image to many jason kelce shirtless in buffalo. >> they don't like that. no way. and that bills game sent kelley into labor. we have a report she delivered a healthy baby girl this morning. thank you for watching power lunch. >> i think the name should be taylor or travis. closing bell right now. >> welcome to closing bell. i am scott walker here at the new york stock exchange. the make and break our begins with a rally in stocks. let's get right to your scorecard with 60 minutes to go in regulation to see exactly where we stand right now. that is where it is. we are in the green across the board. dow trying to close above 38,000 for the first time ever. goldman sachs, united health, and caterpillar lead the way there. take a look at those stocks. nice in the green today. we will watch the indexes there over this final and most important stretch. apple, a big story today. it is back towards $200 a share. a few positive mentions today on the street as well. i don't know, three downgrades

or so in the last weeks seeing but a distant memory. keep an eye on microsoft also. it tries to top three trillion in market cap for the first time ever. it has been in the red though for most of the day. of course, we will see what happens here over the last hour. it is the russell that is outperforming small cap stocks getting a boost from the markets broadening. and probably -- probable drop in interest rates as well, which takes us to our top of the take. just how far can the rally go? let's ask top wealth advisor cheryl young of the rockefeller global family office who's with me back here at post night. i see you again. >> nice to see you. >> you always have a good eye on the market. that is why you are in barons hall of fame, one of the top 12 advisers since 2014. so we are relying on this knowledge now. these accolades. where do we go from here? >> you know, i think the market is priced to perfection right now. we just hit all-time highs today, which is exciting to be on the show today. i am a little worried. the last few shows i've been on scott, i was very bullish. i doubled down on tech the last

time we spoke in october. the valuations are a little stretched, so things are priced to perfection. one of my favorite names, a semiconductor stocks, so any kind of -- >> might start with and in, but we won't mention names. i think i know where you are going. >> any kind of shot could cause big pull -- big pull back. so i still love most of these magnificent seven names, but i am adding protection right now. i am a rock climber and i would like to think of markets like, if you keep going up on the wall, put a little geared to keep you safe. >> do you think the market is going a little too far too fast since the october low? >> i just don't see that we will get six rate cuts this year. i'm guessing it's curry. i don't think it will happen in march. i don't think it's going to happen until at least june. and the markets are really looking for these rate cuts to rally. what we have to watch is earnings. of course, we just started earnings season. it hasn't been that impressive. >> we are just getting started. >> just getting started. look, big tech starts barely on

the 24th, at next week is really when we will see the numbers come in. >> let's talk about right cuts. as the how many really matter? where does the kind that they are going to be cutting matter the most? by the way, goldman sachs today, -- first to come in march. i know there are those who think the market is way ahead of itself on that perspective but again, why does the how many matter? >> i think it's really important that we don't have too many because if you have six great cuts, breaks nimble, you could start arguing what is the economic data supporting that? that could cause a fear infusion into the market as well. so i think the rate cuts happening is very good for stocks. it continues. there are a lot of areas that have not as you know participated in this market rally, so we are really starting to see some broadening. we saw it a bit in hue for. if you look at the magnificent seven, if you pull them out of the snp for just q4 in fact, he would've done better.

so that has completely reversed -- >> what if the broadening was in fact a head fake? that we will go back to that same playbook that worked so well in 2023 for a variety of reasons. economic slowdown, balance sheets that are just better than everyone else, you can count on the growth more, you are willing to pay a higher multiple for all of those things that we'd love those stocks so much more. >> if you are willing to pay a higher multiple, you are paying a higher multiple right now for sure. look, the margins are just -- almost double. if you take the top ten names, almost double on these names, then the other 499 names on the s&p 500. so there's a reason why this trade is crowded, but i'm concerned it's getting a little too crowded. i would love to see small caps with -- down 5% last week. i think they are down to one 5% as of today year to date, but small caps are down 12% in december. again, we are starting to see signs of life there. there's a lot of potential momentum on the smaller cap names, and they could do better than large caps this year.

>> you still think we are going to have a good year though. you came in here's the first words you said were i'm a little worried but you still have a pretty good outlook this year for the market overall, right? >> absolutely. look i think there's still a good story for stocks. election years are typically -- especially with an incumbent running. so statistically based on that along we haven't had a negative election year with an incumbent running since 1944. so that bodes well. you have to watch the earnings. you have to watch what is coming out in terms of the estimates. a lot of large cap ceos are actually downgrading guidance outside of technology. it's really only technology where we are hearing updates in terms of the earnings outlook. >> don't you think if there are these cuts, and let's just say it's three for arguments sake, but the race to continue to come down or at least stop going up, will that continue to be good for growth stocks? people like david costa keep talking about that. it's just lower rates are going

to fuel the growth trade. >> we have seen this every time we've had lower rates. and you have to of course watched not just in the u.s., but if i think about the companies that are in silicon valley where i've spent a lot of my time, over 50% of their consumption is coming from overseas. when we think about rates, we tend to focus on the u.s. but it's not just the u.s.. china still has got some concerns. india's inflation i think is still at 5%. so it's not just the u.s. we have to watch for. we have to watch it globally. >> so you alluded to one of your favorite stocks and largest holdings is and you can't top individual names but we can read through the line so to speak. let's talk chips. the estimates just had the best year in 2023. now it's the best sector to start this year. what do you see there? >> i think chips still have some room to move. we talked a bit about it last week when talking about a.i.,

and the furious demand for chips. that we won't have enough chips. we saw that pop a couple of the big semiconductor names. again priced to perfection. so i am not selling much of names. i am holding them. i am selling calls on them. i'm using the income to -- just again to make sure that we ensure that -- because when we get to the draft, they tend to be large amounts. >> do you feel, you know, people like -- had an interesting note today that got people talking. he talks about, and he's more bullish than most, but he talks about a, quote, exuberant melt of phase. he talks about the potential of a, then maybe this is underway where a little bit on the road to irrational. >> i would agree. if you look at the earnings calls we hadn't queue for 40% of ceos talked about a.i.. this is unprecedented. more than any other topic. before that you heard covid mentioned a lot. you heard political risk mention a lot, geopolitical

concerns. a.i. was the number one term coming out of these earnings calls. a lot of companies are sort of piling on this trend that don't really have a.i.. i will pick on some software companies. we just don't see the earnings coming from a.i. probably till q4 of this year. there's still a ways to go for that. >> outside of the growth universe, what do you like best and why? let's say outside of tech. tech is all the conversation. >> yes, but biotech is cheap. biotech hasn't moved so long. >> two or three years it feels like. >> the stocks have done nothing. you look at crisper technologies, gene therapies, at what a.i. can do in the biotech space, it's very interesting what is going on there. it is a sector that doesn't do well during election years, so that is why i would say i'm not sure if i'm really bullish on it in an election year. if i do look at evaluations, it's interesting. the financials should do well this year. although, again, some of the

earnings out the gate not exactly exciting. and financials, you know, this is an area where you need to be very picky. i would be a stock picker in that space and not just a broad index. or >> why? >> i will give you an example. if you take the top 25 things, they have about 13% exposure to commercial loans. if you take all the other banks out there, and their exposure is 44%. so there is a massive disparity on some of the risks on some of these commercial loans. >> you are still worried about that coming home to roast -- roost at some point this year? >> 100%. the rates have gone up a lot for all of us. if you are on the commercial lending side, your rates have gone from a 4% environment to 8% or 9% environment. >> more so for smaller banks, like? the regional ones versus the big ones. >> yes. so i'm very concerned about some of those. i would be picking in that space. now, some of those have not moved in the last year. again, looking at valuations, what you really have to understand the banks. you have to understand what they are holding.

you know, this meltdown we saw a year ago in march with silicon valley and first republic, it was problematic in terms of are they matching their balance sheets with their treasury and loan -- >> energy has disappointed a lot of people. obviously they performed poorly, but the thought was this is a new year. this is one of the lagging sectors. it will have a good 2024. where do you come down on the? >> look energy was down 11% in 2023. if i look at the last three years, technology did 46% last year versus 50% in three years. so basically did even to where we were three years ago. energy however, was actually the big winner in the last four years. if you ignore last year, energy is up 87%. these are areas in the economy where again if we can buy on dips, and route down our portfolio, and not just have the technology, i think there are some good -- >> that is what you are doing,

to buy on the dips we have seen? >> i am. anytime we get a dip in energy and technology, i am adding to financials, adding to health care, but i'm still avoiding certain sectors as well. >> okay. let's bring in keith lerner now. keith, welcome, good to see what him. >> great to be with you. >> cheryl mentions, you heard at the outset, but she's a bit concerned that valuations of gotten stretched. what about you? >> well, no doubt valuations have come up and expectations of come up, but our view is the path of least resistance, at least looking at the next 6 to 12 months, it's still higher. you think about the fourth quarter, that strong momentum we saw on the fourth quarter, that tends to be a positive when you look out. when we came in this year, we were extended and consolidated. during that consolidation we saw during the first two weeks of the year, minimal selling pressure, credit markets were well behaved. then as we broke to a new height, we just had a study that we published on friday, and we looked at what happens when you make a record high for the first time in more than a year.

a year later, you are up 13 out of 14 times. to be fair, the one big outlier in that study was 2007. so this is also predicated that we don't go into a recession, which is the big debate today. again, i think the underlying trend is positive. i think you want to stick with that. i think there are opportunities. we also put out a note last week saying we delight overweight tech, but on this pullback, with those small caps, you know, or, you know, increasingly attractive, and we are actually like the action today where it [inaudible] and seeing some rotation follow-through today. >> point well taken. russell up 1.5% today. so it is the leader by far. history is one thing when we look back and say when the market does this, it often does that. right? we still have to justify these valuations though don't we? >> yeah. i mean i think warren buffett said the only thing you need and history the richest people

would be librarians. but i think it's a good starting point to say our new highs -- and then stack on other things. sentiment is somewhat extended as i mentioned. valuations is a curious thing. you look at the broad market, generally expensive around 20 times. if you look at the average stock, you are around average just below 16 times. and then if you say the market is expensive and making a bet that the magnificent 7 and others will come down. you know i don't have conviction in that call, saying the magnificent 7 will come down. so i look at the overall market and maybe that moderates how much upside you can get, but i think the trend is still higher and i think you want to respect that. >> you know, i will say this on evaluations, while this market probably does have some legs, i just don't see we are going to have the same kind of returns we had last year. i think it's going to be more muted. so i think there is some upside but i think you have to be a little bit cautious. and the sentiment, he alluded

to sentiment, which i very much respect his work, i listen to keep a lot actually. the sentiment has been really really good at predicting greed and fear. when sentiment is high i actually get nervous. not to play devils advocate, but the fact sentiment is high actually makes me a bit nervous. >> your point is well taken also. key, when everybody was seemingly bearish, we had this rip roar rally and people were kind of slow to make the transition but now it feels like everybody is getting all bold up except for a few outliers. is that concerning that we had many more people on the same side of the boat now than we did? >> yes and just to clarify the position. i do think sentiment is becoming more of a headwind as opposed to a tailwind, but when you look at the overall market i think you still have to focus on the underlying trend. forward estimates have reached another record high this week, or last week i should say.

credit markets are there. so i think, like you said, why could we go back to a choppy fashion? it's because that sentiment is becoming somewhat more extended. listen, sentiment is important but i would say the trend that trump that as far as fundamental earnings, economy and the direction of inflation. so i think the way you use sentiment of this year -- we are not at that extreme yet on the upside. we can use that to trump's issues were i had to positions, but again i don't think that is enough to overwhelm the weight of the evidence that we just discussed. >> maybe this whole thing is becoming too complicated, and that we just go back to don't fight the fed, keith. we know the fed is turning into our friend after being our faux in terms of what it's going to mean, their regime of hiking rates for as long and four as fast as they did. now it's going to be negative for stocks. now we can clearly, we think we can clearly see the other side. isn't that all you need in some respects? >> i don't know if it's all you

need. you also need the economy to stay resilient. given that evaluations are high, therefore corporate earnings to come through, you need to see profit margins reserve as inflation comes down. i do think it would be healthier to see some broadening. if you look at the market breakout that we just saw, you know, the main sector that is up is technology. so we want to see, you know, broadening out there as well. i don't know if it's that simple. the big picture that was positive, that the fed is no longer the enemy, that inflation is coming down, and i think that should support evaluations and we can move up. i am not calling for the same type of returns that we had last year. in fact after we had big years like last year, the next year tends to be more average. so that's kind of where we stand. on a relative basis, we still think there is upside in this market. >> cheryl, what do you think of this idea of not fighting and defend? we have learned our lesson in the past from either playing it, or finding it. what about now? >> yeah. part of me worries [inaudible]

there is a little part of me that says everyone is jumping on the bandwagon. to your point, almost every major economists last year was really parish. now they are updating these stocks that are trading at all-time highs. so i don't like a market where nothing is really cheap and people are jumping into names that are crowded. however, to your point on fighting the fed, you have to think about where the markets are going, and some of the momentum trade. i think this momentum trade will participate. i think it could be sideways to the election and we get a quarter rally for cute for. and i would be happy to see an 8% to 10% return this year. >> i will ask it this way also. are you even with your bit of nervousness cautious outlook even your positive on the market are you looking at your portfolio and saying wow, this stock was up so much from november 1st until now --

for you trimming a little here are no? >> i am. i do a lot of options because i do believe holding positions long term. i have a couple of names that will get trimmed and called they are in the money right now. and i probably won't roll them. i would love to have some cash to play with right now for the bumps when we hit the bumps. because i just don't see this as a straight-up market. i still think there's volatility ahead. >> so you are hedging yourself. >> 100%. it sort of keeps you honest. so if you get called out on a name that is up 300%? >> it's a good thing, although you hate to get out of the position. >> apologize to my clients. >> keith, let me give you the last word. we heard health care, financials, energy, outside of the whole tech universe. what about you? >> we still like back this year. i would say i expect it probably to consolidate after the big move up, the same with semiconductors that are up 14%. i would look at any projects in the area. i think -- we still like discretionary.

that's a big sector. so i think i would have to go underneath -- more of the retail consumer side i think is still positive as inflation comes down, real consumer spending is positive for the first time in several years, i think that is also, you know, a place to. look [inaudible] potentially an upgrade, not quite there yet, so we will be patient with some of our [inaudible] >> i will actually give you the last word. i changed my mind. keith said discretionary. we did not talk about that. how do you feel about the consumer in -- the later names, restaurants, things like that? >> we talked about it last year. the consumer has been very strong through 2023. >> kind of surprising. >> shocking. the retail numbers were shockingly good. you look at credit card that's, the interest rates on these credit card baths, and you look at what is happening to the savings rate. the savings rate has been cut in half. people have spent down their reserves. so sooner or later it has to catch up with the consumer. you can't just spend money you

don't have. i mean people do, credit cards are there, but at some point there's payback that needs to be done. >> we believe it. there keith, thank you. keith lerner from truest. the hall-of-famer, cheryl. we will see you again soon. all right, let's send it over to cristina -- for a look at the biggest names moving into the close. kristina? >> let's start with union and norfolk southern. both are getting a boost today, to rail giants to outperform. analysts there think we are nearing the end of the downward trend that beach seat in the freight cycle as of late. they expect both companies to rebound from the trucking market. since we are talking about trucking, -- j.b. hunt -- upgraded stopped by despite its disappointing earnings reports we had just last week. and let's say j.b. hunts margins have hit bottom and it has a history of performing well during periods of improving trade cycles, and that is why shares are up 4%, scott. >> christina, we will see you in a bit. that is kristina partsinevelos. so i owned bank corporations are out. albeit a little early.

right, steve go back? >> yes, about 45 minutes early. we are seeing shares up about 5% here, scott. let me give you some of the results. dps has come in at 78 cents a share. but we are not comparing that because of the 90 million dollar fdic special assessment impact that is going on, so that throws comparisons a little wonky. then also flag here net interest income down 19% to $583 million. we have reached out to them to find out why it came out early, but those are the numbers we've got right now. shares up about four and a half percent right now, scott. >> maybe you hit the wrong button at the wrong time. >> i guess so. >> we've seen this movie before. steve, thank you. steve kovach. we are just getting started. up next, trading key levels. top technician chris verrone is highlighting where he sees the s&p heading from here. two sectors he's been ignored breakout. he will make his case after the break. we are live from the new york stock exchange. you are watching closing bell on cnbc.

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500 on track for a record close for the second trading day in a row. also pacing now for a third straight up day for the first time in this young year. -- head of technical and macro research. -- good to see you again. >> good to be here. >> you were with me at the last trading day of 2023. here we are with some new record highs. now what? >> what's interesting over that two or three weeks, it was a market that really chopped for about two weeks. yet our big call was there was no meaningful selling pressure under the surface. when you are looking for a change in the character of the market, you look for a really strong down days, where decliners over one advancers.

there was none of that. it looked like healthy consolidation from that momentum surge in the fourth quarter. we have seen this market breakout. you can kind of get to 5100 in terms of technical targets if you want to circle a level kind of in the distance, but for us it's always about what is the character of the move? i look at the cyclicals and defensive's and this is a market still largely led by cyclicality. i think as long as that is the case -- >> as in the character of this movie changed in some respects? we had the broadening out. a lot of people were looking at a small caps. obviously, today they are outperforming, but that trade looked like it was fizzling and money was going right back to be tried and true mega caps. >> i think there's actually a pretty remarkably attractive prayed for small caps in terms of being timely. you had an epic momentum search in the fourth quarter. you consolidated that with a 6% correction almost like, so what? right? we are -- too hot -- i like the last few days you have begun to see some renewed leadership from the smallest. today in particular.

look at this group. small caps, it is banks. i think the way the banks have responded, not just the last couple of days, but really the entire fourth quarter. that is suggestive of some small cap leadership. >> it's funny you say that. i just had a conversation with a highly regarded and respected wealth manager who says watch out for the regionals because of all the commercial exposure. >> something we do in our work, we pay special attention to what the consensus perceives to be the weakest part. whether that is regional banks right now or office reits. we simply asked a question or they behaving as the weakest part of the market? i think you can see pretty comfortably right now that neither the regional banks or the rates are behaving as if they are still moving as part of the market. so i think that is a testament to strength. >> i just wonder, like, reits are performing well because rates and come down. regionals or performing better because the economic outlook has stabilized, and that that has already come to the rescue

once, and there's no reason to believe that if something substantial sort of melted up again that it wouldn't. >> take banks broadly here. something like 80% of banks are in a trend. that's the best reading it two and a half years. so the underlying technicals of the group -- pullback are correction and financials or banks -- the other place you have seen really important internal improvement is health care. i think importantly, health care's strength is not extending to the other defensive -- so this is not a move into defensive health care or defensive staples. this is health care working on its own right which is a change in terms of what the leadership fabric of the market has been. >> do you want to tell me what not just the technical aspect of this move in semis means, but the macro reasons or what justifies this move? maybe there's plenty. i'm not trying to throw stones at it. it's just continuing to blow the mind. >> i think what is important, we know the story of nvidia, we know the story of amd.

it's getting big did that. the breakout in taiwan semi in the last 48 hours has meaningful. >> their guide last week is one of the reasons tech got restarted. >> importantly, equal weight technology. moving from just npr microsoft, equal weight tech it's a relative high for snp today. this isn't seven stacks in tech or five stocks intact, it's pretty broad. i recognize enthusiasm on groups like semi is probably high here. or is high. something one must be mindful of in the first quarter of the year. but it's hard to position against it there until you see the relative deteriorate, which is not happened yet. >> the power of momentum, which are talking about. >> we're talking about today one of the highest highs in a 52 week sectors in years. you can pause for mid, but that's more of a signature of a bull market, not a bear market. the internals from tech reflect

that. >> before you, go is there one thing you look at and think, this concerns me? >> it's important to think, what are the blemishes there? what could disrupt this? watch crude here, seven a seven or 78 would be a change in character. i continue to emphasize that the weakest groups in our work or european luxury and european auto. l m h, hernandez, bmw, mercedes. for all the cyclical momentum out there, they are weak charts. >> because of china? >> let's presume that's the case. i want to be open to it being something we don't know yet. that is the wisdom of the charts. >> we'll see you soon, thanks. chris for owens, strategist. up next, charles swab kevin gordon breaking down how he's navigating the trading environment. will join me post nine, closing bell icongig bk.s mi rhtac

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bitcoin. my personal advices, don't get involved. but i don't want to tell anybody what to do. it is a free country. >> he's automated intelligence to design a coke, drink coke variant. it is about, and can we hear turn quite is -- stocks and the green across the board. the dow and s&p hitting new all-time highs today. the big week of economic value here including gdp, trying to be a post-night to discuss, kevin gordon of charles schwab. thanks for being. back >> hey, scott, good to see you. >> back above 38, thousand above 30,000 for the first time ever but we fluctuated but we are still sitting there. for someone who has been cautious for a while, i think that's fair to say, where are you now? >> a lot of it started to turn when we got to the october

period where you started to see a healthy washout sentiment. wasn't as good but the senate backdrop was enough. the ruling over a great started to propel and lift basically everything. >> have you done a one 80, it then? >> it's never that we were completely outright bearish last year. with more of a cautious optimism on the part of the rest of the market, which you and i talked about a lot. the rest of the market fully up to what had been the leadership that is from things like the magnificent 7 that obviously changed to a significant degree in november and december. we have kind of entered back into this chalk phase of the beginning of january. even though you're get eight all-time highs on indexes like the s&p, slip some of these strange divergences. i think it's still the first time where we've gone to a new all-time high for the s&p but for something like the russell 2000, that still in a bear market, you've never had that before. closest instance you had was a 98 when the russell 2000 was still down around 19%. as np made a new high.

it wasn't armageddon for small caps because it ended up catching up. it took a little bit after that but they ended up catching up. our thinking has never been, don't just villainized the small group of stocks that are leading the market, which is no longer the case. things that brought it out from here. you've gone through a little bit of a corrective phase under the surface of the market. we just kind of the way you want it to happen. but it's not this outright bearish way to look at things. we look at it at a much more nuanced level than that. >> if i just asked you plain, simple is the stock market going to do well this year, what is your answer? >> the runway has improved if you continue to see what you and i have talked about a lot. which is just rolling weakness under the surface of the economy, transforming in transferred to different sectors at different times. look at certain sectors like manufacturing, particularly in the settlement world, where a lot of that still looks recessionary. if you take something like the empire survey last week, which got a lot of attention, doesn't tend a very high reading for at some manufacturing. you're starting to see more cracks under the surface of the

labor market. that doesn't morph into this widespread weakness at the surfaces level or the overall labor level, then you don't go into a full blown recession and you sort of continue to roll on with the unique nature of the cycle. all that being, said that probably paints a better scenario for equities. i think it is a much better way to think about it, where you kind of normalize. you go into an environment where you no longer have these huge divergence is between large caps for small caps or the mag seven versus the rest of the market. it is very much the story last, year as we all know. but a character of a market that was november december, we did really start to see a broadening out. that something that we would look for this year. might not be as great at the headline level but under the surface it would be a lot better. >> do you think that was anything more than just run for the money, heading to the end of the year? >> i think that was definitely a lot of pressure that had built up and sort of pushed money that was itching to look for other parts of the market that hadn't done well. at the same time, the breadth picture for even something like small caps has improved dramatically. look at the percentage of

companies within even the russell that are above their 200 day moving average. he made a series of higher highs and high lows on that index. even though you've been in this chalk phase since 2022, where you've gone up 20%, down 18%, up 15, down ten. for a considerable period of time, throughout that entire period, it isn't that breadth has weakened. it has started to strengthen. >> i'm not suggesting you should be anything in your view of the market, but why are you more bullish if you are here pointing at this broadening that you think is believable? especially under the surface and something like small caps. money has gone back into the mega cap. if you believe in the mega caps and i believe in the small caps, aren't you painting a more bullish scenario? >> it's not a binary trade. one of the things i talked about last time i was on with mike, one of the things i think we get caught up on a lot is, is it good to be one group that has to do well at the expense of one or the other? i don't think it has to be the case? what you can do well and that's why i talk about this more normalized environment where you get to a scenario that, the economy stopped sending these

late to cycle signals, whether it's from the leading indicators or whether it's from the manufacturing and housing side which, thankfully, some housing data look to be turning and maybe not entering their own expansion but at least firming up a little bit. that ends up being a better scenario for the overall market itself. but headlined index gains that you saw last year because of a couple of names that happened to constitute a large portion of the index, maybe that's not the case moving forward. but i much rather would look for something that's a lot healthier where you've participation under the surface improving at a much faster degree. >> how many weekends are we getting this year and when did they start? >> gosh, i don't know. >> modeling it in? you can know how many we might get. >> the discussion about rate cuts, if you think you bettered as to when or how many, that is sort of missing the broader picture of why they are happening. to me, it is, tell me the economic data when we're at the first rate cut and i'll tell you if it's a good cutter a bad cut. i'll tell you probably if you're going to get more or less. i think the fed -- >> and you placing your bets now though that they're going to be good cuts, so to speak? good cats with theoretically

mean that inflation has come down to a level where the fed consider normalizing, your word, rates. bad cats would be that they have to cut because the economy soften too much. >> absolutely. in a scenario where they are using a little bit but you still have a lot more pressure from real rates because they stay elevated, in the instance of inflation continuing to come, down low say you continue to ease at a trend that you've been seeing over the past couple of months, maybe even over the past year. the federally cuts three or four times, that still keeps real rages in pretty restrictive territory. i don't think that's a bad scenario if they think and the economic data prove that the economy can handle that situation. but at the same, time yes, if you have to pivot more wrestled rate cuts, they see something that's a little sinister on the surface and that probably means a little bit of a weaker scenario for risk assets. but i think the unique nature, again, of the cycle is that you can't really pick out and eastern analog from history and say, well, if the fed is getting at this point, it's bad or good for stocks. basing your whole investment analysis of just the fed, i

think it is pretty useless exercise when you're not taking into account the economic data itself. >> really? someone's adjusts it actually is that simple. just don't fight the fed. >> we can all be instances on the fed tightening cycles going back early 19 hundreds, we had the final hike to the first cut. 50% of those instances, the market was up. 50% of those is, this is the market was down. that doesn't tell me anything about an investing strategy based on the fit itself. if you take into account the economic data. could it instance like 2019, we could argue those were just insurance cuts. obviously the pandemic sort of rule under the trajectory from there. mark it defined, you still had economic data that was hanging in there. but look at it instance like 07 and then 2000, 2001, when obviously they were cutting for the wrong reasons. >> is it your base case at this point they are gunning for the right reasons? if not why? >> i do, think if we stay on the current trajectory of the labor market stays relatively resilient, i wouldn't call it

healthy, because under the surface there's a lot of cracks. then you have gdp growth that is holding, up labor force participation that hangs in there. and you've inflation continuing to ease back towards a trajectory that they're comfortable with. then yeah, they'll be cutting for the right reasons. it's just too soon to extrapolate that forward and say, yeah, year from now, everything is going to be totally fine. >> you have to make your sort of market decisions and calls based on, we don't wait for the exact minute to see. biden, the train has left the station, so to speak. right? >> that's why the way we think about, if you are cautiously optimistic or optimistic, or even if you're pessimistic, you can stay pessimistic and reflect that in your asset mix. you can stay cautiously optimistic and reflect that interest that makes. the key is staying invested throughout the entire period. and also recognizing that, even if you have more of a defensive mindset as an investor, the post pandemic era has told us that the concept of defense has shifted. no longer the traditional utilities, consumer staples health care of the world.

it's now and things like the mega caps. but look at what has been dear and what has been missing for a lot of companies that have suffered in this current cycle. those that don't have strong cash positions, those that don't have high interest coverage ratios, one of the mag seven group and even beyond that, i don't want to just keep it to that group itself. but even beyond that they exist those qualities. it is understandable why a lot of times now the knee-jerk reaction is to go into those names at the expense of the rest of the market. >> appreciated as always. kevin gordon of schwab. up next, we're tracking the biggest movers as we head into the close. kristina partsinevelos is standing by with that. kristina? >> s.e.c. is looking into the accounting practices of one food processor and a cancer drug trial did not go as planned. we've got the details next.

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or so to go before the closing bell. let's get back to kristina partsinevelos with the stop she is watching. kristina? >> let start with julian sciences and into its fourth day since 2014 after a key cancer drug failed to meet its goal of the trial.

the company says it will work with regulators to identify whether certain patients can still benefit from the drug, which is already approved a top seller for treatments. you can see shares down 11%. and atm is having its worst day on record as a food processor firms apply giant faces an s.e.c. probe. the agency is scrutinizing some of the atms accounting practices related to its nutrition business. company is replacing its cfo on administrative leave effective immediately and lowering its full year outlook. that's why shares are down a whopping 23%, scott. >> christina, thank you. kristina partsinevelos, we will see you in the market zone. still ahead, virtually down on the chip trade. western digital and amd moving in opposite directions today. we'll tell you why and what it might signal for that sector. closing bell is coming right back.

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united airlines reporting top of the hour in overtime. we'll have that and more when we take you inside the market zone, next.

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crucial moments of the trading day. kristina partsinevelos has, back this time talking the rally in chip stocks, most of them anyway. and phil lebeau but united. we're trying to get 38,000 here at the close for the dow. >> little follow-through. for the first three weeks of the, year the message here was, you know, the market is you know, paying back in some ways for the rally in the fourth quarter but wasn't breaching any of the trip wires where you would, say okay, something a little more sinister is going on. still staying in that routine zone the breakout to new highs, as we've talked, about as other people talked about, it tends to be more bullish signal than a warning sign. all that in the books you say, what would i look for if i were trying to find something to worry about? credits not really going to do the trick. the market did not really surrender the breath move for the fourth quarter. definitely test today. you're seeing it bounce again today. here and i think the willingness of the market to live with a firmer economy, better economic news, pushing out of the fed first rate cut,

at least on paper, it's a net positive. >> rates up for the right reason. >> it's up for the right reason and also people trying to readjust exactly how far the fed is going to be. i would say all to the good on those fronts. in the absence of something new to worry about aside from the basic ebb and flow of the market needing to stay on the soft landing path, i think things are in a decent spot. >> a ton of earnings this week. we'll see. the chip continues. kristina partsinevelos? >> i have to start with nvidia because of the value that you for a ride, up -- last year, recent bullish guidance from time on semi and meadows plans to purchase more graphics chips for a total of 600,000 keeps and video top of mind and why the stock keeps hitting all-time highs like today. emptied, out not getting the same love from analysts that north land capital. they're saying, yes, a.i. is big, not as big as investors are thinking. which is why they are downgrading amd on valuation to

a, check if we know, reading. they believe a nbc ironing potential is a little too inflated right now. and morgan stanley making an interesting move, replacing nvidia with western digital as its top pick. they're giving the storage chip company and price target of $73. that's why shares are climb a higher. analyst joe morris says the stock is dirt cheap and memory prices are ripping higher. also points to a split of memory businesses within western digital that's going to happen in the second half of the, year which should unlock value. that's why shares are up 4%. >> christina, thank you. on the filibuster can't be united airlines. both of us have had conversations in the last week or so with delta is ed bastian. nothing he said leads you to believe there is any weakness anywhere in terms of airline business. >> not right now, scott. in the fourth quarter when we get these numbers it was a strong quarter for demanded execution for united. don't be surprised if we see strong numbers for the fourth quarter. but so much of what is driving the airline stocks right now comes down to guidance. and for united three things

will be looking for in their guidance. what is the max 9 impact? what did they say but the grounding over the last couple of weeks, the full year guidance for 24? international demand remains strong. with regard to the max 9, keep in mind that about 9% of united's fleet is on the ground right now. the impact will grow every day they continue to be grounded. don't forget tomorrow morning on squawk box, we'll be talking with united ceo scott kirby. do not want to miss what he has to say not only about the max 9 but also about this broader question of, they have a lot of maxes, scott better due to start deliveries over the next couple of years. is that going to get pushed out because of these issues at boeing? >> absolutely. phil, thank, you look for to that interview. phil lebeau, we'll see, of course, the earnings in overtime. mike, dallas right, now barely above 38,000. russell 2000 ramping into the close, almost 2% today. >> if a little bit of that catch up many in there. so high in the bond market it's

helping that out. talking about stocks being able to rip to a new high with bond yields going a little bit higher, well, under the, surface the russell 2000 is a little more sensitive on that front. but so, far so good, you don't see sentiment getting overheated. >> the bell signaling that we are extending our records here, closing them up. we will continue with morgan and john. it looks like the dow did, it closing above 38,000. just barely for the first time, new all-time high there as well as on the s&p. that is the scorecard on another record day on wall street. look at the closing bell of overtime, i'm jon fortt with morgan brennan. >> the march to new highs continues rowing. on as a be closed in uncharted territory, second straight trading session we've seen this. check once you get it out, performer helping the nasdaq 100 closed at a fresh all-time high as well. >> now, investor