>> you lose your job, your business goes out for six weeks because of the pandemic, you need money >> there you go. >> all right thanks, dom. >> and thank you, everybody, for watching "power lunch" today >> we'll see you tomorrow. "closing bell" starts pretty much right now >> and wall street is in rally mode the nasdaq leading the pack, up around 1.75% the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen let's show you where we stand, near the highs of the day, up more than 400 points on the dow, nearly every dow stock is higher at the moment. boeing actually adding theos is leading us higher, up 1.75% all the faang names are higher amazon is actually adding the most to the qqqs microsoft, apple, facebook, tesla, alphabet, nvidia all higher today as well small caps bouncing back to the

tune of 2% check out the s&p 500 sector heat math. shows you the breadth of the rally. everybody is up except for energy consumer discretionary is in the lead along with real estate. those sectors up a nice 2% or more communications services, industrials, just energy coming down after crude oil fades a bit. we have a big interview coming your way this hour we're going to talk with the atlanta federal reserve president, raphael bostic, after the world bank and ifm slashed their global growth forecasts for the year we'll discuss fed policy, inflation outlook, and much more first up, a pivotal day for tech stocks earnings kicking off after the bell it comes as the nasdaq makes a big move higher, up around 2%. and outpacing the dow and s&p, but the index still sharply lagging on the year, down about 13%. compare that to a 6% drop for the s&p. will earnings help the tech space catch up joining us, ali and barton

crockett, covers a lot of the big tech names good afternoon to both of you. hard to know what to make of a day like today if it's just a pause in the bear market, especially for the nasdaq, or a sign that all the bad news is just baked in. what are you telling your clients? >> i don't think that all the bad news is baked in and i don't think there's a lot of rationality between days that's what we're seeing we're seeing a lot of volatility and fickle trading because sentiment is terribly negative you can see that in the lack of committed buyers and support on the individual and institutional side you can see that in the aai numbers which just came out. there's a bull rating of about 16%. that's one of the lowest that you're used to seeing. people are really struggling to have conviction in this market and i tink it has a lot to do with the buzz word stagflation there are two major questions. has inflation peaks? we think it has. in fact in march, and hope that will be shown when we see the

april numbers. and is there growth and earnings which i think they're largely driving the positivity we're seeing today, are going to prove that out i think that once we see this earnings season come through, we have a 10% eps growth rate on the s&p. we're seeing beats we have an ism manufacturing that's 57, which tends to lead to very high levels, 85% of revisions. we're hoping we can see a relief rally come out of this earnings season because expectations both from a street level and from an individual level are just so very low, sara >> well, they're low on netflix, that's for sure, barton. right? the stock basically crashed on the last quarter, and that disappointing guidance it has not recovered in fact, has only moved to lower lows what are the expectations for that stock today >> well, the good news for netflix is expectations are set low. the bad news is that may not be

an inappropriate place to be i think we're going through an evolution in streaming media a time when everyone was signing up for services and netflix owned all of it, to now a time when there's a lot more discretion the consumer is not as eager to sign up for anything that's put in front of them i think we're starting to see separation of winners and lureses. signs of saturation in markets, and it's going to be difficult for netflix to navigate this transition from go go growth to maturity, but that's i think what we're coming into at this point. >> so you're not such a fan, it sounds like, from your tone there and also by the looks of your neutral rating and your $354 price target. who is the winner then >> well, i think streaming overall is looking at a difficult market we're seeing lots of competitors come in, wait, try to spend a lot of money to get people to add that fourth and fifth

subscription, which i think is a tall order yet these guys are putting up great content, making a big push hard to see where the margin comes from in this business until we get a shake-out i think netflix is not purely affected by other streamers but also by the broader environment where people are generationally evolving they're watching more tiktok, you know, viral video, i think generationally, there's a change that netflix needs to navigate from netflix perspective, they're a subscription business that's maturmaturing i wish they would get into something slightly different advertising which they said they don't want to do, but everyone else is doing it that could be the one thing that changes the tone, changes the sentiment, certainly mine if they empraise that >> got it. alli, would you include the big tech, the faang names in your optimism about earnings and do you tell people to buy those stocks because last year, you were

saying to be defensive in this kind of environment, but you did express some optimism around how much is already in the market and what the earnings are going to do. >> i think, and to the point that was just made about netflix and streaming in general, i think this is the time for selectativity. i think to a certain extent, we have had so many years of a beta market where you could buy an index where everything went up, that that's almost baked into people's buying behavior whether you're talking about s selectivity, going for big data, the more defensive, more mature companies that have shown an ability to produce free cash flow, to add to margins in gains in technology and infrastructure development, or simply whether you're saying right now we prefer the u.s. over other areas

of the world i think selectivity is absolutely key because growth in the last year has been very disparate and will be even more so going forward >> so does that mean, so ibm and netflix report very different stocks, different profiles it sounds like you're more in ibm. i know you don't talk specific stocks that one is down 3%. netflix, a growth stock, is down 40% this year. sounds like that's where the market wants to be right now, more slower growing, cash producing. dividend stocks. >> exactly, exactly. look, we had been sort of in and out of very long and very quick economic cycles as a result of the pandemic and the low interest rate cycle. but that's what happens in later cycle. you get more defensive you get more value oriented. when you're talking about a streaming company, for example, as opposed to sort of an icon of the dow and a company that supports infrastructure and growth everywhere, i mean,

streaming is one of those areas where probably years of growth was brought forward during the pandemic and so that has to come home to roost when that happens. >> we'll leave it there, barton, thank you. alli, we appreciate it >> take a look at shares of citizens financial jumping on the back of strong earnings before the bell. we'll talk to the ceo next, and later, don't miss our exclusive interview with raphael bostic on inflation, the economy, and the fed's policy path. we have a rally here, dow up about 430 points you're watching "closing bell" on cnbc.

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check out today's stealth mover, plug power. shares of the alternative energy company surging after a deal to supply walmart with up to 20 tons of hydrogen per day to power the forklifts that the retail giant's u.s. distribute and fulfillment centers. don't miss a an interview with the ceo tonight on "mad money. check otshares of citizen financial, near the top of the s&p 500, after a strong q1 report and pretty upbeat guidance for 2022. joining us now is citizen financial's ceo, bruce great to have you back the quarter looked good. the earnings call sounded good especially in contrast to what we got from some of the bigger players earlier in the week and last week. why the discrepancy?

>> well, i think we put up some really good numbers for the quarter. the balance strheet is well positioned to benefit from rising rates wewe're are starting to see that come through we saw a nice uptick in commercial loan demand that was another positive. while the environment put a crimp in first quarter capital markets fees, the pipelines are still really good. we think that will come back as markets stabilize over the balance of the year. when we look out over the remainder of the year, we basically call that revenues would be about 200 nl higher than what we thought in january. 300 on the net interest income side, given the higher rates, but then a little offset on fees from mortgages and capital markets down about 100 net net plus 200, expenses about the same, and credit costs well behaved and should be really good on the credit front for the balance of the year.

>> just wanted to pick up on what you said about mortgage banking because i know the fee drop was attributed to capital markets, but also mortgage banking, which was a weak spot for a lot of banks what do you expect for that business and for the housing market down the road with the fed getting more aggressive raising rates? >> yeah, i think that the refinance side for originations will clearly be off for the balance of the year with rates being higher i still think the purchase market should be reasonably strong there's good underlying supply/demand dynamics that i think you'll see people wanting to move house and get resituated over the summer move season. so we would expect the purchase market to be reasonably okay part of the question is, there's now excess capacity, which was built up in the industry to handle the re-fi wave, so we need to find some of that capacity come out so margins expand so we'll see how it plays out,

but again, i think there's limited had mortgage come way off the highs in 2020, and i think capital markets will help pick up the slack over the balance of the year. >> think the big overarching question for bank investors, small and large right now, is we finally got the higher rates that they were hoping for, and clearly that's helping your bottom line and you're very rate sensitive so that's all good, except with the fed going so fast now and so big on rates, there are worries about a recession. or a sharper economic slowdown, and ultimately, that hurts your business where do you stand on the outlook and what that will do for the banks? >> yeah, so the fed has a difficult job here they got behind the curve on inflation. and now they realize the seriousness of the situation and need to catch up so it wouldn't surprise me at all if rates go up 50 basis points in the next two meetings.

and then we'll see where it goes from there they still are trying to engineer a soft landing. while corralling inflation and keeping expectations, bringing them back into line with a 2% to 3% level, which is, as i said, going to be challenging. the markets still think they'll have a good shot at delivering the soft landing but i think a bit of worry has crept in as to maybe some time in '23, we could have a brief and shallow recession. we have emphasized today that we really like the way our credit risk profile lays out both on the consumer side and the commercial side. a lot of the companies that made it through covid got leaner on their expenses they went digital, strengthened their business model the ones that had weaker business models already took a hit on those back in the covid era, so the book looks pretty

clean. whatever transpires, whether there's a light recession or not. and on the consumer side, the consumer is in great shape lots of liquidity. they bank rolled a lot of cash during the pandemic. starting to get out and spend again. but don't see any signs of distress at all on the consumer side at this point >> well, very valuable to get your comments on all of that, bruce. thank you for joining us stock rocketing higher today the ceo of citizens financial. by the way, the entire market taking a leg higher. session highs right now, up more than 500 points. 534 on the dow again, boeing the biggest contributor along with actually home depot and goldman sachs up there as well. s&p up 1.7%. coming up, our exclusive interview with raphael bostic following comments made yesterday by his colleague jim bullard who said he wouldn't rule out a 75-basis-point hike and later, shares of lululemon

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up 525 on the dow now. check out the travel stocks, working today. airlines, cruises, hotels, casinos getting a lift and among the biggest winners in the s&p 500. the pop comes as oil prices give up about 5% or so of recent gains and after a federal judge in florida struck down the cdc's mask mandate on planes and public transportation. let's bring in seema modi, and seema, i guess investors think that people will be booking more travel because they don't have to wear masks anymore. what does the data show? >> well, sara, this is something that the travel companies have been fighting for, so it's seen as a big win for the industry, and from speaking to industry experts, anything that eases the level of friction around travel reduces the stress, is a positive for travelers who are still on edge about getting back on the road. plus, the unruly behavior we have seen onboard planes related to masks not a welcome picture

do we see more demand in the coming weeks we'll be watching that bookings data we usually get it around thursday either way, it's providing a new boost to the airline stocks. united air on pace to break a two-day losing streak. marriott on track for its fifth consecutive positive session and the cruise lines which relaxed guidelines around masks a couple weeks ago also trading sharply higher one question we still need an answer to is if we see europe and asia adopt similar mask rulings. back to you. >> seema, thanks >> up next, atlanta fed president raphael bostic reacts to the imf slashing its global growth forecast today and discusses the risk of whether rocession is rising here and abad we'll be right back.

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nice up day, and just about at session highs up 530 on the dow. nasdaq is leading the charge, up about 2% right now but it's been a rough start to the year overall especially for the tech sector nasdaq is down 13% and this comes as the fed plans to increase rates throughout the year joining us now for an exclusive interview is atlanta fed president raphael bostic welcome back nice to see you. >> very good to see you as well. >> so i feel like you might be a little more dovish than some of your colleagues we heard from lately would love to get an update on

your thinking about how many rate hikes we're in for and how big they're going to be over the coming months. >> i think i'm in the same area as my colleagues philosophically in that i think it's important we get to neutral and do it in an expeditious way the real difference in view i think is in terms of our thoughts about how the economy might evolve as we are moving. and where i am is right now i don't think it's easy to know for sure how strong the economy is going to continue to be as we move through the summer and into the fall, as we increase our rates. because there's so much uncertainty, and if you think about a catch word for the pandemic more broadly, it's been uncertainty. there's been all sorts of things we thought we knew were going to happen they haven't played out that way. because of that experience, i'm kind of uncomfortable to declare with that much certainty that i know exactly what's going to happen such that i can tell you

exactly how fast or when we should get exactly to neutral or even if we should go beyond it >> what is neutral what is the significance of neutral? what number is that to you >> yeah, so to me, neutral is somewhere in the 2 to 2.5% range. and i think neutral is really sort of conceptually the place where the economy is standing on its own and our policy isn't pushing or putting the brakes on its trajectory so i think the economy is in a place where it can stand on its own. and if we can get there, that puts us in a much better position to respond if we see overheating persist and/or if inflation doesn't respond to the policies we are putting in place. >> i guess one question is how fast you get there your colleague president bullard is saying he's not ruling out 75-basis point hike. is that something you would consider >> well, i have been saying for months now that any action is actually possible, although it's

not something that's really on my radar right now look, i think what's going to happen is you're going to see a steady march of our policy, assuming the economy evolves the way it has over the last several months, and as we take each step, it will give us an opportunity to observe and adapt our policy based on what we see. even just now, if you look at what's happening to real wages, real personal incomes. real personal incomes have grown at a negative rate they have decreased over the last six or seven months, and real wages are in retreat. if that continues, there is a real case to be made that aggregate demand is going to slow down in ways that lead our policies to accelerate but allows us to not push as hard. but all of that is conjecture. we have to watch and see what happens and evolve as we see the reality. >> i guess you're more worried about an economic slowdown what is your pain threshold when it comes to seeing that kind of

weakness at the same time that we're still seeing high inflation rates? >> well, we do have to get inflation under control. and that's task number one i do think that it is important that we start to see inflation move back down closer to our 2% target i do think, however, that some of that is going to happen by actions and developments that may not be associated with us, if we can get supply chains to resolve, we can start to see people come back into the labor force so that employers are able to increase their supply that can reduce the gap between demand for goods and the supply for goods which is an important contributor to the elevated prices we're seeing today i think there's a lot of stuff that's going to go on and how those other things play out will inform how i think about the appropriate course for policy and that can be stronger or faster than where i am right now. i'm really have us looking at 1.75% by the end of the year,

but it could be slower depending on how the economy evolves and if we do see grater weakening than is in my baseline model >> one source of weakness could be the global growth picture we just got another big downgrade to global growth today from the imf does it feel odd to you to be so aggressively hiking into that kind of environment? >> well, this is one reason why i'm reluctant to really declare i want to go a long way beyond our neutral place, because that may be more hikes than are warranted given sort of the economic environment i was actually watching your reports on the imf reports, and their estimates about how the economy is evolving, and to me, that's just a sign that we definitely need to be cautious as we move forward we definitely need to get away from zero. zero is lower than where we should be right now, but at the same time, we need to just pay attention and one of the things i have tried to tell people as we have gone through the pandemic is that the federal reserve actually is paying attention. we have people out in the field

gathering information, getting on the ground intelligence, and that's intelligence i bring to my colleagues to make sure they're hearing the most current ideas and realities about what's going on my hope is that that intelligence will allow us to avoid getting the economy to a recessionary point because our policies won't push hard when that's not really where it needs to be. >> what are the odds in your view of recession this year or next at this point? >> well, you know, i'm not a gambler so i don't put odds on anything my staff asks me this all the time i have said many times, my goal is to have there not be a recession while i sit in this chair. i'm just going to do all i can to make that be true right now y would say there's a lot of momentum in the economy, even so. our gdp right now forecast for this quarter is around 2%. and for the year, we have the economy growing somewhere close to 3%, which is significantly

above its long run potential there is momentum here and i think that momentum could carry us in a way that will allow us to avoid recessionary outcome. >> you think inflation has peaked at this point >> there are signs, so i'm watching this. and you know, there are some signs out there that suggest that inflation has maybe capped off. but at the same time, i'm hearing from others that there is still some inflationary pressure to come down the road you mentioned the global outlook. i talked to a number of people in the agriculture sector who tell me that the increases in fertilizers and other things are going to push up prices for food and other materials. so we're just going to have to watch and see how this plays out. i will say in the last several months there have been surprises to the downside in terms of pressure on prices, and that's a good thing from my perspective >> and finally, just curious, president bostick, how you're

viewing the balance sheet tool in all of this i know you're planning to start shrinking it potentially as soon as this month. how should the market think about what the size of the balance sheet should be in say three years? should we assume that it's a trillion in qt every year, so it will go down to $6 trillion by then >> that's a very good question and you know, i think being able to say with certainty about what's going to happen three years from now is very difficult. what i will say, though, is we increased the balance sheet in response to a major crisis that turned out to be a global crisis, and we saw market ceasing to function. i think as long as the markets are continuing to function, we should continue to reduce the size of the balance sheet to get it back to a more normalized level. and my hope is that can happen orderly over the next two to three years in which case the scenarioia call out might be appropriate. we have to see how the economy evolves, how markets respond to the removal of liquidity, and

that will really tell us when we have gotten to that sweet spot >> we appreciate the time and the thoughts, as always. >> always great to talk to you >> you, too. raphael bostic, president of the atlanta fed. we'll talk much more about central bank policy when we host the imf's debate on the global economy. thursday, 1:00 p.m. eastern time the imf manager director, ecb president, the finance minister of indonesia, and prime minister of barbados. very good lineup to talk about all things global economy. it's going to be on cnbc and cnbc.com, youtube, twitter, and facebook holding on to the gains into the close, 24 minutes left we have a 530-b point rally on the dow. every sector higher in the s&p except for energy because oil gave back about 5% or more the nasdaq leading, up 2.2%. coming up, there analyst who put y big price target on lululemon, whshe sees strength beyond

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check out some of today's top searched tickers on cnbc.com ten-year yield holding the top spot and a big jump right now. treasury prices down and yields are up 2.94% so continued jump in yields. it's not hurting and holding back the tech stocks today twitter down 4%. a top searched one amid the drama with elon musk trying to take out the company j&j after earnings up 3.3% tesla, another strong day up 2%, and apple up 1.5%. all the faang names are higher today is a test with netflix reporting after the close. lululemon is also a big winner after truest hiked its price

target by more than $100 the analyst behind the call joins us next. plus the numbers you need to watch when ibm and netflix reports after the bell we'll take you inside the market zone next with the dow up more than 550 points.

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how's he still playin'? aspercreme arthritis. full prescription-strength. reduces inflammation. don't touch my piano. kick pain in the aspercreme. we're now in the "closing bell" market zone. lindsey bell here to break down the crucial moments of the trading day, plus meg tirrell on johnson & johnson's big rally, and truist's beth reed on lululemon. stocks are in rally mode for the first time in three days at session highs having a climb into the close joining us is lindsey bell

and lindsey, just talk to raphael bostic, atlanta fed president. what was notable to me is, so all of the fed presidents are ready to raise rates steadily, which he confirmed but he said that the difference in opinion right now at the fed is on what it's going to do to the economy, and he sounded a lot more cautious than some of his peers, for instance, on the uncertainties that are in the economy right now. he cited real wages being negative, said the global growth from the imf taking down forecasts today, is an uncertainty and they're willing to sort of see how the economy and the markets digest the rate hikes. very different from bullard talking about 75 basis point hikes not taking that off the table. how do you think it's all impacting the market >> yeah, i mean, there's clearly two sides to this story. and i think the reality is we're kind of in this wait and see mode, where we're trying to determine which way growth goes. and the fed is going to play a very critical role in making that determination, right?

so it was encouraging to hear that he's saying that they're reiterating that they're going to be data dependent, they're going to follow and wait and see what happens to the growth trajectory from here it also, you know, is probably comforting to some degree to investors that potentially he's taking off that 75 basis point hike at the next meeting but -- >> not on the radar, he said >> right right. but the market is already pricing in several rate hikes this year. we're looking to get to the end of the year with 2% to 2.75% on the fed funds, which according to him is the neutral rate that's a very swift pace to get to that level. and there's going to be market implications there you have already seen a lot of volatility in the market just as participants really try to understand and gauge the speed and the direction of which the fed is going to go, not only with fed funds rate but also with balance sheet reductions. >> which he was interesting on

that, too. sort of didn't say it was on auto pilot, said they would react if the market can't digest all the qt, the tightening and shrinking, they would readjust, which i thought was notable. at the same time, yields keep going higher ten-year yield is at almost 2.95%. today, that's not holding back tech stocks or stocks overall. is that a signal that maybe it's really getting fully priced in to the equity market >> i don't know if it's necessarily a signal i just think today we're in a market where different things are shining. we have a great earnings season so far, and today, the market is focusing on that they're focusing on the vix that's coming down, and of course, oil prices, the fall in oil prices helps the inflationary story and even some of the data we got this morning, the housing starts data, while up, surprisingly to the beating the consensus estimate, you did see that single family housing was down, likely being impacted by the higher mortgage rates. higher interest rates are

flowing into the system. they are impacting demand. and ultimately should impact the inflation trajectory from here so again, wait and see what it means for inflation. >> i know you have been poring over the earnings estimates, and we're getting into the thick of it which sector has the best setup, do you think >> you know, i have got my eye on the consumer discretionary sector not only is that sector significantly beaten up from a price performance perspective going into the earnings season, but expectations have come down quite sharply for that group unlike the other sectors where we have seen estimates remain pretty stable to start to move higher going into the earnings season so i think that the consumer still remains very, very healthy. there's over $2 trillion in excess cash on the sideline that the consumer hasaccess to. while real wages might be lower, they are rising. we saw in the consumer sentiment survey last week that the consumer is very upbeat and

positive about expectations. their tune seems to be changing. they're becoming less worried about inflation and more excited about potential wage growth moving forward and so i think the consumer is in just a very healthy place compared to where they were at the beginning of the covid crisis and i think the market hasn't given the consumer enough credit with their ability to be resilient throughout the remainder of this year >> i guess it's the outlook, what we hear from these companies that will be key on that front lindsey, thank you very much consumer discretionary, by the way, having a great day today. every stock in that sector is higher led by wynn resorts, except for dollar tree j&j, johnson & johnson, one of the best performers in the dow today. the giant beating profit estimates but missing sales expectations and lowering the full year revenue and earnings guidance on the call, the company's cfo warned of headwinds from commodity supply issues, higher labor, energy, and transportation costs

meg tirrell joins us j&j also suspending the covid vaccine sales guidance how is that impacting that stock and the vaccine makers j&j is up nicely today >> yeah, sara, it's been a really interesting story for j&j today. it started off lower oball of the things you mentioned that seem like negatives in the quarter and their commentary on the covid vaccine, saying there's a global surplus right now and uncertainty when it comes to demand, that affected other stocks of vaccine companies. we saw moderna trading off you saw biontech slightly lower, novavax lower. they have largely come back. you're seeing pfizer lower, although that may not necessarily be related there's another story suggesting demand for paxlovid may be weak. maybe that's driving that. in terms of j&j, really seeing the stock come back from that as analysts parse through the information and saw what they call a recovery in medical devices coming back amid concerns about covid slowing the business the consumer business doing pretty well despite the headwinds you talked about

but of course, there's continuing questions about what inflation, what the supply chain impacts are going to look like for the rest of the year, sara >> what generally are you expecting from the health care sector it has been seen as a bit of a port in the storm lately, a defensive place for investors to hide amid concerns about an economic slowdown and rising rates. >> not sure if this is an expectation or more just sort of communicating the hope i'm hearing from people, particularly in the biotech sector, but there's a huge hope, an appetite for seeing some more business development and some more m&a, particularly as you're seeing the biotech sector so beaten down and you're seeing a lot of cash and a lot of need for new products and growth within the bigger pharma companies that have been really well appreciated by the street more recently. that's a real question, are we going to start seeing these companies start to acquire more. will that bring biotech valuations back a bit? >> yeah, it's been brutal. down 16% year to date for ibb. meg, thanks. >> shares of roblox and

electronic arts rallying despite being downgraded by goldman sachs. the firm cutting both stocks to neutral from buy, slashing the price target on roblox to $50 from $108. trimming the target from ea from $185 to $153 this just seems like a catch-up move for analysts. they're basically taking targets down to the prices of where these companies, what else did you glean from the report. >> i read maybe 100 pages of video game research for you today, so let me just boil it down the best i can for you. so what they're basically saying is the comps are going to look really tough for these companies after this pandemic boom they saw just astronomical growth since roblox first ipo'd and ae games with big hits like apex legends which is kind of their answer to fortnite all that growth isgoing to loo tough year over year and they're basically warning of a tough comps over the next 12 months. the long term is what they're

really -- is what's really interesting, the apex legends game we're showing now is coming to mobile soon, and mobile is the biggest gaming platform in the world. you have to keep in mind the reason why people are so bullish on video game stocks right now is because at least half the population in the entire planet is playing video games in some capacity, whether it's on a console, on a phone, or whatever, and soon, glasses. and that's where roblox plays in too. the long term goal here is there's a lot of upside, especially for roblox as these new kind of gaming platforms come out, and of course, roblox is the only metaverse company really out there, the only public company making the metaverse in front of us, and if you want to bet on the metaverse, roblox is really it >> that's what i was going to ask, what happened to the whole hype around the metaverse? did that die down with the fear of rising rates? because even meta hasn't done that well. facebook >> i mean, let's do a reality check on meta.

meta is so much in the early days as far as building this metaverse thing that zuckerberg keeps talking about. roblox is doing it right now, sara if you -- sure, the technology right not be there, this whole vision we have been talking about for the last year and a half, two years about what the metaverse can be, sure, we're not there yet. but roblox, virtual worlds happening right now in roblox. this is how kids are socializing and interacting, and spending their parents' money, and the real challenge is going to be how do we move beyond the kids into older and older audiences to get them into it too. but again, goldman very bullish on that. >> yeah, for the long run. the stock is down about 60% this year, roblox steve, thank you >> and we are at session highs, continuing to build on gains here shares of lululemon jumping as well today after truist upgraded the stock from buy to hold raised the price target by more than $100. the firm says it believes it has momentum beyond nand and they view lulu's higher income

customer base as a key asset in the inflationary environment joining us, the analyst who made the call, beth reed. what happened to the lulu growth story? this was everybody's favorite stock and there was so much runway ahead of it, and then it sort of has been underwhelming in the past year or so >> yeah, absolutely. hi, sara thanks for having me i would say when we initiated coverage on the stock in december with a hold rating, we were bullish on the brand and the business and secular tailwinds such as the consumer's prioritization of health and wellness valuation was a build bold in our view at the time there was a sentiment overhang giving around mirror, which didn't perform up to expectations sales for the business ended up coming in about 50% of what we had initially expected so i think there was really kind of a drag on it, some investors maybe perhaps bucket it in with other covid stories. now as we look at coming out of

the pandemic, consumers are still going to prioritize health and wellness the higher income customer base and pricing power we see as key assets in an inflationary environment, and thirdly, the company's tam is larger than what we thought it was in december so spending into footwear, golf and tennis collections as well as when we come back to the office, two, three days a week, we're not wearing suits. lulu has a product for us. they benefit from all the trends >> the valuation is closing in with that of nike. so nike is at 36 times next year's earnings. lulu is about 40 what should that gap be? >> well, when we -- we're looking at 2023 pe ratio, so when we initiate on lulu, that was in the mid-40s, and it's come back to 35 times. so i think this is an attractive buying opportunity for what we view as a long term growth story. >> and when it comes to lulu's performance during recession or periods of economic slowdown, i know you said it does well in an

inflationary environment they always had good pricing power. what happens, does it just get thrown out with all of the other consumer stocks when there are worries about the economy? >> i think that would be unfair. we're starting to see the bifurcation potentially between the lower income customer cohort and the higher income customer cohort, and i think lulu definitely stands to benefit from the premium position with the higher income customer base. i'm not concerned about their performance fundamentally in a recessionary environment at this point. >> got it. $495 price target on lulu. suggests another $90 or so plus gains. thank you, beth reed from truist >> ibm one of the big tech names set to report after the bell today. seema modi with a preview. >> sara, it's made bold bets over the last year in the cloud and cybersecurity spaces since the beginning of 2021, it's acquired 18 companies spending about $4 billion does this remain a key part of the ceo's strategy to grow and

develop ibm into a more competitive cutting edge tech player software and consulting combined make up the largest share of the business, so the company's lens into corporate i.t. budgets will be listened to closely and its dividend of 5% has made it a value play morgan stanley upgraded the stock to overweight, calling it a popular place to hide amid macro uncertainty. you'll see shares of ibm down this year, but outperforming the s&p tech sector, among other heavyweights like microsoft and meda we'll see if earnings allow it to continue to outperform. >> seema, thanks netflix reports after the bell julia boorstin here to break down the key numbers to watch for there. julia. >> the key number to watch is 2.5 million, how many subscribers netflix forecast it would add in the first quarter though since then, it's likely lost about a million subscribers since it shuttered its service in russia. analysts also expect the company

to forecast the addition of 2.6 million subs in the second quarter. and on the upcoming earnings call, investors are looking for insight on the impact of competition, on price hikes, on inflation, on the crackdown on password sharing, and of course, on the pressure to potentially launch a lower priced ad supported version of the service. netflix is expected to grow revenue about 11%, while earnings per share are expected to drop by nearly 23% from the year earlier quarter >> julia, just want to highlight twitter here because there's some news coming through on the wires, on the twitter bid. private equity potential participation. what can you tell us >> that's right. the financial times just reporting a couple minutes ago that blackstone group vista equity partners and brookfield asset management are among some of the biggest private equity industry groups who have decided against providing an equity check for a buyout this is being reported by the ft now, the ft also says that musk

or any other bidder would need well over $20 billion of new equity to complete the deal with the remainder coming from debt or potentially existing investors. twitter shares now down nearly 5% sara >> julia, thank you. not over yet, i guess. one minute to go here before the bell, and we're looking at the best day for the dow in about a month. it's a pretty strong rally on our hands. it's built throughout the closing hour and we're near session highs up more than 500 points up 500 points or so on the dow most positive impact there is home depot travelers is the biggest weight. not a lot of dow losers. travelers, chevron, and merck that are lower everybody else is higher s&p 500 also with a broad based rally. every sector higher except for en energy consumer discretionary in the lead thanks to the travel stocks, some of the retailers as well real estate doing well that seconder up 2%. so is communication services we'll see what that does after netflix's quarterly earnings after the bell

nasdaq is coming back. nasdaq 100, up 2.14% it's still about 15.5% off the highs but still a very strong session and a big bounceback small caps also with a gain of about 2% into the close. dow closing with gain of more than 500 points. that does it for me. have a good evening, i will send it to carl quintanilla in "overtime. >> and welcome to "overtime. i'm carl quintanilla in for scott wapner in a few moments, we're going to speak with marko kolanovic we're going to start with the talk of the tape, and of course, tonight, it's all about earnings results from netflix and ibm crossing at any moment let's bring in matthew harrigan, who covers netflix with a hold rating, also stephanie link and jason snipe. both cnbc contributors great to see all of you. thanks for being