♪ ♪ ♪ welcome to power lunch everybody, alongside -- i'm tyler mathisen, good to have you here. let's take a look at the dow. it is down at this hour as you see by 100 points or thereabouts. the s&p 500 and the nasdaq with

modest rallies. and check out the moves in the bond market, as this morning's inflation numbers came in less than expected, the opposite of what we heard yesterday, the mildly opposite from the cpi. >> but the inflation in the fed are not the only things affecting the markets right now. we have to go to the earnings story to worry about some of those issues. united health accounting for losses on concerns that medical costs are higher than analysts previously projected. several of the big banks also were boarding. jpmorgan chase, slightly lower as you can see here. now, it's going to gain. the rise in that interesting -- should be starting to slow down there. citigroup is also down there, now up 2%. 20,000 jobs are being cut there as part of the restructuring plan. bank of america is actually down today, truly down, two thirds of 1%. and by the way, ceo brian moynihan is about to join us with more on those results in a exclusive interview later this hour. >> all right, dom. let's start with the markets.

our next guest is sticking with the new year, new bull market stands, and says that the biggest risk is a turn higher and inflation next year. joining us to talk markets, the fed, inflation and earnings, steve johnson, chairman and cliff economist with huge onset economics, joining us throughout the hour is cnbc contributor kourtney garcia, senior wealth adviser with pain tackle management. good to have you in studio, inside the hudson for a change. huge on, some welcome, good to see you, happy new year. >> thank you, happy new year to you. >> you keep doing this, you! you keep doing this year after year after year! i keep trying to catch you and i can't. so you think a new bull market began back in october, and you think it has legs? >> oh yeah, it definitely. as if you look all the way back to 1890, you have the average bull market being 47 months, and if you look back to the post war period, you have

essentially 63 months. so we are at the two month mark, maybe three month mark, and when you have markets, bull markets that last that long on average, this one has a lot longer to go. >> what was the demarcation point that you think set this bull market off and running? >> well it's a number of, things tyler. i think the number one thing is the performance of the financial markets generally. not only a decline in interest rates, but most important thing was the performance of different sectors of the mark it. you saw the so-called bull market sectors like consumer discretionary, industrial, some technology stocks doing well, and i think the real tip off at least for me was that for a long time small capitalization stocks were -- large capitalization stocks and that all changed. that change in october, and i think that is the signal that a new bull market has really begun. there are a lot of other things that tell you that basically when you look at cycles all the way back to 1890, it is

starting to shape up as being a very somewhat normal cycle. >> hugh, it is dame. one of the things we talk about with the cyclicality, we are now in an election year, and we talked a little bit over the last several weeks about some of the moves that we typically see in this election years. do you feel as though there is a risk out there because of the political situation in america right now for any kind of enhanced market volatility? >> yeah, there is always that chance. there is always a chance that it's going to be increased volatility. i will be honest with, you dom, i don't believe that the outcome for the election, or the potential outcome of what people think will be the outcome of the electionis going to have much of a bearing on what the markets do, what the stock market and bond market due in 2024. the number one things are going to be the same things that you and i worry about all of the time, which is what is the economy, doing what are interest rates doing, what our interest rates and earnings doing? those are the things that ordinarily go with stocks, and

when you get away from the election, a little bit away from the election, you will find those are the things that are going to make the difference in true thousand 24, and in 2025, because we are headed towards 2025, which will be an equally important year. >> courtney, react to what you have just heard from hugh. >> i agree with what he was saying. some of this change that we've had you're not really going to see the magnificent 7 leading last year and you'll see things like small caps, which you pointed -- out >> which is one of the things that hugh points out. >> i think there's a lot of value to. that is going to be continued broaden of this market, and i agree with all of his points, and i think for a lot of those reasons, investors need to continue to look outside of those areas, especially this year where we are kind of saying, okay, is that market going to continue to rally? are we going to go back to some of our big seven tech companies? i really think everything he's saying, i completely agree. with >> so you are with the idea of small caps? hugh points out that in the early stages of the bull markets, they tend to do better than the big? caps >> which is actually true. on top of, that if you think

interest rates are going to come down this year, i think the consensus most people think it is, the question is how fast and how many times rates are going to get cut. but if they do in fact go down, that is going to help your small cap companies because they take a lot more debt financing. so suddenly, that is cheaper, that is going to help their growth prospects a lot better when small caps are set up well enough. >> hugh you like what disney, microsoft, jpmorgan, you can touch on them when you answer my question, and that question is, what is the possible risk to your thesis? what is the big? one >> there's one big risk that i don't think a lot of people see coming. i think yes, interest rates are going to be coming down, the federal reserve is going to be seeing interest rates quite clearly, and the markets are over expecting one we're talking about -- interest rate reductions by the fed. that is not in the cards. i think there will be three and 2024, maybe five in 2025. that is one thing. the second thing is that interest rates will be coming down. this is all what courtney said, and i think the yield on a two-year treasure will come from the 4% level two or three

and a half percent level. i think inflation is going to be coming down steadily throughout the year. the big risk in my judgment is, as we get to the second half of 2024, i think people will start to see, including the fed, that there is a real chance that interest rates or inflation, or interest rates could turn higher in 2025. the consensus now is clearly that inflation and interest rates are going to continue down for 24 and 25. i think that is wide of the mark. i think we are going to see somewhat higher inflation, somewhat of a turn in federal reserve policy in 2025. in other words -- four times in 2025, and you will probably only see two cuts in 2025. it's going to take a little bit of an edge off of the bull market, it's not going to end it, it's not going to derail it, but it is going to take a little bit of the edge off of the bull market. >> in courtney, we are going to give the last word here on this topic. the volatility picture in the stock market, it has been trending near term downside, but it hasn't been horrific,

and volatility generally still remains below. is this a set up for more elevated levels of volatility throughout the course of the year? >> i don't think necessarily. i think, especially when you look at i share, we had a really concentrated mark, it and i think that's why you're seeing the volatility has not been so strong. i don't think that is a good or bad thing for the markets. i think everybody is going to keep waiting for them to get to a certain point, see the markets going down previously, and i just don't think that's necessarily something that we need to focus on. i think it is the broader picture here, and for example, when you look at the s&p 500, there's 150 companies there that are trading below 15 times earnings, and generally things are still attractive and still cheap when you're looking at the diversified portfolio. >> are you courtney, thank you very much, you'll be joining us again later this hour, but hugh johnson, always good to see you, appreciated. >> my pleasure. >> let's turn now to oil, which is bouncing back above the 75-dollar mark today. it did hit that 0.1 point. the u.s. and the uk carried out military strikes against houthi

targets in yemen. those existence have been attacking vessels in the red sea, now targeting both u.s. and israeli ships as well as others. let's bring in pippa stevens for more on the impact on the oil markets. what you could argue, pippa, has been a direct view having taken shape in terms of what is happening in the middle east. >> yeah, that's right dom, and you did see crude briefly topping $80 per barrel earlier in the training day after those u.s. and uk strikes against houthi targets in yemen. now the oil market is an h as traders evaluate what an escalation could mean for supply. so far, it has not been disrupted. rbc notes that the key wildcard is iran, and in the country seemingly fired a warning shot about its willingness to come off the sidelines when it sees an oil tanker yesterday in the gulf of oman. but in the red sea itself, attacks have so far largely avoided oil tinkers, and that means crude vessels are still transiting the waterway. --

smith telling me that we have seen a slight decrease in volumes going through the red sea, but that is not thanks to diversions. rather, it is european refineries importing less from the middle east because they are hesitant to take on any risk. instead, they're looking elsewhere, including to the u.s. with u.s. crude exports to europe now at a record, but you can see really off of the highs of the day from earlier today. >> yeah, $75.25, the high for u.s. benchmark wta. pippa stevens, i would like to turn on the supply issue right now. the world's biggest uranium miner is warning of a shortfall over the next couple of years. but can you tell us about that mineral and that supply? >> so ukrainian stocks are surging on that warning from cars out on prom, which is the world's largest minor. the kazakhstan state owned company has long term contracts that they need to deliver on, and so if their production falls short, which they worried about, they will have to turn to the stock market, where supply is already really tight.

your prices surged above $100 yesterday hitting a 16-year high amid this global resurgence in nuclear power. and is also growing calls to sanction russian uranium passing a bill to ban imports back in december, and so that could create a even tighter mark it, and right, now we're seeing this etf up about 7%. tyler, dom,? >> pippa stevens. coming up on the, show a power player. bank of america shares in the red, although off of the lows of the day following its result. our own becky -- is sitting down with ceo brian moynihan. coming up next. stay right here, we will be right back. you always got your mind on the green. not you.

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with courtney. welcome back, courtney. >> this is the best segment on here! >> it's awesome. >> we were talking in the last hour about the idea that an awful lot of last year's gains in the market came from an expansion of p e. the valuation quotient of return. is that like to be repeated this year? and second, is what we've seen here to start the year, as the market is kind of retracted a little bit, is that a deflating valuation? >> no. because i think most aware it expanded was really concentrated in the markets to just the big tech firms. a lot of the other areas are

still undervalued like the energy for example. traits like -- >> banks. >> i think there's a lot of opportunities investors can look at where you don't have these large stretched valuations. i think investors should still own companies like apple, google, microsoft and nvidia, but i think there are a lot of other areas that are cheaper valuation that you can add money to. maybe take profits at rotate out into those. >> what's interesting about that, if you look at the way it moved in terms of the market in the last half of the year, a lot of that multiple expansion was because of these lower interest rates. people saw interest rates go lower, or had the expectation that the fed was going to cut as soon as march. that puck into multiple discussion, why you justify higher multiples. what if that gets derailed? is their actual multiple contraction this year, if interest rates don't play along, or is this that has multiples independent of the interest

around rates? >> i wonder if that is as much play into the expansion, or artificial intelligence and the speculation and what it will lead to earnings. i think you are starting to see that, where everyone is so excited about what this will do productivity in the future, and i think there's something to that. but now this year they are saying how much of that will actually affect earnings on the short term. i think that was actually a bigger effect to a lot of the earnings multiples and interest rates coming down, which i don't think has been fully realized yet. >> you mentioned banks being remarkably cheap at this point. let's talk about a bit about that, and whether you see that as a sector that is highly investable, moderately investable. of course, we will have brian moynihan here in just a moment. do you have any thoughts on bank above america? -- bank of america. >> yes. especially with what they are's -- are seeing on consumer. everyone looks to jpmorgan when jamie diamond reports there.

so far they have not seen the issues with consumers people were expecting to see. they are generally in good shape. bank earnings maybe have not hit their expectations, but a lot of those work for some one time costs. >> charges. >> exactly. strip those out, and a lot of them actually beat expectations. i don't think it's as much a concern people should be worried about, especially if interest rates start to come down this year. we could actually start to see letting activity pick up which could help the banks. >> there's been so much of a discussion, and rightfully so, because these mega banks are the focal point of earnings season. but it was maybe just a little over a year ago we saw the silicon valley bank, regional bank issues getting all the attention. is it perhaps an opportunity now to see the smaller mid-sized bank trade, and not focus on bank of america, because there has been so much attention towards those, that there might be a catch-up trade elsewhere? >> i do agree with that. i think those really got hammered hard last year.

for valid concern. this time last year, there was a lot of concern on what would happen with those smaller admit sized banks, but a lot of that has not come to fruition. i think you will probably see a catch-up trade in some of those mid and regional banks. >> how should people think about two things that are sort of extraneous variables in the market? one is the presidential election, and the other is tension around the globe, whether it's taiwan, the middle east, whether it's ukraine. >> these are always going to affect certain extent. the question -- the elections i get questions on every day. there can often be volatility leading up to an election, but it's typically, election years typically tend to be a good thing for the markets. especially once it has been decided, get doesn't really matter which party gets into office, it's just a certainty of knowing it is. it will be interesting to see this year because if it does end up being a trump biden election, it's two people that we've had an office before.

so you know what their policies have been. things like pharmaceuticals, for example, people are a little less concerned in this election year than they had in the past. they are saying we have already seen these two people and know what they've done. with things like the farm industry. so it is too early to say with any of, that i think it will continue to be a conversation this year. i do not think it is a reason to be concerned to be investing at all. >> courtney, thanks very much. we will have you back and a little bit. we continue on power lunch. we will be right back. (vo) explore the world the viking way from the quiet comfort of elegant small ships with no children and no casinos. we actually have reinvented ocean voyages, designing all-inclusive experiences for the thinking person. viking - voted world's best by both travel + leisure and condé nast traveler. learn more at viking.com.

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looking back to power lunch everybody. a big reaction in the bond market today following this morning's inflation numbers. rick santelli following it for us in chicago. hi rick. >> hi, tyler. well the producer price index was significantly different than yesterday's cpi, that is for sure. there was a cooling their, albeit there were some -- year over year, but investors look right over it and they continue to monitor the big moves that we saw, especially that headline number that we saw on cpi. and the moves? well let's let the pictures speak for themselves. here is a today of two year, tyler, and look at what the high yield was yesterday.

for 39, we're trading 415. when we close last friday? 4.38. now contrast that with the long part of the yield curve. look at the two days of 30s. right now, 30s are higher in yield than yesterday, they are up a couple of basis points, and they are virtually unchanged on the week, which of course leads to the notion, what have the yield curve stun? i tell you what they have done. what trades have told me since early december that 2024, and we have said this many times, it is the year of the yield curve, steepen's, and it probably moves dramatically in positive territory. let's look at that twos to tens curve, covering around minus 19 basis points, it has not been at this level since halloween. that is how big of a move we have had! and, as you look at that chart, let's go back a year and a half

on twos to tens. we are at very close levels that we haven't seen since july of 2022. what does that mean? what is the translation? why is that important? i will tell you why. because the market is gravitating towards easing. the fed is going to ease, and they're going to do it rather aggressively. they will fuel that. so they will be going down. and even the longer maturities have not been immune to some of the pressures pushing yields down. for the most part, traders don't play these naked positions, they play this reds, and the reason that they are playing this spread is that, unlike history, they think that we could see a slowing in the u.s. economy and that slowing is still going to be followed by a debt level to service that is going to keep global longer term interest rates higher than many anticipated. back to you. >> all right, rick thank you very much. and several of the big banks reporting mixed fourth quarter results this morning, including bank of america. shares of b a c shush trading a

little bit lower after the nation's second largest bank reported a lower profit because for regulatory charge. let's send it over now to becky quick, who has an exclusive interview with the bank of america ceo. >> i, becky -- >> i want to welcome brian moynihan who is the chairman and ceo of bank of america. brian, a big day for the banks. we've heard from a lot of reports, and there have been a little bit of confusion as people try to look through these numbers because there are some big charges that have gotten handed out to every one of the banks, fbi assessments, and all of the other things that have been included. on the earnings of pushed the share, you came in at 70 cents. that was above expectations, but was down from last year. when we dig beneath some of these charges and try to really get at what is happening with the bank. one we walked or segment by segment. and we can start by sales and trading, because revenue there was up by about 3%. what is happening? >> hello becky, it's good to see you, we will see you next week in switzerland, but if you

look at sales and trade, we've done a good job. up 7%, this quarter up a bit. we are down a little bit and fixed income this quarter, but you are, year it's up 11%. so things and and flow. they made money every trading day, they've done a great job, they've gained market share. the equities business came stronger and the fourth quarter, but year over year it is relatively flat. so they've done a good job. then when you move on to the investment banking, corporate banking side, loans group, deposit groups and that area, and then importantly are investment banking fees it seems perform better than some of our peers and our team of gun a good job there of running the whole global corporate investment bank business and also helping on investment big inside. so we feel good but our markets base businesses. >> in terms of consumer banking, revenue there was down by about 4%. what was the pressure? i think part of this may have been having to pay up to keep some of those consumer deposits. >> yeah, largely, when you look

at the company overall, last year's fourth quarter of 22 was high interest income, but it has come down as a rates paid to consumers have gone up and the fed has quick raising rates. so if you look at that, that affects consumers most of all because they get 950 billion dollars of deposits of which they pay 40, 50 basis points for them. it's a great business. deposit met businesses are stabilize, credit card loans are, up the rest of those relatively flat. credit costs are affected a bit just because we are building reserves for the critical growth, but the team is done a great job there, and importantly, 600,000 new checking accounts. 40 something billion dollars of flow sent to the investment side of the business, and we feel very good, and they've opened 50 new branches last, year and we've basically finished our remodeling of all the branches. so they are absorbing all expenses, and expenses are relatively flat you have a. year >> in terms of net interest income, down 5%. you mention the reasons why, i just hired posit costs of

setting those higher asset yields. 13.9 billion was the number that came in. what are you anticipating as rates potentially will come down, federal reserve may lower rates. what are you anticipating in net interest income for the current quarter and the rest of the year? >> so four fourth quarter last year, it was 14.1 billion, and then what happens in this fourth quarter of 23, first quarter of 24, you have one last day, but believe it or not, that's 150 billion dollars. so we will say next year it will be 39 to 40 billion, which is what we said in the last earnings call. the interesting thing about that is that since the article on october until now, you have had the rate cuts in the market go from 3 to 6, and so that is a major change in interest rates for 2024, and we still think we have the same trajectory where we come down a little bit in the third quarter, we come down in the second quarter, and we start to go up from there. that stability is the power of the deposit franchise starting to actually grow. we actually grew the deposits

quarter to quarter, the third in the fourth, and it's very stable, and there's some seasonality in that. but we feel very good about that, and that is all funny that helps us grow, but it's just a matter of basically getting loans to, grow getting deposits to grow, but also taking the effects of the squeeze from the fed, quit raising rates in the deposit price is gaining for those deposits are more trade sensitive. >> brian, there's a lot riding on the idea that the fed will start closing rates in the first half of the year, and that certainly what the market seems to think now, but there are issues that could complicate that. part of that is what we saw with cpi earlier this week. obviously, ppi today showed the producer prices were down, but cpi was a little hotter and more stubborn than had been anticipated and there are some headwinds out there. things like higher transportation costs, like when you look at what's happening with the red sea. you saw oil prices up for half percent, maybe better than that today on some of those concerns too. if that starts to trickle back through into the inflationary cost and the fed does not

actually lower rates sooner, what does that mean? from our companies perspective, it actually helps a bit because the instruments we have on the asset side, and the cash, the almost 600 billion dollars in cash we have that we put with deathbed overnight in very short treasuries, but let's back up and talk about what we have seen. the market moved heavily. the fed stopped. then they started putting putin. and the market, as i said, six -- our team has four cuts. if you mix that all together, at the end of the day the rates are not coming down and that helps us. the reality is that everything is setting up for them to be able to normalize the rate environment, given that you are seeing consumer spending, which for the first part of 22 to 23, was up like double digits. it's now down to 4% or 5%

growth in the first part of 24. when we think about that, we've been watching that for years and years. as you look at that, that is more consistent with a lower growth low inflation economy. if you think about the customer, or the consumer driven economy in the u.s., in terms of the amount of impact they have, siloing down purchases is not inflationary. we have to get through the housing rollover and the inflation statistics, we have the issues you talked about, gas prices picking up, the consumer feels that. the consumers expectations have stayed in line. i think there's still some tenuous ground here. we have to make sure we get a short putting, but i think the consensus view, what we hear from our customers is they are basically planning for a soft landing. that is still a major step down in grocery third quarter of 23 to the first quarter of 24. you will see a quote from 4% plus to about 1%. that is a major down drafting of growth. so the fed has to be careful it does not go below that. it needs --

cause them to hold on a bit longer to make sure the inflation does not get back in. >> bank of america's stock was up 1.7% for 2023 i think, versus a gain of about 10% for the financial sector overall. you have all been facing some headwinds and a big part of that is that low yielding elongated securities that you really loaded up on during the covid pandemic. what can you say about where that stands? i think the paper losses at this point on the security is something like 98 billion dollars versus $132 million that you have been looking at before. you've been talking about how it doesn't matter, you are not going to take these losses, you just let it right off. when do those things actually right off, and when does it give you more freedom to do things with that money? >> so why do we have to invest? it's that we have a trillion dollars of lost trade. [inaudible] we have more than two trillion dollars, so we have a trillion

also. we have to put the work every day. less than half of that is in the health and -- portfolio. it just keeps running off. that was the plan. we made investments since 2021, but when rates were predicted back, then we had to start to extract value. so that just keeps converting. eight or nine billion last quarter. it will continue to be that. it will continue to be converted over. meanwhile, as deposits grow we are building up more and more cash. we are just putting it short term, as we did back then, so we built a portfolio still there. that is earning five. if you look at -- you will see the yield of the combined portfolio of a trillion dollars actually continues to rise every quarter, because you have a runoff of the lower yielding health, and -- short term stuff. so we will write it through, but it gives us stability. if you think about what people are saying, they are down a lot next year. we are basically saying if you do all the math, you are down a couple of percentage points for the year, which is outperforming others. because we have the stability and earnings power driven by

the deposit franchise. at the end of the, day we've got a trillion and deposits, which opened cost is 160 basis points or something like that. it's really fantastic base, but it's our customers and we do a great job together. >> are you frustrated by how the street has been grading it off? just based on the stock price itself. as i've been president for you? >> i never get frustrated because at the end of the day, if i go out and look at what our company does for our clients, our teammates and our shareholders and society, we generated 29 billion dollars plus earnings, 15% return -- 90 basis point return assets. we started the year with people thinking there would be a recession. turns out it's a soft landing. a completely different environment than predicted. as you talked about, bank disruption, all the things that went on, we started the year with about 1.93 trillion deposits. in the year with seven billion less. so this idea that deposits are going to get out of the system

as rates normalize, none of it proved true. i never get frustrated. we just go out and do what we do. we deliver good core earnings and let the market maker of itself. if the stock's been we keep buying it. what >> is your outlook for the housing market just given how mortgage rates have come down? >> you know, i think we are in a process. we have 15 years of note right environment effectively, and people thinking that was normal, and we are just starting to get normalized at 19, then the pandemic came and the rates fell again. so i think it's just going to take a while for everyone to get used to a higher mortgage, write what you are starting to see, as it even gets down a little bit, you are starting to see the kick up. the activity. it won't be as robust. it won't be a big -- activity, but we are basically getting, on home equity loans, a constant amount of production. on the market just, we are kind of running in place. -- paid down every quarter. it's not something -- you know i think it will be okay.

. ,. we have 40 odd percent of our mortgage portfolio [inaudible] so those rates are starting to move up. we will see all that play out. at the end of the day, people move because they either have more children or something like that, or they retired, to become empty-nesters. or, unfortunately, the house is sold because people pass away. all those things are still truth, it's just be re-violently is lowered because people have lower normal rates. which is basically a good thing for american consumers because it provides durability to stay in the game spent because they've got their mortgage rates by and large are shifting [inaudible] >> brian moynihan. i want to thank you for your time today. we look forward to seeing you at the world economic forum in davos on tuesday. we will be talking with brian moynihan again tuesday morning and we will see you then. thank you. >> thank you, becky. >> we will send it back over to you, tyler. again, when we get to double, there will be a lot of other things we will be talking about including the loss of trust in

institutions. what happened and how [inaudible] >> they interesting and very topical. becky, safe travels to you and your team. >> thank you. >> thank you. and mr. monahan as well. as we head to break, a quick power check on the positive side. jeffries raising the price target on the i.t. services firm. on the negative side, united airlines down 9%. deltas week guidance along with oil prices dragging the entire airline area down. that is your power check. it's 37 past the hour. we will be right back.

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lunch. we just heard from bank of america ceo brian moynihan on the bank's fourth quarter results. of course, much more on the macro paycheck. let's get an analysts take on that big interview with becky quick and the other banks reporting today. david comrade's managing director of equity -- at kbw. he more neutral writing on bank of america, also a 33 dollar

price target. we have corticosteroids of course. david, thank you for joining us this afternoon. i know you were listening in on that brian moynihan interview. there are a lot of folks who suggest that bank of america is one of those ways that you take a broader view on not just the u.s. economy, but specifically the u.s. consumer. did you find anything he said interesting with regard to the trajectory of the u.s. economy going forward because of that consumer? >> yeah. thanks for having me on, dom. i think bank america stands with the consumer franchise. more specifically what we saw into positive growth this quarter. and i came in at a little bit ahead of expectations. although the forward look is a little below, but all in all with the rate environment, they held up very well. i think it since -- in the sense of the consumer, we are seeing 80 celebrating pace here from what he said, and so i think what is interesting for banks is that

we do have a slowdown in the economy, but the push and pull of this quarter and earnings is that we are still thinking of a soft landing. the forward curve doesn't really make a lot of sense, those six cuts, so i think we are getting some more severe -- guys. and that might be the reality as we move through the year. >> the net income story is not only specific to what is happening with bank of america, but we also got results from jpmorgan chase today and citigroup, wells fargo as well. when you take a look at those four across the board, is there one that is particularly focused better or better leveraged towards a potential interest rate cut than the others right now? if it were to hypothetically come between march and august of this year. >> yeah. i think in the near term, i mean jpmorgan had the best net income guide. many of that is the benefits of the first republic acquisition, but a lot of it is also due to growth of credit cards. so i think in terms of think

about the performance of the empire going forward, the credit card names certainly do have an advantage just as balance sheet growth. conversely, wells fargo probably have the best quarter out of all four of this morning. probably more susceptible to six cuts than their peers. so they're guide is to make six cuts came a little below trek speculations. >> [inaudible] i am naive on this because i don't know how you all to price targets, but your price target on bank of america's $33 a share. and it's at $32.95 or $32.92 right now. does that mean, if you are sticking with the $33, that i should expect basically no return on this stop if i were to buy it over the next 12 months? or would you lever up the price target in light of the numbers that were reported today? >> i don't think a lot will

change. we will see what happens over the weekend. i think basically the results are relatively in online as well as the guidance. i think when you look at bank of america, i think it's a stock thatwill likely outperform its peers in more of a stress situation. so to brian's point, they can hold the a nii little better in the six pet environment. part of it is because of deposit growth, the other part is because of a higher [inaudible] liabilities. but i also think with bank of america, where we get more constructive is there is a safer place on a credit. so if the economy turns a little more challenging, we think they would outperform body criticize. >> let's bring in according to the conversation. courtney? >> i saw in your notes here that you pointed out, specifically goldman sachs and morgan stanley, they have a higher impact if you look at investment banking. you think that will be a concern when we look at the

last quarter. how do you look at that position now into 2024? how will that impact them? >> yeah. for all the banks, the perfect environment is probably more -- two or three cuts with lower inflation, soft landing. i think it would be very strong for capital markets and for the banks overall. so the way we kind of think about this group is nii he's going to be pressured next year. we are pretty confident that we think capital markets is going to improve, especially investment banking, and so we do think, you know, we have had a drop in [inaudible] narrowing quite it spread, it feels like a good backdrop. so we would rather own more sensitivity to capital markets and asset management, then sensitivity to net interest income. >> that makes sense. >> all right, david. thank you very much. we appreciate your time today. >> you bet. thank you.

>> david comrade. let's go to kate rooney for cnbc news update. hi, kate. >> hi there, tyler. hunter biden's attorneys signal that he's ready to comply with the congressional subpoena if house republicans issued a new one. they say the change comes because there's no unauthorized impeachment inquiry into president biden. house republicans are pushing to pass resolutions asking the justice department to hold the president's son in contempt of congress for defying in earlier subpoena. the younger biden surprised republicans this week when he showed up to a vote on the resolutions. the white house said this afternoon that it's not interested in a war with yemen, but thank you west will not hesitate to take further action in response to houthi attacks in the red sea. the comments came after iranian -backed rebels about retaliation for u.s. and uk launched military strikes in yemen on thursday. and this is sad news, guys, assigned the holiday season is over. the 80 foot christmas tree at rockefeller center is coming down tomorrow. what's the crews remove it, the

tree will be cut down and then it's number will be donated to habitat for humanity. tyler, back to you. >> thank you very much, kate. always a said passing the season with the tree comes down. still ahead, the turbulence for delta, shares sinking despite posting a fourth quarter beat after trimming its 2024 outlook. we will look at delta and a few more, and of course, power lunch returns after a quick break. [♪♪] your skin is ever-changing, take care of it with gold bond's healing

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time for today's three-stock lunch. today's menu's earnings focused. here with our trades is scott nations, founder of nations indexes. i hear, we have delta air lines. that airline reporting a fourth quarter beat, st. bookings for corporate and leisure travel has picked up from covid lows. shares of the al however are down big, after the company trump its 2024 earnings broadcast. scott, case delta flying high or getting grounded in 2024? >> delta is holding. as you pointed out, dom, the problem is the forward guidance. interesting that they beat one eps but they will guide lower in the future. unlv is actually the worst performer in the entire s&p. so the entire space is getting

hammered. one important distinction, delta does not fly the 737 max nine that united does, which has been in the news so much. it is a tough space to invest in, but delta is the best name in the space if you want to be in it. >> so delta, what do you think? would you want to be delta or another airline? >> i actually completely agree with that point. of all the airlines, this is the one you want to be in. they have a very strong balance sheet. the free cash flow is very impressive. generally, one thing that has not recovered it is international travel so much as domestic. airlines such as delta, which have more international legs, is something i think can benefit them moving forward. >> up next, united health. that company reporting a better than expected fourth quarter, with shares falling because of soaring medical costs. your trade on them? >> it is a buy. we should not be surprised that there is inflation in health care costs, but the company still beat on eps. isn't that the definition of a

well managed company? castro coming up, but they still managed to beat on eps? so i actually applauding their performance. yes, the medical cost ratio was much higher than expected and it's been higher than expected seven out of the last ten quarters. that is certainly a problem, but right now the stock, which is down a few percent, this being hurt because it is defensive. that sounds like a straight complain to me, and one that would carry weight only when the market is -- >> courtney, your thoughts on united front? i will agree again here. i think you want to look at this optimistically. there are still the largest provider of medicare advantage plans especially with the aging population, that will benefit them. some of the concerns within the additional costs, i think a lot of those are one-time things. there's a lot of people coming in for rsp vaccines and covid has recently spiked. some of that is just seasonality. i think you want to try to sort that out when you can. >> finally, let's take a look at goldman sachs. the company is set to report its results on tuesday. what is the trade on goldman?

are we going to see the capital markets recovering? >> goldman is also a buy. the valuation is very low with the forward p/e a tick below 11. it's not even in the teens. earnings estimates have been coming down over the last 30 days. that is a bit of a problem. however, this company is not cheap. it's not just a by, it is a long term buy and hold. the only problem i see for the stock is the potential for them to not be getting out of the consumer landing as quickly as they should. all of the senior leadership above the c-suite -- this failed experiment with consumer lending. so if they get out, this would be one of those situations where drastic and ruthless is not a bad thing. >> all right. courtney, goldman sachs? morgan stanley. both out next week. >> good point. i actually like goldman sachs here. specifically when talking about the retail business and then spending it off. it will be a good thing for

them. so they can get back to their bread and butter. our guest earlier pointed out, david was talking about how investment banking is likely going to be a beneficiary next year when you are looking at banks, business rates come down. i think that is where they will benefit. >> scott nations, thank you very much for that three-stock lunch. according, you are sticking around. >> we've got some more power much coming back at you after this break. trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

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seconds left in the show and we will use every last one of them. several stories you need to know about. let's get to it. first up, a tough day for tesla. shares dipping after a slew of negative headlines, including supply chain delays from the chaos in the red sea disrupting global trade. price cuts on its vehicles in china. and yesterday's decision by the rental car giant hearts to sell off a large portion of its ev fleet, but not all of it. tesla is certainly taking some hits lately. >> you wonder whether or not this is going to be one of those situations where the people focus so much more on this because tesla is the first company that we all know so much about. that will take a supply chain hit because of the risk. >> that's true. i think it's also interesting that it's coming right around the time we have been getting headlines about byd suddenly having additional production. they are having to cut prices and china. that is probably going to be their biggest competition, in china. now they are having production cuts, which will not help them in that race to get the consumer over there.

>> from one makeup to. we are talking about al gore retiring from apple's board. he's 75 years old. the company has a rule, barring directors seeking reelection past the age of 75. he's been on the apple ward for more than 20 years. we of course no he's very high-profile. he has a lot of the cachet with regard to climate change and the other initiatives out there. you wonder whether or not the replacements that come into these boards, what goes into the selection process for some of the people who come in? >> yeah. i don't know. i think probably, there was another person who's off the board as i recall. i am not a fan of required age exit. i think it's not constructed. >> all right. >> because i am approaching 75. [laughter] >> oh stop! >> new data showing remote workers are falling behind colleagues in a important prospect, that's promotions. analysis from live data technologies founded fully

remote workers were promoted 31% less frequently over the past year than folks who work at least part time in the office. they also received much less mentorship than their counterparts who showed up in person. >> i could've told you that. >> yeah, absolutely. >> it makes perfect sense. >> do you do most of your work from home? what do you do? >> i'm a combination. a lot of clients prefer to do stuff remotely but we are getting more and more want to come in. i think there's so much more to do in person. i prefer to be here at the desk with the best in doing it remotely. and i think it makes sense that you will get more opportunities that way. >> all right. of course, it is a very big football weekend out there. wild card round for the nfl. six games over three days. jim cramer, our own jim cramer, is doing met money tonight. live from arrowhead stadium, home of the kansas city chiefs. he will be joining the football night in america crew pregame tomorrow. the big thing people are talking about, the chiefs dolphins game will only be available on peacock.

a very bold experiment. the clock is owned by nbc universal slash comcast. >> that explains why jim is going there and not the eagles game. of course, he is one of the biggest eagles fans. courtney, great to have you with us. >> thanks for having me. >> we appreciate you bringing in this all broke addition our with us. >> have a great weekend. welcome to closing bell. i am mike santoli infer scott walker. this make-or-break our begins with stocks -- ten when week at the last 11 as the big cap index published just below record highs. encouraging news on wholesale inflation, sparking a strong treasury rally today as the market grows more shower of fed rate cuts coming months. the two -- that's the most dramatic. it's actually below the 30 year yield for the first time in about eight months. we had mixed reactions to bank results. city announcing it will be cutting roughly 10% of its workforce. that's in the next two years. it reported 1.8 billio