you can imagine earlier, i saw the market. i saw the airline. i just tried not to break something. >> yes. >> soon to come. great to see you. thanks for watching power lunch. welcomed the closing bell. life here at the new york stock exchange. make or break begins with rates mobbing, stocks dropping, and now some questions for the state at this hour. that is going to be over this final stretch. in the meantime, scorecard with six units left to go in regulation, looks like that. it started moving up, when the fed governor chris wallace, suggested that they come this year, but was noncommittal on how they might begin. what happened to stocks.

looking at that as well. we have big nose at the dfw today. iphone price cuts are over there in china. looking at nvidia, with the only bright spot today. stunning move continues right there. nvidia, energy, also looking at these gas plunges big-time. the bowls might be more optimistic on the markets. we have a chief investment officer right here, joining us at post nine. back. >> things, scott. >> the market has been really choppy. what is on your mind? >> you have to conceptualize where we are. think back to 2022. we are trading at 19.5 times earnings. the market is higher. with that being said, yet parts of the market that are

attractively priced. some areas are priced very cheaply. the defense six the soft landing and the lower rates. don't forget that we have he second-longest going back historically. if you go to a recession, you're going to want a different basket of stocks that some of the leaders have today in the market. >> these very areas that you say are cheap, are cheap for specific reasons, correct? >> you have different types of cheap greed all of these areas, people overpay at the end of 2022. people have a decision from last year. you can put your money in coupons, and click yield. you have hollowed out this area of the market.

there are a lot of uncertainties out there. you have different ways to win, other than just betting. >> why do utilities do better at any rate? are they going to remain at best where they are now? after going from five to four, they are sticking out. maybe they won't cut rates as fast or as soon as people think. >> spread between the two year bond yield. look at that spread. it is very wide. people are hung up on this departure. you have to break mild two, or model 3. the reality is that they will be cutting. other areas yield to

interesting investments. utilities, stables, and the reeds. they should do better than relatives. this is what you know and discuss. this was another bowl in this market. there i say, they were trying to come on. >> they were trying to look at all of these investor dictations. >> we were looking at the top. >> we were looking at the market value. do you think they have adjusted well? >> they have distress this historically. you're looking at economics to show that. before the surface dot, those

are very cheap. within those, you have to look at this for the rise. >> this is at the end of october. this is towards the end of the year. you're going to be going through that. we are looking at the mega cap did maybe that was a head fake. maybe it is too soon. this was 33%. this is from the 2000 value. this is all from back to back years. we're going to look at another existential crisis. this is coming out of the 2009 crisis. that would be a gift. you have real stretch evaluation opportunities that

are cheap. >> rates are zero. >> you have been hung up on where they are today. look for the evaluation. we are looking at chocolate chips. today, it is the exact opposite. you were trying to look at domino's pizza. they were looking really good. looking at a group of stocks. this is what they have been talking about. i think there are better ways to make money. >> how many cuts do you need to make this thesis on his market work? >> everyone knows what the market is parsing at. what do you think? >> 100 is totally reasonable. this is a very prudent thing for them to get to before the years end.

the reality is that we went to a recession. if we keep crediting them, and cutting aggressively, we know how much they need to do it. they have kept it very tight. it is going to be a problem the longer that they keep it. they need to loosen that up. they have been telling you this for months now. the fed is in a position where they have no choice than to cut it this year. hopefully, we don't go into a recession before that returns. >> i'm trying to look at what chris waller had to say. arguably, he ignited this whole rally of the end of october. part of the reason that we are where we are. we have been in striking distance. >> this was on the s&p 500. what do you make of what they have to say right here? >> which part? he's waiting on cuts? it may not matter quite so

much. you know how much the fed starts with. it is crazy how bullish the market appeared to be, preparing for the remarks. disappointing. he was ever so slightly less than expected. we went into this thing. this was 70%. it is now around 67. the market is still betting on it. i will give you the moment right now. the market hasn't changed a whole lot. these of expectations that he would add. he didn't add to any strict or strong parameters around. >> this is no reason for the

fed to move. i'm taking it. no reason for them to move rapidly. we have prior easing cycles. this is equivalent to the rush back to where the market seems to be priced. we are probably going to cut this year. we could be real all sides with where the market thinks we are going to read >> this was the distinction that they were moving right here. they looked like the economy was cratering. as you go into next year, the differential is less from after that. they are in the same place. futures are going way out. what's really interesting and going on now, it is an unremarkable development. i want to get a quote while i'm talking to you.

it was the collapse of the 210 inversion. for a very brief nanosecond, we took out the low of 1605. i don't know where it is right now. it was like 1630, something along those lines. that is really going to help out the bank sector. the lending is more available to main street. >> the other take on that, the additional take, we will have people putting the economy on the clock, so to speak. we have had this happen. we are really on recession

watch. >> we thought they were going to lead to it. i don't think we are completely out of the woods yet when it comes to the recession, but we are underestimating the consumer. trying to think the mistake that people make, is to take prior analogs and charts. trying to overlay them from what is happening right now. i think you have to be available for new and different outcomes. every outcome that i have followed to make it, has been new and different. we really used to cut in a hurry. we do want to cut. >> going to bring in cameron dawson, from new edge, at the

table too. >> we are calling it the strange, indigenous thing this year. there is no historical analog. we haven't seen a similar kind of setup did we have these massive recessions. we have the fed embarking on easing cycles. if the bond market is right, it will be the largest non- recessionary cycle in the last 40 years. this is so very different. this is so parallel. >> i have a total agreement. we have different points of view. the largest, non-recessionary cycle, by the way, the fed is going to move very carefully here. going back to 1975. this is the twin peaks right here. you will see peak number one. the fed cuts rates.

inflation comes down. peak number two, they have elevated the tech policies from day one when it comes to this hiking cycle. trying to overlay the 70s and log on what is happening right now. the fed is definitely afraid of peak number two. it hasn't happened yet. i don't know if it is going to happen. you have to be available for it. we are going to look at the finances. it this time, it is different, and exactly the same. >> this is the most concern. you have to be thinking about it. what do you want to say? >> the longer they wait, you are pushing towards getting into that recession. you have this image of tom hanks in apollo 13. we need oxygen. we need lower rates. the real estate mode, you have

seen it so far coming off of the october low from last year. that is predicated on the risk that there is some belief. a lot of companies are looking to refinance. you have more debt on those balance sheets. we will talk about that right now. >> whether it is still intact, or even a little suspect, it is right here. >> evaluations are all stressed. if we go into this fourth quarter earnings season, we don't get robust, healthy outlooks. this is within 2025. this could be a source of all utilities. if you look at the market 2025 earnings, they mean two double digit back to back years of growth.

this is now the 2021 peak. we are already very full in evaluation. it doesn't mean we can get higher because of liquidity, but we have to keep that in mind. >> rates are coming down. the economy is staying good. we are supposed to fix the problem. do you think that earnings are going to be good enough? >> maybe they are talking about the upside for the investment activity coming back. there are pockets of upside. you think that you have to be aware. there is the celebration and economic growth as well. none of this is decelerating in 2024. revenue costs are expected o accelerate. that is a pretty meaningful divergence. >> is a highly anticipated

conversation. >> there is value. >> a lot of people suggested that is the place to be investing in. not exactly the s&p 500, but back to waller for a moment. we were trying to figure out the comfort of sending it. we were trying to talk the market into a realistic place. >> you saw how two days later,

he had to walk back what they said. the fed, almost had one concerted equity. pulling back on the reins of the horse. trying to bring the market back to more in the line of what they were looking at. they had to be very unsuccessful to the point where i was really surprised. it is one thing one street in the futures really were aggressive. they were looking at the wall street economist join that. once you lose mom, you are gone. this was a different rate cut. when i saw that, the fed is losing his battle. he does want a cut. this was what he has spelt out.

what they are trying to do, is pull back the reins, and create more alignment between the cutting forecast of the bed, and the cutting forecast of the market pricing. in part because of what the fed wants. they want flexibility to do the right thing at the right time. i agree with the comment that they made. i am not sure how big that window is for the fed to get the rates right. this was in order to stave off a recession. i don't think it is an infinitely open window. >> they do mention that as well. >> it can also mean keeping rates too high. >> this was the rest of it.

>> nonetheless, the choice is yours. >> i want to hear this part. >> this is why i like the other areas. staples and utilities are here. those don't need the same earnings growth to keep the multiple expansions going. they are already discounted. we have the steepest discounts. this goes back to decades. this is what we have talked about. they cater to life science and pharmaceutical companies. they are deeply discounted. we have massive operating margins. steeply discounted to his history. we are giving you double-digit returns over time. we have lots of opportunities. we have to look at a couple of different areas for those pockets relative to the broad market. >> the defenses are unloved and

unload. we have the upside volatility. we do well for a short period of time. they tend to give it all back when people have a sigh of relief. we see them more as trading vehicles, versus long-term holds. we have seen this as a long, downtrend. >> let's look at the mega caps. they have been uneven. there's a lot of talk about this broadening out. this hasn't come into fruition yet. >> not all mega caps are created the. we are looking at a number less than seven. those that have earnings growth momentum will do better. those just benefited from those multiple revision upsides in 2023. they don't have earnings momentum's that were going to struggle. >> somehow, we managed to do just that. thank you very much.

we are going to send it over to k roger snell, for a look at these numbers. >> we are looking at shares of paypal. they have been out with the restaurant outlook. this is more than 3%. this is all about the prediction. this was increasingly over from these perspectives. >> we are just getting started. this is midsession once again. he is back. he is helping from the rally.

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we are back towards the closing day of earnings season. this is technically. is the market overvalued or not? we're going to ask the dean of evaluation. welcome back. it is nice to see you again. >> simple question. is it a simple answer? >> right now, the market is over that. part of the reason is the

expectation against the market. this is from the start of last year. the recession is almost guaranteed. inflation rates are out of control. this is going to be terrible from these overstocks. this is the exact opposite. everything turned out in the opposite direction. some of these are not under control. i think this year, good news is going to require a lot more than it did last year. stocks are in a dangerous place right now. >> what if it is going down right now? what if it is going up right now? this is a different answer. >> that is the promise. i think the worry now, there might be surprises.

go back to 2008 every single year. we have had some big surprises then nobody saw coming. we don't have significant, big surprises. we have all of these unloved places from one year ago. >> they are cheap from an evaluation standpoint. how do you view those? >> overall, this is where the stocks are up 26%. they were actually down from last year. they had a bed, previous year as well. we had a defensive investment. i think they are okay.

>> that is fine. >> it gave back some of those winnings. >> this was going to be down over the last two years. you have not seen these interest rates. this was exactly the same level. this is an industry perspective. this is still overdue. that is one reason that we will go forward. >> let me talk about two stocks before we wrap it up. apple got a bunch of downgrades already this year. at least two, not three.

fundamental questions exist. how do you view apple from an evaluation standpoint right here? >> this is the smart one that they have exposed. the other businesses are going out to the point. they have some resilience. it has been a long, good run. if anyone is complaining about this year, it is because they bought that stock very recently. this was from the investors. it is time to give up some of that. >> what about nvidia? have you justified the evaluation from these things that we have spoke about last year? the stock has been incredible. the guidance has been equally as stunning too.

>> this was half holding. this doesn't make me less nervous about the fact that they were trying to have incredible success on the front. i don't know how much more good stuff can come from ai. >> i don't know. the stock was 400 now. thanks. we will see you soon. coming up, more on this day in stocks. she is here with me to make the case for having a position with me right now. including the four areas that investors should have on their buy list right now. buy list right now. closing bell, coming up.

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we are back, and under pressure. looking at his investment strategy. are we on solid footing with this market? are we feeling a little dicey? we were 10 out of 11. >> we are not in a downtrend. this is a different point. look back at the previous, all time high. we have gone back to the point that we were at. this was another action. maybe the market has decided that recession is not necessarily in the cards. we are struggling to get above that previous high. there isn't a lot of risk appetite in the market so far this year. it is interesting after such a ferocious rally. >> is this the pause that refreshes? are we taking a break? are we assessing where we are?

do we need more earnings to come into the system? can we spin something out one way or the other? >> we have some solid, good news to break above it. we are trying to figure out where we are always cutting in. so far, the idea that has been bullish and supportive. depending on the direction that occurs between now and that meeting, is about the market that starts to go down. the market is falling. as investors, this is big. we can tell what is going on. i think they will be interpreted as bad news. there might be some fear that gets baked into that.

>> historically, when the market starts to struggle, it has been good for this cycle. yields come down and seem supported. >> we would need to see more deterioration in the economic data. from the bullish signal, you really risk the overheating from the cut. >> there is the other risk of over tightening. leaving rates too high for too long, and causing a recession that you didn't need to cause. snatching defeat from the jaws of victory. >> this is the narrative that i

keep thinking about. the narrative hasn't really changed that much. we were trying to look as if they had picked this grand statement. >> positioning certainly has. >> they have themselves looking at three. >> this was the mere fact that they were looking at three. >> this is from the start of the cycle. they had said over and over again, we would err on the side of going too far, or staying high for a little bit too long. they were not going far enough. >> this was the idea of it. this was pretty clear. they seem to make that vivid in his own way.

>> i think they would be comfortable with a little bit. the need to be some pain. it is inevitable that some of them are going to result from a hygiene cycle like this. i don't know that we have seen that pain yet. they are expecting the below trending gdp growth. i think they should wake themselves up they have the buffer of when they start cutting rates. they are not getting problematic for nflation. >> this was the near chart. we have moved up on these comments theoretically. as long as the rates are above or on this level, to these equities have a problem? >> they have a problem getting further up heard as yields rise, it was a ceiling on the

outside potential from the s&p 500. >> this was the idea that they were going to copy >> this was right to it. they were looking at the waterfall. >> we had historic days and drops from the basis for monday. that is what drove the stock rally. >> we are showing the playbook right here. let's go through this. >> we have a lot of money markets. everyone knows that. where should i put it? are the is coming down? you are not going to be making 5% money market actions. do you deploy it into the risk assets? where do you do that? if you still want that income, they need to do well with it.

>> why do you look at the financials now? >> there is still a big release that we are going to have a soft landing. that is certainly a possibility. if that is the case, you have yields in a place that is a little bit more attractive than they were. they talked about this earlier. they were looking at this right now. that's a big difference from where they were three months ago. some of that is because it has a good attraction that is looking at the near term. if you don't have recession fears that come in with certainty, cyclicals don't get hit yet. i think financials can hold. >> healthcare is what you like. this is the best, rewarding sector of this young year? >> it is very early. >> healthcare is one of those sectors that actually plays both sides of the fence. you have parts that can be very defensive. they are seen that way.

you still have biotech that has a lot of growth potential. that is not as sensitive to all of this other volatility. of next, we have a spirit ending today. they say not so fast about that deal with jetblue. we are going to tell you why. closing bell, is coming right back

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welcome back. two big stories. >> we are going to start with jetblue and spirit. this is judge william young. dedicated customers of spirit, this one is for you. what did you do for those customers? he basically said that you will be able to keep low fares and your cost business the way that spirit has it right now. this is in a ruling that has a lot of people saying that they were not surprised. the writing was on the wall when this was first proposed. $3 billion merger between jetblue and spirit, has been blocked. he ruled in favor of the doj. the breakup fee when this was first agreed to, jetblue agreed to a breakup fee of $70 million. potentially paying spirit owners as much as 400 million. there are some fees that have been taken off since then.

this is a joint statement. the airline said that our combination is the best opportunity to increase much needed competition and choice. we are going to look at shares of both jetblue rising after the decision came down. they just got hammered. we are showing you back to july 2022. the proposed merger was announced then. they are assessing the legal options. the airline index, not surprised that we are seeing it under pressure today. if you are looking at the airlines, and saying that you need a merger, maybe they will go through because that is up next. a lot of people are saying maybe not. the airline index is down for the day. shift gears. i will show you the latest for the outside quality advisers. they have the chair of these

industries. they have been named as the outside counsel. huntington eagles industry. named as an outside adviser. they have all of these inspections that have taken place. will we get those results in the next day or so? that is the big question. some of this is in question. we have more than a few analysts who are saying that they need that right now. are they going to make it by 2026? they're moving these quality questions. it has announced a number of steps. we are adding this outside quality assessment team. they're going to check the work on the production line in washington. it is sending people. it is owning people. they are supplementing the work they already do. this is all within wichita,

kansas. >> there summing up a couple of coming up next, the $35 billion deal that is shaking up the software space. we will do it, next.

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unsettling. >> they had some payback moments on the surface. they are very negative. most of them are resetting lower. it has not put an index into the flood. you know that you can hang in right there. i'm looking at last week's low. we were not close to it. until you break that, you are not doing anything except turning around. the volatility roof has gotten someone's notice. it is more traditional from this third week of january. nvidia itself, has helped stave off the tech sector. >> this is one of those things that you can reiterate. this is the total possible ai leverages. this was the call. there is the excuse to perform

better. >> maybe there are interactive brokers. >> we are looking at the pending trading values and customer estimates. with his account growth, this is not what was expected. they were up 21%.

investors will see that momentum in the double-digit growth. this could be affected by benchmark grades. this was expected to see a boost from marginal lending as well. the stock is up about 13% in the past year. charles schwab, as i mentioned, reports tomorrow as well. he's coming up in overtime. we don't want to miss that interview. >> we look forward to that. >> do you want to talk about the stocks for a little bit? >> this is really the pure play on what retail is doing. maybe some hedge fund institutional stuff. it is transaction-based, being held up a lot better. we are looking at how they measured the stuff. the activity wasn't really here. we are looking at the retail all in. we have not had this sustained,

all-time month move for the most part. you haven't had a lot of money still back at them. there could be potential energy for these stocks. that remains to be seen if we can get there. >> we are treading water in a bit. we are looking at the potential earnings. before that, you're going to get a decent run of earnings. we are going to give you a read on whether we are okay. i think many of them are a little bit later than that. we are still in this game of economic surprises. this is about the lowest level it has been in a year. it is low for the past year. that was in combination with worrying about the fed that wants to intentionally be late. we are 2% off. i don't think it is too crucial.

>> we have to see some of these companies. >> we are talking to this physical area that we want to hear from. >> never going to go it. >> stocks are starting to be built with losses. we are looking at the sector that came today. this is wall street action. >> we are leading the lower market mentality. they are outperforming. looking at the synopsis, $35 billion ancestor. one of the largest tech deals