its talent and they are relying on that in terms of keeping the upward trajectory. >> very interesting . we have 15 seconds left, let's go make a bet. thank you for watching power lunch. >> closing bell starts right about, pause, now. welcome to closing bell, i am in for scott. we begin with the s&p 500 on the verge of recapturing all of the tuesday sharp drop on the slightly hotter inflation rating with the index now slightly green for the weekend flirting with an all-time closing high set last friday at about 5026. small caps and financials outperforming today, resuming the leaving of mega caps.

goldman sachs up 2.3% and wells fargo of 7.2%. nvidia cooling-off that the ai enthusiasm continues to flow into supermicro, it is up 12% today, up more than 200% since the start of the year. all of which brings us to our talk of the tape, kenny clean breakout follow the shakeout? our markets correct in shrugging off that uptick in cpi and soft retail sales this morning before the ppi meeting tomorrow? the head of blackrock global allocation team and chief investment officer of global fixed income. great to see you. i think there was a lot of comfort that we had a solid economy and the central banks were in a good place because they could be patient as the economy did not be much help and inflation was going the right way. does anything interrupt that view? >> that cpi number, it was not

the headline, it was scary, relative to the trend. when you dug into it, there were a couple things to respect, service level inflation, when you go down the list, insurance, medical services, education, it is pretty firm. the federal reserve as a hard time bringing down the level of inflation. those are not areas that are interest-rate sensitive for the most part. we have sticky service level inflation. however, the marc istook that, my god, inflation is going the other way. you have to respect that inflation, the fed can be more patient and start in may or june. i still think they will get 75 basis points this year. two weeks ago, the consistency in the market -- consistent -- they can be patient. you have to have respect for

the number we have to watch the inflation numbers. if you take the long-term trend, inflation is coming down , service level inflation remains high for a bit. >> on economic growth, the atlanta fed number was a snapshot and still looks good, up 2% over the first quarter with some noise in retail sales, a giveback from a strong december. so hard to tease out what is genuine weakness or a new trend , and what is a return to some kind of normal activity. >> we are having an outbreak of normality. if you think about where we have come from, go back to 2021, gdp of almost 12%, 7% plus in 2022, 5.5% last year. 4% nominal gdp, going back three decades, before covid , that is a normal rate of growth . when you parse the numbers and say, retail sales are

softer and some areas are softening up a bit, you still have a good economy. the idea that recession, deep recession, when you look at consumer spending, 3.7% -- consumers will keep spending, research and development spending, good. the economy will chug along. you will see 1.5% to 2% real growth this year with 4+ percent nominal gdp. pretty good. >> historically come in the range of where nominal gdp is where 10 year treasury yields oscillate around. does this make sense where we are? the bond market did get a jolt on tuesday and maybe an outsized reaction because of the positioning. giving back some of the yield pop. >> where should the tenure be? nominal gdp was where the tenure was. sometimes we were behind but generally the ntermediate

trajectory was close to nominal gdp take the metric we just talked about, 10 year at 4%, the tenure has found a home. if you have some stronger inflation data, i think you will in the year with a 10 year 3.5% to 4%, the fed will cut rates and move the forwards down and get to a place near 3.5% to 4%. 2024, not let's bet on mortgage interest rates, i think they found the place. >> if the fed , the markets have come in the direction of what the fed has had on paper, three point, four point cuts, but the markets have hung in there as the market-based expectations have come in. reinforcing the idea that, at least the stock market, was not banking on deep cuts starting very soon to justify their levels. >> there was way too much focus on the 10 year and what it means for the equity market.

coming -- companies are in good shape, they are dead burdened, take the debt service cost which is come down the last two years, companies are in great shape. if you think about asset allocation, you can buy interest rates at 4%, the average return on equity for the s&p 500 is 18%. that is incredible long-term investor, my book value of equities has grown 18%, if i will compound, maybe the economy slows down a bit and i compound at 15%, that is pretty good. i think the world will change, i have to on long bonds because i they are my great hedge against equities, on equities and building come in your portfolio and you will generate return. i don't think these valuations are stretched or the equity market. >> clearly, the economy does not need help with lower interest rates. the economy is

less rate sensitive and not as if it is pulling a lever which is a tight gearing to the economy. what about the idea that financial conditions have loosened up? stocks are up and valuations are up, frothy stuff happening and the smaller names, credit spreads are really tight, does that matter? the fed at one point needed to target those things right now where are we? >> you take where we are today, core pce, even though cpi was high, we think core pce will be 2.75% this month, down to 2.4% by april with a fed funds rate, you have an incredible restrictive interest rate with an economy very slow to moderate. the fed has to get that funds rate down. by the end of march? absolutely not. in the next

couple of years, 75 off this year and another hundred 25 off next year, because you can. because core pce is at a level -- we think that level will be stable and may trend up a little bit, we are running at inflation was 9%, the delta between 2.3% and 2.8% not very dramatic. >> the fed has a targeted 2%, the world, the arkets have done fine and slightly higher levels. the question in terms of, generating those returns, if you have your core equities, they can do okay. how are you piling income into that? >> we are at an interesting time, the fed has the rate here , companies are in great shape and pay down their debt, cash flow coverage is great, companies are borrowing off the risk free rate and you can buy investment-grade companies 5.5% to 6% come in europe for 6+

percent when you include the currency. we launched an etf, blackrock income, we are generating close to 7% yield on that fund and not really taking that much risk. some high-yield markets which are in good shape. investor great credit. you can bill 6.5% to 7%. i think interest rates will come down a bit if you can build that yield and not take volatility risk, keep your volatility in the equity market, equities will do the job and get you 10%, 12%, maybe 15% return this year, a pretty good portfolio without long bonds to hedge it. >> the idea the fed can basically narrow the ap between fed funds rate and where inflation is running right now over a couple of years, 200 basis points, that does suggest that they don't have to respond to any real emergencies. are we looking at two years of a decent steady

economy in your view? >> the u.s., china, the election, there is stuff, i am predicting normal and assuming something abnormal will happen that will create some shock. the idea being that today you can build a portfolio that is reasonably stable and work your way through it. the economy, the u.s. economy is a service-level economy, you think about why is service- level inflation-, service-level growth is high and hard to bring it down. service economy still going to recession, it is rare. spent on education, medical, technology that will continue for a time. we will be in a normal time and i am certain i will be disrupted and something that comes out over the next couple of years. you can position your portfolio in a way that is durable with decent returns. >> you would not be too concerned with talk this morning about japan and the uk,

in a technical recession, for years, the word and the u.s. is not the thing that gets dragged along. >> people have bigger things to worry about. i lose a lot of sleep every night. the u.s. economy is definitely an open economy, functionally is a closed economy that the u.s. economy is extraordinary and what it produces domestically. the size of our gdp and lack of reliance on the rest of the world. the amount of stuff you can throw at the u.s. economy is extraordinary. the technology, the amount of spent on research and development, if you go back 20 or 30 years, research and development was a small fraction. it is a huge percentage of the x. that creates velocity, and a stability in the economy as we continue to innovate different than europe and other parts of the world. the innovation -- the last time

we did this interview, i called the u.s. economy the polyurethane economy that bends. >> a lot of people, they were worried about the treasury supply, how much they had to sell and what it will mean for the market's ability to absorb it. i am not saying i was worried that there was a storm of concern about that last year. are we finished? >> know. i am worried about that. a question of timing. the next two, three years, the amount of debt we will issue is too big and a problem. however, when you have a central bank that is cutting rates, there is a activity to funding the debt domestically, two or three years ago, international was buying treasuries, the fed was

buying treasuries, you don't have that today and have to rely on u.s. domestic demand. people -- you can absorb -- to get to the level of normal, demand for treasuries can come in, 4 trillion, while the fed cuts rates, people putting money in, there will be a time over the next two to three years when policymakers come if they don't address the amount of debt and the size of the deficit, we will have one of those moments, an option that will fail aggressively and people get nervous and that will stimulate the conversation. a lot of debt o place in the market every day. >> lori long-term. great to talk to. stocks solidly in the green come up more than 300 for the dow as wall street was to regain momentum lost on tuesday.

let's ring in joe and stephanie. good to see you both. joe, let's talk about the big picture, in light of what rick was saying, but in the retail sales number, and earnings season, where do we sit? >> in a good place. we woke up this morning and you mentioned it, the news of economic weakening, in japan and the uk. can the u.s. decoupled from that were eventually doesn't get sported -- does it get exported to the u.s. like china is into europe? an economic environment where, maybe not a soft landing, maybe a firm landing and that landing is the best outcome for risk assets to continue the appreciation. at that point, you test the patience of the federal reserve which finally delivers on what the market has been clamoring for, the first rate cut. it leads us to a place where the federal reserve ultimately is going to address quantitative tightening. that

is the big issue on the table we see the reverse repo facility, down at 500 billion, it was $2.2 trillion in december of 2022. the excess liquidity is being drained out of the banking system, the financial conditions are getting tight, time for the federal reserve to back off off of the ballot she tightening. >> stephanie, a lot of these dynamics are encouraging. how do you integrate that with what we are hearing from some companies as we go through this earnings season? some companies reporting, anecdotally we are hearing more about layoffs and softer demand. are you concerned about that or is that the normal noise of the first quarter and earnings season? >> i think it is kind of noise except for technology companies who beefed up during covid . you are seeing company shipped within technology into more ai centric products and initiatives

. that does not surprise me that you are seeing layoffs. we know it is happening in the financial industry. some layoffs in that sector as well. if you step back as a whole, we got mixed economic data this week, still running gdp at about 2.9%. that is pretty healthy. rick mentioned the consumer, retail sales were disappointing today but real consumer spend is still strong at 2.3% on a seasonally adjusted annual basis . real wages are 3.4%. consumer is still pretty good with pockets of manufacturing that are seeing a small renaissance with private construction growth of 11%, public construction growth of 20%, the regional pmi's are indicating that factory orders are about to recover and move higher. all of this is really good. it is leading to more inflation than we want but, i take better

growth, a little higher inflation, because you have double digit earnings growth. rick did mention about cash flow , in the s&p 500, free cash flow in the last year has up to $1.4 trillion with over $600 billion in buybacks and $3.2 trillion in m&a. that story has been consistent and free cash flow generating companies have been one of the ways to outperform in the last year. joe, in terms of overall market pricing in, a week ago, at the highest we are at right now in the s&p, it looks like 5000 is where the rally was headed and time for a breather. in february, sometimes weak. maybe we ran out of a cushion,

was in a one day gut check? >> it seems like that is the case. you mentioned the seasonal weakness in the back half of february, everyone identified that and looking towards nvidia and say, be careful with nvidia , that could be a problem stephanie nails it, it comes down to earnings, you will not get multiple expansion, if you are relying on multiple expansion rate cuts in 2024, you have the wrong investment thesis, it is about earnings, the ability of earnings to continue to grow. the one area where we have not seen growth is small caps, they are still in an earnings recession and the market is anticipating they will come out of that earnings recession in the next quarter or so. i think the market is pricing that in and that is why you see value equal weighted, and the small caps outperforming over the last several days. >> stephanie, yesterday, the industrial sector had a new record high, a one day break

from that run the question is, you mentioned the reasons to be confident the consumer will stay in decent shape. you have been shoveling stuff in the general sector, selling tjx and mcdonald's, and adding to home depot. >> i think they are both good companies i think they are both at fair value. mcdonald's up 90% from the october lows with tough comparisons coming forward in this year. they did so well last year and had pricing power last year. that will be challenging for them. nothing wrong with the company but at 24 times forward estimates, full. same with tj, ve i continue to like housing and like that theme for 2024.

nahb numbers that are encouraging as i think homes will start to improve and homebuilders in general. >> when homes improve, you need home improvement retailers. thank you both and we will see you in markets let's have a look at the biggest names moving into the close. shake shack share prices are not the only thing moving as the burger chain expect to grow total revenues by 11% to 50% in 2024. shares are up 25%. contrast that to wendy's with a higher average spin rate but saw customer traffic declined in the latest quarter and sales went to miss expectations. shares of twilio down 15% and

refusing to give a for your outlook as they want to reveal the underperforming business segment after months of activist screening with the goal to identify the appropriate path forward. shares are down 15%. we have a taylor rogers with details. >> take a look at restaurant technology company, toast, falling by 7%, on a report from bloomberg citing a source familiar that the company is laying off 550 workers. they will report earnings after the close today and likely get an update. this is the latest technology company we have seen cutting its workforce to start the new year. shares are down nearly 8%. we reached out to toast for comment. we are just getting started, next, top plays for your portfolio, adam parker breaking out his market

playbook and highlighting the sectors he is betting on and how he is navigating mega caps. ready for arnings in overtime, what to watch from coin base, roku, and more. you are watching closing bell on cnbc.

fresh, warm hot dogs! when i'm not selling hot dogs, i invest in a fund that advances innovations like robotics. fresh, warm hot dogs, straight out of my torso!

one for you, one for you. oh, you're a messy one. cool, right? so cool. anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. hot dogs! fresh, warm hot dogs! before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

>> stocks climbing for a second date with the s&p on track to just about hit the record close from last friday with wall street calling back steep losses from earlier in the week. four of the best places to invest, let's bring in adam parker, good to catch up with you. bring us up to date on what you think makes sense as we have come to most of earnings season with some themes to pull out of that. you have been saying, maintain

exposure to the big dominant menu caps -- mega caps and look to be the index what does that mean at the moment? >> i listened to your last segment, people i know very well, all of them, i don't see it the same way. nobody has asked me, not an institutional investor asking me about the second half of february trend or a slowdown. i think that multiples can expand. if you think small caps will work, the way that will happen will be gross margins will expand the average small- cap. the medium company can have multiple expansion and i have not heard of a second half of february slowdown. those are people i know and respect well. today, i am looking at it differently and remain constructive, i think rick's comments, i shared them,

positive, good earnings trajectory, i think earnings will be up this year and next year versus this year, gross margins can expand and the fed will be accommodating. >> just to be clear, the second half of february thing is a seasonal stock performance pattern showing up over the years. not anymore fundamentally based than last year on july 31st saying, august and september, they are the weakest months of the year and we went down 10%. there were other reasons. >> sometimes it can be a self fulfilling prophecy. >> or an excuse. >> when you analyze data, you need more sample size to reach a statistical significant confusion on a 10, 12 daytrading window. i think that is a little bit astrological. i do agree with joe, will be big, in terms of the trajectory of ai, potential shortages, et

cetera. i am seeing those margins improving, whether lower logistics, less labor pressure, more productivity. to me, that is the most important thing in a lot of the fundamental work we do, focusing on the specter of expansion for the average security. >> you think that that will be pervasive enough as a margin expansion, that you will have a more inclusive market where would you be looking to really pick your spots? >> i think here is a lot of opportunity. margins bottom for last year for the medium and bottom company and a lot of them have seen a margin expansion or a steady bottoming in those margins for the average company since last july. we are already seven months into that . i am observing gross margins expanding and

forecasting gross margins off 70%. sales size analyst are greater forecasting things but pretty good about knowing whether gross margins are up or down in absolute terms. a high percentage of analysts, 75%, our thinking gross margins will be up next year, each company, one at a time people think margins will go up. if that is the case, stocks tend to do well. the point you are talking but i have been making for a couple years and continue to believe, the magnificent seven are a risk management group of stocks and not for alpha. i say that because i can display a lot of their returns from basic factors, the market is up, growth beats value, i have explained 70% of my returns . not idiosyncratic and covered by, the idea that i can know something not in the price, nobody else knows, is really

low. lastly, statistically, i cannot create a replication basket, i cannot find 30 stocks that trade just like the mac seven, and i can on and disseminate the risk basic logic, why would i have humongous outsized overweight or underweight positions in securities that i don't know anything about, nobody else knows, macro, and cannot be replicated. >> i wanted to talk about energy . it felt to me like it was people stuck with it for a long time last year. it had been done well the year before. you hear less about it with commodities not fully cooperating. why is that attractive to you? >> i have liked it for three years and it has been wrong. i would start there. more supply than i would've thought given the political risks. a weaker demand. in a short-term what keeps me tied to a bowl thesis is two

things, one, i don't see a lot of supply coming online from the company perspective. two, demand in the medium to long term is robust because the installed vehicles and the new vehicle sales are less electric vehicle than predicted. peak demand five, six years from now, i don't think we can produce what is needed with today's set up. that is bullish in the long term and we have to navigate whatever it is, the 19 variables. i don't know the six month view but i'm confident that stocks are cheap, people hate them, the risk reward feels pretty good. probably wants to go higher over 12 months. >> it has been more resilient and the energy sector having a good day. like you so much.

>> be well. next to my trading the retails sales slump, consumer spending dropping in january from the government figures, ithe best way to position your portfolio before retail earnings next week? and more about discovering magic. rich is being able to keep your loved ones close. and also send them away. rich is living life your way. and having someone who can help you get there. the key to being rich is knowing what counts. i could use a little help. yeah, there's a lot of risk out there. huh ♪♪ hey, is this thing hard to learn? nah, it's easy. huh. you know, i think i'm going to ride it home. good thing you chose u.s. bank to manage and grow your money.

with our 24/7 support at least you're not taking chances with your finances. yeah, i think i'm gonna need a chair. oh, ohhhh.

icy hot.

ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. consumer spending falling sharply last month, breaking a two month streak of increases as january retail sales worse than expected, down .8%. joining me is brian from

oppenheimer. a giveback from a strong december. revised down for december. is this something that is a new trend or noisy? >> thank you for having me. there is a bit of noise january is a strange month, between the holidays, big spending time and before. before spring with a pause and spending generally. we have erratic weather in the month of january companies were talking about that. the numbers decelerated. i would not read much into this . into the oddities of spending in january overall. >> within the group, the areas you cover, you had recently downgraded the home-improvement retailer, home depot, lowe's, what is happening where you

felt it was in great? >> it was a shorter downgrade. my view is, the longer-term is very attractive. in the near-term, we will see a weaker demand until we get further past the pandemic and as we wait for rates to bottom out. in the near-term, the market is too optimistic about a rebound in home-improvement and we need to reset expectations in the near-term. i think the stocks could set up very well in the long-term. >> is there a pervasive theme you see in your company work that says there is fatigue in terms of lower and consumer households? or are we over extrapolating? >> there is some noise. what we are seeing, the higher-

end will be better, in january, between events, there seems to be some weakness in spending. this episodic spending trend. a bigger ticket, some weakness, talk about home-improvement, that has to do with the demand that happened during the pandemic we are still seeing that. overall, relative to where expectations are, the consumer is holding up very well. >> yes, those long-term charts of total retail spending show you that all we are doing is sort of coming back to the long- term trendline as we were so far above it for a couple of years. lulu lemon, one of your favorites, anything fresh or do they keep delivering in a similar fashion? >> more of the latter. every time i take to them, go

to them, i see good consumer traffic, a relatively small brand and bigger than it was several years ago, i think they set up quite well. >> it is a good reminder that they don't really have anything close to saturation. brian, good to speak with you. >> thank you for having me next, a big bank balance, shares of wells fargo on the rise, up 7.5% on the day, why a crucial move via regular has investigators -- investors cheering after this break. closing bell will be right back .

(grunting) at morgan stanley, old school hard work meets bold new thinking. (laughter) at 88 years old, we still see the world with the wonder of new eyes, helping you discover untapped possibilities and relentlessly working with you to make them real. old school grit. new world ideas. morgan stanley. a car is a car... old school grit. newis a spa.eas. an office. hi! hello! a cinema. so automated. yes, the definition of a car changes... but one thing stays the same. it's a mercedes-benz.

were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding?? we just got back from her sister's in napa. who gets married in napa? my daughter. who gets married someplace more expensive? my other daughter. cancun! jamaica!! why can't they use my backyard!! with empower, we get all of our financial questions answered. so we don't have to worry. can we get out of here? i thought you'd never ask. join 18 million americans and take control of your financial future with a real time dashboard and real life conversations. empower. what's next. (♪♪) in this clinic, we pride ourselves on putting others first. it's on us to help care for our clients' well-being; to help them adapt. it's inspiring to work at a place where our patients succeed. and we as therapists do, too. with great benefits from principal, we feel appreciated for the work we do. (♪♪)

17 minutes until the printer with the s&p up a half a percent, on his prior closing high from last friday shares of wells fargo popping towards the close. we have news behind the move. >> good news for wells fargo. they say that regulators have terminated the 2016 sales practices consent order, sending shares up 7.5%. this had required them to revamp how it offers and sales to consumers following the scandal that erupted eight years ago. wells fargo ceo saying that, i

have repeatedly said that implementing a risk and control framework appropriate for a back of our size and complexity is our top priority and closing it sent orders is an important sign of our progress. this is the sixth consent order wells fargo regulators have terminated since 2019. they still have eight more o go including the one from 2018 that prevented wells fargo from growing the assets beyond certain thresholds. >> that was exactly what i thought, the asset cap, and whether the market is implicitly thinking that maybe that is not far down the road, it may be looking at that, the material one with the most focus . >> important to make that distinction, it has stifled growth for wells fargo because it limits the deposits they can take in, last year, other west coast bank failures that took place and wells fargo would have been in a prime position to acquire some of that business but their growth is

capped because of this consent order from 2018 that limits the size of assets they are able to have. yes, the market should and is focused on this. however, this 2016 one means they are moving in the right direction. >> the market rewarding the stock. a pretty good day for the banks. th> next, countdown to coin base , e stock higher and we will bring you a rundown of what to watch when the numbers hit the tape. closing bell will be right back . during my entire life i have been somewhat of

an outdoors person. golf, gardening around here. how can i stay out of the sun? so about two years ago i was diagnosed with basal cell carcinoma. when they discussed the mohs surgery on my face, i was not really a fan of that because the scarring can be disfiguring. if you've been affected by skin cancer, surgery is no longer your only option. we chose gentlecure. gentlecure is a surgery-free treatment that uses low energy x-rays to kill skin cancer cells with a 99% cure rate. plus, there's no cutting, no surgical scarring and no downtime. the results are absolutely fabulous. see why so many people, including doctors, are choosing gentlecure. call today or go to gentlecure.com.

icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

coming up, your earnings rundown, coinbase reporting abt watch when the numbers hit, and much more when we take you inside the markets. icy hot.

ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot. is it possible to count on my internet

like my customers count on me? it is with comcast business. keeping you up and running with 99.9% network reliability. and security that helps outsmart threats to your data. moaire dida twoo? your data, too. there's even round-the- clock customer support. so you can be there for your customers. hey billy, how you doin? with comcast business, reliability isn't just possible. thanks. it's happening. get started for $49.99 a month. plus, ask how to get up to a $1000 prepaid card with a qualifying internet package. don't wait, call and switch today! you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com. power e*trade's easy-to-use tools,

like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley. we are in the closing bell markings on. joe is back to breakdown the crucial moments of the trading day and two earnings reports we are watching, kate on what to expect from coinbase and julia watching roku. s&p 500 slightly above the

former closing high, only last friday, 5026. two days without a record is all we have to suffer i wonder about the rhythm of this market. in addition to the s&p 500 making its way back, nasdaq, the speculative stuff is starting to get jumpy. supermicro is an overbought stock coming into today and up double digits gain. the crypto stuff is moving what does that tell you mike max >> is tesla a value stock? up 5% today on nothing. calling back from what it lost from earnings. the market is about this broadening out narrative. we have been able to move away from where we were on tuesday where we had the overwhelming concern that that broadening out would not happen.

you have seen the broadening out happening again. the critical index to watch is the russell, try to get back to the december high at 2071. if it goes above, nondiscretionary funds will tap into the small caps. >> today, if it is a broad rally , the cyclical stuff is doing better, but, supermicro is in the russell 2000, the largest holding, 1.6% of a 2000 stock index and it seems like there is an element, even in the russell, of new economy nuttiness. >> that new element is the reawakening of the momentum factor which was dormant for the better part of the last three years. momentum is back and that is the leading factor come up nearly 50%. that is driving the price

activity that you have seen in the individual stocks. >> let's hear what we should expect from coinbase. >> coinbase is tied from what we have seen from the crypto markets, crypto is trading in the volume in real time, less of a surprise around coin base earnings. the rebound in the fourth quarter expected to have boosted volume to coinbase in the quarter and any updates on january trends as bitcoin prices rally , that will be key, with the commentary as the company is not expected to turn a profit. watch the revenue mix. if they can diversify away from less predictable trading volume and trading fees, a potential boost in subscription revenue which is seen as a positive watch monthly active users. they were worried about robin hood taking market share with the etf's being launched. you cannot trade that bitcoin

etf, only bitcoin itself. watch the take rates. a way to measure profitability and see if there is pricing pressure going on. watch expenses as they are among those in silicon valley tightening their belt and a reduced headcount last year. we will see if that improves the expense elements for coinbase. we will watch regulation as coinbase is in a legal battle with the sec which are suited for operating on up -- unregistered security. >> roku , the stock reaction, set us up. >> that stop swings, the shares plummeted tuesday on reports walmart is in talks to buy visio , but shares a 57% up, better than expected third quarter

earnings results and shares did more than double last year. this quarter, the projection for roku, smaller loss than the earlier , revenue is expected to grow by 11.5%. a key number to watch is active accounts which is projected at 79 million. investors are watching to see if the last quarter's advertising readout continues. analysts are concerned that if a walmart is you get what pose a meaningful challenge to best advertising business for roku but hopefully the company's guidance for the quarter is conservative. joe, in the time we have, etf holds, applied materials and trade desk, we will hear from them after the close. what are your thoughts? >> different feeling on each one of those. >> with applied materials, expecting a strong report. lam research are already giving you the insight to what you

expect, recovery in china, coming back demand, margins around 47%. you feel good about applied material. with a market cap above $175 billion. guidance will be critical. expected to be overbought but that can become technically overbought -- trade desk is a different story, horrible earnings report last november, the stock has not recovered. the high was in last july, this has been a significant underperform with challenges relating to advertisement on video with google and amazon. the street has not capitulated a 12 month price target is $77. this is a make or break quarter for this company and i am concerned. >> the all-time high goes back to late 2021 when this was seen

as a one-way trade. one of those nonprofitable companies in 2021 that we paid the premium for on the belief that the profitability would be here at some point. >> the design aspects of semis? >> we have seen a drop in memory chips, what is most important for applied materials and others. >> great to see you. possible record close watch for the s&p 500, only 26 and change, where the record close was on friday and the dow is up 340 point. a broader rally today. stocks 83% up by volume and treasuries went down today, they backed off a yield and

retail sales, volatility index, about 14. we will make a new record on the s&p. that does it for closing bell. the bolts are back in charge as the s&p 500 closes at a new high. 5029, the rally is broad. we are just getting started. welcome to closing bell over time. >> real estate , technology, the only sector in the red. brace yourself as we get ready to deliver you a wave of earnings with analysis of