i said that back when it was nvidia torrential and all you needed to know. >> nvidia is, what, 10% off the highs? >> just 10% off the sky scraping highs that we got to in a $2 trillion plus market cap. >> what does powell say about the recent mini spurt of inflation we've got for january and february. have a good weekend. happy st. patrick's day. thank you, mike. now over to courtney reagan and "the halftime report." thank you, sara and mike. welcome to "the halftime report." i am courtney reagan in for scott wapner. front and center this hour, is the tech trade tired? i know i am. the sector leading the s&p 500 to the down side today driven by two big earnings disappointments. as the nasdaq turns negative, the investment committee tackles that question and a lot more. joining me for the hour steve weiss, brenda vingiella and rob sechan. let's give you a check on the markets at about 12:00 on the east coast. the dow jones industrials is doing the best of the major

three averages but down 0.4% and the nasdaq, that tech trade that is the laggard, down about 1% at this point and, of course, the russell has been struggling this week. we want to watch that one as well. when it comes to sectors, again, technology is the biggest laggard down more than 1.3%, and energy is leading the way but up just 0.3%. it's been an interesting week. steve weiss, i will start with you, and i know mike and sara were ending the show talking about nvidia. it's up today. however, it is down about 10% from those meteoric highs but up about 80% year to date. what do you think? have we seen the best of nvidia for a while? >> i don't know. that's a great question. in the meeting coming up, who knows what they'll say at the meeting. >> sure. >> still the only game in town really. but it's not really an nvidia issue. we haven't seen the others down as much like meta or microsoft. they're barely off their highs. they look like they're down move because of the dollar moves. on a percentage move, they're not. i think it's more about the market than nvidia, frankly.

and right now we're in an information vacuum, a data vacuum. the data that's coming out pales in importance to what we'll hear from the fed on the 20th. i think people are pausing. there are always people that get in at the top, and those are the ones that are the first to leave, believe it or not. i think that's what we saw in nvidia, what we're seeing in meta and microsoft. just go through it all. and then there are those that get nervous and have huge gains that are taking some profits. right now it's a consolidation period. that's why i'm saying for a little while. that could be influenced by inflation numbers, which we saw, which were too strong. at this point you see rates backing up or yields backing up, rather, there's nervousness the fed, powell, will come out and say, hey, we're still going to pause and that the soft landing -- he won't say this, of course -- but others think the soft land something in question, as we heard from jamie dimon. so where do i stand? i have shorted the qs.

i have shorted the smh, because i don't want to take profits in the companies i own because i still think they will grow into their valuations relatively soon. so, for example, asml, valuation will go from 40 times to 25 times over the next year. so why pay taxes on all that? i think it's just a time for caution, not to put new money in the market pending what will happen with the fed and valuations are still inflated. >> okay. you're not a first in, last out, you're just pausing, taking a minute -- >> i'm not putting more money in the positions. it's difficult enough. a concentrated book that i run. why add to the concentration. >> i see. brenda, you've taken some profits in this area? >> we did. late last week we did trim nvidia and meta for the majority of our clients, really recognizing there's nothing wrong with the fundamentally story for both companies, but there is a lot of good news, we think, baked in when we look at even with meta.

amazing focus, refocusing, on margin improvement and margins beat by 7% in the fourth quarter was phenomenal, but it's a question of what happens going forward, what's already baked in there. the stock has had a huge move up in terms of the market multiple, focusing on the core business. we just recognize both companies, nvidia stocks and meta, have moved a lot in a very short period of time and think this is a market where it pays to be disciplined and take a little off the table. we came into this year, we were expecting the s&p could appreciate in line with earnings growth, which is low double digits, and we already had a really big move higher primarily led by some of these large cap tech names even though we've seen a broadening. but tech has been a big part of that. and, again, it's justified in many ways because earnings growth in the fourth quarter for

many of these companies was phenomenal and a standout. just think that, as you mentioned, the trade is getting tired, i think, for longer term investors. it makes sense to take a little off the top and reposition portfolio as little bit. >> fair enough. rob, the nasdaq is coming off its fourth down day in five. we're down again today, down about 1% for the composite. what do you think overall, is this tech trade tired, or is it just time to take a little pause, take a little breather, look around for other opportunities as maybe we're finally getting broadening out? what do you think? >> yeah, we still think tech is in a strong trend as a sector, but semi strength is masking hardware weakness so it's not shared across all tech with the strength in semis being obviously the leader. hardware is weak because of apple. it's ten times the size of the next largest hardware name which is cisco.

software is seeing some stalling in momentum with names like microsoft, although not that much. it's also ten times the size of the next biggest name, which is oracle. and semis have gone parabolic led by nvidia, which we don't own. i think the message remains that you need to respect momentum and higher growth revisions, but be aware of stretch valuations, positioning and sentiment. and so, right now, dips are being bought quickly. what that shows you is institutional individual investors are still trying to get full allocations. that's kind of a last leg of the buying chase. they're doing it based on resilient economic growth, which is kind of keeping them semiebullient. once there is a catalyst, though, such as growth estimates getting cut in this complacent environment, i think that's where we have to be careful,

because valuations are so high. so we're invested. we're not in extremes from stretch valuation standpoint. we see a lot of value underneath the surface. our portfolio traded at 20% discount to each of their respective benchmarks. and so unless we see kind of an eps scare or something like that or a growth scare like we saw in '22, we think we can continue to ride, although you know we're fundam fundamentalists. we get a little more cautious here at these times. >> everyone is making really good points. and, weiss, wolfe is talking about potential down side catalysts. rob was talking about potential upside. they talk about fading fed liquidity, tightening financial conditions. i mean, how closely should we be paying attention to any of those, and how fast do you make moves if one of those catalysts

starts to proof shares further lower? >> i think wolfe has generally been -- i wouldn't say bearish, but most cautious. >> okay. >> you always have those catalysts out there. nothing ever changes. there's always a potential black swan event like tight credit. we're going the easy way. we're going to easier credit, right? so i don't really buy into that. the market, i think, is fairly well in balance with a slight bias to the down side because of what i anticipate from powell on the heels of what we saw with the inflation data. so that's why. i don't disagree with what brenda did. for my view and the way i manage money, i'm very concerned about taxes. so if i think microsoft is overvalued, which i do think it's slightly overvalued, or meta, not as much, then i'm going to hedge more than i'm going to sell, because i don't want to have to replace and i don't want to pay taxes.

so i have to assume we're going to see a major decline, whereas brenda's clients are managing their own taxes. she's not managing it for them. so i'm just in a different position. >> sure. >> i agree with rob. technology would continue to be the leader. i met with the ceo of one of our companies and what used to take them four to five weeks to produce now takes 45 hours. and this happens to be a technology company involved in a.i., so they're on the cutting edge. wait until that starts going out broadly to other companies, right? so, to me, we're just at the beginning of this evolution, revolution, so to speak. that's why i'm staying there. i think it will move quickly because it's xitcompetitive. i don't want to give up my position. i would talk about positive catalysts more likely going into the second half of this year. i think the first half of this year is sort of going to be like where we are. we'll get to earnings. earnings should have good momentum continuing in tech.

you'll see some that didn't perform as well like an alphabet because of the misplaced launch they had. it has been recovering. in terms of broadening out, take a look at data we got today. the economic data shows that the economy is weakening. you have -- as far as the consumer goes, you have dick's sporting goods but you have the others that we're seeing and more retailers are disappointing than surprising. so it really depends how you manage your inventory. overall the economic trend, in my view, is lower. so if we broaden, those stocks get overvalued. >> that's very interesting. >> hey, steve -- >> yes, rob? >> i have a question for you. >> personal question or stock related? >> it could be either. could be either. but it's stock related -- more macro related. the narrative has really shifted back to a goldilocks narrative

for mid-21 where you have continued growth trajectory but decelerating economic data putting us in a sweet spot for markets. and what that really did is it set us up for a lot of complacency, and ultimately we had a pretty big giveback in some of these names in 2022. do you worry that the narrative shifting to goldilocks right now mirrors that type of pattern? >> actually, that's a really good point. i think we have started to see a shift somewhat from it being a slam dunk, a soft landing and a goldilocks scenario. one that won't be the case. let's not forget the auto companies have tons of inventory. how are they going to do? tons of inventory in evs. and as rates come down, you would think naturally that car buying will pick up because the

financing costs are less. we're seeing some home buying pick up. but yet you still need to see consumers keep pace with what we saw with the increased pricing from the pandemic and the scarcity fact that drove auto buying. i personally think companies like that won't do so well going forward. if employment stays where it is, that could be a different story. >> right. the next big test for nvidia kicks off next week on monday. kristina partsinevelos joins us now with three things to watch. what should we be expecting ahead of this? >> i'll be there, so the first thing is any update on their next architecture for the blackwell, so the b-100. we'll want to know specs, the memory content. if the memory content surpasses amd, that will be a negative for amd. we'll want to know maybe some details on the average selling price because that will affect margins. rumors maybe it will be 30% higher than the h-100. if that's the case, good news for margins, but may depress

demand a little bit. the second major point is just this adoption across enterprise. we've seen this with a capex, the spending of big players like google, amazon, microsoft, et cetera, but there's all the other facets of the market yet to implement their own large language model, so we should expect more commentary about that as well as partnerships. there's been some talk of micron alluded to something. oracle alluded to something. you'll see the derivatives that have event move in unison as well. and then, last but not least, inferencing. the second part of the large language model. you shoot the training in and use the training data to answer queries. and on the earnings call, jensen huang, the ceo, said 40% of data revenue came from inferencing and most people were surprised by that number because nvidia has been so well known for training, and the concern was they're going to lose that market share to an amd or others for the inferencing. i'm sure he will talk about this being the next big driver for

demand, and then how that maybe will result in an update to their total addressable market, which is at $1 trillion, crazy number. what, five years ago the market cap was $100 billion, and now it's $2.3 trillion, or a little bit more than that. >> those numbers are astronomical. it feels like the fomo trade. brenda, what would you want to hear from nvidia next week that might entice you to buy more, get back in? i know you just trimmed profits. is there something you could hear that, oh, my gosh, i can't risk not being in? >> we're still in for sure, we've just taken a little bit off the top, recognizing how much movement we've seen. i personally don't know if there's anything we can hear that we haven't already. jensen huang does a good job on the conference calls of the market they have, how every data center needs to be updated, and how they're going to touch all kinds of different businesses. they do have pretty big

concentration in revenue in terms of customer concentration with the microsofts and the metas of the world. i guess hearing more about how that will broaden out potentially in the shorter term could be good news in terms of potential risk from those customers. next year not spending as much as they spent last year. outside of that, i don't know if there's anything new that would change our mind. >> fair. >> still feel positive about the company and their positioning. it would be a lot. >> weiss, what about you? would you be interested in some of the tertiary players? >> i would be interested there but also in his take on the customers, the key customers, brenda mentioned, who are so aggressively looking for other solutions with titan semi, with asl providing their most advanced technology to allow the competition to blossom and bloom.

nobody wants to be that dependent on nvidia as a sole source at very high prices. i want to know if he's thinking about that, you don't have this massive rush for the door, which is building. i mean, every large tech company has come outand said we're building our own chips, designing our own chips and asml is a toolbox for that and intel foundries. how will you compete with that burgeoning threat? >> that's a good one. one stock that is not benefiting from ai, adobe shares sinking. they beat earnings but is that the whole reason for the downward pressure? >> you think decent, decent report. the bar is so high now for anything ai related that when you don't beat at that magnitude, you start to see the sell-off.

that came in a little bit light compared to buy side estimates and because of that there's worry that maybe there's going to be pricing tail winds and most of the driving forces for adobe will be in the second half of this year. and then, of course, you have the concern about competition. openai text to image platform and that's directly encroaching on adobe's turf. the ceo was asked that on our airways yesterday on "closing bell overtime." he said it's all good. competition is good. it will bring more video to the platform. and then eventually they will have to edit the video using adobe programs. he even name dropped jensen. the amount of ceos on earnings calls, the midas touch -- >> how can we sneak this in? >> he mentioned that, too.

they probably are. as an outsider listening in to the calls, it's incredible how often they do that and then hoping you see the spike, oh, this company, maybe working with nvidia, boom. the stock goes up. >> felt like the quarter before it was saying a.i. but now more specific and use jensen huang or nvidia, they have to get more specific. >> associated with him. >> exactly. rob, you own adobe. a lot of price cuts from bank of america, jpmorgan, ubs, barclays. what are you thinking about your position right now? >> we actually added to it not too long ago. i'm going to give you a comment from our chief marketing officer today who felt the need to speak on our morning call, chris broussard. he said, let me tell you something, creative folks are not going to move away from the creative suite anytime soon. it's too embedded in work flows and there's too much time invested in how to use it. they use it all day long. there's no way they're going to move off of it, so work place

efficiency would grind to a halt. when you look at this report, if you're a fundamentalist, this was a great report, the company beat on top and bottom lines, reported 11% revenue growth, 15% eps growth. their biggest segment beat expectations growing 12% year on year. the net, what kristina talked about, recurring revenues, actually beat. it fell short of kind of forward expectations. long term this company will not be disintermediated by a.i. it will benefit from it. we view this as a time investors should be considering buying this. >> brenda, you're nodding here. deutsche bank says, look, the disappointing first quarter that wasn't, reiterate buy. what do you think about adobe

here? >> this is a buying opportunity that's presented itself here. i also think it's a great example of a scenario where the a.i. hype was really, turns out, driving a lot of the returns we've seen in the stock, obviously. that's getting flushed out today. to rob's point, i think this company is still incredibly well positioned in their market. they are a leader. switching costs are high. the fundamentals remain healthy, and i think they should have a benefit from a.i. it's not as big as everybody was initially opening at this stage. >> the one-year return on adobe up 72%. that is really strong, and i think rob's chief marketing officer makes a good point. if you're a user of this, you're going to continue to be a user. you're fully embedded in this process. >> that's right. >> i want to know the ceo's opinion on the photo with princess kate. >> i think that points out to they have to work on their game a little bit. you shouldn't have been able to tell. i was gleeful when they missed. >> were you. >> i was.

i will be gleeful if it goes down another 10% or 15%, because i sold it down there. >> okay. >> i would like a chance to buy it back. no offense, rob. i'm rooting against you here. >> there you go. that's how we make the market. straight ahead, new year, new goldman from david solomon in his annual shareholder letter as he points to a rebound in capital markets. will it be enough to reignite the stock? the investment committee weighs aoufter this quick break. >>nnncer: are you following "the halftime report" podcast? what are you waiting for? look for us in your favorite podcasting app. follow "the halftime" podcast now.

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goldman sachs' ceo david solomon laying out the strategy for 2024. leslie picker joins us with the details. hi, les. solomon calls 2023 a year of execution for goldman sachs while saying he's optimistic about 2024. remember, in 2023, goldman was backing off from its consumer expansion and taking write-downs from that as well as exposure to commercial real estate all while m&a ak ctivity dropped to a

ten-year low. you can see goldman has lagged many peers, even this year, year to date. but it's a new year, one that the firm plans to spend focused on its two core businesses, global banking and markets as well as asset and wealth management, according to solomon's letter. now goldman -- global banking and markets, which includes investment banking and trading comprise nearly two-thirds of goldman's revenue last year, even in a weaker deals environment. solomon said in today's letter that the firm stands to benefit as capital markets rebound. this may be a bit more constructive than comments he made even six months ago at a conference where he said activity is improving but it's still a ways off. solomon noted in the letter that the firm increased its wallet share in banking and markets in 2023 by nearly 350 basis points since 2019. on the asset and wealth management side touted that it surpassed its alternatives fund-raising goal a year early. since 2019, the firm raised 250

billion for that initiative. court? >> remind us what solomon had to say about the consumer. i know you mentioned they stepped away from the consumer business unit. in general, he did give his thoughts on what he sees about the u.s. consumer right now, right? >> yeah, and it was interesting. this was in a paragraph he characterized his conversations he's having with ceos, and he said, and this is kind of similar to what he also said at a ubs conference a few weeks ago that those consumers he would put in the paycheck to paycheck, the lower end consumers, they are feeling the effects of inflation. even though the velocity of inflation has been decreasing, just the fact that prices still remain high has had an impact on those consumers. and he's seeing some slowdownin that market, and that's just based on his kind of conversations with ceos who operate and have a direct line of sight into those consumers. so it mirrors a lot of what you've been reporting, courtney, in terms of just this

bifurcation in the consumer group right now. >> absolutely. thanks so much. i appreciate you bringing that to us and the details of the latest goldman shareholder letter. weiss, you own goldman, leslie mentioned investor patience has been needed because it's been an underperformer. how are you feeling about the letter and the year ahead? do you still want to stay where you are with this holding? >> yeah, of course. it's really been an underperformer just near term, away from jpmorgan but also the movement in jpmorgan is less. when you hit new highs, it doesn't mean you're up 20%. but, look, to me goldman is a microcosm of what happens in corporate america, right? you hit a misstep, and the question is, not how you get knocked down but how you get up. and when you take a look at the aggressive action david has taken towards the businesses that were underperforming, the mistakes that were made, and just said get them off. we're not going to stay married to them because we got involved,

we're going to get divorced and move on. you will see the capital markets open up as rates come down, and that doesn't mean ipos and secondaries because that hasn't picked up. we see headline transactions. it means m&a, the most profitable business. so goldman is the best positioned there, in my view, has the deepest benches. i think they'll just continue to kill it. and i think david's a great steward of the company. he's done great things. he's changed the market for them from just being a trading market to also being an asset gathering market which should get a higher valuation in the market. >> maybe he needs to use that song "i get knocked down but i get up again." brenda, m&a has been a big deal, the focus, because, frankly, it hasn't been there. talking about a hopeful turnaround there. if investment banking does see a turnaround, is goldman the biggest beneficiary or jpmorgan stands to benefit, which you

hold? >> our preference is to stick with a jpmorgan which isn't relying solely on this piece recovering for their business to do well. it's more diversified. i do hope we see a pickup in m&a and would be healthy for the market overall if we do see m&a of small, mid-sized companies that would help how we should be valuing these companies since they've been lagging so much over the last few years relative to large cap stocks. but i also think the ipo calendar, there's a pipeline that's full, but we haven't really seen a lot of activity there. certainly that would be a healthy development for the market overall to have some freshness assuming those deals come to market and act well. also it would help with valuation discovery within those sectors that they lie in as well as potentially mid-cap stocks that have lagged. that's where we think the bigger opportunity is. we're getting a new alert on

boeing. phil lebeau has the details. oh, gosh, what have we got? >> reporter: it's not a huge deal in terms of how the stock is reacting right now, but it is important to notice fitch has downgraded the credit outlook for boeing from positive to stable. the fact they're going from positive to stable is not a surprise given the challenges boeing now faces as they are seeing their max production limited. they likely are going to be seeing higher costs as they work to double down and ensure quality and safety is at the level it should be at which clearly it has not been over the last couple of quarters if not the last year or so. again, fitch downgrading boeing's credit outlook going from positive to stable. not a huge reaction from the stock. i think the street looked at this and says, yep, that seems about right. guys, back to you. >> thank you very much, phil. brenda, you own it. does it seem about right, a fair downgrade of the kredcredit? >> it does.

i hate to say. there has been nothing but bad news for boeing over and over again. we've been sticking with our position, though. we think that the pipeline for planes is not going to change. we think that the company continues to be well positioned in that regard. but clearly there is a lot of work to be done, and whether that's acquiring spirit and then bringing more of that control over the production in house, that would be a very important step in the right direction. clearly, there's a lot of work that needs to be done, restoring confidence in this company's ability to focus on the details. >> case in pearoint, an alert o boeing. >> i thought it would be a management change. >> that's what you're looking for? >> obviously i think that's what's needed to restore confidence. >> you're probably not the only one that has that opinion. over to the headlines with pippa stevens. if iran sells ballistic muscles to russia for the war in ukraine, the response from the

international community will be swift and severe. that from a senior administration official to nbc news today as the g-7 countries issue a warning to tehran. the new sanctions will be imposed if it happens. one of them being considered, banning iran air from flying to europe. the official does say the administration has not yet seen confirmation of any missiles on the move. 80,000 muslim worshippers attended the first friday prayers of the holy month of ramadan as the war's shadow loomed over. police stepped up surveillance in the old city heading into the mosque, one of the holiest sites in islam. and alec baldwin has asked a new mexico judge to dismiss charges of involuntary manslaughter in the "rust" movie shooting. the motion alleges prosecutorial misconduct. his trial over the death of cinematographer halyna hutchins is scheduled for july in santa fe. courtney, back to you. >> pippa, thank you very much.

up next, our "call of the day." a big price target hike, we have ownership on the desk so we'll debate that one.

welcome back to "halftime." to our "call of the day," eli lilly price target raise d. rob, you would be excited to see this hit that price target or at least get close. i imagine you agree with this call? >> we do. we view the market for obesity treatment as one of the biggest secular growth opportunities in health care. according to goldman, obesity treatment is going to be a $100 billion market by the end of the decade up from $10 billion in '23. half the world's population will qualify for these drugs at the end of the decade. in addition, they're proving to be effective beyond obesity in heart disease, addiction, et cetera. and so while lilly is very expensive in a forward 55 times p/e, it's still a company we

continue to own. as weiss said early, we're taxpayers, and we want to make sure that we're not getting off this momentum train too early. we could be in for a trim if it gets to the targets you're talking about but a long-term owner. >> they're at 752 so 850 about 98 bucks to go. you also bought some exposure to a different name because you want some more exposure even to that obesity drug space, part of the reason you like lilly. >> i guess you could say we're going for seconds, the obesity buffet, courtney. we bought some novo nordisk. it's a less expensive way for us to get exposure at a 37 times forward p/e. combine these two companies have 80% to 90% market share with tremendous profitability. 80% growth margins. 35% free cash flow margins, and

so it is a wonderful business. you have to pay up. so why not look for a less expensive way to do it? >> the glp-1 drugs are absolute blockbusters. it will be amazing to see what happens over time. brenda, i understand you're in the health care trade but not specifically in these names. >> we are but i do feel like glp-1, in my mind, is very similar to a.i. in certain respects. >> okay. >> just given the thought about how much the growth opportunity is going to be there and how they're going to be applicable for obesity and other chronic conditions, health conditions. i do think that maybe there's a lot priced in especially with a lilly, novo nordisk, a question about the company's structure and the ability and willingness to increase supply, which is very different from a for-profit company like lilly. but, nevertheless, we're on the sidelines, admittedly. we missed the trade here.

we would be looking to get in if we saw a pullback. they're too rich for us. >> thoughts on either the call for an 850 price target or the space in general? >> look, i missed it. i'll wait for it to pull back. the spaces get crowded quickly. i'll be on the sidelines. >> how far of a pullback would you need? >> it depends on what the competitive landscape is. i don't have to think about that right now. i need to get robin a new joke writer. >> and focus on nvidia next week, too. well, coming up, we are running through a number of big portfolio moves today, but, first, mike santoli will join us for his "midday word." you don't want to miss that. he always has a lot of wisdom to share. he's like a market poet to me. when you realize you can give your people everything, and more. thank you very much. [applause] ask, "now what?" here's what. you go with prudential to protect, empower and grow.

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we're back on "halftime." senior markets commentator mike santoli joins us with his "midday word." mike, a lot of focus on the 10 year, it's touched 4.30. we've talked about the weakness in tech. i'm wondering if tech is weak, can we broaden out anywhere else if yields are still this high? >> it's been the pattern that has been a struggle for the majority of stocks to do well when yields are higher. i guess the market is sort of putting on a braver face than i might have anticipated. today, if we finish lower on the s&p 500, the seventh down day in the last ten and yet we're up over that period of time. two big 1% gains of the the market is sort of going sideway as little bit under the surface. it's trying to digest this big rally. i thought for a couple of weeks any upside above, like, 5050 felt like an overshoot. it was all about just ever higher momentum aggression in some of the big semi names.

but if this is the character of the digestion that we get, it's probably okay. but, the fed will determine some of that next week and the bond market is a little more sensitive. >> that's what i was going to ask. is the sideways action because we're just waiting to hear from the fed? do we really expect any big surprise? >> i think some suspense has been injected into what powell might say. >> okay. >> simply because we've had a series of warmer than expected inflies numbers. >> sure. >> it's been a good news story all year so far that -- so coming into this year, there was a real standard way of denigrating the rally and saying it's all about the hope for immediate rate cuts or, b, it's all about six stocks. we pushed off the start of rate cuts, and now the market only anticipates maybe three. maybe the fed will change that next week. so far we've done five. the economy has held together. credit markets are great. so we'll see if the whole equation can still work together and if we can continue to kind

of dodge the rain drops here as we go because you haven't had a real broad pullback, not a 3% pullback in five months. >> right. absolutely. good stuff. mike, thanks for joining us. still ahead, a retail realty check with lululemon and nike. one of toour committee members just got in ahead of the print. we'll discuss that next. when change makers can challenge the status quo, they won't immediate adversity. the changemaker will have to be driven by a higher purpose to bring great purpose to society. only then the changemaker can motivate themselves and transcend the diversity into motivations. hey, is this thing hard to learn? nah, it's easy. huh. you know, i think i'm going to ride it home.

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welcome back. let's hit some key retail earnings coming our way next

week. lulu and nike reporting after the bell. you just bought lulu. it's been strong for so long, so what made you look at it finally now? >> a little bit of a play on the consumer offering brand power, history of consistent growth, leading returns on invested capital. obviously the earnings are next week. looking for mid-teens, top and bottom line, continued progress on operational efficiencies. frankly, we look at both lulu and nike and opted for the company that is continuing to execute well versus the one that's a turnaround story. obviously a highly competitive industry, susceptible to volatile consumer trends, but this has emerged as a consistent grower generating 20% revenue growth over the last ten years. and relative to its consumer peers, it has industry leading gross margins and operating margins. and it trades at a discount to

its p/e average the last ten years. we see a broadening out in the markets. we kind of like this. >> its margins certainly are impressive and sort of the brand power that it's had even as so time. every time you go by one of their stores, they're crowded. i do think it's a unique brand and offering. you have a couple others that you mentioned, but i don't leave they're having the same impact that lulu is, so i think it will continue to grow. i'm challenged by any retailer with that kind of multiple, though, despite the margins. >> sure. >> but yet that kept me out of cng, chipotle, and the stock is doing well. so there are stocks that have a valuation paradigm that will -- i think rob will do fine with it, as long as he doesn't become an adverse advertiser by wearing

the clothes in public. >> brenda, i know you're not in lulu or nike, but you are in tjx. sometimes you can find lulu products in tjx, but why does tjx make sense? >> it's uniquely positioned in this environment, where everybody is upset about having to pay more for everything. so i think they benefit, not only there their core customer, but from a customer that is just looking for a bar gain. so higher quality inventory, uniquely positioned to appeal to a large variety of customers in this current environment. and the results have been good. so we continue to like tjx. it's our preference for brick and mortar. we don't have any other exposure to brick and mortar retail. >> it's so unique that they've been able to be successful in brick and mortar without expanding too much online. they have a tiny online business

and it's worked for them. >> that's part of the appeal. this is for the customer that likes to shop and willing to do the work. >> do the treasure hunting. i just go through the racks on my phone. the one industrial stock thatob r is making. the reveal and the debate, after the break.

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we're back. we have some more moves for you.

rob, you turned to o'reilly auto. tell me about this. >> so they are a construction supply company, so fastenal is leveraged to accelerating manufacturing activity. they have a ton of essential products. they're one of the fastest crowing profitable companies in the u.s. capital industries. their margins are terrific. 45%. they have super strong, competitive positioning of the it's a premium valuation. however, we think this can be supported because of earnings momentum. >> sometimes that can really turn it in for you, huh? >> as o'reilly. we've owned it for a long time. we talked about auto zone on the show a lot of bit. a defensive grower in the consumer space. we sold a little bit of it because of where it's sitting

right now. an all-time high. >> yeah. >> it's a durable discretionary business. so really like it, and that's how we got some of what we needed, you know, to rotate out. >> good job. congratulations on that, getting out at a nice level there. stay with us, because our "final alades" are coming up on "hftime." see you soon. ading app makes trading easier. with its customizable options chain, easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley business. it's not a nine-to-five on t proposition.ket. it's all day and into the night. it's all the things that keep this world turning.

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helps investors meet their goals. pgim investments. shaping tomorrow today. time now for "final trades." rob, you get to go first. what do you got for us? >> that is great. this is a ceo override by my investment team. i wanted adobe, they told me i had to do lulu, so i'm doing lulu. >> and lulu is down 1% here, but earnings are next week. so we'll see what happens. brenda? >> mine is cme group. we could see a pickup in volatility or just hedging positions like steve was talking about earlier. just given the market return

that we have seen this year. >> okay. and mr. weiss, bring us home. >> you saw what rob did there. he got two "final trades" in. >> he snuck one in. >> archer daniels has been acting great, so a good way to play the commodities acting better with lower risk because they will restate. >> that does it for us. "the exchange" starts right now. have a great weekend. ♪ ♪ thank you very much. welcome, everybody, to "the exchange." i'm tyler mathisen. here's what's ahead on a busy hour. inflation concerns front and center this week, after both consumer and wholesale prices stayed hotter than expected. the consumer also showing signs of stability, pressuring stocks, and rate-sensitive technologies, shares in particular, propping up yields on bonds as well. the ten-year climbing more than 20 basis points since monday, now back above 4.3%.