because ad dollars following that engagement in games and content made about the games. >> julia, thank you. kelly? >> thank you for watching "power lunch. see you on tuesday "closing bell" starts now. happy friday welcome to "closing bell." i'm sara eisen the market lower today and the nasdaq is bouncing back. just on the flat line right now. major averages on paces for the losses for the week. >> good afternoon. i'm wilfred frost. a mixed picture on earnings as big bank results get under way retail sales missing ers mates falling 4.9% in september versus a drop of 0.1% energy surge continue just the sector leading today this week, as well and the

month. up 15% in 2022 ahead on today' show, talking to wells fargo cfo about the earnings report as the name is boosted and others pull back. fundstrat tom lee will join us on the volatility and whether he sticks by the prediction for nasdaq to hit 5,000 in january watching this final hour, mike santoli tracking the market action wilfred with the bank earnings and i'll talk about the hawkish fed commentary moving markets. mike, what are you watching? >> it is pretty unsteady i would say. low con vviction. the selling never got out of hand a few levels is monday low from this week is about 1% below where the s&p is trading right now. absolutely developing, solidifying this idea that the market gone back into that kind

of a range another level is like down in the 4500 area. that's the low from december a lot of folks don't want to see the market trade lower than the december low in the new year holding together we had some slippage in this rotation you mentioned financials not holding up the end of the bargain today. in the range of a normal digestion period and not necessarily giving people tremendous amount of hope in the short term here is consumer discretionary definitely contributing this idea of a soft patch in terms of spending look back do where it peaked out basically in the spring. and that's the case with a lot of cyclical areas. just taking off consumer staples. tobacco, beverages doing well

and supermarkets wh if what we have been mostly going through is a valuation adjustment and compression maybe taking care of the overshoot, shooting above 30 times future earnings it is in the high 20s 27-ish before the pandemic it didn't get much above 20. that gives you an idea what's going on banks arguably are kind of at a ceiling that they have been at industrials somewhere in between. that's the pinch that the overall market is in is the two groups maybe levels hard to make fast headway. >> probably come back and chat about the banks in a moment. both jpmorgan and citi lower jpmorgan the loser down 6% underwhelmed when outlining the higher rates to deliver for them

on the year ahead. down to two key factors. the forecast at 50 billion for the year ahead more importantly the forecasting of increase of expenses to $7 billion surprising the investor just here's jamie dimon. >> global competition is nonbank competition. there's fintech competition. paypal competition it is a lot of competition we intend to win and sometimes you got to spend a few bucks we want to be competitive in pay. there's compensation for top bankers and managers that did an extraordinary job and we will be competitive in pay if that squeezes margins so be it. >> citi gave numerous strategic

updates including new reporting structure, details on the southeast asia sale and planned mexico sale. frazier confirmed there will be no further die vest churs. >> the vision is to be pre-eminent bank we'll be a leader in -- global leader in wealth >> their stock down about 1% following decent numbers her own word decent numbers without any major issues like jpmorgan year to date up about 10 pshs. wells fargo surged today up about 3.4% now and 20% year to date comfortably the best performer expenses better than expected unlike jpmorgan but also an

improvement in the net interest margin in light of raising rights showing ongoing improvement in the remedial work and decent cyclical exposure to an improving rates cycle and the cfo will join us shortly mike, really interesting to see now almost 10% share price differentials. almost 10% share price differential between wells fargo and jpmorgan relative outperformance over the last few years and that expenses point perhaps grabbing the most headlines. >> i agree the market uncomfort able it seems like they have a little more ease to rebuild toward kind of a more winning structure so i

think that explains a lot of back and forth that we have seen jamie dimon talking about jane street and citadel that's high frequency trading hype businesses so clearly they're not going to give an inch and spending to do it. >> on netflix which is popping, julia boorstin has it for us. >> shares are moving higher news on raising the subscription service depending on the plan. the standard plan that's the most popular plan now kortss $14 $15.49 and the premium plan is going from $18 to $20 a month. so interesting to see netflix shares up more than 2% and says that the company feels like it has pricing power here in the

u.s., believes that people won't drop the subscription raising the prices and additional higher price will help them pay for the content producing both in the u.s. and around the world and netflix reports the earnings next week. >> everybody else is raising prices in an inflationary environment netflix, plenty of demand. no way to grandfather in the current package? this is across the board >> this is across the board. just looking at if announcement they roll it out slowly and will give you time to cancel if you want to but it does seem like that they believe that people are going to hold on to the subscriptions. current members receive an email notification and will happen over the next couple of markts. >> market likes it je julia, thank you. the week is dominated by fed officials. a notable shift in tone.

using the tools to shrink the balance sheet as they see as a worsening danger for the economy. listen. >> the economy no longer needs or wants the very highly accommodative policies in place to deal with the pandemic and the aftermath so that's what that's really about. we are really just moving over the course of this year to a policy that is closer the normal but it is a long road. >> inflation is too high and working people are concerned about how far their paychecks will go. our monetary policy is focused on getting inflation back down to 2 pshs while sustaining a recovery that includes everyone. this is the most important task. >> on this show philly fed president yesterday talking about the number of rate increases we could see. >> i think we need to take action i think it is appropriate this

year three is penciled in. >> he did say he favors a slower approach on the balance sheet and the fed should wait before whittling it down. that's a key discussion point and investors paying close attention. it removing the easy money all this hawkish fed speak did send stocks for a while, bond yields have mostly fallen. the dollar weakened. it signals that the market is already priced a lot of this in. wasn't necessarily surprised or that the market is guessing they don't go through with it like kyle bass told us because the reaction is too volatile across the markets. that they'll have to pause guys, there will be some new fed voters likely coming soon on the fed. for this tricky task president biden today nominated sarah bloom raskin, frequent

"closing bell" guest for the top slot lisa cook, the first black woman on the fed's boeshd. philip jennifer sob, both cook and jefferson academic economists they have to get a senate approval no one expects anything huge for the pushback but this is the key how much the market can digest turning hawkish and vigilant on inflation on a day like today seeing signs of weakening economy. consumer confidence. home sales all misses. >> yeah. they're going to talk as aggressively as they can get away with talking i think. it makes sense to see if they can kind of set expectations at those levels 2-year note up to .95% priced this in a lot already i guess you could argue from back when we were talking two hikes this year or three or now

and maybe more gone sideways to up a little bit and credit spreads are okay so i think they try to see what they can do in terms of setting everybody's sights on the higher rates without having to go through with it. they test the ability to withstand this >> mike, thank you crazy day for rates. 1.77 on the 10-year. financials, the worst performing sector at the moment. we'll be joined by mike santomassimo of wells fargo. u you are watching "closing bell" on c nbsz. cnbc

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we are seeing loan growth for the first time, seeing in a while. seeing good momentum in our wealth business and then executing on efficiency initiatives. continuing to support communities so we have a lot of work to do but hopefully people see the progress we make. >> let's run through the individual points loan growth. how sustainable is it? >> we see it across the board in all businesses if you take the commercial bank as an example part is driven by the new business and clients starting to use the lines more and seasonality that's in there, as well. people starts to build inventory. seeing some good growth there. on the consumer side we see it

in our mortgage space, personal lending. on the commercial side in the corporate investment side we execute well there and sectors so it is a little bit of a lot of areas across the boird which is good to see. >> do you think credit losses can remain this low throughout the year >> it's been much lower than we expected and it will start to normalize. the question is when at this point it doesn't seem like there's any clear catalyst to start to see that change substantially but we'll start to get back to more normal levels and hard to tell how fast or when. >> i'm curious for the read on housing and what's going to happen to this amazing recovery in two years as mortgage rates rise. >> yeah. the good news is there's -- the housing starts have really

started to pick up you are seeing more construction in single and multifamily homes in the end of the year and good news for the market but the mortgage market is -- if you look at the industry data it says down 20% to 35% as rates start to rise and should still see a strong purchase market and will impact everybody in the mortgage business i think you will start to see some of those declines in mortgage come through. >> mike, i know you have been focused on your numbers and i'm sure you saw the headlines that jpmorgan surprised with an increase in their expenses in their investment and you beat expectations on that level and a reason for the share price differential investors take that as a positive today is there any part of you that worries to the long term to get

left behind by not investing to the same scale >> no. look we start from a different place right now and we continue to have a lot of efficiency opportunities across the place and that save us money and opportunity to make the experience better for kcustomer and we add people so we are making the investments to make to stay competitive to peers. >> what about pay? increasing the pay and i'm sure the banks are and so many different industries are right now. can you talk about how competitive that's been in this labor market >> certainly is competitive out there and we are seeing some wage inflation above the normal levels expecting to see year to year particularly in the branch business and the operations in

contact centers and made changes. charlie highlighted a little bit on the call today to bring the minimum pay to $18 to $22 an hour across the country and having an impact and seeing that really matter for employees and the ability to approve folks and feel good to get people to come to wells fargo we are hiring across the board in the front line employees as we continue to get more efficient across the rest of the place and got to stay competitive and feel like we can compete. >> the forecast assume that the asset cap stays in place for the year do you expect this time next year doing the january earnings interview the same will apply? >> look. we are really just focused to get the work done and up to the fed when the asset cap is lifted

and will continue to operate as if it's in place and execute on the work to get done and leave that up to them to decide when it's lifted. >> three more biden nominations of course to the fed announced in the last couple days. do you think it's harder to get it lifted but doing more work? >> no. the focus is getting the work done to deliver on the environment. we think we need to have as well as the fed has we look forward to working with whoever gets con firmed at the fed and important to have the positions felted for the system and look forward to working with them on it when they do get confirmed. >> thank you great performance up 3.4% and up 20% year to date good to see you. >> thanks. take a look at market. dow's down 250 points right now.

middle of the range today. nasdaq firmly positive up a third of 1%. s&p 500 flat energy, technology, xhuns services and staples higher. everybody else down. toni saccanaghi weighs in on the note to apple and looking at mac sales pulled forward in the pandemic and if there's payback to come. check out the top searched tickers on cnbc. we are seeing a sharp rise in yields today back from 1.70 yesterday to 1.78. jpmorgan down 6.3% big loss tesla, wells fargo higher and citigroup 1% we'll be right back.

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tweeting today that tesla merchandise is buyable with dogecoin almost 6,000 in the last 12 months it has gone live on the site you can buy a giga texas belt buckle for 835 doge. about $156 >> shame our birthday is so far away i accept a gift all through the year. >> you'll take it this year in dogecoin. >> we share our birthday. >> the gift. i mean you'd have to pay for it in doge for me little things get it moving. up sharply as i dyou pointed ou. let's talk to someone that likes bitcoin and nasdaq rallying intraday. let's bring in tom lee from funstrat my apologies

we have this misorganized. we have someone equally brilliant joining us toni saccionaghi my apologies for that. let's talk about tech stocks nasdaq's bouncing today but down sharply year to date what extent is there a shift in big cap tech is valued. >> thank you for having me on and no workries why it is important to set context hire and what happened to the broader technology market particularly over five years. tech stocks, the nasdaq up almost 3x. some of that has been better earnings growth and most of it is the tech stocks are more expensive so entering this year

the average tech stock trading over 30 times forward earnings the market at 21 times forward eschings and nearly 50% premium is highest we have seen the bubble collapsed in 2004 we have had this build against the context of very low interest rates where the market did exceptionally well and expensive stocks have done better against that backdrop. we entered the year at relatively elevated valuations why the market saying great things will continue and with the worry with interest rates you're seeing the market sort of say, maybe that premium is too high to pay now and particularly for unprofitable or most expensive tech stocks and 30% are unprofitable and more than 30% of tech stocks trading

at more than 10 times sales and i think that's what the market is telling us and important to put the context in play where we started around valuation and earnings slowed or a trigger point whether it's macroeconomic developments or earnings slowing or rising interest rates and really causing people to scrutinize valuations. >> at the same time, you are dealing with the questions of the tech stocks about how much business pulled forward in the pandemic because everything went online and digital and the trends that were in place got accelerated and one of those you were looking at today is apple published a note on this what did you decide? did that business get pulled forward? >> yeah. so one observation is that prior to last year if you looked at apple's operating profit growth

in the previous five years is 4% a year last year the profit grew more than 60% and really striking the see this we have seen this with other companies but apple with the large capitalization is a particular interest and apple benefited from several things. major player in education and con consumer there was a lot of work from home and school from home and the ipad and mac businesses exploded and iphone had a great year and pricing is very firm across the market. margins were great i think that's a question of many investors in many cases for consumer oriented companies, whether that level of success can be repeated going forward so

that i think is an important question in the marketplace. >> toni, thank you so much for joining us we appreciate it. >> have a great weekend. >> you set the bar high for tom lee who is joining us but later in the show. coming up in the next hour plus talking more about netflix. raising prices when we're joined by michael packter. bond yields firmly higher today. we'll be right back.

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we have gained a little steam? s&p 500 flat time for a news update with rahel solomon. >> here's what's happening at this hour. starting next wednesday the biden administration says that it will begin distributing at-home covid tests to american and available to order with a limit of four per household. the white house says that tests ship within 7 to 12 days of ordering. russia is limiting restrictions for people. under the new rules people would have to prove they are vaccinated, have recovered from covid and have a medical exemption to enter public spaces. pharma bro martin shkreli is

ordered to pay $65 million the ftc and several states sue ds him alleging monopolistic behavior you are up to date back to you. >> thank you. we have 23 minutes left of the session. only just lower now on the s&p 500. nasdaq up a full half of 1%. so nice improvement since about 2:00 p.m netflix seeing a big pop after announcing to increase prices. a top analyst has a take on the revenue that could add and the four sectors that could see upside surprises this year we'll be right back.

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take a look at netflix higher into the close after announcing this hour price hikes for the u.s. and canadian customers starting today the basic plan up to $8.99 from $8.99 to $9.99 and standard plan from $13.99 to $15.99 let's bring in michael from wedbush securities what does this do to sales estimates for the company or too soon to tell how many people will sign up >> they'll end up probably

making this universal and take vix six months so excusassume a dollar across the region i think it's highly likely that they're going to turn positive free cash flow this year and this is a big move churn will pick up because they became the most expensive service in the u.s i think that while they remain everybody's number one option they're saturated here and the redbox are the customer that hasn't turned on the internet. i think you see people flip in and out. it's going to be a competitive battle to keep customers i think this is a signal they're done growing in the u.s.

>> i also was wondering, hiking prices if people don't cancel is a good thing but i wonder whether the streamers should be switching the ability to just pay monthly so that you can't switch on and anymore and be better served to switch to 12-month plan. >> i think that's an intelligent suggestion and amazon already does that. disney plus is discounting to get you to sign up a year at a time but there's an answer there. i think that because netflix dumps content all at once. it's really easy to watch everything you care about and which you were out and others parse out weekly and took seven weeks to watch "hawkeye" on disney so the monthly billing

doesn't really matter with hbo because they parse out the content. it matters for netflix i agree with you they should try that. >> remind us where it puts netflix relative to the competition and whether we have seen it be a swing factor for consumers. >> hbo is only other one close at $15 amazon prime right now is $10 a month. everybody else about $10 you can do ad supported for cheaper. netflix is most expensive. in fairness they have more content than anybody open question whether it's good. i'm watching a bbc phenomenal on netflix they have good stuff. >> watching "yellowstone." i'm obsessed with it on peacock. thank you. >> thank you hold on, though. can you acknowledge that my

recommendation -- how many years? >> early the rest of america caught up. >> you're welcome. >> and scary. financials lagging and at kc stocks are rallying t that's next in the market zone we'll be right back. right now. and thinkorswim® is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and a passionate trader community sharing strategies right on the platform. because we take trading as seriously as you do. thinkorswim® by td ameritrade

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funstrat lee and the ceo of hp to join us following the company's inclusion on the just 100 list we'll talk about the news today that peloton is getting the boot from the nasdaq 100 and what that could mean for the stock. first we have 11 minutes to go in the trading day and now in the "closing bell" market zoeb cnbc senior markets commentator mike santoli here is break down the trading day and today head of invest. group charlie back welcome. we'll kick it off with the broader market nasdaq outperforming near session highs and all three are on track for weekly losses mike, it is a weird day. nrg is continuing to move high ir technology looks strong. chips having a comeback. banks are down on earnings what's the narrative for the day and the week >> yeah. i think you are seeing less of a

perfectly clean kind of migration from the growth into value as we have seen before a bounce here. yields near the highs. market largely digested the absolute loud drum beat of the fed speak and 3% off the highs in the s&p with a ton more damage handed out below the surface why now a fed blackout period and probably going to be more about earnings ahead and often is kind of offsetting moves based on corporate fundamentals. >> charlie, you have said that you expect inflation 7%. it is not that high, though, is it >> i hope you're kidding projected to be 2% at the beginning of the year. maybe i was considered a wild infla inflationista. inflation much worse than anybody couch expected and

disappointing the fed is behind the curve and finally seeing what the rest of us which is that we have persistent inflation and now inflation expectations we have pricing that netflix is taking price increases because of inflation this can start to spiral and it is too bad that the fed was so long in coming to the party. >> do you think it was a -- we will have a major hard landing now or can they rein things back in >> no. i think the economy is so strong and so much pent-up demand to be able to get through this i think the consumer is in great shape. balance sheets are in great shape. so many people want to buy cars and houses and services and i think we are at the worst point in omicron i think the news from here is going to be better that's going to help a lot and i

think we'll be able to get through this but bondholders will be hurt having rising interest rates on the back of all this inflation. >> wells fargo forming the best today. up 3% while citigroup and jpmorgan trade in the red. we spoke to the cfo and asked him if he's concerned wells fargo could fall behind. >> we start from a different place right now and continue to have a lot of efficiency opportunities across the place that not only save us money but opportunities to make the experience better for customers and investing in technology, people so we are making the investments we think we need to make to be competitive to the peers. >> jpmorgan down 6.3%.

what do you think, charlie, of this sector and what would be your preference within it? jamie dimon highlighted if they don't hit 17% rotc this year they hit 15 or 16 which is well ahead of the rest of the pack. >> my grandfather taught me to look at price to book when you evaluate banks and the rule is buy them at 1 and sell them at 2 and jpmorgan got close to two times book here and may have started at 1.9 times book. it is a great bank it was not an inexpensive stock. some of this is some of that sheen is coming often a little bit today. we have other banks that are more reasonably priced that i think hold up fine the other thing is cost.

jpmorgan is city sen trick and have cost pressures on the labor front on a number of procurement that maybe bank of oklahoma in tulsa won't ask. >> i was going to ask which ones you like seeing a big divergence in terms of performance. wells is up as noted and regionals are doing well despite the loss for jpmorgan. what else do you like? >> banks that do well in a higher interest rate environment. northern trust is a favorite wonderful set of relationships with the forbes 400 and does well in a rising interest rate environment. biggest lendor to the energy industry oil's gone to 80 and will start to use capital and the loan growth will be excellent it is cheaper. trading at an attractive price

>> mike, it is interesting all year we talk about whether the banks run up too much but wells is outperforming today comfortably the best performer and might suggest this is an individual company performance than recent share price performance. >> definitely more than recently you need to go back further to see how wells went from a very persistent premium to a discount and now kind of making up for that i think part of the reason is that the market's concluding that there's probably a little more upside to earnings to impr improving returns and market is interesting in recli mags projects citi year to date fell into that category. >> we are seeing a huge move in the casinos of macau

las vegas sands and wynn top right now. >> for sure. there's gaming companies to run the casino resorts and expire in june tofd the government announced to keep the number of concessions at six the current number of operators with ten years this is not a done deal and calmed concerns. it is an indication the process is moving forward as expected. wynn resorts told me the tone and details provided by the authorities are very encouraging. wynn stock up by 9% there. sands getting a big lift las vegas sands up 14% on the day. mgm a tiny fraction -- >> lost contessa unfortunately

mike, huge moves today some of these licenses wouldn't be renewed and extended? >> yep definitely was definitely an item in the bear case for a while it's one thing it is not the only thing that people have been concerned about. just they're really coming often depressed levels bounced hard after losing a lot from the highs and operated to a secondary degree as reopening plays so i think this is one of those things to take away one of those things weighing on the names and then figure out the rest. >> in terms of casino companies, charlie, what is your take on them >> tofrd is a reopening day. we love madison square garden. indications to get is that they will have a great year what i talked about before with demand

people want to get out and see people again january could be a little slow h here omicron canceled plans i agree with mike. this is not just china but a reopening day. >> we have two minutes left of the session. very nice final two hours of the session. dow down and nasdaq up mike, what are the internals showing? >> bit mixed and improved. if you look at the new york stock exchange breadth like 1 to 2 up to down volume earlier and now positive so light volumes and certainly holding it own in there. seems like there is some january retail money finding its way to the market they say there's been a bit of an afternoon bid from retail all week as we have had these little pullbacks. take a look at energies versus financials they have largely tracked one

another. die verging slightly volatility index had been hovering around 20 remember going into a three-day weekend. usually pressures volatility why anxiety at the close coming out of the market around 19. around where we have been hovering for a few days. >> buying or not being short going into the long weekend. with one minute to go, s&p 500 is positive. there's the dow down 187 that is well off of session lows biggest drag is home depot with jpmorgan declining 6%. goldman sachs, american express at the bottom with it. groups that are works in the s&p energy, technology, communication services and staples. financials at the bottom with real estate.

materials, industrials all weaker looks like a decline for the week for the s&p 500 nasdaq and dow but a gain on the day and nasdaq closing at session highs up 90 or .6% a real rebound seeing strength from microsoft, tesla, facebook, apple and netflix this hour. an announcing to raise prices welcome to "closing bell," everyone i'm wilfred frost with sara eisen and mike santoli, cnbc senior markets commentator coming up tom lee on the trade and seeing buying opportunities amid the volatility. charlie is still with us mike, come to you first in terms of how we look at the week as a whole. it is kind of surprising to see the s&p 500 only down 0.3% for the week it felt more negative than that. >> it was wear and tear why did

have a big opening gap down on monday and fighting the way out of the hole. we are talking about narrow changes. things we know going into this period one is when the market's up 25 plus percent there's usually some payback and in multiple transitions from an ultra easy fed to something less easy stepped down in earnings growth. it makes sense that we'd be seeing these sort of shifting sands under the feet in terms of what's working and not in fact market through it all s&p down 3% from record highs doesn't feel that terribly but not that comfortable for the year. >> energy is performing and the year so far and consumer staples are making new highs

looking at the list of new highs they trade at all-time highs jm smucker at the highest level since 2016 i don't know what that says about the economy. >> yeah. this is tricky because i would say the reopening trade would not be helpful to those kinds of consumer staple names. part of the thesis is that people rediscovered folger's coffee and smuckers. but i have to admit i am a little bit surprised that consumer staples performed so well we would say it's a consumer discretionary economy. they're ready to spend and should be good for discretionary items. >> earnings season kicks off this week as we have seen.

wells fargo up 3% after results this morning let's bring in president with more of a preview for what to expect and which sector do you think stands out for opportunity as far as the set-up relative to earnings >> i think we may get earnings surprises. this is the season for surprises. typically analysts lowball the results we get i think energy is an area. certainly energy companies are spending less on capital spending and at the same time had higher oil and gas prices and create some upside surprises in the fourth quarter results. i think the other area of financials some sell-off on the news. good news is an opportunity for some to take some profits but i think the important point is loan demand is starting to come

back had been weak for a couple of years as businesses especially to refinance on the capital markets. industrials look great especially things like electrical and industrial equipment and the orders numbers are all-time record high and flying i think supply chains are coming back to the u.s. of a and entails capital spending and affecting industrials, technology, too, by the way. i think sell-offs are opportunities to get into the stocks because i think technology is going to be used to continue to bring supply chains back home that's the kind of rounds it out for now. >> sounds like you every pretty tilted cyclically strong industrials, energy, financials. a buyer of the recovery story? >> yes think about it if we get the market currently

discounting four rate hikes this year and up to 1% on the fed funds rate and maybe the bond yield will move to 2, 2.5% these are not killer interest rate just the key is to see inflation peak and come down that would help the markets a lot and give another lift to the stock market broadly and cyclicals specifically. >> how much do you consider sentiment for broadly as opposed to the discount rate and how that should impact valuations? whether we have shifted now to the sector to a new era to take profits rather than chase momentum higher. >> you are seeing investors conclude that being invested long term makes more sense than timing corrections i had some success in timing the tops and then the frustration is telling people when to get back

in and i think generally the case strategists that play corrections to get out and when to get back in and i don't think too many did a good job of that. i would say that the key here is, is there going to be a recession this year? the fed is hawkish will there with b a recession in 2023 i don't think so then we don't have to worry about a bear market. corrections will be buying opportunities rather than something to try to time. >> i think of you and the bond vigilante call and curious how you see the 10-year yield given the talk of hawkish fed policy shrinking the policy sheet shouldn't it be higher >> you and me both are curious

here it is a conundrum is the way i have discussed it. i thought we would get to 2% by the end of last year and got back to 1.5% the bond market around 1.5% over a year it is continuing to do that. it should be a 2% right now based on the inflation new just there's something else going on. maybe we have to wait until march when the fed is done buying the treasuries and other bond securities and maybe when the bond yield goes up some more but not too many people are aware of this. i don't know that anybody's aware other than mystumbling upon it. we had a record inflows into bond funds last year into both mutual funds and it ofs and they did so well that they rotate into the bond market saying it

is not a great yield and i'm overexposed to the stock market and want more in the bond market and i think march will be important to see if we get to 2% as is widely expected and i expect that but i won't panic over it. >> charlie, to pivot back more to the macro i want your take on viacom cbs which is a great start to the year. >> yeah. this was a wild ride last year we have had to monitor every day. some days very cheap at the beginning of the year at 20 and then a meme stock at 90. and then went back to 29 we like it here now. it's trading at about nine times earnings doing very well with paramount plus and will have a big year this year with "top gun" and "mission impossible. political spending is more

important to viacom cbs than people think and we think record spending this year this is a cheap stock with subscription growth. i'm mad they gave away "yellowstone." it is an attractive stock. >> you missed that portion of the show talking about "yellowstone." the final word i guess on this call on the economy and to get into groups like industrials and financials and energy, what about the data what about retail sales today weaker than expected and consumer sentiment industrial production soft do those data points worry you >> not that particularly i don't want the economy to overheat we had an inflation boom and consumers purchased a lot of goods. i think pent-up demand is

satisfied for just about everything than autos and then the industry will find the semiconductors and produce measure car just the inventories at the dealerships will go up. car sales will go up the big story is a tremendous lay bosh shortage out there. companies are scrambling to spend money on capital goods and technologies to increase productivity there's the big story to watch out for. >> great to see you as always. thank you for joining us today. >> thank you. >> charlie, we want your zone in best trade idea right now. >> it is still apache. the wti gone from 70 to 84 earnings haven't budged. they have had great news with renegotiating the contract with egypt on a much more profitable basis and have a discovery in

south america that if it comes in this stock can do extremely well trading at six times earns. it is a very exciting place to be this year. >> i like that chart there up 25% since the last appearance we hold you to it. thank you. >> thank you. we are just getting started here on the second how shall over "closing bell." tom lee on the stocks he thinks are oversoed netflix announcing to be increasing prices but will that 'lcrease subscribers wel discuss late iron "closing bell." we're back in two minutes. ts. with this offer, there's no room for excuses.

welcome back let's bring in tom lee great to see you wanted your take on the market outlook. you said the first half of the year could be treacherous. did we have enough treachery for you to be buying >> it's a great question i just think markets are trying to price in what it looks like

when the fed has to make it first hike and whether we looked at the last four first hikes the average first draw down is a base case to expect the market down 10% from the peak does that first 10% decline have to happen in january you know, i think it is a bit early because, number one, we are starting in january and i think earnings season will be a catalyst and look at the nasdaq. today, today was an ugly open and finished positive why if you have the nasdaq working which is tech and everything of that, roughly half the market and energy has you know is outperforming strongly you have 60% of the market in a bull trend so i don't think you end

up with -- i don't think the 10% correction is happening today. >> i understand you are out of time and have to leave you there. always good to get a take. >> thank you. coming up, david rosenberg on why the retail sales data could be a warning sign for stocks and the economy netflix shares ending the day higher after that news and pairs the gains to the close we'll discuss what it could mean for the company's bottom line. the price hike they announced that moved the stock

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netflix announcing last hour it will raise prices in the u.s. and canada hi, julia. >> netflix spends more on content raising prices in the u.s. and canada. hiking the prices by between $1 and $2 the most popular standard netflix plan is going from $14 to $15.50. basic plan is a dollar more expensive at $10 and premium

goes to $20. netflix saying quote we understand people have more entertainment choices than ever and we're committed to delivering better experience for members and offering a wide variety of quality entertainment options. analyst michael nathanson saying he expected this hike and drive growth in the u.s. and canada where subscription growth is more limited because the market here is more saturated but interesting to learn more next week. >> remind us the difference between the individual packages why i don't know which one i have. >> you probably have the standard package why that's the one right in the middle. the more expensive one from $18 to $20 for people with hd and a lot of streams standard is going up by $1.50

from $14 to $15.49 it is the kind of move and price hike that indicates that netflix really believes it has pricing power why i don't think it's a coi coincidence is after record numbers from very range of content. "squid game. this is netflix showing that it believes that both the series have international appeal. foreign language here. u.s. based like "emily in paris" and doing well and subscribing for the movieings and hopefully getting numbers next week but confidence that people won't cut the netflix cord. >> i saw "emily in paris" was picked up for a few seasons. they have done this before experimented with price hikes and a big deal what have we seen with the churn numbers? >> with every successive price

hikes netflix is better. netflix has an enormous amount of data how and when people cut the subscription and one thing that's crucial about cutting the subscription services because maybe we see more churn in this coming year is if there's a steady drum beat and drip of content, new series people are less likely to quit. if there's a service with a big hit once that hit is over and if people can't find other content to watch that's the risk i suspect that netflix has a lot of data based on the shows and move vis coming to do this increase. >> mike, a few years ago we obsessed about what multiple netflix was on going through its original surge it's not been as strong a

performer. how's the valuation multiple looking? >> it is starting to have a concrete pe multiple based on 2022 estimates 40 times. still not really produszing a whole lot of free cash flow and not run to do that they are redeploying the revenue in new content so the stock has had a struggle. had agreat breakout in last year and given most of it up in the carnage we have had here and it is certainly part of the core bull thesis to be able to incrementally raise prices and applies to a third of subscriber base and not necessarily huge game changer for the revenue path does it lift the pricing umbrella for the rest of the competitors? i think netflix it seems like the core and explore

you probably going to have netflix and then add around the edges. i think that's how people think about it >> really has an underperformed the faangs in the last year or so meta up double digits. julia, thank you. shares of blackrock under pressure after a revenue miss. leslie >> that's right. at the end of the fourth quarter the assets under management surpassed $10 trillion first time ever. new other firm has come close to that figure. passive investments represent a majority of aum. on the earnings call this

morning though the first analyst question around sustainability of the growth in 2022 in the face of higher interest rate just the ceo pointed to the roots as a fixed income manager. despite some of the volatility that many expect the foirm slightly missed on the top line shares traded in the red today down more than 2%. >> thank you. mike, what do you do with blackrock in rising rates? >> it's just a machine across so many asset classes and different channels it is the passive investing in equities and etfs but not dedicated to that. it is an institutional business. fixed income mostly tied to asset value the market determines the asset

base of blackrock. that determines the fee level. not that complicated but strategically pretty well set up for whatever comes in the way of different asset flows and not clear they appreciate the way they did last year you are not seeing the net asset values go up that much. >> if we saw a sea change in the way that people look at markets and think we are back to an active management decade, it doesn't really make a big difference to black rock they can do it all they got the types of offerings. not like it trades purely off being the etf play. >> not purely. they're in different channel just they bought the old merrill lynch and mostly broker sold it is all there. you know

just the market to look at it as a leverage proxy to the markets beh beh behavior the trends helped it it's razor thin fees on the funds not as if they really rake it in on every dollar that comes in. >> thank you up next david rosenberg on why investors should take the profits off the table. hp the top company with treating customers well in the industry the ceo will join us later on "closing bell. things were as sharp as i knew they once were. i heard about prevagen and then i started taking it about two years now. started noticing things a little sharper, a little clearer. i feel like it's kept me on my game. i'm able to remember things.

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welcome back time for a cnbc news update with shepard smith. >> from the news on cnbc, a massive winter storm in the plains set to begin to snow and bring rain and strong winds to much of the eastern u.s. that storm forecast to drop 6 to 12 inches. and then mover up through the

northeast. windchill 0 in new york. minus 10 in boston then as low as minus 40 in some isolated spots tomorrow night. in the southeast that same storm expected to dump rain with the potential for ice storms in some areas. alec baldwin turned over his cell phone to investors in new mexico as part of the probe into the death of the woman there she died when a gun that baldwin was practicing with on set went off. in a statement his lawyer said there are no answers on the phone. alec did nothing wrong. australia has canceled novak djokovic's visa for a second time saying today in the country's best interest to do so djokovic is down under trying to compete after a medical waiver

scheduled to be in court this hour if he loses he'll likely be deported. tonight incredible new video showing the moments when the marshal fire tori through a colorado town two weeks ago. the shefr's deputies raced to evacuate people on "the news." sara, have a great weekend. >> you, too. nice long one. shep smith. stocks ending the day mixed. posting the second straight week of losses. retail sales falling nearly 2% in december from the month before meantime consumer sent miment. joining us by phone is david rosenberg. how do you read the data on the consumer is it the high inflation is it omicron or something else problematic to you

>> you know, if it was just about inflation and everybody's talking about that look at nominal growth is still doing great because companies are raising pricing and the volumes are hanging in the nominal number as you said was negative 1.9. the consensus looking for a flattish number. but ultimately the contours of the business cycle are determined not by nominal figures but by real figures. the real economy and what stood out to me is real retail sales worst reading since april of 2020 and came after a negative .6% in november now i guess you could say that there was a lot of preholiday buying with inventory concerns but we know that the december data didn't contain the pullback in consumer spending that we

know happened in restaurants and air travel and accommodations. that's going to be cascading into january so that's the big concern is that the numbers as bad as they were probably get worse in january and the other kicker is that we don't have fiscal stimulus december number didn't include the fact that the child tax credit extension fell by the wayside. >> december 16 the last one. >> the numbers are troubling. >> the thing is it's hard to merry that with what we hear from jamie dimon of jpmorgan he was talking about how strong the economy is and the consumer. we saw the recent bank of america credit card data and continue to hear anecdotes from companies about how strong the consumer is right now. >> look. i guess my only answer to that is you can believe the rhetoric

and the narrative from ceos with an interest in being economic cheerleaders which they always are or just look at the hard fact just the facts on the ground are that the consumer is down shifting. probably will continue and that's what the data are suggesting negative print on manufacturing right now. >> sorry to interpret but you suggest the bank ceos falsely cheering the economy >> well, i'm not going to go on record saying that >> you kind of just did. >> you don't have to mention jamie dimon. the biggest economic cheerleader is jay powell. there are economic leaders out there that will always sound positive i remember home building ceos at merrill in 2006 talking about

housing no longer a cyclical sector of the economy as the data turning down so i guess that's the point i would be making that maybe jpmorgan is only institution that's seeing rampant growth these are data based on a sample. but the reality is that retail sales plunged. the consensus looking for a weak number and nothing like this and then a down washingward revisioo november and the atlanta reserve cut the estimation for final sales. stripped inventories down to 2% for the fourth quarter. fourth quarter supposed to be a boon 2% real final sales from the atlanta fed. 7% a month ago so what i'm saying is i would say broadly speaking without picking on names is that you do

have to separate narratives and anecdotes from the data portraying right now. >> listen. i think it is fine to say people might well be wrong and that's certainly the case different suggesting they do it even though it's wrong why if they expect things to turn down to warn that interested to get your take in the likelihood that we do see more than four or five rate hikes in the year ahead or whether the fed doesn't actually go through with that because it's spooked by whatever factor that might be out there like a pullback in the stock market. >> look. the stock market isn't the fed's mandate but the economy is there's huge disconnect between the economy and the stock market and been that way for a long period of time my sense is that the fed is

sounding very tough on inflation. president biden i think actually quite wrongfully is being blamed for the inflation. and so, the fed and janet yellen now have to basically sound very tough on inflation you can see the shape of the economy. what do we know with certainty for the year we are not going to get anymore fiscal stimulus and going to get monetary drag. i don't think they will have -- i think what stops the fed is going to be the economy. they boxed themselves into a rate hike in march because of inflation caused by a global supply curve and stuck now because they have been so hawkish past couple of months but the economy will dictate what the fed will do maybe they raise in march to show some flex of muscles.

but i'd be surprised if they actually do mump more than that. the economy is clearly rolling over i don't think there's enough appreciation of how intense the fiscal and monetary stimulus was last year. combined it contributed 5% to gdp growth nobody talks about that. that's a policy vacuum for the coming year. what will compensate for the lack of policy stimulus? you see we have only known through the pandemic how the market and the economy can thrive as we have rampant fiscal and monetary stimulus and they're both in the rear-view mirror and contractionary forces if the fed wants to fight a pandemic indeesed inflation which is what we are we weren't talking about inflation before the pandemic or the delta and yes we have inflation. the only way the fed if it wants to get ahead of this to create

the conditions for a recession guess what the numbers are ratifying that view. >> david urks good to see you. thank you for joining us. >> you, too. the ceo of hp on being named to the just 100 list and how the company is navigating inflationary pressure just peloto peloton shares pulling back. one analyst said it might be a buy the dip opportunity. details later.

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welcome back let's get over to mike for a look at financial conditions mike >> this is what we have been talking about with the fast increasing expectations of the fed to move. this is the implied probabilities in the market of a march rate hike. less than two months away. i think march 16th would be the decision running at 85% likely that a 25-basis point hike comes and around 20% back in november. shows you the market's had to absorb a lot of change in the fed policy likelihood. take a look at the starting point. this is why perhaps the market is able to do okay with this financial conditions the easier the whole complex of liquidity conditions are as the number goes down and never been lower and therefore never been

easier with financial conditions a bear curl upward from again given pe and credit spreads and stock market levels. this is the upbeat case why there's head room for the fed to withdraw some stimulus from the starting point. >> been on easy street for a while. mike, thank you. just capital out with the ranking of top industry leaders. hp in third place. ranks high in the top 100. hp ceo joins us xtne to discuss. "closing bell" back in a moment. , you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq,

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just capital out with the just 100 list this week. it's a ranking of largest u.s. public companies on esg issues that are of importance including the environment, communities and workers. hp among the names making the list ranking 27th overall and 3rd in the tech hardware industry joining us is the ceo. welcome to "closing bell." good to see you. >> thank you for having me here and really thank you for the cnbc and just capital have done in the week. >> we have been having great conversations and happy to

continue them. i wanted to start with you on diversity. you have one of the most diverse boards in the country. why is this such a difficult problem especially for the technology industry? >> we think that diversity is a key priority for us and we think we need to start from the top and have one of the most diverse boards in america and we have continued to hire in the last year and diversity is a criteria that we choose to select them. if we look at the industry i think what is important is every time the look for a new director consider diversity a key criteria to look for because with diverse board we will be able to make better discussions and decisions and get good advice because of the diverse board. >> you have a target of gender parity for management in the

next decade. how do you get there and faster? >> let me acknowledge that this is a journey we have done things to continue to make progress and need to accept that we have a long way to go. and we really need to start by hiring more women, especially engineers. make sure that they see hp and the company as a place where they can continue to develop careers, where they get the right opportunities to get promoted and a big initiative as a company is school of talent centered in making hp a destination place for top talent around the globe seeing the company as a place to grow and develop the careers. >> what about the "e" part of esg? not trying to be annoying here but i wonder giving the passion for esg you hope say in ten

year's time it's a world where we have not using paper for printing and purely digital? >> let me say that as a company we believe that taking action to slow down or to reduce climate change is one of the most important priorities for us as a company and a generation and defined very specific goals on areas. around war don footprint and about reforestation. as you say many people connect printing with paper. and paper with cutting trees and this is why we have selected reforestation as a priority. we are partnering with teams for trees for jane initiative and next years investing to drive reforestation.

>> i think you also use ocean recycled plastics in some printers as come ponents. can this be a sales advantage and not a statement of it actually help you sell printers if you advertise there are ocean plastics in them and they are sustainably made >> we think that more and more customers want to buy products from companies they trust, from companies that represent the values that they have. clearly by using the recyclable material, both in our printers and in our pieces, we think we're doing the right think, but also a competitive advantage we just announced that we have more than 160 of our pcs using recyclable plastic, and we think this helps us to continue to grow in the market thanks so much for joining us,

enrique. good to see you. >> thank you great to see you. you can check the full list of just 100 companies by heading over to cnbc.com/just100 or -- we're doing qr codes for everything now that's great it's been kicked out of nasdaq, hence pelo-gone. within analyst is betting it could bounce back. with my hectic life you'd think retirement would be the last thing on my mind. thankfully, voya provides comprehensive solutions and shows me how to get the most out of my workplace benefits.

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welcome back shares of peloton falling today.

the move come as the fitness provider is set to be dropped from the nasdaq. that takes make loop lowered its price target, while also reiterating the stock is a buy the analyst behind that call was on "power lunch" earlier. >> you have to look at the fundamentals both in terms of valuation, and also what we're seeing in the data, and most recently we calm out with a research note overnight which looked at app store rankings, and it's showing a pivotal point, an upward inflection in terms of user engagement we believe this would be where the narrative shifts to the positive. >> many people made the switch from gyms to at-home fitness,

and the stock down 80% over the last year. mike, it's really interesting. he point that this could be the quarter where the narrative shifts i feel like on the way up these things weren't really responding to any fundamental narrative probably on the way down, they're not either, and price targets, applying multiples to expect expectations. >> i agree, but if you're trying to make the case that if the narrative is something like, you know, customer engagements this idea it was strictly making do at home, because you had to, as opposed to this grand that has legs, i know theaters tempting to solidify the collection it's different to say whether enough is enough

and the market doesn't care where it came from at its peak, but i would say it's not necessarily an outright negative for it to decide, because that's just a market cap threshold thing. it's not frern news. it was only 0.07% of the nasdaq etf before getting ejected. >> how cheap had it gotten >> i wouldn't say it's cheap 2 1/2 to sales that's not daunting, but it's also a hardware company. this isn't a virtual business where it's all about electrons beam around the worldle. >> i want to go back to the banks, i can't wait for bank of america next week.

and of course yield sensitivity, too, which is the key factors today where wells and jpmorgan came out on opposite side. bank of america fell 2% today in sym sympathy, and bank of america could move more than its own stock next week, as people are waiting to see if it's a stock-specific issue or whether it's an outlier. >> in other words, if the competitive intense yet for people and technology spending, and bank of america will say the same thing we often sigh it with banks how the story line kind of swings from week to week, as the big companies do report, the business mix is closer to jpmorgan than to wells fargo,

though it is a good blend. >> the media blackout period for the fed reserve this weekend that will end next week as well. it will be interesting to see what dictates rates, and this whole valuation. >> and if it's just people fixate on the earnings starting, things like that, you know, yields went out at the highs it doesn't seem to be the main drivers of which stocks seemed to lead today, but i guess it's still within its range maybe that's not necessarily changing anybody's mind. >> good point. we haven't broken out of that

180 we saw early i'll be back at 6:00 p.m. for a bonus hour of "fast money. tweet us and tune in to see if we answer your questions. >> i have one. >> submit one. have a great weekend, everybody. "fast money" begins right now. i'm going to tweet once in, too. tonight on fast, why carter worth is inclined to believe, netflix and bills, the streaming giant upping fees, and investors upping the shares, and later on options action, jumping the ark innovation how do you probably yourself as dollars flow out of the cathie wood's ark fund. tonight ace lineup, steve grasso, jeff