On the east coast. Were coming to you from the Milken Institute global conference in los angeles. Its time for the hot topic of the hour. Former President Trumps so called you hush money trial is resuming this morning. Heres President Trump yesterday. This is just a political witch hunt. Its election interfering. This is really, truly election interference and its a disgrace. The other thing that maybe is even more disgraceful is the gag order where i cant basically i have to watch every word i tell you people. You ask me a simple question, i cant talk about it. Because this judge has given me a gag order and says youll go to jail if you violate it. And frankly, you know what, our constitution is much more important than jail. Its not even close. Maria oh, my god. This is incredible. The witness yesterday said that trump did not personally direct a Trump Organization executive to set up reimbursement payments to ex lawyer michael cohen. I want to get your take on this. At the same time the judge is saying he will consider a jail sentence for trump if trump continues to violate the gag order. Your thoughts, thomas. You know, i am kind of loving this. I know they really wanted this to destroy him, destroy his campaign. Its been fantastic for him. Hes visiting bodegas, taking pizza to the fire department. I think they should send him to jail. He needs to show that this is such a corrupt thing that is happening in this country, i think it would be great for the campaign. He would love it. It would be great. So its really backfired. Maria come on, thomas. Hes going to love it . Hes going to love a week in jail, thomas . Come on. He would be fine. They would take care of him. Maria i understand what youre saying. You think theyll take care of him . It would be good for the campaign. It would show how corrupt this is. Maria President Biden is slamming trump and now biden claims that trump wants to cut Social Security and medicare. Watch this. My predecessor when he was in office he enacted a 2 trillion tax cut that benefited the super wealthy and biggest corporations and ex of exploded the debt. He wants to cut Social Security and medicaid. He says theres a lot we can do in terms of cutting. Ive got one idea how to cut. The candidate. Anyway. Hell say anything to get elected, right . At this point in time maria i dont know what hes saying. Hell say anything to get elected. We all know, the only number you need to know is 1 trillion every 100 days being spent now at this point. Hes the biggest spender and sugar giver out there at this point. I come back to 1971. We got off the gold standard. We started to give out the sugar in the 1970s. 1973, thats where i think were kind of at right now, before inflation jumped a couple percent, before the gdp went down to negative and a unemployment jumped a couple percent. I think were back to 1973 when we started giving out out the sugar. Take the sugar away. What trump wants to do is beneficial for longterm organic growth of the economy. Maria you know, its interesting that you say that. The 1970 ofs. You know what else is like the 1970s. Inflation. Okay. Look at where we are with inflation elevated, a lot of people say it feels like the 70s. Thats what jamie dimon has been saying for months. It does. It does. Thats why i go back to 1973, before inflation rebounded. The Federal Reserve lowered rates to essentially a couple percent lower once they found inflation was beating the 1970s. Were not going to make that mistake this time around. We may not get any rate cuts. We may get a rate hike. Your interview earlier you were talking about rate heights, rate cuts. Rate hikes, rate cuts. I think its possible well get a rate hike. In the 1970s we saw a rebound in inflation. The Federal Reserve would rather break the economy, have unemployment jump to put inflation under. Maria yeah. Thomas, what do you think . Look, if this administration understood all of the money theyve been spending has led to inflation, maybe they would stop. I dont know if they understand and theyre connecting the dots because hes still forgiving student loan debt, he still wants to spend, thomas. They have no idea. I would love to know where is the guy that came up with bidenomics. Why would you brand the worst thing thats in this country as a biden thing. Hes hiding in an office somewhere, saying it wasnt him. They have no idea. Theyre just getting so desperate. They realize theyre losing, the campaign is not going well, theyve got a bad candidate. All they can do is throw money at the problem and give away. You see the issues that are affecting people in this country. Theyre not dealing with any of them. Theyre not dealing with the top issues. What theyre trying to do is appeal to crazy leftists in the hope theyll maybe win the election but most americans are not happy with the situation. Maria yeah. I mean, look, if you let me end where we started and that is you said trump should go to jail because its a good message to send. If that were to happen, i think that people would look at this country as a banana republic, honestly. Youve got one political candidate trying to create all of this on another political candidate. Am i wrong . No, youre exactly right. When this happens in a foreign nation, this what is the United States condemns, when russia does this to political opponents, or north korea, the United States is usually out there condemning it. What is happening . It really is crazy they wont p let him talk, hes in the courthouse every day, the whole point of this is to drain his money which is he spent millions of dollars on this and its to stop him campaigning, hes stuck in a new york courtroom every day in the middle of the Biggest Campaign of our lifetimes. Its outrageous. Maria of course hes winning in seven swing states right now so there you go. Thats what that has done. Its backfired. Maria lets take a short break. We are just getting started. Its a busy week of First Quarter earnings. Well get into it when we come back. Disney is down almost 5 . It reported mixed results earlier this morning. Were going to take a look at the stock this morning. Ill talk with dan niles, who is now niles Investment Management founder and manager, dan niles is here live on the other side of this break. Youre watching mornings with maria live from Milken Institute global conference in los angeles. Stay with us. luke so. I hear some of you are concerned about the fact that im taking over the company. Well, rest assured, companys in great hands. Marci, hit the vid. both lukes homesdotcom. Weve done your home work. luke now, that is worth celebrating brad i love it. luke thank you. brad home. Work. Very clever. vo ding dong luke vo homesdotcom. traffic noises the road to opportunity. Is often the road overlooked. At enterprise mobility, we guide companies to unique solutions, from our team of mobility experts. Because we believe the more ways we all have to move forward. The further well all go. She always thinks of others first. But for one day, its all about her. Celebrate mom and all she does with thoughtful mothers day gifts from weathertech. Treat her to lasermeasured Weathertech Floorliners and cargo liner to keep her vehicle looking like new. Keep moms phone in reach with handsfree viewing with cupfone. She can feel like shes on cloud 9 with the antifatigue comfortmat. Or pick a gift card and let her choose. Find these American Made gifts mom will appreciate all year long at wt. Com. Happy mothers day from weathertech. Maria welcome back. It is time for the word on wall street, top investors watching your money. Joining me is niles Investment Management founder and portfolio manager, dan niles. Dan, its great to see you. Thanks very much for being here this morning and congrats to you on the firm. I want to get your take on the market here. Let me look at futures here because i know that you believe we could see some outperformance for this market this year. Markets are up this morning and of course its been a pretty good beginning of the year, except for the Second Quarter. Disney Second Quarter earnings out this morning. They beat on earnings per share but missed on revenue, dan. Disney plus of course subscribers increasing by more than 6 million in the quarter while sports operating income declined, slightly from last year. The stock is down about 5 this morning in a market that is mixed. Your reaction, there, and assessment of markets today. Well, i think when you look at disney and how its reacting, its sort of emblemattic of the market. The stock is up 29 this year, trading at a 27 multiple. The s p is trading at 21 times. The expectations are high. But they came out and they missed the top line. Whenever a Company Misses the top line, beat on the bottom line, that makes me nervous. You cant continue to do that. Also, theyre in a tough spot. Media is being replaced by people spending a lot more time online and so theyre in a competition for time that people spend and thats not going in their favor so i think with all companies, now with the stocks up to much since october of last year, youll have to start to put up the number. I think thats why youll see increasing differentiation amongst the biggest name with apple and tesla that are down for the year and nvidia and meta or amazon that are up between 20 to 80 for the year. I think thats going to continue through the rest of this year. Maria well, i want to ask you about apple be. Youve studied this company for so long and know it so well. The Company Reported earnings last week. Iphone sales falling for the quarter with revenue down as well. Weve got competition coming out of china, huawei and their phone. The company y announced its developing a. I. Chips for data center servers, a move that may have the potential to give the company an advantage in the a. I. Arms race. Whats your take on apple . I know on the longer term apple youre not so convinced but shortterm you see some performance here. Tell me how you view apple . Well, youve got to remember, the very short term stock prices have nothing to do with this has to do with perception, what people want to believe. With apple, people just want to believe that theyre going to somehow fix their lack of no growth because if you look at the top line, their revenues are down 4 year over year. If you say well, thats just this year. You go back three years, their revenues were 1 over three years from the march quarter three years ago to now. To put it in perspective, magnificent seven as a whole, revenues are up 86 . If you take nvidia out, theyre up 45 . So people want to desperately believe that this is going to work because apple also we talked about disney earlier and a its high pe, apple be trades at a 27pe. So that i think a. I. Is obviously the hot topic. Your prior segment was on that. Everybody wants to talk about it, its going to change the world and i think people want to believe that with apple, that its going to drive an upgrade cycle. Once you get past june 10, the Worldwide Developers conference, they have to show they can sell phones and thats a different issue which is why longterm were more concerned about it but shortterm the a. I. Optimism i think will help the stock outperform at least between now and the Worldwide Developers conference. Maria so the Worldwide Developers conference june 10th you said, going into that conference maybe we see some strength here for apple but longer term do you want to sell into this . You want to sell into any rallies . Absolutely. My thought right now is that barring something miraculous object june 10 on june june 10th. T at that point my point is we go back to being negative on the stock. You go back and analyze apple, it always goes into product launches. Go back to the vision pro, at 3,500 bucks, who would imagine that would sell well . And it isnt. But the stock still went up 9 in the month of before the launch. If you can believe that about the investigation pro, at least this is around a. I. , i think investors will do the same thing and its just pattern recognition at this point. Maria really important points youre making. What about the rest of the magnificent seven . Nvidia obviously has been the star, you just mentioned the incredible outperformance there. Talk to us about envied ya. Meta, which is one of the names you like and microsoft as well. This conference in la much about Artificial Intelligence, dan. Yeah. I think there are a lot of really great Artificial Intelligence investments over the longer term. You named the names we like on the longer term. Obviously, nvidia, theyre going ahead and providing the chips that are making a. I. Possible and youre getting it at a 40 pe, 100 Revenue Growth and youre very early on in the brought of the a. I. Infrastructure. You look at meta, theyre probably the best at using a. I. To drive their business and so youre talking about a company thats growing revenues in the high teens. You still can get it at a mid20s multiple and they use a. I. To help recommend what videos you watch as well as monetizing the ads. With am a son, its the biggest amazon, its the biggest public cloud vendor in the world. If you want to run a. I. Applications, you can run it on amazon and they put up record operating margins, driven by retail business. We think eps can double from calendar 23 to 25 a. With microsoft, open a. I. , chatgpt, that got this whole thing started back in november of 2022. And microsoft gets 50 of the profits from there. Theyve got a close cooperation with that company. And so theyre really going to been fit especially when you think about in search, googles got over 90 market share. Microsofts bing has less than 5 . I think youll start to see microsoft continue to pick be up share there. Those are the four names we feel very good about looking forward. Maria and i know that you look at google, this is the name you debate the most, google, alphabet. Yeah. I mean, really when you look at google, you have to think about if if you think about it very simply, do you believe a. I. Is going to be real . If it is, do you believe google can maintain 93 Search Market share . Thats kind of hard to believe as people change the way they interact when looking for information versus clicking on 10 blue links, they have a conversation with an a. I. Engine and thats a very different prospect. With google i think over a very long period of time youre going to see that market share start to erode and for youtube, you talked about disney earlier and subscribers, you also got amazon that just started launching ads on prime video and so youve got more ad dollars flowing to other things than youtube and so between that, thats why over a longer period of time we have concerns. Maria yeah. I mean, dan, i wonder how much youre focused on the ge geopolitical backdrop because 90 of these advanced Semiconductor Chips used for Artificial Intelligence are produced in taiwan. Weve got two wars already. I dont you know, i dont know or expect to know chinas plans but if the ccp goes into taiwan and overtakes taiwan and then is in charge of that semiconductor production, 90 of these advanced chips are made there. Do you worry about the geopolitical backdrop here in the middle of these two wars . And how do you invest around that . I absolutely worry. I said many times and i still believe this, you dont have to guess what chinas intentions are. Xi jinping told you. He considers taiwan an integral part of china and at some point im sure that they will go ahead and reunify taiwan with china. Now, the good news to some degree is because russia is having such an awful time in the ukraine, thats put off any timeline they had as they watched this and say oh, god, thats going way worse than anybody could imagine so that will delay it. For us, were looking at chip companies, Texas Instruments for example was a name we liked coming into this year that are trying to build up Domestic Semiconductor Manufacturing so eventually when we have to deal with this situation and who knows, maybe its tomorrow, maybe its five years from now, but at some point this is going become a thing and youre going to need to have those advanced products being produced in the United States and you want to invest around that. Maria for sure. So dan, the rest of the year, whats your sense . I know were talking about individual stocks right now. But do you think well see a good year for stocks, 2024 . I think were going to see very volatile year for stocks. I think the spread between stocks is going to be enormous and weve already seen that. Teslas down over 25 this year. Apples down about 6 or so this year. And then youve got an nvidia thats up 80 and the market is up in the single digits. Both nasdaq and s p. So i think between oil, Interest Rates, the geopolitical environment, the elections in the United States, youre going to have to know your fundamentals incredibly well because a good story isnt going to get it done. Youre going to have to put up the numbers. Maria great analysis, dan, as always. Love talking with you. Thanks so much. My pleasure, maria. Maria all right. Dan niles joining us. Well take a break. When we come back, john kirby refusing to confirm or deny whether the United States is delaying ammunition shipments to israel. As the idf takes over parts of rafah overnight. The tanks winning yesterday. Virginia congressman rob whitman is here to tell us more. Youre watching mornings with maria live on fox business from the Milken Institute global conference in loss los angeles,y with us. The all new godaddy airo helps you get your Business Online in minutes with the power of ai. With a perfect name, a great logo, and a beautiful website. Just start with a domain, a few clicks, and youre in business. Make now the future at godaddy. Com airo and theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Maria welcome back. Israeli officials confirming they have taken over hamas controlled areas of the rafah region after launching a ground Counter Terrorism operation yesterday. The idf says troops continue to operate against Hamas Terrorists on the ground in rafah as they say hamas is far from meeting demands in a potential cease fire agreement. President biden spoke to israeli Prime MinisterBenjamin Netanyahu yesterday and once again he told him he does not want israel to invade rafah. Heres White House NationalSecurity Communications advisor john kirby. Watch. We made clear our views about operations in rafah that could put more than a million innocent people at greater risk. During this call with Prime Minister netanyahu the president made it clear. The president was consistent this morning that we dont support ground operations in rafah that would put the majority even any of the civilians there in any greater risk. We want to see their safety and security allowed for, factored in. Maria well, how many citizens were ayou e affected by hamas invasion. Joining us now, virginia congressman rob wittman. Hes a member of the china select and Natural Resources committees. Congress ma nan, man you for congressman, thank you for being here. What is your reaction to President Biden continuing pre pressure netanyahu not to respond. Israel has the right to defend themselves. They need to keep in mind innocent civilians of. Hamas embed themselves in civilian populations to avoid israel coming after theyll but israel has to be able to destroy hamas. Hamas is a continued threat to israel. Theyve seen in the past where they allowed hamas to survive, it reemerges and threatens israel. Maria yes. Of course. But the white house is being quite vocal about this, continuing to reiterate what theyre telling Benjamin Netanyahu. Im wondering how you view this in terms of the United States getting involved in israels response to terrorists. Well, israel has the right to defend itself. Israel is in the best interest to determine how they prosecute this. Maria right. You said that. I want to make sure we are supporting israel. I think we have an obligation to do that. Israel is fighting for its very existence. Theyre doing the things that are necessary. Its not our place to second guess them and to direct how they protect themselves in a very dangerous neighborhood. Maria yeah. Meanwhile, i mean, this white house is also being coy on this, tjohn kirby refusing to either confirm or deny these reports that President Biden has placed a hold on a shipment of u. S. Made ammunition to israel. Watch this response. Our support for israels security remains ironclad. Im not going to get into the specifics of one shipment over another. Maria so the question was very specific. Are you holding back shipments of ammunition. And he comes up with this ironclad statement again. Is it really ironclad, congressman . Well, if theres any interruption in sending arms to israel, it must not be ironclad. I have deep concerns about delays. Delays place israel at risk. We are a friend of israel. We have committed to help them. Congress passed supplemental to provide resources to help israel. The president s obligation is to do what congress has directed him to do and continue our help to israel. They need it more than ever. Time is of hes owns here. You essence here. You cannot delay. Delay places israel at risk. Maria but apparently they are, congressman. So what im asking is what is your reaction to this heavy hand of the white house when it comes to israel . My response is its unacceptable and the executive branch has an obligation to carry out the directives from the legislative branch. We were very clear in passing the supplemental for israel that the resources are there for the administration t execute this delivery of arms to israel. Maria yeah. Exactly. I want to get your take on the happenings within the congress and the house. House Speaker Mike Johnson will meet with georgia congresswoman Marjorie Taylor greene again and he said that they had a productive meeting yesterday. What is your take on this motion to vacate that mtg keeps threatening . Listen, i dont think its productive whatsoever. I think its problematic. I think it weakens our conference, i think it weakens speaker johnson, i think it empowers the democrats. Why would we do this. This is counter productive, especially with a narrow of majority. We need to be united, not divided, not fighting amongst ourselves, it just doesnt make sense. Maria well, i mean, especially since youve got the minority leader Hakim Jeffries going on 60 minutes and saying this, lets watch this clip. Were in the minority, we effectively have been governing as if we were in the majority because we continue to provide a majority of the votes necessary to get things done. Those are just the facts. Maria it sounds like Hakim Jeffries thinks that the democrats are in charge in the house. Well, theyre certainly not but a narrow majority makes it very, very difficult for us and thats why its critical for us to remain united. The only way were going to get the things done that this nation needs to get done is for us to be united. Anything that divides us or anything where we have instances where were fighting amongst ourselves doesnt help that situation and as ive said, it empowers the democrats. We cannot do that. Being united is key for us moving forward. Maria yeah. And then theres more suggestions that perhaps the white house is getting political on just about everything. Even this steel deal. Nipon steel is delaying its 14. 1 billion acquisition of u. S. Steel because the department of justice is requesting more documentation. Nipon steel says theyll fully cooperate with authorities and theyre denying the delay could push the deal past the election and denying this has any correlation to the election. Does it have any correlation to the election . Is that why joe bidens doj is pressuring nipon steel so it doesnt happen before an a election . I think it certainly is a question that needs to be answered. Listen, japan is our friend. But we also need to make sure that we have that sort of critical mineral production here at home. And i do think this administration now at the last minute is trying to make this political. It shouldnt be. This should be about whats in the best interest of the United States. And remember, japan is our friend. Maria yeah. Well, they may be our friend. I spoke with former President Trump about this merger back in february of this year and he was against it then. Watch this. I want to get along with china. But theyve really taken advantage of our country and we turned it around. We put big tariffs on steel. I saved the Steel Companies and now japan is buying u. S. Steel. U. S. Steel. You know what a name that is . Thats the most important name, 50 years ago there was no company like u. S. Steel. Now japan is buying it. I dont think id let that deal go through, by the way. Maria so what are your thoughts on this deal . Well, listen, i think the president has some very, very valid points there. We need that critical mineral production here in the United States, producing steel is critical for us. I want to make sure that we keep that capacity here. Maria yeah. Congressman, its good to see you this morning. Thank you, sir. Rob wittedman in d. C. This wittman in d. C. This morning. Thanks, maria. Maria all right. Well see you soon. Well be right back. Things will go wrong for your customers. But your business can make it right, with watsonx assistant. Ai that can help resolve problems by understanding your customer requests with 90 percent accuracy. Lets create Customer Service in service of customers, with watsonx assistant. Ibm. Lets create. Maria welcome back. Exxon mobil is trying to stop a planned merger between chevron and hess. The deal expected to close within the next year. I spoke with c chevron chairman and ceo, mike wirth at the conference. Its a good deal for the companies, its a good he deal r the industry, were confident the deal will close. Were working through the ftc process. Shareholder vote at the end of the month and weve got a contract issue with one of the other partners that will be resolved through ash a station. That will take arbitration. That will take a little longer. Maria i want to get your take on what hess brings you. Guyana is the superstar of the deal. Tell me what else hess brings to the table for chevron. Ill start with the people, really good quality people and a culture that alliance with our culture a aligns with our culture. Its a tribute to the family that created such a commitment to safety, to integrity, to protecting the environment and doing the right thing so great people. Theyve got a great portfolio of businesses. Weve got complementary businesses in the gulf of mexico. Theyve got a strong position in north dakota where we dont have anything and guyana is a tremendous asset. Its people, technology, these great assets. The combination will create a premier Energy Company that will be good for our country. Maria it sure would. I want to get your take on what exxon is saying about it. They claim they have the first right of refew sal. Refuseal, they want to start the deal. A whats your take . We worked and hess worked to try to understand exxons concerns and address them for a long period of time before this went to arbitration. And we thought we were making progress and being responsive to their concerns. They concluded it was better to put this through the arbitration process and so those discussions have come to an end and were really now headed towards resolution through arbitration. Maria because of that arbitration case on friday, hess said this deal is likely delayed until after least 2025. Is that what youre expecting . Its hard to know exactly what the timeline will be. Thats set by the Arbitration Panel and the arbitration process. Were hopeful that its faster than that. But ultimately, thats something we have some measured input to but certainly not control of. Maria tell me what drove the most recent quarter. We had really Strong Performance operationally, largest production in the history of our company and in the u. S. , 35 year on year. Which led to Strong Financial performance. Our eighth quarter in a row over 5 billion in earnings and distributed over 5 billion to shareholders for the ninth consecutive quarter so Strong Operational performance, Financial Performance and strong returns to shareholders. Maria and shareholders want to know that the dividend and the buybacks will continue. What are your expectations . Dividend was increased 8 earlier this year, making 37 consecutive years of dividend increases over the last two years weve distributed 17 of our market cap back to shareholders through dividends and Share Repurchases and we have a history of prioritizing those and i think shareholders expect that to continue. Maria lets talk about the growth away from this deal. I know youve got your enormous project in kazhakstan. That expiration is coming up, right . You have to renew it . Concession runs for another almost 10 years, it expires in 2033. Weve got a large project underway to take production from 650 or 700,000 barrels a day to a Million Barrels a day. Weve begun the startup of that with some significant news this last quarter about compression and conversion of the fields to operate at lower pressure on our way to a full startup of the incremental capacity in 2025 so its an important part of our business and an important supply to europe and to the world. Maria whats plan b if the hess deal does not happen for you . We have a really strong portfolio exhess so the hess deal makes us Even Stronger but were delivering 10 compound annual growth, Free Cash Flow over the next several years, 3 compound annual growth in production driven by the permian, driven by other shale assets in our portfolio, projects in the deep water gulf of mexico, one scheduled to start up the myc middle of this year, several will follow that, big position in the eastern mediterranean, offshore israel so weve got a number of other assets that are delivering growth and the combination with hess only strengthens our cash flow long into the future, not only the end of this decade but well into the next. Maria im glad you mentioned israel. Weve got two wars underway, israel and iran are this close to a wider conflict. How do you view that in terms of the potential for upsetting production . Well, we didnt see some impact on our supply of natural gas into israel during the early days of the conflict. We now have both platforms online and are meeting all the needs not only for israels domestic market but he egypt as well. Were operating well. Weve seen disruptions to shipping in the red sea. Weve had some disruptions last year in the arabian gulf. So the risks in a situation like this are that through some sort of escalation, miscalculation, that you could see impacts on physical supply in an area that supplies so much of the worlds oil and thats a real concern. Maria its a real concern and i think its the reason that many people expect oil prices to stay elevated. Whats your expectation . Its really hard to he predict oil prices. We prepare for volatility. Weve got a Balance Sheet that allows us to withstand a period of low prices for a long period of time. Right now were seeing prices that have been in the 80 to 90 range for quite some time. Markets are relatively balanced, demand growth is strong. Last year was a alltime record demand. Well see demand grow again this year. The end of the oil age is not yet upon us. In fact, its important that we continue to meet that with new production which is certainly what weve been doing. And the short term these risks due to geopolitical events are things to Pay Attention to because they could impact markets. Maria how would you characterize demand globally right now . Continuing to grow. Were seeing demand growth in the us. Were seeing demand growth in asia. Europe, less so. But the u. S. And asia are really the two big drivers of Global Oil Demand and demand growth and the u. S. May not be growing as fast as it was a year ago but its still growing. China has recovered from where it was a year ago and it looks to have stabilized and so Global Demand was up about 2 Million Barrels a day last year, year on year. This year we think it will be up about a billion andahalf so still strong growth in the oil demand. Maria well have a lot more with mike wirth. Well have part two of my interview with the chairman and ceo of chevron tomorrow right here, join us for his commentary on u. S. Policy and oil prices longer term. Thats tomorrow right here on mornings with maria. Quick break and then commercial real estate foreclosures spiking more than 117 . Just since march of last year. Cane international ceo Jonathan Goldstein is with me to discuss the latest real estate trends. Hes next. Youre watching mornings with maria live from the milken global conference in la. Grace didnt believe in magic. But her daughter was happy to prove her wrong. You were made to dream about it for years. We were made to help you book it in minutes. While i am a paid actor, and this is not a real company, there is no way to fake how upwork can help your business. Upwork is half the cost of our old recruiter and they have toptier talent and everything from pr to project management because this is how we work now. And theyre all coming . Those who are still with us, yes. Grandpa whats this . Your wings. Light em up gentlemen, its a beautiful. Day to fly. Maria welcome back. We are zeroing in on real estate. The wall street journal out with a piece titled properties waiting game is getting harder. Writing this, last years motto in real estate circles was to, quote, survive until 25, Property Owners thought the fed would cut Interest Rates throughout 2024. If borrowers could sit tight it would be easier to refinance troubled loans, right . Well, over the past three weeks borrowers and lenders have realized this is probably a fantasy, writing the wall street journal. Joining me is cane international ceo, Jonathan Goldstein. Jonathan, its great to see you. Good morning. Maria thank you so much for being here. I want to get your take on commercial real estate right now. You know the worries out there. Assess the market for us. I think theres no doubt as we turned into 2024 there was a hope, an expectation even that the fed and around the world in europe and in the u. K. Rates would start to come down but clearly theyve been stickier than everybody expected. I think the good news is that every signal were getting from the organizations is we are past the peak and the expectation of Interest Rate rises is low but as you said in your introduction, the longer it takes for Interest Rates to come down, the more the interest carry that the borrowers have and the more theyre looking a lot of office blocks around the country particularly in the United States and saying i cant see where im going to get my money back. If im not going to get my money back, theres no point in me putting more money in and as a result ill leave it for the banks to sort out. Maria is this going to create a bust . Are we going to see defaults . Im wondering if this is within of those situations where it has an effect across the board in business and markets. I think there is a danger in looking at real estate as a hoe homogenous class. If youre in multifamily, condos in a long market like south florida, youre still seeing strength. Youre still seeing growth. The problem is in the office class market, particularly secondary offices, where people, the pandemic, desire to work from home giving people the freedom to stay home had a big impact on office usage and the more this carries on, the more offices become obsolete, people dont see the purpose of putting more money in and im afraid its a growing problem and its a problem thats going to ultimately rest with the banks. Maria i dont know that thats changing any time soon. I think people have changed their approach to work. The world has changed. Were not going back to pre2020. People need to build buildings bearing that in mind, creating flexibility for people to come into work, make it more attractive for them to be there and thats when you come to a secondary office class which doesnt support that type of operation and doesnt merit that type of investment. Maria so youre saying youve got to if youre a quality building, high quality, like obviously many of your buildings, then you feel you could actually be okay even if we see a big string of defaults. Were signing off this week a building in miami. Were fully leased with great names coming into our building. South florida is a strong market. Midtown new york youre seeing an upsurge in rental rates because youve had Less Development over the course of the last few years so it is market by market, there is strength in certain marketplaces. In the Office Market where youve got secondary offices its very challenged. Id look around you, where were sitting today in beverly hills, we started our Development Next door and were seeing great demand from Luxury Department for great, great Quality Properties situated within the best localities so i do think its important to look across the class and not just focus on one aspect of it. Maria how are you changing the building of today, given what youve just said in terms of were not going back to before 2020. Whats different about New Buildings today. First, its the space. You provide amenities to attract people into your office, to ensure they want to be there. Its not just a commodity the. Commodity office space is finished. You do not want to be building that. You wont find occupier fs for. Maria Fast Companies is reporting march commercial real estate, maybe youve seen the piece, the foreclosures hit the highest level since 2015. Up 117 from last year. The states hit the hardest were california, new york, florida and texas. You said south florida where your buildings are is doing well. Walk us through the country, where the weak spots and the strength is. Im from england. Im not going to be competing with americans on geography. Were seeing around the miami area, we think in my miami thet is yet to come. In south florida the best is yet to comment were seeing people wishing to migrate businesses to florida, lower tax regime, the environment. We adopted miami as a base for investment in 2016, 2017 and weve seen huge growth during that time. Maria huge. Hospitality in 2023, miami had its greatest ever year. Miami is seeing this 12 months a year, hospitality destination in a way it wasnt seeing before the pandemic so i think it is important to look at where you wish to be investing. You really need to invest your money where you see things being strong. Pockets of nashville, austin, youre seeing great strength. You need to go to marketplaces where young people wish to live, companies wish to locate and you can still prosper and thrive. Maria youre basically following the trend of the migration move, people are moving to florida, moving to texas because of what you just said, tax rates, better environment. Surely you want to be investing in localities where talent wishes to live. Ultimately were people based businesses. Were looking to attract people to live and to work and to play. And that is it has to do with the environment that people want to move to and migrate to. Maria sounds like a bifurcated market right now. I think thats 100 right. 100 right. Maria its great t. Thank you so much. Jonathan goldstein from cane. Well be right back. Stay with us