events it's helpful to take some protection hedge and selling the q short. >> jenny >> 3m, it was mentioned in barron's this weekend. a couple of analysts say love is coming back in this as the story's gotten a let cleaner. >> teradyne, good positive, technical momentum. >> i'll see you on "the closing bell". >> "the exchange" is now. >> thank you very much, scott and welcome to "the exchange." i'm kelly evans and here's what's ahead. >> roaring kitty and the dreaded "s" word and what it says about the health of this rally and how you want to be positioned from here plus apple, google, microsoft they're all gearing up for developer conferences coming up and open ai's live spring event is kicking off right now they are reportedly nearing a deal with apple to put chatgpt on iphones one of our analysts says apple

needs an ai moment and this will qualify and we'll bring you all of the headlines this hour three buckets of the health care names. this is one of them. our guest says buy it. it has the business best model in pharma and it's not eli lilly. he's here to make his case and michael santoli kicks things off at the new york stock exchange >> hi, kelly we have steady indexes here which means that the s&p 500 is holding on to last week's gains and holding on to this little 5% rebound rally we've had over the prior three weeks and to me, the story of the market, this latest pace started six weeks ago at the all-time highs and that was the last trading day of the quarter and to me it was the moment of maximum confidence in the scenario and it was right after the fed sort of confirmed the expectation of three rate cuts in the dot plot about a week before. the first quarter gdp was looking great. earnings anticipation was running high so i think that we've had tests on both those fronts and

obviously, a third, straight, hot month of inflation readings and we had a question about the fed path and treasury yields go back to six-month highs and all of it created what looks for the moment as a normal, 5% pullback and the rebound rally has been broad enough and it has been global enough and other markets are participating. the question is have we settled with the growth of the consumer cyclicals struggling a bit as they wobble? yields come off their highs and we'll see if we can make our peace with that. that's the moment and we're at a neutral spot going into the pp and cpi numbers on a technical basis. >> michael, we'll talk later on about stagflation, not to give it away. what will it mean for you? because for a lot of us the reflexive playbook isn't there if inflation and stagflation become the market narrative. what will it mean to you >> first of all, i still think we're a distance from genuine

stagflation when we're talking about pretty high real gdp numbers even right now what it does mean, though, it's pretty tough to have a lot of progress from a fully valued stock market from here even if nominal earnings growth are good i always go back to the idea, though, kelly that even though 2% is the fed's inflation target the stock market has been just fine with rates of inflation, a good deal higher from there and you want to see more progress and i don't see a lot of magic in 2% out there. so we have this higher metabolism and higher nominal gdp economy, and i think we have to find some kind of new equilibrium among valuations and treasury yields and fed policy if that's where we are >> no, i like what we said which is what barry knapp wrote about over the weekend and he said basically for a higher inflation playbook you want to own stocks. people talk about owning real assets and the stock market kind of qualifies >> it does it's a call on the nominal growth of the economy and so in

some respects even though it doesn't mean it only goes up, it definitely -- you participate in that nominal growth. >> michael, thanks for now we appreciate it mike santoli my next guest says unless we see signs of growth the rally can have legs and we're nowhere near the earnings peak. quite the opposite joining us is dan suzuki from richard bernstein advisers great to see you again welcome. >> kelly, always great to see you. thank for having me. >> mike put his finger on the issue and i'll quote him and play devil's advocate, even if earnings growth continues from here the market is fully valued, so make the case that you still think it's still not and can grow from here >> i don't think there's any doubt that the market is very expensive, but as we all know timing valuation is a terrible timing indicator and it's not like valuations are any more stretched than they've been in the last few years ultimately, when you start to see signs that earnings growth is rolling over you have to

start to worry about the valuations and that tells you there's quite a bit of down side for areas of the market and for the time being, if you had the stable valuation perspective and earnings growth is broadening out and accelerating i think it's a pretty supportive environment. you might get some pullbacks and volatility and there's still strong support for markets >> these earnings growth accelerating and walk us through not that we haven't been following quite closely, some of us, dan, but what do you see what's going on? >> i think if you think about the last, call it four quarters or so, it's been a very narrow earnings recovery. so while the s&p earnings growth has been accelerating over the time period it's been driven by the mega-caps while the rest of the world and the rest of the s&p 500 actually continued to decelerate over that time period, i think the difference now is that those mega-cap earnings growth numbers while very strong are starting to peak

out and roll over, but it's the rest of the market that will be driving the acceleration at the s&p 500 level from here and that's not just here in the s&p 500. you can look outside the s&p 500 and small cap earnings growth, it looks to be troughing and it should be accelerating very aggressively and that's also true for,000 outside of the u.s. particularly in emerging markets. you start to see more companies put out better and better earnings growth. >> the dow is struggling intraday even though you have a thesis about the cycle, you're still afraid of energy, traditionals and cycles and they tend to benefit from inflationary growth and everyone is looking at the same set of facts, i sneeze i think that's right, kelly. either earnings growth will roll over which again we're not seeing those signs or earnings growth will stay strong or even accelerate and in that type of

environment because we are late in the economic cycle, that simply means that the economy is tight enough to where that better growth, is it going to come with more inflationary pressure and so that's not uniformly good and it's not jumpily bad it just has winners and losers so i would err on the side of being in the winners' camp with respect to inflation and also nominal growth and that's the late cycle cyclicals. >> remind me, where would that be favorable where would you want to rotate away from? >> we're seeing it right now a lot of the companies that have reported within the consumer sector are feeling the bite of higher info cost that's an area where you have to be careful so within the consumer space, and i think there are other areas out there that just don't have the inflationary hedge. obviously, if inflation is higher and prices are higher and producing countries like energy,

building and industrials will do better and those that have operating leverage and pricing you poor will do better such as small caps and that's an underappreciated small caps. they look at small caps as a uniform loser and it's a tug-of-war and i think the operating leverage will win as you start to see salesgrowth accelerate and that's an area that you and others are becoming more concerned about >> thanks for joining us appreciate your time dan suzuki with richard bernstein advisers. up next, despite big gains, healthcare has been underperforming the broader markets and my next guest says there are misunderstood opportunities for the sector and he has them in tools and analytics, devices and animal health he brings us his top value pick for each aaron dunn with value

management good to have you here. it is a good place to ride out what could be coming from a macro point of view. are you one of those >> i think it's increasingly interesting and i say that because it's a sector that has really been stuck in the defensive market now for the better part of 18 months and really, that's been driven by the pharmaceutical companies that the longer have the competitive yield with the higher short-term interest rates and also the managed care stocks have not done well, which is very interesting to me, though is the momentum factor, if you were to factor out the market the momentum factor is over two standard deif yagds about norm and that's only happened three times since 1995 a lot of people are piled into a lot of these stocks and what i'm really looking at though is the federal reserve as we go are ward and the employment report was helpful in this regard, but the longer we go with inflation, the narrower the options for the

federal reserve from here. i'm increasingly more concerned about as we go through the year with the policy look like and inflation looks like in that regard i want to focus on very durable franchises and health care is a great example to do that today and we still have the baby boomer generation going through the health care bucket as well and there are good fundamentals that i don't think we've been paid for. >> you like thermo fisher. not to give away the answer, thermo fisher and boston scientific and like an animal, ha, ha, why do you like the first two. >> on the value side we want to own businesses that have good returns and manage the balance sheet appropriately and manage free cash flow and competitively, we know they're going to be around and in this market i kind of like that given where we are with inflation. so the three stocks i'll put in

there were the tools and analytics and not a great place to be in the past 18 months. you have heavy spending and big capital markets gains for raising capital back in the covid era and last year we gave that back. you actually have kind of capital spending from the industry from the pharmaceutical bio technology et cetera and that was down $60 billion. this year already we're up to $60 billion. so we think the pig and the python is coming and the capital markets are freed up and we think that's good for thermo it's a great company, great returns, great balance sheet >> tell me about be on lagd, the new technology revolutionizing it, i'm curious about what they have going on here >> yeah. this is called theropulse. the med tech stocks have done well they did well post-covid because you had the backlog of procedures which we saw last year and the investors benefited

from that and what we like about boston, knowledge inm and management has benefited and it is a targeted way to freeze heart muscle and really stop the -- the arrhythmia on a go forward basis. it's a billion dollar product in our view and that's significant growth for boston just off the product alone. the stock has done well. we still think there's a lot of opportunity there, though. >> we want to talk about zoe owetis people love the pet story and do you think it has the best business model in pharma we have many people warning us about the consumer slowdown later in the year. >> don't you think zoeta is more exposed to livestock than traditional pets would they not feel some kind of tradedown? >> it's tilly the opposite the latest is more levered from

the companion room and the health care happened stree, generally speaking at the year, is not the concern zeotis is a spin-off from bouncer and it's an animal health business that is more stable it's got -- it doesn't have a risk of patent, so to speak and reimbursement risk from the government and what we really like about it is you have two products paying for oftio arthritis and that would be for felines and canines. this has been in the news and the discussion around is the impact of certain pets and we've spent a lot of time on this and we think it is very much relateded to other issues with pets and it's not a big enough issue in the grand scheme of what pharmaceutical companies

have, deal web the 1d effects of products that it's an issue that will be raised at a higher level. we think it sold off on that and it's a huge opportunity for zoetis >> aaron, thanks for your time we appreciate it >> aaron dunn for morgan stanley. that's one way to look for opportunities in the market, but what about a stagflation scenario if that's coming up we'll look at the risks for longer for longer beneficiaries and howio can hedge against a potential downturn apple with open ai that would put chatgpt and other features on the iphone. the spring event is under way right now. after the break we'll bring you all of the headlineses so far and any further potential implications of a potential deal with apple i assume this is some sort of sitcom anyway, as we head to break. here's a look at the dow falling sharply and it's a race to a 134-point gain to turn down by

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♪ welcome back we bring you breaking news from open ai's live event you saw a shot moments ago steve kovac has the story and details. >> hi, kelly a couple of headlines out of this event and the new version

of chatgpt-4 it will be called gpt-40 and that stands for the omni model that will take end data and not just text like chatgpt and this model is capable of processing images and voice you can have a conversation with it they're showing a demo just a few minutes ago where you can interrupt chatgpt if it's giving an answer you don't like or you want to go off on a tafrmgent or something like that and much more conversational and the ability to talk gpt like before and minor things there will be a desktop app for the first time and they showed a mac version and i imagine it will be on windows, as well and they redesigned the app, as well so it's a sleeker look right now no sam altman appearing at this event and it is being led by ctomorati and they're giving demos of what it's capable of.

on top of that they said 100 million users of chatgpt and that's a big number there and also this new model is going to have an api come means developers can make use of it and make their own apps using this new model and to have that more natural conversation as part of their own third-party apps, kelly. >> i don't know why i chuckle to look at the way they're doing the event. it feels different it's more casual and like the apple ad from last week and the whole vibe that's why i joked it felt like some kind of show we were watching a bunch of friends sitting on the couch and chit-chatting. >> i'm almost positive that's open ai headquarters in san francisco in the mission neighborhood at least that's the way it looked like to me. i've been inside there before. i believe there's no press in there, it sounds like it's full of open ai employees and i'm not sure if they invited press or

analysts and i want to impress what google will do tomorrow at io or the much more flashier apple, apple events and it's ai getting ahead of technologies and it's the new model, gpt-40 and this is front running that. >> they were the first to kick off the first category to put it in the public's hands. are they still leading the way for technology >> you have fill apth roppic and whatever apple is going to do and it's dramatically interesting that we're having this event today ahead of the developer's conferences with google and ahead of microsoft and apple next month those three giants have had to re-orient their entire businesses, kelly around around fishl intelligence because of what this one start-up has done and it's interesting to watch them to go first ahead of the developer conference season where we'll see three giants unleash the latest on ai

>> steve, we appreciate it steve kovac. speak of chatgpt, an cell nearing a deal with open ai to put chatgpt on the iphone and impressive in a down market. for more let's bring in rosen blast's senior managing, and ever core isi. barton, what would you like apple to do with chatgpt should it be pursuing something that's rumored >> we've done survey work earlier this year which suggests that a third of consumers think their next pc purchase will be influenced a lot or a great deal by ai capabilities about a quarter for smartphones and in that survey work we found a 10 percentage point between the android universe of smartphone users and ios so apple seems to be behind the

game gamewise in consumer perception in this developing ai environment. so we'd love to see them come out with features to narrow the brand gap and they'll have to do that by working with others and they'll have to do the level of development work that's state of the art at this point. so open ai could be a great opportunity for them and certainly, it's not google and it's not android and it would present balance in the smartphone and it would also make sense because microsoft doesn't have a natural smartphone partner so ai, open ai if they were to pair up more closely with apple that could be powerful. >> and it's like intel all over again. >> what are you thinking in terms of the potential here? >> yeah. listen, i think apple is behind by design versus anything else ai is not the existential threat to apple's ecosystem as it might be in other companies that are way more aggressive on this and it is ways to entice to make the

ecosystem more sticky and it's not. >> and i think where open ai and gemini and the done deal and who they're going to go with right now and where they'll end up is with the larger models and more intensive parameters and i purchasing it will either be gemini or open ai, and i think if i'm apple, this this which one is the most financial for them but a chat bot who do they use and those are different partner with, and including ai on the, and the more intensive workloads. barton, do you think this is all about maybing siri best in chase or is it going to run much deeper and in some ways be more invisible, as well >> we'll have to see

i think that what they need to do, you know, and i would disagree a little bit. ai is crucially important for apple right now because it is an opportunity to inject excitement into their device's ecosystem again, right apple's stock is interesting when they're doing disruptive innovation and they haven't delivered that for a number of years and they've taken some swings with cars that aren't really delivering that today, but this could if they get it right and is that a better searies? certainly it would be great to see siri matching the capabilities out let and if they can make it greater than the state of the art that would be a real kind of coup, difficult to seek even if they don't own the technology they're working through partners and the jury is really out here, but it's crucial for them to do something interesting. >> bart beon, you have a neutrao the stock. what do you think about the open

ai announcements to what end >> the fact they used a macbook to demonstrate the desktop options i thought it was an interesting option versus not use anything brand >> the ai, announcement, and on june tenth i do think they'll get a better update from apple and how they're going to do it so far, the -- other than the fact that they've used the desktop from an apple perspective. >> gentlemens for now, thank you. we appreciate it, barton crocket. meantime in open ai's event they're one day ahead of google's headline developer's conference and google io where it's expected to have its latest advancements in ai deirdre bosa, will this put more pressure on google >> it does, and there will certainly be more of a crowd in

mountain view tomorrow i'll be there as well. what we're seeing from open ai raises the stakes for io and one of google's advantages is distribution and 90% of the market and a billion-plus users and it's been relatively slow to roll out its ai and it has users to sign up for it and it has the search generative experience or sge that we talked about, kelly and the search and chatbot that has been in beta mode. the big question on jen at or do they work together, and i've been opening, and how it's making more advanced, models and mull mode, and you doan need a

aft is not stock talkinging and it can respond with a motion there was this interesting demo where one of the execs said tell me a bedtime story and the assistant started talking and said say it with more drama and the assistant was able to do so. you saw the assistant, i'll call her a her, i guess, and walked him through a math equation and stun by step and was looking at what he was writing and responding to it we are clearly going into a new stage here and you know, there's been speculation as well that google tomorrow could talk about more of an ai assistant. so it does look like we're moving into this mode of not talking to a model, but having conversations with models. >> it feels like magic it does. it feels, sure, a little spooky and a lot exiting in many ways and it is now over and it wasn't super long, but perhaps it's

showing all it has to show right now. >> he said that there were two modes and one is an extension of yourself and the user where it can answer emails automatically. it doesn't have to talk to you the other example he used is the ai assistant that's more like a senior executive to a ceo. it can push back it can reason and do things under your super vigdz, but from what we just saw from open ae, you can see how it isn't perfect and it was pretty amazing. >> my response rates would go way up if it was doing just -- soften that tone a little bit and make that one -- you know? the possibilities are endless. deirdre for now, appreciate it google's event is tomorrow they're still holding high above 7% and we'll get the housing trade 3on bays and a bail

we're back after this, don't go anywhere

♪ ♪

♪ ♪ welcome back to "the exchange," everybody i'm tyler mathisen with your cnbc news update the donald trump hush money trial is set to return from a lunch break at 2:00 p.m. eastern time and minutes before the court was set to break michael cohen testified that he was the one who suggested to add the clause to fine daniels a million dollars every time she spoke about her story saying it was meant to ensure she didn't speak. crews in baltimore today will use controlled explosions to remove the key bridge it was originally scheduled for yesterday and postponed because of bad weather u.s. army engineers have been preparing for weeks to remove the section of the bridge that

came down on the dolly when it collided with the shep the defending super bowl champion kansas city chiefs will start their quest for the third consecutive title when they kick off the 2024 season hosting the baltimore ravens and it will be the afc championship and the nfl made the announcement today and the rest of the schedule will be released on wednesday. kelly, back to you i think i went into labor during that game. >> i think you did, actually >> i skipped that one. tyler mathisen coming up, tighter lending standards tend to be a leading indicator of the recession and this time around it could be different. the deiltas and how to position for a stagflation scenario we'll dive into that next. with a plan that's right for your team. let our expertise round out yours.

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welcome back new research showing that over the past 30 years every recession has been predated by a tightening of lending standards, but this could this time be shaping up differently leslie picker joins me now i love this one, leslie. we need to do a very deep dive what's going on here >> kelly, you and me both. as you know, the usual playbook is that the fed raises rates, banks pull back on lending and demand for landing plummets and yes, there is a recession that

follows, but so far that hasn't been the case in the recent tightening cycle jefferies conducted an index that measures the% percentage f banks lending titles with the opinion survey or slews. the research shows that over the last three decades every recession has coincided with the index rising above 30 and the scale is inverted in the chart you see on your screen there, but you see the correlation during the pandemic and the financial crisis and the dotcom bust, but even though the slews-based index surpassed the end of 2022, gdp has been relatively stable so why is this time different jefferies notes this will be the subject of a whole host of future future diser is theations and it

may be muting the impact of higher rates and traditional bank his been tightening their standard averting a soft landing and the resumption of loan demand are helping fuel a huge reversal in the spider bank etf, a 47% over the last year compared with the declines of nearly 30% over the year prior, kell so it just goes to show you that the prospect of a soft landing really helps serve as a nice tailwind for bank stocks, as well. >> a great trade for those that are kontcontrarily minded and although it's been much longer than usual leslie, thanks we appreciate it leslie picker. while we are able to avoid a hard landing our next guest says the biggest problem could be stagflation. if that prlays out, joining me

next is maxwell. good to see you. let's lay this out for a moment and we've gone from the hard landing worry of last year to the hard landing consensus of the first quarter to maybe sta stagflation or inflation for longer now where does that leave the markets? >> thanks for having me on again, kelly yeah it's important to talk about the setup in terms of how we got here, right? we started the year with the fed pivot fully priced and then to higher for longer which the market and the equity markets have now seemingly digested and stagflation risks are seemingly creeping back up with some of the recent macro data in terms of gdp and pci data and we uponed to get a sense on our side and which sectors are mispriced for that risk even though it's not the economist base case. no one wants to say the "r" word when we talk to investors and where the model is suggesting is

the strong guess defensive versus a cyclical, and it is the only ones that would outperform in stagflation >> yeah. the reason we think is because gold miners relative to traditional miners, we think that's an interesting relative value pair and geared to economic cyclicality and it's a gold alpha trait, so to speak and you're really seeing this play out, and the earnings story is given the rally, the goal and the actual commodity has had and gold miners are seeing earnings momentum and seeing the multiple to the traditionals. >> we have been talking about how banks would trade over the last year anr long put candidates which you are with consumer discretionary why are materials in that basket >> yeah. look, as i said before it's very 2022-esque and it's a top down

and it's very defensive over cyclicals 37 for example, on utilities -- >> i have the elect ri if i kagsz companies and the ai narrative, but we think these bond proxy defensives can work well in an environment where rate cuts can done to get priced back in or each worse if stagflation risks will start to get into the narrative as we've been suggesting. >> do you think the market overall can continue to do okay? >> look, you know, what we said at the start of this year is tech and ai and growth stocks in general remain at the helm, the s&p 500 index remains a very high-quality index in terms of balance sheet and profitability. so the real story this year is the bifurcation you've seen in earnings momentum of tech and ai versus everything else, cyclicals and defensives

>> i think what you're starting to see is the broadening out as i mentioned before a lot of you are starting to benefit and you're starting to see momentum unless you get's i real inflation. >> you sound like dan suzuki and you're coming to his conclusion with this, very interesting. very quickly before we go. what you make of the vix these days where do you think that goes next >> yeah. that's a good question and we've been tracking it closely over the last month and equity traced very nicely and we basically said this is only warranted if realized volatility can keep pace that was trading eight points under at the time. since then volatility has totally eroded post fomc and as a geopolitical concerns have waned in terms of equity

markets. vix should trade as a premium and realize it's been sneakily on the rise and we think the volatility risk is due for a moderate rise this week in the short term >> very interesting. i'll let meme take conclusions what they may. maxwell, we appreciate it. maxwell with ubs coming up, don't look now, but gamestop shares are soaring and the move happens to coincide with an uptick in the short interest in the stock and there was and we'll take a look at that and the other names next. don't go anywhere.

>> welcome back to "the exchange." the dow has given up its gain to turn lower s&p 5219, it's down three while the nasdaq is hanging on to a quarter percentin and increase here 4.475 ahead of cpi. check out shares of gamestop

surging 60+ percent up 110% at session highs today after keith gill, aka, roaring kitty posted online for the first time in three years. gil showed a gamer taking the game seriously and this was enough to bring out the meme masses with the likes of amc, plug power, chewy and hertz all seeing big gains today if you wonder what they have in common, the roaring kitty's gamestop shares now clocking in at 24% of the float and a whopping 17.4 days to cover as you can see right over there, but its plug power with the highest short interest at nearly 31% as you can see here. one reason why all of these stocks have started spiking in the session today. conclude from that what you will coming up, shares of this housing adjacent company are up more than 13% so far today and our technician says they've broken a key level the name and the two others apparently flashing buy signals.

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exchange." homebuyers are under pressure with steadily over 7%. a report from adams has one and 37 homeowners now have mortgages that are seriously underwater. that number is up from the prior quarter but still below the pre-pandemic average. we are taking a look at the opportunities in the housing trade and one name to avoid in that sector, joining me now is the head of technical analysis. it's good to see you again, welcome. let's start with home depot, they were reporting. the shares have largely been moving sideways. j.p. morgan is warning that this wet spring and headwinds in the pro segment could her earnings but are you? >> i am. i think there is enough here. granted, it has not been relatively strong either but with that said, it is set up tactically attractive with a very minimal downside risk. i think it came out of an important base last year,

coming back testing the breakout level. that was former resistance becoming support. there was a gap in the price from a couple weeks ago. i think that that is the key level as long as. above that level, it is a buy and i think it moves higher. >> we will keep our eyes on home depot. i see so many people working on their homes and that kind of thing. that was the mystery chart. those shares were an all-time high on friday. management said those remain strong. you think this one is a breakout? >> i think the common theme is that we are constructive in market conditions. that is going to include housing, housing related ideas, and carriers, what we would call hits the trifecta at the firm. it is a fresh breakout in the price. it ran out. it has been

consolidating there, finally got there in recent weeks. that is a sign of new demand coming into the stock. you will see accelerated that point. you want to stick with by more on pullbacks. >> that is so interesting, i love little windows like this. everyone is warning about a consumer slowdown in the market momentum and that you have such positivity on a name like this. can those two things both exist at the same time? i guess it depends on what framing your rhetorical market conditions. i think it's more constructive than that. not too hot, not too cold backdrop. i think that intermarket stability can be record prices. >> the homebuilder, those shares have nearly doubled since 2021 a potential catalyst for the stock.

>> recovered at the firm so it's high and our radar with an outperformed rating. homebuilders, generally speaking, they work. they have established leadership, they went up a lot, that does not mean that they should continue to work. generally speaking, once this cycle's leadership is established, they continue to the balance of the cycle. we think this is the second year has room to run. here is a stock that is already out to new highs. i see that as an indication of relative strength. once those market conditions start to improve again, i think this stock will take off to the upside. >> that is so interesting. going back to what it might say like you've insisted multiple times but also, housing might think okay, to rotate into what you heard earlier, defensive, maybe not cyclical but inflation hedge. although, real estate is that. you think housing can continue

to hang with the market, if not beat it for the next couple of years? >> i think in terms of these bull market cycles. 70% of the make it to their two year anniversary. our indicators are not denying that road map. the next six months the balance of the year, i think that works. with that said, sprinkle in some of those newer momentum ideas that are starting to come, some financial stocks, capital markets. about building diversity about around the momentum factor. >> our next guest was cautious around financials. is that an area that you think is attractive right now? >> probably one of the top industries for us. if you screen out the great financial crisis, you have some really constructive looking charts that are breaking out for big, important levels. in our momentum work and across capitalizations and i think is one of our higher compelling ideas. >> is that related to -- the incredible strength of the markets. the kinds of debt that can be raised. was talked about the i turn of

the market to the extent and. >> the charter telling the story. what's notable for us as it's not just one or two of these charts that are doing this but when you go through that group and you see the broker doing that, asset managers, private security exchanges and really covering that entire complex, those of the charts telling the story and you have these indexes moving above levels from the great financial crisi . you really have the set up for structural, long-term outperformance. >> finally, where would that leave you? i know we have to get your bill but on the tech and momentum area, let me talk about some of the trades. would you fade that whole thing or is that fines run with? >> i would stay away from low- volume bond proxies. i think it would be offensive or defense. that includes tax. those are the three sectors that ranked highest for us. i think that we are in a

steadily placed secular bull market to be driven by those growth companies. i think the steadiness of the nasdaq is underappreciated with long-term change levels. we are close to what we saw in the late 1990s. the setup is for catchup rather than shut catch down. >> i got so carried away i forgot about your bill. there is one stop but the shares have been on a steady decline since 2021. we know the competitive problems. >> we took an easy one. it's been an established downtrend. i always say this. if it looks like this, what does it look like during the down? the stocks collapsed. continues to respect that average. there has been rallies when the market typically strengthens but those have lacked strength on each one. >> down the whirlpool it goes.

thank you so much for your > th iwe appreciate it. >>ats it for "the exchange." i will see you next on "power i will see you next on "power lunch. and that person... is impossible to replace. you need c" m. em needs benefits. work with principal so we can help you help clem with a retirement and benefits plan that's right for him. i'm short but i'm... i'm confident. you know? let our expertise round out yours.

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welcome to "power lunch." alongside heavy out kelly evans, big day on "power lunch." the dow has been update sessions in a row last week. best week of the year, belie