and his first interview since he taken the job over a year ago. he said those those all about connecting with our younger consumers, trying to bring them in right for the journey. a store within a store and it's a licensing agreement. >> thank you very much and thank you for watching power lunch. welcomed the closing bell. this make or break our begins with a battle within big tech. whether your best move now is to stay with the years big winners or switch. we ask our experts over the final stretch. that space stages a rebound in today's session. we hear from can get 10. we will do that in a few moments. your scorecard would 60 minutes to go in regulation looks like this. the average is all but rushing off today. s&p was a touch hotter. the yields did move modestly higher.

graded a c- by her own. he's a tough grader. nasdaq outperforming several momentum names in that index bounce back led by nvidia back 900 bucks. oracle is the best and s&p following its earnings report. that after naming a new ceo. and all takes us to our talk of the tape which is all about the rally. is it running out of steam? is it taking a momentary breather? no real breather at this moment as we come on the air. let's ask archie market strategist for j.p. morgan asset management. welcome back. reading through your notes, you sound really positive on this market. >> we do some positive. first on the fundamentals for the economy we see growth normalizing this year 2%, but zero recession in our base case. we see inflation also moderating towards 2% by the end of the

year. you still have a pretty resilient nominal growth backdrop for companies. resilient revenue growth area and at the same time it seems to us the big take away from fourth quarter earnings was a bottoming in the margin from last year. >> i read through the notes here. you hesitated for a second or i said you seem positive. use a positive trend for stock should continue, fundamentals point to further gains, he used the word sweet spot at the overall level. expect equity multiples to stay elevated. >> i hesitate when we say very positive just because -- no, we are positive. i want to clarify some nuances beneath the surface. i think when we speak about the fundamental backdrop it is supportive, but there are pockets of important normalization here. we are not talking about re- accelerating above trend kind of economic growth.

we're also not talking about a very swift return to normal interest rates. things that are really tied to nominal or rate cuts are not the environment we want to be focused on. >> today's cpi really did nothing to upset the story. it's not like we expected anything in march anyway. now there's a bunch of data still coming around before june when the market still is placing the big bet you get the first cut. >> it really didn't change the narrative. you took away the same conclusion you came into the report with. ultimately, if you actually take it out to two decimal points cpi beat by very little and increased 0.36%. it wasn't a hot 0.4% and it's still the same remaining inflationary pressures of shelter and auto insurance. people forget auto insurance is adding 0.6 percentage points on

its own. it does not change the narrative. we do expect inflation to continue to normalize and it's really nice we had already taken out 3 1/2 rate cuts since mid-january and now the market is completely aligned. if there was any doubt june is the earliest for cuts. it's still very much on the table. >> what do you make of hat some suggest is the changing makeup of this rally? one that was led primarily by nasdaq, large growth stocks. maybe that's changing, maybe even within that space of large- cap tech? >> it's changing quite a bit. it's a healthy sign. for example, within mega cap tech that dominated so many returns last year there was dispersion within the group but they were all up. this year using substantial dispersion within the group, some are up, some are

performing in line with the market and some are down double digits. it's healthy to see thinking of the actual companies as individuals. you're also seeing other parts of the tech sector participate and other sectors. and like healthcare which we have talked about being our favorite sectors contributing as well. i think it's a very healthy appreciation that it's not just ai, not just the initial beneficiaries of the theme. it's about resilient earnings. >> at the same time you suggested to early to invest in areas of the market that need rate cuts. if there's one sector today that you look at indexed, the russell is red. no shock because cpi still reflects that inflation to some degree is maybe a little stickier than people think or it keeps rates elevated. that space is probably not going to work well in that environment.

is that a fair assumption? >> if your thesis is purely dependent on substantial rate cuts as the catalyst it's still too early for that. the time will come but it's still too early. the place to really express that view is a preference for large or mid-cap versus small- cap and it's even within sectors. for example, it's impressive over the past year since the crisis a year ago that regional banks are down 10% while the large-cap tanks are up 14% and the broader market is up 22%. it's nice to see the differentiation in size but also with the sectors. >> to those who say the rally is looking tired and maybe they used nvidia as a litmus test as the power of strength in the market. if nvidia gets tired for a little while does that have a difference at all on the quality or strength of this move? >> i think it does at the index level.

given how large several of these companies have gotten and they are at this point the top 10 companies representing dirty 3% of the index. at an index level it certainly matters. our perspective is that it is getting a little bit long on the tooth this hyperfocus, but we don't expect them to collapse as a group just for there to be a little bit more muted returns from here and the big differentiation within companies. for the space, which was rallying today, it's really not about cpi rate. it's just a little bit of fatigue around the ai story and several conferences and industry events that can help for a little bit of cold water. >> steve is going to join us now. this is quite a step back that you're getting in some names. it really isn't just nvidia. it stands out because it always stands out. it's better than 5%. like her soft is up near three,

amazon having a decent day, microsoft up to and a half percent. the only one not really participating is apple, but what else is new? >> like we have been saying for the last couple weeks is apple has been such a lacquered in this group because there's still no coherent ai narrative around apple yet. they are trying to paint one and picture one, at least new laptops a couple days ago and called them ai computers. no one bought that. it's all on that wwdc announcement of whatever their product will be. i'm looking at oracle. we don't put that in cap tech at the same time, but it's so demonstrative the results were mixed on revenue slightly. they just said ai about 10 billion times on the call and that's what got people excited. they said things like the demand for ai product is outstripping our supply. i got people excited. they expect to book more

contracts around ai. that was kind of telling me that these other companies that set out last year are coming. the opposite story with hp enterprises a couple weeks ago and the reported earnings saying we can't get enough nvidia chips in order to do what we want with ai. they got punished, but dell was the opposite. they said we have ai chips and we are able to do what we want to do. i would also point out as we look back to the mega cap tech stocks, microsoft was not punished the same way that google was punished with its gemini last week. you might remember we reported it copilot the image generator is having similar problems to what gemini had. the market brush that off perhaps because of the lead that microsoft already has on the perception of the lead.

that is also very telling that maybe some problems don't worry investors and it depends on the company. >> i like that, you make noting the differentiation between the way the stocks have been treated. since he brings up ai, we've had a debate on this program multiple times over whether we are late cycle or actually much more towards a midcycle because ai has prolonged or renewed the whole business cycle. the whole way we will think about corporate spending and the way lives are changing and stocks are moving and the economy evolving and all that. had he weigh in on that critical question? >> i think it's refreshing to talk about the economy being in a business cycle again rather than binary self landing hard landing. we do think the cycle is extended this year. we don't think it's going to be the fed that kills less economic cycle. it's going to be what determines the end of this

expansion is based on whether we have some kind of shock. oil prices traditionally is a shock that ends expansions. otherwise you could be and what we consider late cycle for a considerable amount of time for years and years. there's many indicators you could look at, the one that suggests layer cycles is the labor market. with the unemployment rate before 4% for 26 consecutive months, it makes economy more vulnerable to a shock. if you don't get that shock the expansion continues which is good news. >> if nvidia takes a break a much do we need apple? we used to think a lot. this market has thrown water on that idea because so many other things have worked. to what degree do we need it if some of these trades actually take longer than we think break? >> i would answer that two ways. the first is defining what taking a break means.

>> stopped going up every day is perfectly digestible. especially if you continue to see other tech companies, other sectors participate in the rally. if you get to a situation where you have a substantial momentum unwind and you actually have not just a couple, but more than half or all of them then you're in trouble and an index level temporarily. that is not the case, we do think they are good fundamentals for some large companies and you can have the other ones catch up. you wind up in the middle. >> the other thing i hear from investors around the name is there's a lot of optimism about wwdc and what ai will bring but it's also that buyback which is so large as to being a bit of a backstock or a floor underneath shares to some degree. they may dip below 170. they may not stay there very

long for that reason. >> that's what happened last week. everyone suddenly remembers there's massive buybacks every year that only keep going up. that's what apple does. two years ago when the market went through that horrible period we saw apple stay afloat. a lot thought that was because of the buybacks and you got that guaranteed check coming in. that's probably a lot of what's holding it up now above 170. because they know that's coming even if the a live picture is not clear. another thing is all these estimates we are getting for late in the year for the fall cycle and the question becomes are those bullish estimates because they think there's going to be some magical ai thing that only the iphone 16 can do, therefore everyone has to get iphones again or is it just we are on the cyclical park of the iphone cycle where

a lot of people just have old bones ready to upgrade? it feels like the letter but we have to wait and see. ideally, >> thank you very much for that. let's bring in keith. how does your view match up to what you've heard on the program? >> great to be with you. it matches up pretty well i would say overall. we have been positive since october. at this point we think the underlying trend is still positive. we look at estimates and they just earned a record high last week as well. economic growth we expect a step down but we are still showing resilience. the picture is still moving down but it's not going to be perfect. all in all we are still constructive. a lot of discussion about tech. tech has moved a long way. we are seeing the boarding just beyond a few days.

we only have four of the max seven stocks of this year. despite that the market is up 8%. we're going to have some checks along the way but at this point we think we should still respect the underlying trend possible. >> where's your favorite place right now in the market? >> if you look it over the next year we still like tech and communications. that would be the place we still think makes sense. when you look at those areas earners momentum is the most important. even if the economy slows down that company will continue to have to invest in tech otherwise be left behind. we heard from salesforce and oracle yesterday confirmed that point of view. outside that we like making a new high. if the economy is still resilient the financials will do well. it's interesting, financials are up more than tech maybe by about a percent. we still think mid-caps make

sense to diversify some concentration risks. we still think tech and communications are among the best sectors. >> to those who say that tech especially is either too stretched or showing signs of a bubble you say what? >> we do not see signs of a bubble. i think we see pockets of speculation. we see people using ai in every transcript even when the business isn't there. i was in the business in the late 90s. during a three-year stretch at the highs, tech outperformed the s&p by 250%. over the last three years, tech outperformed by 30%. earning trends is the key. what would make this more negative is we see those earning trends. that's what happened in 2022. does that mean we won't see some cooling off where we have

a big blowoff move where you consolidate sideways? i think that's starting to happen. if you stick with the trends we still think it's up. >> what does that mean signs are pockets of speculation? are you worried a lot of trades that have written this ai wave are exhibiting too much euphoria? i need you to be more specific. >> if we look at these small names that goes up 25% in a day or the biggest name is much bigger than everything else i think these small place. if you look at the big stocks as a whole the trading around 25 to 30 times valuations or rp basis look much more reasonable and a lot different than 50, 75 times we saw more broadly in 1999 or 2000. when i say pockets of speculations i don't think you

see that broadly across the market, especially not in the big stocks that have really good cash flow and fundamentals that we think are not cheap, but reasonable relative to the growth outlook. >> how would you address that? not suggesting in any way the overall market is a bubble or anything, but some have gone up a lot since october. >> they have gone up. here we are specifically talking about that cohort of the magnificent seven and some select small-cap companies as keith mentioned. i do agree that at the broader fundamental level we don't see signs of a bubble because ultimately, especially for large companies there were fundamentals behind that increase which are earnings and increased 30% last year. these companies monetize ai, cutting costs and their valuations have been cheap to begin with.

with that said, i do think we have to be on the lookout a little bit further down the road whether eventually it becomes a little bit more frothy when you start seeing google searches for things like ai start to match level for crypto and the pandemic you have to be a bit on the lookout and think about not just what work but what can work in the future. >> can we pull up the smh brought november or from late october? it's going to show you way low, left, away high, right. that's well beyond mega caps. that's well beyond nvidia. there's your chart. you have gone virtually one way whether nvidia, amd. i could go down the list of things that make up that index. >> what i think is interesting about the 70 moving away from a pure ai plus story within that

group is i think it's a great example of different parts of the market that have been following different cycles. you actually had quite a recession within semiconductors earlier before november of last year and you had a lot in those companies and you're now starting to see recovery and semiconductor production and sales. not to use ai related but more related to computers and cell phones and electronics more broadly. i think that's a great example of what's been working the past four months, but we can't forget words come from which was a very painful cycle of four. >> keith, give me a comment. >> they are extended. they are right for a little bit of a correction but you have to be somewhat positive on semis because semis lead. i think the cooling-off phase,

but if you have six or 12 months stick with that underlying trend. we can't forget that in 2022 it was down 40%, nasdaq was down a lot. if you zoom out a bit it doesn't look as stretched. on a short-term basis look at that chart. it's straight up a hockey stick. what does that tell you? i would expect more cooling off in time as opposed to a large significant correction. >> we will talk to you soon. thanks as always for being here. let's take a look at the biggest names moving. >> let's start with on holding. it's the swiss shoemaker. it is on pace for its largest ever one-day percentage drop reporting a loss with considerable currency impacts. it's a 6% loss versus expectations of $.13. you have archer daniels on the rise

today as it wraps up in the agricultural company and it says it completed an investigation at its nutrition subsidiary and says that won't have any material impact on finances taking away some overhang on sharers. results did fall short but guidance was at. >> we are just getting started. up next, we go hunting for yield with the credit markets with sycamore trees mark okada and why he thinks the fight is far from over and what that could meet for this record rally. you will hear from citadel finer ken griffen exclusively in florida. we are live at the new york stock exchange and you are watching closing bell. icy hot. ice works fast. ♪♪ heat makes it last. feel the power of contrast therapy. ♪♪ so you can rise from pain. icy hot.

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today inflation rising slightly hotter than expected but clearing the way for investors to resume highflying tech names that seems to be what's happening. nice to see you in person. >> good to be here. >> he sat down and said it's weird. but you are. >> i am. once they decided to turn on the spigots and doing the same thing the liquidity needs, streets wide open, it's a busy time. it's picking up. >> supply has been the thing i've been thinking of a lot. you got to learn from things. we learn from covid and inflation that came out of that was it was all supply. if you got supply wrong you have the housing market wrong, everything. the fed got it wrong. they thought it was transitory. i've been thinking a lot about supply and from a supply

standpoint, labor seems to have topped out. i'm in texas. a lot came over the border here. a lot. i don't think there's going to be a labor shortage anytime soon so that's off the table as an issue. the other parts of supply is really about treasuries. the other thing is about m&a. that's something i think will continue to rebound hard. >> i cannot remember a time that we've spent together where you have been this bullish. you say this is the most we've been on overall risk and credit. that's your wheelhouse. >> it is weird. credit people say the world is half empty, but if you're going to have this big of a move and what the fed is doing as far as leaning against the economy and leaning against markets. you have this dynamic where as

a former fed chair has politicized the whole situation and we are in an election year. biden's approval rating is not good. i don't think there's any way they let a recession happen anytime soon. credit people care, but bad things like recession, if it's not in the cards and we are making nine, 10% in higher- quality credit let's go. >> the treasury secretary is not the one responsible for cutting interest rates. >> on the other hand, look at what she did and flooding with bills in december. they've given 100 billion dollars in student debt. there's other things to pull. i don't think we will have a cycle anytime soon. i wish we would. >> are we midcycle? where are we? >> we are long cycle. very long cycle. i think what happened in

november, december resets the clock a bit on this economic cycle. we don't see broad weakness anywhere we look. >> capital market certainly. there's plenty. if every time i talk to people on the street it's like let's go. there's been a huge drought of m&a. we see 22, 23 probably some of the worst years in a long time. if that bounces the way we think it is there's going to be lots to do, a new issue is always a good thing to play with as opposed to figuring out secondary. it's just getting going. a lot of dividend financing that are not that interesting. once this sort of actually gets going i think we will see a lot more flow and good deals.

>> when the credit guy is pulled up that makes me nervous. when do you think we get the first rate cut? it sounds as though that is the overriding factor for you that we had a trend change. now it's don't fight the fed and don't fight liquidity. don't fight the supply. >> last time he had me on they were pricing seven cuts at that time. i said no way. we are in the higher for longer camp. i think there's a chance they don't hike at all. i think that's a good thing. they don't cut it all. some people talk about maybe one, that would be upsetting. >> seems unlikely. >> that's an outlier. i think a case where they don't cut at all this year is still an outlier case. the fed has telegraphed they

are going to go at some point. 100%. i think they go in june but i don't think the markets care. today was a good point. the cpa comes in hotter. this is not a fed centric market right now. it's really about liquidity and momentum. i'm not an equity guy so don't ask me those. >> why do you think a second wave is the base case? you made that statement. be careful which metric you look at because pce is closer to the fed's target than cpi and at this pce matters more doesn't it? >> pce is data, cpi is survey. one makes more sense in this world. history tells you it's a rare to have one peak in inflation.

usually there's another hump somewhere. i think that's coming at some point. i don't think it's right now, but if we are in an election year, we took financial conditions very easy and that's why talking about m&a. that's going to be very creative to the money centers. it's going to take a bit. we are definitely -- we don't have the labor pressure i think on that inflationary dynamic. >> this was mostly would you suggest a pandemic induced supply shot? >> 100%. i hope not. i hope we don't lose a lot of people again. >> i'm saying we won't get a pandemic induced supply shock to cause a second wave of inflation and some stimulus that we did out of washington probably did too much but that

still is going to run off. >> the economy is strong. i think if he sat at my desk and saw the things happening you would think the gdp numbers are light. if we start to heat up in here you could certainly see another bout of inflation. the thing that is a little more concerning is the supply of treasuries. we have to issue 24%. come on, i don't want to talk about that. >> we will save it. see how you are the next time. be well. >> coming up, citadels ken griffen is live from the industry conference. we get his thoughts on everything from the markets and interest rates to the presidential election and regulation. it is an interview you do not want to mess and it's cong umip after this short break.

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>> welcome back. citadel founder and ceo ken griffen speaking exclusively in florida at the international futures industry conference. here's what he had to say about the market, ai and regional banks. >> as an investor what do you do right now with a record high stock market? is it time to be adding risk or pairing risk? >> i think it's detailed many roles right now.

you've got the magnificent sound, incredible story ripping through the equity market about the transformative changes that are coming with ai and then you've got much of the market at earnings levels that are far more in line with historical averages, particularly across the industrial base. there's a moment in time you can come in some sense, sign up for big, bold -- these companies are changing the future you can put your money to work in areas where ratios are much more in line with historical averages and have a different profile. >> which are you? >> i'm so happy i run a hedge fund. multi-strategy. i let my colleagues make those choices. >> you must have thoughts on ai and momentum we have seen. whether it looks frothy or it looks like the beginning? >> none of us know where we are

in this journey. when i will tell you the team and nvidia looks like they're on top of their game right now. there's no ifs, ands or buts, they have done an incredible job. this is the gold mining in california. they made a lot of money. it's very clear that nvidia sells one of the most important ingredients of the ai story and they've done an incredible job of capitalizing on it. what's interesting is the large language models, the barriers to the production of world- class models appear to be somewhat lower than what we thought they were nine or 12 months ago. if you look at recent events, most recent model release is a real competitor to what's been done to open ai. that's one of a statement. i think you could argue -- >> you're not an investor? >> i'm not. >> yeah. >> sorry.

>> that's fair. go on. their competitors. we want to find out who the next nvidia is. >> i don't know who it's going to be. i don't know where amd is going , i don't know where intel is going to get, but right now nvidia sits in a good position. >> there have been some worries or concerns forget we are when you're out from collapse and regional banks, commercial real estate has been a problem spot. last week, you are part of the capital infusion along with treasury secretary stephen. why did you invest $1 billion into that bank which looks to have some problematic commercial real estate exposure and also some problematic internal controls? >> the question with every investment is about whether or not it's the right price. that's the fundamental of investing.

a building where rent has come down may be an attractive building at the right price. for the risks intrinsic in new york community bank i think this is the right price. to be clear, steve has an incredible record investing in the space. he's very thoughtful on these issues. i think if you wanted to know blow-by-blow how he thinks the bank should best be run to address the issues at hand you should ask him to join you live on tv because there are few in this world who are as talented as he and his team are at thinking about opportunities in the banking sector. >> you expect more ripples from the regional bank fallout? >> i think we will see a continuation of these stories over the next couple of years as both commercial real estate struggles and as the broader economy encounters various different idiosyncratic setbacks. we will see more of these over

the years to come. >> that was citadel founder and ceo ken griffen. you can add him to the long list of nvidia. you can catch the remainder of that streaming live on cnbc.com. up next, we track the biggest movers as we head into the close. kate rooney standing by. >> a change helping one component leaving the blue-chip index today. a failed drug trial sending in the other direction. we bring you those details next. rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view?

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>> 15 out from the bell, let's get back to kate rooney for a look at the stocks she's watching. >> 3m is the biggest gainer after news it's ceo is stepping down. micro men will pass the torch to bill brown who ran and have been under pressure. it's also got an upcoming spinoff of the healthcare division and continues to face a decision about its dividend. acadia pharmaceuticals has been dropping double digits after a failed trial. this is for its late stage schizophrenia treatment which did not demonstrate a statistically significant improvement over a placebo in treating some symptoms. >> still ahead, bowing under pressure. new details emerge around its

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the crucial moments of this day. what bowing and the airline stocks have been moving today, we will begin with you. nvidia has a big fan. we learned that today. the stock continues to have fans. >> a couple days, 10%. take us back a few days or maybe a week in terms of where the price was and trading to the stock today. this is the game that will be underway for a long time. the market is performing very admirably. you have a lot of dispersion, the breath is 50-50, up down today. you have big caps doing their job. i'm surprised to see the volatility index down. all we have to do is get past cpi and have it not be inherently a scary number and all of a sudden we are locked in. it's a well lubricated market.

people take more risks when they sit on house money profits and i think you almost have to wait for a ton of equity offerings or supply or something to really break the fundamental piece to get the real correction at this point although i still will say i don't think it makes sense to fully expect the choreography to stay this positive. >> you get one a day saying the rally is exhausting and looking tired as they continue to try and hang on a key point and say this just can't continue the way it is. the market has shown this unbelievable resiliency to say maybe we can. >> i mentioned those years that this year looks like. you never got an across-the- board comprehensive deep pullback. every tended to get bought and you took turns and what was resting and moving aggressively

to the upside sector wise and stock wise. it can stay that way. i think it's a matter of setting expectations based on where we have come from. where only 8% above the early 2022 highs, it's not different from tremendous amounts of new ground. i'm usually a little wary of when it seems so good to just assume it'll stay that way. >> fell, bowing. the stock can get out its own way because we continue negative headlines around this company. production issues as well and all of it sort of a perfect scenario for the stock to remain troubled. >> as long as there are investigations going on with the doj, faa and ntsb and as long as some of these details week out of things like the safety audit that's what happened overnight. the new york times had details about the audit by the faa.

these are damaging numbers. 89 production checks, 33 times they found failures. 97 instances of noncompliance. all was enough to put shares lower today. boeing's head of commercial airplanes put out an employee memo today outlining some changes they are making as they assess the quality controls. that was not enough to push the stock back up to breakeven. max production is capped at 38 a month. you look at shares of southwest hammered today after the company said it is going to be reassessing its full-year guidance in addition to cutting it's 737 max delivery plans. they are going to get 46 this year. that is enough for hares to be under pressure, and we heard not bad comments, but caution that many people have surrounding the airline stocks despite airlines today. delta reaffirmed positive guidance, but right now you

have investors looking at the airlines saying is it really going to be that strong? every ceo tells me there is strong demand right now. >> telling us about solar stocks today getting hammered. >> solar stocks are getting. it came to today's cpi print and concerns for higher rates. if rate cuts are push out further it will have a big impact because solar companies depend on borrowing especially residential installers and higher rates make with top symptoms marks offensive this is playing out in today's performance with some of the largest u.s. residential installer down more than 10%. send power insular edge also declining. higher interest rates have ransacked demand and valuations of companies leverage to the shorter cycle development. there's also growing overhang as we approach the selection and what that means for the i.r.a. lucrative incentives.

>> thank you. cleared until the fed meeting next week. >> generally to the fed meeting. >> we will see on the other side. tomorrow dow goes out at 250. all-time closing high for the s&p. right around 5175. dow and nasdaq ending the day in the green. welcome to closing bell overtime. >> technology to munication services, discretionary the top- performing sectors today. real estate and materials lagged but coming up we ear from talk tech portfolio manager of how he's navigating the ai trait and where he sees