornia has been saying. Yeah, that was the thinking initially, is that give them what they want. And the July FOMC, when he did that press, I mean, I'm sorry, the June meeting. That's when we saw rates take off. They were hawkish and then rates stabilized. It was only after the July meeting that they took off for sure. Has the playbook changed because of the political and rhetorical friction on AI? So we're still bullish that part of the market, right?

11:52So we're still overweight in terms of sectors, tech, industrials, utilities as part of the AI ecosystem, not the utilities of the defensive world, right, of years ago. So we're still bullish at those parts of the market. And I think what this kind of comes down to, Carl, is the MAG 7 versus the 493. You're looking at the cheapest levels of the 7 versus the 493 in over a decade. We have a S &P 500 target into the middle of next year, up about 10 % from here, about 8 ,400. And that's all driven by earnings. I can't tell you how many people I talk to that are saying, why aren't some of these tech names higher?

12:29Because everybody's asking the same question. the P that people are willing to pay for NVIDIA, for example, who just doubled earnings, people aren't sure what to pay for, right? So those multiples have come down, which I think is a really, really good sign. We started this year on the S &P at 22 times. We're at 19 times now with a market that's up double digits. I think that's an incredibly healthy sign. It's like the opposite of euphoria. Is there anything magic about 5 % on the 10-year yield? Yeah. So the last time we were there, the buyers came rushing in, right? So I think that there is something that is going to bring in demand at those levels, Sarah.

13:02But I keep going back to it's not alarming. It's normal if the 10-year note should be at a nominal growth rate. So if you have 2 % growth, 3 % inflation, 2 plus 3 is 5. But you're not worried about it. No, we're not worried about it. You think he'll bring in buyers. We've had other guests on the shows. I mean, Rishi Sharma from Rockefeller was on earlier this week saying 10-year goes to 5%, then that burst the AI bubble. Yeah, I wouldn't go that far, Sarah. I don't think this economy is interest rate sensitive like that, where 5 % is some magical number. Again, if you're getting the earnings driven by nominal growth, right?

13:35If you take out, Sarah, right, a growth, for example, and earnings go down, sure. But we don't think 5 % is an alarm bell for the AI trade, for the funding trade. I don't think that it's that. What about for the Russell? Yeah, so the Russell has kind of been an enigma all year, right? Because the common sense was the Fed would have to ease for the Russell to do well. They are more interest rate sensitive, Carl, for sure. But the Russell has kind of been an enigma all year. At the end of the day, I think the consumer is what matters. And they're still sitting on a four and a quarter percent mortgage rate.

14:08I mean, Diana reported this morning that new mortgages are at seven. Fine. But existing mortgages, there's still a pristine balance sheet story coming from both the consumer and the corporation that's going to keep this thing going. Yeah. Households, not the problem in this cycle. and other other problems. Yeah, and household debt. I mean, Brent's back to what? 104? Where are we today? Yeah, and we look at this all the time. Total debt in the U.S. is actually unchanged from where it was a decade ago. Government has gone up, for sure. But corporate and household debt is lower, which is actually kind of a really good sign if you're taking risk on the consumery of the corporation.

14:43Right. Phil, thanks. Important month in process as we work our way through September. Phil Camparelli. Get our roadmap for the rest of the hour still to come. Will Apple's folding phone be a winner for investors? We're going to talk to an analyst about that question as yesterday's product launch got a lot of eyeballs. Plus, former National Economic Council director Gary Cohn is with us. We'll talk about President Trump's plan to pay Americans if Republicans win the midterms. And after the break, Airbnb's Brian Chesky with some words of advice for both Sam Altman and Dario Amadei. I think they're on top of the world.

15:17and I think you're most at risk when you're on top of the world because I think hubris always gets the best of us. That exclusive interview is coming up next. I'm a bear, and you know what really agitates me? Watching you scratch up your truck bed with your mountain bike and mess up the inside of your truck with muddy hiking boots. It just makes me like, grrr. So take better care of your truck with products from WeatherTech, From custom-fit impact liner and floor liners to no-drill mud flaps and side window deflectors. WeatherTech can keep your whole truck looking like new, and that makes me less agitated, which is better for everyone.

15:56Trust me. Outfit your truck today at WeatherTech.com. Ever notice how every new AI tool asks you to explain your business to it all over again? Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools, no extra logins, just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. Welcome to the circle. In this game, you never meet the other players. Your goal is simple, become the most popular.

16:37But should you play as yourself or catfish as someone else? With the new host, celebrity contestants, and this time, audience voting will influence the game. You decide who has what it takes to win. Watch the Hulu original series, The Circle, on November 17th. Streaming on Hulu and Hulu on Disney Plus for bundle subscribers. Terms apply. Airbnb CEO Brian Chesky says AI is transforming his company and could create new opportunities well beyond the core travel business. David Faber spoke with Chesky exclusively at Goldman Sachs' Communicopia Technology Conference on AI, the future of travel, and his pre-IPO advice for OpenAI and Anthropic.

17:19David started by asking why Chesky calls AI the best thing to happen to Airbnb. Listen.

17:28Number one, we are shipping 80 % more software than we were a year ago. So this is like a super tool that allows us to ship as much as possible. Number two, Airbnb is a very, very hard business to run. We have one of the most difficult customer service challenges in the world. There are hundreds of different types of problems that can happen on Airbnb. And we have to historically train seasonal customer service workers. Now we can train an AI that understands the entire context. Almost half our tickets are now handled by AI. The entire platform is infused with AI top to bottom. And so I think what you're seeing is we are now growing faster than our competitors because we are becoming a more AI-native company.

18:09Beginning this year, we hired a guy named Ahmed Aldali. He was the leader of Meta AI, essentially the Lama models. We brought him in, and my ask of him was, they said, Ahmed, I want everybody to become an AI-native company. Imagine we were founded today with AI from the very beginning. What would we do? And that's exactly what we're doing, and I think it is truly the best thing to happen to us. What did he do then? What does that actually mean to transform a company and make it, as you said, AI-native? What do you need to do to the organization itself? It started with all of us. I was using just ChatGPT, and he got me on QuadCode.

18:42And I basically downloaded a huge amount of my information into this corpus, hundreds of gigabytes of information. I started really using it as an agent to help me run Airbnb. I trained. I had everyone else in our executive team get AI tutors. I said we have to be completely AI native. And that basically permitted the entire company. I basically told our team, we need to be on the forefront. every step of the way. We brought in a number of world-class people in the AI field into the team and really focused on modernizing the company. And so it's been an entire cultural change. I think in the beginning of the year, I felt like we're a little bit behind in AI.

19:18I think at this moment, we are not a frontier AI company. We don't make AI. But as far as applying AI, we're probably one of the leaders. So there are those who make AI and those who apply AI. And I think right now we're seeing most of the benefit going to people who make AI. But if I were to bet on where the economy is going, I think applying AI is where most of the economic value will eventually be. Just like electricity. There was a lot of money making electricity, but those who used it to apply it to consumer applications was where all the value went. So you think the next 18 months could really bring significant use cases for the wider world?

19:55Here's a way of saying it. It's an existential risk to everyone, including Airbnb, if we don't use it. But it's a risk to us. It's a risk to everyone else. And if it's a risk to everyone else, it's an opportunity for us. Businesses we had no business going into, we can now go into. Such as? We're selling tickets on Airbnb now. We had no business selling tickets. But now we can spin up new businesses. We're looking at longer-term living on Airbnb. We had no business doing that before. There are so many businesses. Hotels would have been a 10-year journey. We now can do in a few years what would have taken 10 years because of AI.

20:25But let me return then to the larger theme that you hit briefly, which is the concern of the average person. Perhaps part of the reason why people are opposed to data centers, not the data center itself, it's what it represents. This technology could take my job. It could replace my ability to think. If I rely on it too much, I'm going to lose my own ability to critically think. I have no idea what the future holds, not to mention cyber risk, hacking, bioweapons. I mean, I can go on a long list, Brian. And it's nice to hear you be so positive, but what gives you the confidence you're going to be right?

20:57I'm not confident I'm right. I'm not confident that it's going to be positive, but I think it can be. It's like nuclear power. It can either light up a city or destroy a city. AI is not inherently good or bad. It's what happens based on what's in our hands. I'll tell you the positive version of this. You see, I think we talk about AI wrong. I don't think anyone in Silicon Valley should use the word superintelligence. Super intelligence sounds like an inorganic species that's smarter than us that will replace us. The chief scientist at OpenAI literally wrote a piece this weekend called The Alien Mind.

21:30Yes. Talking about the lack of alignment and what we've been seeing. I think there's maybe an incorrect mental model that we have. And our incorrect mental model is that we humans are stagnant and AI becomes more intelligent and it leaves us behind. And I think what may be false, and I'm not confident I'm right, but I hope I'm right. and I hope everyone roots for me and roots for this theory, is that AI is a cognitive revolution in which we actually ride the intelligence, that the intelligence actually makes us smarter, that we stay in the loop, that we are not stagnant, that actually there are superpowers in all of us, that we're just waiting for it to come out.

22:06I think when people bet on superintelligence, they're also betting a little against the human brain and the human power and the human mind. I think we are more intelligent than people realize. I mean, I'll give you an example. In many ways, we are smarter than AI. AI, a child touches a stove in one data point and knows it's hot. AI has to see something hundreds, thousands of times to learn. Our brain is powered by, what, 20 watts of energy? AI needs tons of gigawatts to compute. The human brain is incredibly powerful. I think people, we need to remind people of how valuable they will be to society.

22:42And that AI is a wave and we can surf the wave rather than get swallowed underneath the water. Yeah, all right. Well, I mean, back to the company itself. We're obviously at a Goldman Sachs investment conference. I've enjoyed this conversation much more than I might enjoy the ones about margins and whatnot. But your revenue numbers have gone up. Your margins have gone up. Obviously, there's a good deal of excitement around the stock price, which has also been moving higher. You seem to believe that you can continue and even perhaps accelerate that growth. What gives you the confidence, though, that that will be the case?

23:15Let me just tell you a quick story. So we went public and we were, okay, pandemic hits. We do this emergency financing and$18 billion valuation. We hope to get back to$30 billion market cap when we go public. The night before we priced it on 48 billion. We go public that day at a hundred billion. At some point I'm like, oh my God, are we really a hundred billion dollar company? We had to grow into that valuation. Airbnb was like a ranch house. We had one business and we built the company like a one story house. I realized we need to launch 10, 20 more businesses. You can't build 10 floors in a ranch house.

23:50You've got to rebuild the foundation. So you spent the last three, four years rebuilding the foundation. We've now done that. We now are ready to launch 10, 20 new verticals like Amazon. Imagine if Amazon was just a book business. How big would they have been? But here's the most surprising thing I've learned. Our core business, our mature business is not mature. 70 % of our businesses are in just five countries. Four of the five countries are still accelerating. So our most mature countries and our most mature businesses are accelerating. We do about$100 billion a year in bookings in our core business, close to.

24:23For every person who stays in an Airbnb, about nine stay in a hotel. This is completely greenfield for us. And now hotels are obviously something you've been... They're coming to us because they don't like the duopoly that exists. They want another channel. And we have lower commissions. We have younger travelers. We merchandise them really well. So they're coming to us. And then I think there's so many other verticals we can go into. You do. Beyond what we're thinking about now. Because obviously, to your point, you've added quite a few of them in the last year. I think there's three horizons.

24:53Step one is travel. Imagine everything you could ever do for travel. Step two is living. You know, nearly a fifth of our business are people staying for longer than 30 days. Why can't you use our army to live? And then step three is ways to meet people. We're living in a world where it's really hard to meet people. And I think our army, eventually, I mean, a lot of people use our army to meet one another They're on experiences. They stay in people's homes. But we're really focused first on travel. But I think travel is just the beginning. You and I met a number many years ago at this point. And it's funny because you are sort of now an OG as opposed to an up-and-comer.

25:26There's a couple of companies in town here. I don't know if you've heard of them, Anthropic and OpenAI, that are both going to become the public. Anthropic probably sooner than OpenAI. I'm curious, though, what if any advice you would offer to either one of their CEOs at this point in their journey, given you were just describing some of the things that went on around your IPO. Is there anything that Sam and or Dario should be thinking about? That's a great question. I would say I know Sam very well. And so I don't know Dario as well. But I think they're on top of the world. And I think you're most at risk when you're on top of the world.

26:01Because I think hubris always gets the best of us. And I would just recommend to both. And I'm not saying they have this. I just recommend, you know, be humble. Just don't assume that everything you think is going to happen is going to happen. Be paranoid. And always pretend like you're the underdog. The moment, like a sports team, the moment you think you're going to win and you're complacent, you lose. And so just like sports, you don't want to think you're a loser, but you want to go into the game knowing it's 0-0. And I think they should approach this as an underdog. And I think what I would tell them is if technology, the rate of technology doubles every year for 10 years, that's a thousand X.

26:40So maybe we're just one year into a thousand year journey. If we're one year and a thousand year journey, we have no idea who will win in 10 years. There could be 50 more open AIs in the tropics if this is a cognitive revolution. Who knows? And so I think they're doing incredibly well. And I think as long as they stay focused and they have the underdog mentality, which made them great, they'll be OK. All right. You can watch that full extended interview on CNBC Pro with Brian Chesky and David Faber. Getting some news out of Washington this morning. Let's get Damon Javries with that story. Hey, Eamon.

27:10Carl, that's right. The White House is announcing that it's going to send$500 checks to nearly a million Americans in 30 different states. The White House says these checks are going to be reimbursements for overcharges under the Obamacare health insurance program. They say Those overcharges have been collected over the years. They've been accumulating in an account at CMS, Center for Medicare Services, and they will then issue those checks in October. Of course, that's just a month before the midterm elections. The president suggesting here that these overcharges were collected by the Biden administration.

27:45They accumulated a surplus of funds that were not used to benefit the Americans who paid higher premiums. And therefore, this is a refund to those Americans coming just before the election. And of course, Carl, it comes after the president last night at his midterm convention in Dallas, Texas, suggested that the administration would pay$5 ,000 to every American if Republicans were to win the midterm elections in November. So this is an administration that is focused right now on the idea conceptually of sending checks to Americans, whether the logistics of that work out, whether the legalities of that work out.

28:24That's a separate question. But the administration says it's doing this Obamacare payment now. And the president said last night he wants to send more money to more Americans after the November election. Right. It wants to, but Congress ostensibly will have something to say about that. I see that Thune has already been asked this morning about whether they would have the votes for it. Yeah, I mean, that's the question, right? Would they actually pass that? You're talking about more than a trillion dollar expenditure in an era of massive American national debt that would not be balanced by anything.

28:54And of course, the suggestion is that, you know, you would take tariff revenue and send that money back to Americans. And that, of course, undermines the argument that tariffs are really great for dealing with American deficits. So at some point, something has to give, and the politics of it are really unclear. But this idea of just sending money directly to Americans is something we've now heard twice in 24 hours from this administration. So just to be clear, though, the one that you're talking about, who's eligible? It's enrollees of Obamacare who had to pay the full premium? It's a subset of enrollees to Obamacare who the administration says were overcharged in the previous administration.

29:40It's in about 30 states. And what they're saying is that it will be ultimately nearly a million Americans in those 30 states who will qualify for these payments. So it's not everybody on Obamacare, but nearly a million Americans in 30 states there. Eamon, thanks. Eamon Javries this morning. Still to come, oil extends its gains today. Brent tops 105, briefly 106 this morning. And we're getting some new inventory data in just a few seconds. We'll get you those numbers when they cross. CEO of Compass is with us. We'll get his reaction to existing home sales data today and his outlook for the 30-year fixed, which is at its highest level in more than a year.

30:21Don't go away. I'm a bear. And you know what really agitates me? Watching you scratch up your truck bed with your mountain bike and mess up the inside of your truck with muddy hiking boots. It just makes me like, grrr. So take better care of your truck with products from WeatherTech. From custom-fit impact liner and floor liners to no-drill mud flaps and side window deflectors. WeatherTech can keep your whole truck looking like new, and that makes me less agitated, which is better for everyone. Trust me. Outfit your truck today at WeatherTech.com. Ever notice how every new AI tool asks you to explain your business to it all over again?

30:58Google Workspace with Gemini skips that. You get Google's AI built right into the premium versions of Gmail, Docs, Sheets, and more. No new tools. No extra logins. Just one subscription that gives you personalized AI right inside your actual workflow. Make work less work. Try Google Workspace with Gemini at goo.gle slash workspace with Gemini. Welcome to the circle. In this game, you never meet the other players. Your goal is simple. become the most popular. But should you play as yourself or catfish as someone else? With the new host, celebrity contestants, and this time, audience voting will influence the game, you decide who has what it takes to win.

31:42Watch the Hulu original series, The Circle, on November 17th. Streaming on Hulu and Hulu on Disney Plus for bundle subscribers. Terms apply. S &P reclaiming 7 ,600. Let's get a news update with Brandon Gomez. Hey, Brandon. Hey, good morning, Carl. A number of advocacy groups and the city of Denver filed a lawsuit today seeking to block immigration agents from deploying to polling sites. They argue their presence violates federal laws protecting free and fair elections. Homeland Security Secretary Mark Wayne Mullen said last week ICE would not patrol polling places but could be there if there is a threat to a location.

32:18European scientists say August tied July of 2023 as the planet's hottest month on record. It came as South Korea recorded its highest temperature last month in modern history of 108.5 degrees. And the average temperature in the U.S. last month was 75.6 degrees, a new record for August. And ABC late night host Jimmy Kimmel said his interview with Texas Democratic Senate candidate James Tallarico would not air on the network and would instead be available on YouTube. He said the decision was a result of FCC threats against his show and the network regarding equal airtime requirements. It comes after former late-night host Stephen Colbert said earlier this year, CBS lawyers blocked an interview with Tellarico over similar concerns.

32:59That's your news this hour. I'll send things back to you. OK, thank you very much, Brandon Gomez. Time now for today's ETF spotlight. We're watching energy this morning with those rising oil prices. XLE extending its yearly gains, hitting an all-time high this morning, as oil sees another sharp spike, with Brent now above$105 per barrel. Last night, President Trump said he doesn't expect energy prices to come down until after the midterm elections. Those comments coming as he threatened Iran over its pickaxe mountain nuclear site, following a barrage of attacks between both countries on tankers in the Strait of Hormuz, also had some good lines about renaming the Strait of Hormuz, Trump's Strait, said that if he's going to get something out of it, he was talking about all the different name changes that he's done lately around bodies of water, joked about the Pacific and the Atlantic, but did say that Strait of Hormuz should be Trump's Strait.

33:50Hilarious. When we come back, Evercore's first reaction to Apple's product event and whether the new foldable iPhone is enough to move the needle for the stock. Next hour, don't miss ServiceNow's Bill McDermott. Shares rebounding slightly over the last month. Still well underperforming the market this year. Howie's thinking about the software trade. We're back in two.

34:12Welcome back. Apple unveiling its first ever foldable smartphone at a highly anticipated launch yesterday. The iPhone duo will hit store shelves October 23, starting price$19.99. Let's bring in Ahmed Daryanani, Evercore ISI analyst. He covers the IT hardware and communications equipment sector, has a buy on Apple and 365 Target. Ahmed, welcome back. Good to have you. Thanks a lot. Were you wowed yesterday? You know, I was pleasantly surprised by the foldable phone internet. I think a lot of folks walked into the event thinking more skeptically compared to Samsung for grabs. I left wanting the device personally, so I did come away more impressed with the deal than I expected to be.

34:58Let's talk about the function for a second. I assume you were able to get your hands on it. Your impressions of that exterior screen and then their ability to minimize the crease. Is it good? You know, the crease is nonexistent. and I've spent a fair amount of time on the device with the device. What I'd say is I think it's a mix of hardware innovation and software as well that makes the speed very minimal. I think the fact that it has a matte finish inside versus more glossy the way Samsung does also dampens the depth of that crease that's there. So I think in certain angles it's there, but people were having a very hard time trying to find it.

35:34So I do think the crease or the lack of it, I should say, and the larger screen size will resonate a lot with folks. What remains to be seen is how does the phone really hold up when you open and shut it multiple times in a day? And what does the battery life look like when you start consuming a whole lot more video in a consistent manner on it? Interesting. All right. So then what are you going to be looking for in terms of early telltales of demand? So, Carl, our take is this phone is going to sell as many units as Apple can produce, at least in New York, in the next three to six months. Eventually, the two things you want to watch for is, as people start using it in Q4, does the crease hold up really well, or do you have issues with it, right?

36:17Samsung, for example, has had a lot issues. That's a new one. The battery life will be the other one. But I do think in the near term, if Apple can just sell 5 % of the install base or 5 % of the units to the dual model, that will alone drive about$25 billion in revenues and about$5 billion. So I think it might work very well. supply constraint, not demand constraint, focusing on the increased quality and battery life at the number of times. Were you surprised at the price point under$2 ,000? That was lower than what some of the Wall Street analysts were expecting, I thought. You know, I was pleasantly surprised.

36:53I'll say this. I think all the entry-level models, the Pro, Pro Max, the iPhone Duo, the entry-level price points are lower than what folks expected it to be, right? What Apple has done, in fairness, as you look at it, the higher tier models, the one terabyte, two terabyte iPhone SKUs, is where the bigger pulse of the price increases are happening. So I think they're trying to keep the entry-level model more approachable, more manageable, especially with trade-ins. It's the higher level models which are, I think, getting more of a 20 % bump up in price on the ProPro Max side, for example. So upcoming catalysts, in your view, Amit?

37:27Is it going to be about maybe software developers and what they're going to do with this new form or anything else? You know, as people have their hand on this phone, you get more detailed reviews. That will matter a lot. iPhone deliveries will come out, you know, as pre-order start in a week. That's going to be important. The other part I'll say that, you know, what's missing in this, in fairness, is Siri AI. This has been something Apple has talked a fair amount about. All they said is, hey, it's in beta. It'll be out soon. I do think we need to come up with AI-centered use cases with Siri. And that is something that's still missing on the story.

38:02Yeah, certainly Muse is making a lot of waves over at Meta, which gets upgraded today among some of your colleagues on the street. Interesting day yesterday, Ahmed. Appreciate the insight. Good to have you as always. Thank you. Ahmed Dharinani. CEO of Compass is coming up after the break. His reaction to this morning's existing home sales data with the 30-year fixed hovering just below 7 percent. And then do not miss next hour, NEC, former NEC director Gary Cohn with his take on rising rates and President Trump's new plan to give$5 ,000 payments to Americans if Republicans win the midterms. We'll be right back.

38:39Welcome back to Squawk on the Street. Existing home sales date out at the top of the hour, falling 2 percent in August from July and posting the slowest pace for sales activity in 14 months. That's as the 30-year mortgage rate sits at its highest level in more than a year, propelled by the tenure, closing in on 5%. Our next guest runs the top residential brokerage in the U.S. And joining us here at Post 9 is Compass International CEO Robert Refkin. Welcome back. I'm glad to be here. So what is the real story you're seeing in the sales of existing homes? Well, the real story is there's not one market.

39:12There's different markets by geography, different markets by price point. And what we're seeing is the low end is dragging down the overall market, where homes that are between$100 ,000 to$250 ,000 are down 10%, while homes that are$1 million plus are actually up 4%. And that's because while the low end is more mortgage rate sensitive, the high end is more wealth effect sensitive. And we have mortgage rates at all-time high, but we also have the stock market at all-time high. So that high end doesn't really tee off of the higher mortgage rates? Yeah, because they're not using mortgages. They're using all cash.

39:48And when the stock market's at an all-time high, they have that purchasing power. Yeah, I mean, how much bigger is the lower-end market, really, to offset some of what you're seeing in the higher-end, though? So on a transaction volume basis, it's not bigger. So the upper-end is more than the lower-end. And when you look at transactions for the overall market, yes, they're down 2 % year over year. I'm sorry, 2 % month over month. But year over year, they're down 1%. And when you actually include price, price is up 1.6%. So the actual transaction volume in August is actually just modestly up year over year, which is impressive given that mortgage rates are 50 base points higher now than they were a year ago.

40:33Aren't you seeing a lot of price cut activity? Yeah, we are. Yeah. So 42 % of the homes on the market in September have had a price drop. That's the highest in nearly 10 years. So from that perspective, it's a great time to be a buyer because it shows that sellers are motivated to negotiate. I mean, there's whole indices of motivated sellers. And they seem to be really concentrated in certain states like Colorado and in some argue even Texas. Why is that? What's moving? What's the calculus around that? So in Texas, we had a lot from Austin earlier this year, and that's because of the huge run-up from California to Austin.

41:14Some people moved back. We're seeing the lease price cuts are actually in Chicago and in New York, and that's because there's very little supply. And also in Northeast and New England, there's not enough supply. So what drives it is supply. Overall, in the country, we have 4 % more supply than we did this time last year. and where mortgage rates are, we expect it to go to 7 % in our forecast by the end of this year. And if we get there, we will basically be at pre-pandemic levels of inventory. What about San Francisco's? I mean, are you seeing the boom as a result of all the AI activity and the soon-to-be IPOs?

41:51San Francisco continues to be beyond belief. It is not stopping. We were here over the spring talking about how incredible it was. We're here in early summer. It is continuing. The way that I would look at it is rent. Rent prices are basically flat in the country. In New York, they're up 6%. But in San Francisco, they're up 26%. And in terms of sales in the higher end, people are competing in the higher end at a level that we've never seen. And the kinds of people that compete in the higher end are not used to losing deals. And so it puts incredible pressure on our real estate professionals to help secure these properties for them.

42:36Right. I mean, to your earlier point about wealth effect, that is the poster child, I would imagine. It is the poster child. I mean, remember when there were existential discussions about anyone would ever live in San Francisco again? I remember when I was on this show and I told you if there's one place I would buy, it'd be downtown Manhattan. I'm sorry, downtown San Francisco. Yes, I remember that. You remember that? Yes. Well, politics matters, and that does raise a question about New York because that should benefit also from a very good wealth effect. What's happening in the market here? Yeah, so Anthropic IPO in San Francisco and opening IPO in San Francisco, both pending.

43:09They're not just helping San Francisco. They're helping all of the key luxury markets. They're helping in Miami, obviously Hamptons, of course, in New York, in the high end and penthouses. And so we're seeing a benefit from this wealth effect everywhere. But is the New York City market overall right now? How's it doing? New York is doing well. Yeah. Yeah, there's low inventory here because of the demand. And prices are up, not just on rentals, but in sales as well. On the low end, is there anything that can be done besides just lower mortgage rates to make it more affordable? Because we did have this big housing legislation that was supposed to help.

43:44So over the last four years, there's an argument that homes are more affordable. And here's why. Because prices have been basically flat across all price points, if you include the low end. And in each of those years, their purchasing power from earnings, from income, has actually increased on average 3 % to 4 % a year. So if income is growing faster than the value of the homes, the purchasing power goes up. The only hostage to that is the mortgage rate. So if you made a great call on San Francisco a few years ago, what would be your great call today? My great call today, look, it's not going to be...

44:23MSA-wise, right? Yeah, it's not going to be as great as San Francisco because it was just so obvious. You know, when people are fearful, be greedy. When people are greedy, be fearful. So people were very fearful about downtown San Francisco. So the call I'd make right now would be, on a geography basis, would be Texas. I think they're going to continue to have a population that increases. They're going to continue to have more jobs. And with that, you'll have increase in prices. Okay. Robert Refkin, thank you for joining us. That's why we have you on, the CEO of Compass International and chairman.

44:54When we come back, the next test for the AI trade comes tonight. What the options market is signaling about Oracle after the bell. We come back.

45:04Welcome back. Oracle reports tonight after the close, the stock underperforming sharply on the year so far. Let's get to Oliver Rennick at SIBO in Chicago, see what options are saying. Hey, Oliver. Hey, Carl. Trading in Oracle ahead of earnings is very active this morning with options volume double the 30-day average ahead of the bell. Oracle is down 20 % this year, and its recent earnings history is not great. Two sell-offs in the past three reports, but one very big rally this time last year. The stocks moved an average 9 % after earnings. Options are currently priced for an 11 % move, and implied volatility is priced at 73%, making Oracle one of the top five most volatile stocks in the S &P 500.

45:48All those signs point to action as far as direction goes. The positioning we see this morning isn't exactly encouraging. The most popular trade today by a fairly wide margin is selling calls. There were some heavy sellers of the 150 strike call in particular in the October, November, and December expiries. That's a contract that's in the money by$7 right now. So as far as call selling goes, it is on the more bearish side than neutral. That said, there's not much notable put buying with less than 15 % of the total options premium spent buying puts this morning. So the message here might be that traders are more interested in fading the volatility that's priced into the stock rather than picking a direction for a big move, guys.

46:31It's going to be an important catalyst here in the middle of September. Oliver, thank you. Oliver Rennick on Oracle Tonight.

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