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30-Year Fixed Mortgage Rate Closing In On 7 Percent; 7 Big Stocks Dominate Wall Street Gains; The Top-10 Climate Stories Of 2024; Tonight's Mega Millions Jackpot Hits $1.15 Billion. Aired 1:30-2p ET

Aired December 27, 2024 - 13:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[13:34:07]

JESSICA DEAN, CNN HOST: Americans looking to step into the new year with a new home are in for a bit of sticker shock. The average rate on a 30-year fixed mortgage is now nearly 7 percent. At 6.85, it's the highest it's been since July. It's the second consecutive weekly increase.

You compare this rate to just four years ago, it means less than encouraging news for potential home buyers.

CNN's Matt Egan is here.

Matt, all those Fed cuts, all those Fed rates that were cut, were supposed to, you know, bring some kind of relief. What happened?

MATT EGAN, CNN REPORTER: Yes. Jessica, this is just so frustrating for all of the home buyers out there and everyone who had been hoping to refinance their mortgage rate.

As you mentioned, this is happening even though the Fed has slashed interest rates by a full percentage point since September. You see, the 30-year average is now 6.85 percent, almost triple where rates were back during Covid at the end of 2020.

[13:35:00]

Now, why is this happening? Well, it's really important to remember that although the Federal Reserve is extremely powerful, it really influences short-term rates for stuff like credit cards and car loans.

When it comes to long-term rates for things like a 30-year mortgage, the bond market really calls the shots. And the bond market has driven rates significantly higher since the end of the summer.

As investors anticipate three things: faster economic growth, fatter budget deficits to pay for Republican tax cut proposals, and also the potential that the Trump economic agenda on stuff like tariffs and mass deportations ends up being inflationary.

And that forces the Federal Reserve to keep rates higher for longer, no matter the cause. Unfortunately, we are seeing that mortgage rates are ending the year on a high note. And the outlook for 2025 may not really be for rates to come down all that much from here, unfortunately.

And listen, this is just adding to the affordability crisis when it comes to housing. Because it's not just high borrowing costs, it's high home prices. There's just too many people chasing too few homes.

Now, if you own your home already, this is good news because you're seeing your net worth go up and it's adding financial flexibility.

But we know so many people want to buy, but they can't right now. Oxford Economics has found that in order to afford a home right now and pay for property taxes and home insurance, you need household income of $107,000 a year.

That's almost twice the household income that was required before Covid 19. Only around one in three households make enough money to actually buy a home.

And so this is going to continue to be a problem, Jessica, for not just as long as mortgages are high, but until there's a building boom that addresses this shortage of homes.

DEAN: There's a there's a lot of pieces there.

I also want to ask you about the stock market, which has had another great year struggling today a little bit. But how much of today's drop is about the so-called magnificent seven stocks that are at the heart of the market?

EGAN: Yes, Jessica, the market lately has just been living and dying with these magnificent seven stocks. You see that again today with the Dow down 400 points, about 1 percent. The NASDAQ is down around 2 percent. And this is coming as big technology companies have sold off.

Now when we talk about the magnificent seven, we're talking about Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla. And as you can see, all seven of those stocks are down today, led by Tesla, which is down around 4.5 percent.

Now, these stocks have really been dominating the market. They've accounted for the vast majority of the gains since Election Day. And more than half of the gains so far this year, the combined value of these companies has now surpassed $18 trillion. Trillion with a "T."

With some -- some context there, that is more than the entire GDP of the economy of China. It's pretty staggering.

And when this group is doing well, they can carry the whole market higher. And we have seen that happen.

But the problem is the market has become so concentrated. I think that chart shows that right there that the -- the top-10 stocks in the S&P 500 account for the very, very high -- a record percentage in terms of the total value of the market. And so, you know, in a perfect world, you'd have broader

participation. You wouldn't want the market to rely on just a few stocks to go higher.

It would be like a football team that can't score a touchdown without their running back doing well. What if the running back goes down? What if the running back's in a slump? You can see how that would become a problem.

And so this all exposes a potential vulnerability when it comes to 2025. Because for the market to continue to power higher and continue to make new record highs, either the rally is going to have to broaden out or these seven stocks are going to have to stay magnificent -- Jessica?

DEAN: All right, Matt Egan breaking it down for us. Thank you so much for that.

EGAN: Thanks.

[13:39:06]

DEAN: Troubling warning signs when it comes to the bird flu. Samples of the virus taken from the first severe human case in the U.S. shows signs of mutations that could make it easier for that virus to spread. We'll tell you more about the CDCs new report just ahead.

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ERICA HILL, CNN HOST: When it comes to the climate, 2024 was a record- setting year for so many of the wrong reasons. Month after month, there were new heat records as scientists continue to warn that the window to act is closing fast.

Here's Bill Weir with more of the top-10 climate stories of the year.

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BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voice over): At number 10, a rare moment of national unity and wonder --

(CHEERING)

UNIDENTIFIED FEMALE: Wow.

WEIR: -- thanks to the celestial dance of sun and moon. April's eclipse stretched from Texas to Maine, putting over 30 million Americans in the path of totality. We won't see another one over the U.S. until 2044.

At number nine, this year's hajj fell in June, drawing millions of Muslim pilgrims to Mecca just as thermometers hit 125 degrees. And the Saudi Kingdom reported over 1,300 heat-related deaths.

At number eight, wildfire nationwide. While July's Park Fire was the fifth biggest in California history, Texas saw their biggest ever with the million acre Smokehouse Creek blaze.

And in the northeast, the worst drought in decades led to over 500 wildfires just in New Jersey.

At number seven, and fueled by record high ocean temps, Hurricane Beryl roared to category five strength in July, the earliest storm to ever hit the top of the scale.

While it hit Texas as a weaker cat one, millions lost power around Houston, and it took nearly two sweltering weeks to get the air conditioning back on.

At number six, tornadoes, and lots of them, the most in a decade. Of the two dozen billion-dollar disasters this year, over half included twisters.

[13:45:02]

And while Oklahoma saw two monster EF-4s, climate change is shifting tornado alley from the Great Plains to the southeast.

At number five, earth's overheating atmosphere. It's like a giant sponge in the sky, soaking up more water, wringing it out with a vengeance, and causing the National Weather Service to issue an unprecedented 91 flash-flood emergencies this year.

And at number four, the deadliest rain fell in Spain, where, in late October, a year's worth fell in hours around Valencia. The surge broke riverbanks, turned streets into raging rapids and took over 200 lives.

At number three, the devastating duo of Helene and Milton. Back to back hurricanes that began with a 15-foot surge in Florida's Big Bend but got worse in the mountains of Appalachia.

Up to 30 inches of rain around Asheville, North Carolina, brought horrific flooding, while spun up tornadoes helped make Helene the deadliest since Katrina.

And then came Milton, just two weeks later. Jumping from a tropical storm to a category five in 24 hours, Milton is just the latest example of rapid intensification in the age of climate change.

But at number two, we have the rise of climate denial. After promising fossil fuel executives deregulation, Donald Trump retakes power with a promise to hamstring the nation's clean energy momentum and pull the U.S. out of the Paris Climate Accord for a second, and possibly final time.

The American election cast a pall over Cop 29 in Azerbaijan, where petrol states that agreed to transition away from fossil fuel at Cop 28 transitioned back to praising oil.

And at number one, the heat driving so much of this destruction. Eight years ago in Paris, the world agreed to limit global warming to 1.5 degrees Celsius, but this year topped it. It was over 100 degrees in Phoenix for 113 consecutive days, shattering the record by 37 days. So, first responders now carry body bags and ice. And the city has

embraced a policy of shade, signs that humanity will have to adapt because 2024 could be the coolest year of the rest of our lives.

Bill Weir CNN, New York.

(END VIDEOTAPE)

DEAN: And now to some of the other headlines we're watching today.

Storms could prompt flight delays as millions of holiday travelers prepare to head home. A series of Pacific storm systems will continue to affect the west this weekend, with periods of strong winds, low elevation rain and heavy mountain snow.

Meantime, severe thunderstorms are expected to hit the south on Saturday, with possible tornadoes, damaging winds and large hail from Louisiana to Alabama. Rain from that storm then stretches up the east coast by Sunday and could cause some minor travel delays.

The FDA is pushing a new proposal aimed at making sure all cosmetics are asbestos free. The new rule would require standardized testing on products like makeup, baby powder and other personal care items that contain talc.

The FDA says the asbestos exposure can lead to illnesses such as lung and ovarian cancers. The issue coming to light after more than 60,000 claimants sued Johnson and Johnson, claiming their talc powders products caused cancer.

The company has denied those allegations and is looking to resolve the claims through an approximately $10 billion settlement in bankruptcy.

Still ahead, how would you like to end the year winning a billion jackpot? Yes. Erica is nodding.

HILL: I would love that.

DEAN: She says yes. I say yes.

(LAUGHTER)

DEAN: Well, tonight's your chance, but the odds are probably not in anyone's favor. But you can't win if you don't play.

HILL: That's what they say.

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[13:48:54]

DEAN: We'll be right back.

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[13:53:36] HILL: So we have great news for you. If your New Years resolution is perhaps to become a billionaire, tonight -- tonight could be your night. Could be. That's because the Mega Millions jackpot has now soared to more than $1.2 billion. It is the fifth-largest in history.

DEAN: But when it comes to your odds, well, yes, I'm the Debbie Downer here.

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DEAN: It's a quick reality check. Chances of winning are roughly one in 302,000,000.

HILL: So you're saying there's a chance?

DEAN: Yes, there's always a chance.

HILL: CNN's Marybel Gonzalez is joining us now from Altadena, California.

How many tickets have you purchased so far?

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MARYBEL GONZALEZ, CNN CORRESPONDENT: Erica and Jessica, the question is, how many have I already bought? Plenty. But listen, it only takes one. And that is what so many people, including myself, are banking on today.

Now, here in Altadena, we've seen people flocking, you know, trying to hedge their bets here as well as nationwide. This is just one of the many spots where people are doing that today.

But this place, Joe's Service Center, is special and lucky to many in the area. And that is because, two years ago, this spot sold a winning Powerball ticket prize at over $2 billion. Billion with a "B" dollars. And ticket buyers are definitely banking on that. And to strike gold here again.

We spoke to one woman who says she spent around $600 in tickets and gave those away to her family for Christmas. She drove all the way down here because she says she's feeling lucky.

[13:55:01]

Let's take a listen.

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UNIDENTIFIED FEMALE: Its once-in-a-lifetime, no matter what. And then, at the same time, if I don't win, the people in the school system get it. And so that's the main thing, the kids, our kids, our future.

And if I do win, boy, oh, boy, what a day, what a day.

(END VIDEO CLIP) GONZALEZ: What a day, indeed.

Now, Joe, the store owner, says they've been super busy this week. On Tuesday alone, selling over 7,000 tickets with lines out the door.

But, you know, on Christmas Eve, no one won that $1 billion prize. And as you mentioned, Erica and Jessica, the chances of winning tonight, unfortunately, are slim.

Just to put it into context, you have a higher chance of winning the U.S. presidency. You have a higher chance of getting struck by lightning, getting eaten by a shark, or becoming a movie star. So sorry to disappoint.

And we checked with the California lottery. Here in this state, no player has ever won a jackpot -- a Mega Millions jackpot this high. But I'd say, for $2, it's worth it. It's worth trying.

HILL: Yes, I think you're right. I think it's totally worth it. And we look forward to you calling us when you win. And, you know, if you want to share, that's cool, too.

DEAN: Just say we were here with you, you know? Yes?

GONZALEZ: Yes.

HILL: Marybel, thank you.

Also, a very important programing note for you as we look ahead to New Years and your resolution to become a billionaire, the boys are going to be back for the biggest party of the year. Be sure to join Anderson Cooper and Andy Cohen for "NEW YEARS EVE LIVE" right here on CNN. Coverage starts at 8:00 p.m. Eastern.

We'll be right back.

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