pressure trading heavy dow only up 178 netflix weighing on the nasdaq. >> all righty. >> what do you think, everybody? time to go >> time to go. >> thanks for watching "power lunch." >> "closing bell" starts right now. the dow higher but nasdaq falling hard near session lows as netflix weigh was on tech the most important hour starts now. welcome to "closing bell." i'm sara eisen dow remains higher up half a percent thanks to ibm and procter & gamble s&p 500 lower by 0.2 masking strength in real estate, consumer staples, health care, utilities. slightly defensive financials up. so are industrials, materials and energy what's not technology communications services. thanks to netflix. chart of the day it is shedding tens of billions of dollars in market cap now down 37% about $50 billion of market cap

lost right there after posting a surprise subscriber loss much more on that in a moment. coming up on today's show, ceos of the two dow components driving the dow higher now hear from ibm chief and the stock sits atop the dow after strong performance in its cloud business stock jumping, and later jon moeller on impact on inflation and ability to keep raising prices from pochter and gamble. biggest decliner on the s&p netflix down 37% stock plunging after the company report add shocking subscriber loss first in more than ten years or quarterly results. mike santoli is back with a closer look for the dashboard. what are you keying into. radical revaluation of the business, sara take it from me, approach of middle age happening gradually then suddenly. it's happened to netflix market saying you are now a mature company, slow growth.

maybe even ex growth as they say an converged valuation on an erntdnterprise basis, forward with disney almost got together a couple years ago at a significantly higher valuation right now down 15 times forward to cash. a good way to value these media businesses when they have a little bit of debt on them it tells you, of course, we have caveats. cash flow estimates could go down disney is not all streaming. have the parks a different mix of businesses, but pure media companies even cheaper than this. looked at paramount, ten times, comcast, eight, seven times, something like that. showing people are essentially saying can't count on it being a growth business. >> and cascade selling across names. disney down a lot and paramount and in warner brothers discovery. nearly formed company. the question is, if these are

growth stories on streaming, is this a ceiling >> the growth at expense of, what expense of the more stable cable linear cable business for sure for some businesses. other piece for netflix, model was going to work at a certain subscriber number. continuing to spend this heavily on content was going to be fine. going to generate good returns down the road, if they relatively quickly got up to whatever the numbers call it 300 million global subs? higher than wherever they've gotten to now. >> talk more about netflix stick with us, mike. the company laying some blame for its quarter on inflation some on password sharing is the consumer really the culprit? several ceos came on c nbc to say consumers are doing fine. >> consumers are spending. >> so far seeing the consumer actually do quite well. >> we continue to see strength in the consumer. >> watching the consumer closely. the consumer is robust now here in the u.s

>> so is it a netflix problem? a streaming problem, or a broader consumer problem let's bring in our panel on this top story. we've got will power senior research analyst from baird and cnbc's economics reporter mike liesman and, of course, mike santoli. steve, makes you wonder whether there's going to be a problem with consumer discretionary spend. netflix is not like buying p&g soap and shampoos. is that an issue you've seen pop up >> just starting to see the first signs of it, sara. actually, in the beige book and of course some anecdotal reports you're talking about there first of all, our cnbc all-america survey from last week showed 84% of respondents doing something in response to higher prices. some of them are cutting back on entertainment. about 62%. some driving less. a whole panoply of things people are doing to make ends meet. just can't have higher prices.

people have reaction entertainment has take an bite out of that. the beige book shows overall companies are passing along what were called swiftly rising costs. at the same time we're finally getting to see pushback. i thought i'd share, sara, this quote from the beige book from the cleveland fed. some consumer-facing contacts reporting spending picked up about covid-19 concerns subside. the other side others noted spending slowed as consumers were more concerned about rising prices. we saw a bunch of other reports that at least in some cases these high prices have hit a limit, which is beginning, perhaps, of pushback here. >> well, ask you is the consumer slow down a valid excuse or more a netflix problem or broader streaming problem? >> sara, good afternoon. thanks for having me look, i think it's precisely what's impacting stocks so

sharply today. just the uncertainty around that it felt like, listen to the company and the newsliner and call yesterday, some of these are grasping at straws i think a little of everything think about the consumer, without question facing some pressure in parts of europe, in latin america. seems to be where the more acute macro economic pressures are sewed. not clear seeing it in the u.s reality, three of four major regions saw decline in subscribers. lone positive grower, asia a combination of macro, but also reaching penetration ceiling quicker than expected in mature markets and i think that surprised them. >> will, on the stock, neutral going on feeling good not recommending it to shareholders, even though already down double digits sharply for the year looking at fidelity retail data.

heavily bought stock among retail traders today on this dip. is that a wise decision? >> we're still at a neutral rating still a lot of uncertainty ahead for the stock. look, this is a classic broken stock right now. the company fired double digit grow and forecasting 7%, 8% growth, until you see inflection point on acceleration, betting on initiatives to hem, monetized password sharing, ad-supported model over time. until you have greater confidence and that inflection, it's tough to see what the cat lit will be to get the stock working again, even on the weakness. >> is this story dead, mike? >> yeah. the hyper growth story is that the idea that the overall pie is growing so fast that effortlessly and with password sharing netflix can continue to meet its subscriber growth numbers seems to be past i don't think it's dead. internet tv will be internet tv. a bundle include netflix at the

core of it not that desperate, but transition of consideration of a lower priced advertising supported tier of netflix, a lot of folks thought a matter of time probably make as tremendous amount of sense, but less clean story than it has been for netflix where we have pricing power and don't have to worry about. >> and subs, right >> yes presumably go from payings $15 ad-free to down shifting or trading down to a cheaper wurn i think phenomenally successful at gaming advertising market share in a hurry, because the brand marketer business is desperate to reach digital eyeballs consider how many eyeballs hours are free of ads, welcomed by the industry doesn't necessarily mean netflix's only bottom line a quick score. >> what do you think about that, will and what would happen to the billions of dollars spending on

k con content? lose subscribers can't fund it as well? >> actually the economic model i think is probably still okay able to recoup from advertisers, right? to supplaement what they're not receiving. particularly in international markets. earlier, customers more price sensitive. important to remember cable services relative to netflix pricing and international markets, particularly in parts of asia pacific, india, indonesia, thailand, et cetera, netflix looks expensive. able to introduce a lew lower-priced schs to the consumer could stimulate demand ultimately helps stimulate revenue. the challenge more of a 2024 not something they've even started to work on in a significant fashion yet. not a stock or revenue mover for a couple of years still. >> netflix now almost 70% off highs. will, mike, steve, leave it

there. dow up more than 200 points. ibm surging to top of the dow jones today. turning positive for the year after first quarter earnings topped estimates we'll falk to the ceo, arvind krishna. you're watching "closing bell" on cnbc.

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that beat expect aces. revenues rising 8% froms year ago and gross margins contracted joining me for an exclusive interview here at post nine is ceo arvind krishna >> great to be with you. >> 8% revenue growth, feel going, and stock reacting nicely where is the growth coming from and why did it come as such a surprise >> a great testament to the strategy laid out. talked about hybrid cloud and driving demand and saw it drive in consulting and software really where it's coming from. from all geographies and all parts of software and consulting pleased after the year in the start and great trend is for high end of single digits. >> good news though margins disappointing what is the story there? >> i wouldn't call them disappointing. look, investing in consulting. saw growth coming early in 2021 and started getting ahead of the curve in terms of bringing

capacity on nap allowing us to fulfill in consulting. a lag of six, nine months of stagflation, nothing more. on the demand of market, get on the side of getting demand and market share and the next six to nine months fixing margins margins in software were good. i see no problems with software margins. >> fixing margins, able to pass on prices? is it going to happen and why hasn't it yet? >> anywhere-from-12 to 18 to 24 months not really five years or so but typically a year ahead very lard to go back to somebody and say, look, six months ago, now i want a raise not 4happening. everything noun inflationary pressures bigot into that. you see in six months 1 smonth,s

more and get it in there yes, putting in should be inflationary pricing it is expertise based and going to get passed on two, also supply chain process going up hardware not a huge part of our business, there are pressures in the supply chain as well those two where we are able to pass some of that along to clients and they should expect that. >> feel good about that. >> yes. >> the other question raised today, there was a possible from kendrell, you spun off significant. some wonder if that shows lesser quality of the underlying business, and how much longer that is going to sort of distort results? >> we've been very, very clear the contribution will carry until this october and come to a dead stop because sort of a, call it inorganic voltron. at that point goes away. we expect 3.5 points for the whole year q1 a bit more than average and expected that, because of how

revenue profile plays out through the year we expect 3.5 points for the year and goes away we've committed mid single digit on high end of midsingle digit without kinderel you look opposed to 11%. take kinderel out, still another 5% right on the model, and what we expect going forward. >> software the baby, the sexy part of the story. ai, cloud. how big of a business do you want to make that? what about 40% overall revenues in the soft structure >> software literally 40% of the revenue. i expect time goes on, closer to 50%. i think consulting at 30% should remain there and 20% there in infrastructure as time goes on, we'll see software will rise a bit more and infrastructure less saying software should be a mid single digit grower now expect more at another time.

right now infrastructure flat. one is sexy one is trendy, one growing 5% one zero. just math. >> a better equation people wonder with a big valuation loss seen in software and cloud sector in public markets whether you could get out there again and do another red hat-style deal to grow that business we've seen prices come down? >> always open to strategic m & a and always open to that. have flexibility let's us do that that said, it's not really criteria while it was very large. something comes along, makes economic sense and we believe good for our shareholders, we will take a look all that said, expect 1.5 points average growth from m & a. other organic. meaning driven by what we do from organic r & d rd and organic expertise.

once in a while comes along, that's once in a while can't predict that. >> or what's happening in the economy. concerns about the spending environment. if we get a slowdown even a recession, you've said you're well protectsed from a slowdown in i.t. spending usually i.t. spending falls a lot in those environments? >> i think this will be different. because economies change in terms what's more important and less important slowdown and recession are different. a slowdown, technology one of the last to get touched. i meep enterprise technology i think technology has become "the" source of competitive advantage. all enterprisers spend on that want to emerge stronger. now, a mild recession? same statement applies severe recession, that's different. i don't think anyone is expecting a severe recession. >> do you see evidence of -- you operate in europe, feeling the russian impact i know you uprighted in russia as well. seeing signs of weakness

>> no in our business right now. that is reflect ed results, strong growth across the geographies. predicting, i would say energy prices with inflation may cause a gdp slowdown in some countries, but that's going to be a slowdown. not a recession. i don't think tech spending will be much touched. maybe goes from 8% to 6%. >> the stock acted defensively all year long. ar arvind, thank you for taking time ceo of ibm, up 7%. breaking news here on apple. turns out work crews at an apple store in atlanta first in the nation to file for a union election today move sets up a battle between apple and organized labor also playing out recently as we've covered it amazon and starbucks, nlrb confirms they received the petition to unionize a store in atlanta. according to bloomberg, proposed union includes 107 workers at the store. apple telling us "we are

fortunate to have incredible retail team members and we deeply value everything they bring to apple." obviously, one to watch. a first for the company and follows in a wave of unionization efforts across this country. right now workers have power a tight labor market that's for sure. keep an eye on it. a check where we stand in the markets. dow continues to be strong 300 points stands in direct opposition to the nasdaq, down 1%. netflix taking down a lot of tech stocks. streamers, faang names, tesla lower after the bell s&p 500 flat given that, strength in a lot of defensive groups and in financials and materials still ahead from computers to consumers just heard how ibm is faring coming up, ceo of proctor and gam belong moving higher after posting strongest sales seen in more than a decade tomorrow, quick note hosting imf debate on the global company featuring fed chair jay

powell ecb president and imf managing director and current minister of barbados global be growth a hot topic watch it on cnbc.com, faboceok, twitter and youtube. we'll be right back. >> announcer: this cnbc program is sponsored by -- while taking your mother and daughter on a once-in-a-lifetime adventure — your life is just as unique. your raymond james financial advisor gets to know you, your dreams, and the way you care for those you love. so you can live your life. that's life well planned.

check out today's stealth mover. conveyorfair home goods and furniture retailer falling shortly after morgan stanley slashed a price target on the stock to 90 from 145. citing supply chain issues and higher expenses. turn in the market not good for wayfair. up next, procter & gamble's ceo. missing profit margin expectations last quarter and posting highest sales growth in decades. we'll be right back.

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procter & gamble shares up 3% topping earnings estimates this morning consumer goods giant able to offset impact of rising inflation passing along higher prices to consumers.

joining us now proctser and gamble ceo jon moeller nice to see you from cincinnati. >> likewise, sara. >> so how should we think about that 10% jump in organic revenue growth a lot of it was higher pricing what does it say about what you're seeing from the consumer? >> actually, start with very strong volumes volume's up 3% volume growth in almost every category you're right pricing added on top of that and mix as consumers continue to trade up within our product categories a couple other characteristics of that 10% i think are important to share every category grew sales, personal health care up over 30%. laundry business low teens up. baby care, feminine protection, up double digits, on and on. same thing geographically. focus markets grew 9%. enterprise 0 markets grew 12%.

growth is very broad-based and it's predicated on a very nice mix of volume price and mix. >> do you continue to see that kind of consumer strength going forward? because there are growing concerns about slowdown? as inflation sets in, how do you see the consumer responding? >> we'll see how that goes keeping our eye on that very carefully. but to date, you can look at a couple of pieces of data to see if there are indications of consumer trade down in the market today, and so far we're not seeing it. if you look at private label market shares as a proxy of trade down, in the u.s., they're down past 3, 6 and 12 months look at them in europe down past 3, 6 and 12 months look at channel data and look at channels where budget constraint to consumers most likely to

shop share growth take dollar channels for example some of the highest across channels. so you're absolutely right to raise the forward-looking question i don't have a crystal ball. we're watching that very carefully. so far we're in a very good place. the other thing is that we're ensuring that we take the kinds of actions that won't immunize us from -- significant consumer pressure but certainly will help for example, being more pro active in communicating the, the mileage that our brands provide. so that the entire value is framed in a way that's not just, you know, price bravado. >> innovation, too, i think helps. so do you have more room, jon, to keep raising prices is that part of the plan for consumers? >> it's part of our business model. again, coupled with innovation so that value improves every

step of the way. if you look at pricing as a component of our top line, it's been neutral to positive mostly positive, for 43 out of the last 46 quarters 16 out of the last 17 years. so in a fundamental level it's part of what we do and then really the question you mentioned it is, can we continue to innovate in a way that allows that value creation to continue? and i'm hopeful we can >> what about the margin story, jon? clearly the cost pressures are intense now. transportation, supply chain, commodities. how long do you think it takes to fix some of these big issues, where it's not weighing on profitability so much? because it looks like you revised forecast for the costs to continue to climb >> we did. those costs, if you look at commodities, transportation and you throw in foreign exchange, that impact is about 3.2 billion

dollars after tax. this year over last. so significant as you've seen, we've been able to offset that through both continued investment in the top line as well as our strong productively program grew earnings per share 6% 10% on cost of currency basis and have to keep at that. >> yeah. cfo before ceo a long time starting to see extreme moves especially in the dollar against the japanese yen, at like a 20-year low. how much is this impacting your business and do you think broader multi-national earnings in this country relative to other periods where we've seen this thing happen >> it's significant. no way around it you mention relationship between the dollar and the yen look at the relationship between the dollar can and the turkish l lira, talking extreme moves.

significant and a dollar-based company we can't hide from it but have been very successful in pricing for it and developing markets and continue to do so. and using, again, top-line strength, bottom-line productivity programs to help offset impact elsewhere. >> mentioning china. you saw sales down there clearly dealing with these rolling shutdowns. the zero covid policy. i wonder, jon, what it's like to operate a business there right now, both on the production side and on the consumption side? given what they're dealing with? >> you know, it's tough. that decline in china on the top line, though, needs to be contextualized up 22% looked at it on a two-year stacked basis, still a very attractive number. but no doubt the shutdowns have directly impacted us. both from a consumption

standpoint i read something the other day that said 25% roughly of chinese citizens impacted in one way or another by those shutdowns factories not operating as we speak. it's difficult if we look at china, the last ten years can, we've doubled our business grown at about 10% average rate each of the last four years. continues to be a very important market for us. secretary largest in sales and profit, and we have high hopes for the future >> jon moeller, thank you for giving us a snapshot of the business appreciate it. >> thank you, sara ceo of procter & gamble, a winner today off the back of strong sales numbers? where we stand overall in the markets. s&p 5 00, pretty much inchanged. everybody else up in terms of sectors. defensive, life staples,

utilities, health care also industrials, materials energy and financials higher as well that explains the nasdaq's more than 1% decline. netflix, and all mega cap growth names in technology while the dow continues to soar. lululemon announcing aggressive sales goal not helping the stock today. we talk about whether the pullback is a buying opportunity on this investor day. we'll be right back. aited tl my doctor my heart was racing just making spaghetti... but i didn't wait. i could've delayed telling my doctor i was short of breath just reading a book... but i didn't wait. they told their doctors. and found out they had... atrial fibrillation. a condition which makes it about five times more likely to have a stroke. if you have one or more of these symptoms irregular heartbeat, heart racing, chest pain, shortness of breath, fatigue or lightheadedness, contact your doctor. this is no time to wait.

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check out some of today's top search tickers on cnbc no surprise. netflix drawing most interest. dethroning ten-year treasury yield. number two spot.

yields moving lower today. big change from yesterday. 285 on ten year. netflix down 36% this on top of a day netflix fell 20% in the last quarter when reported in january now down more than 60% for the year after reporting it lost subscribers in the first quarter last night other names on the list. disney, all streamers are. down 5%. tesla down almost 5% and meta as well faang names hit hardest. meta down 7.5% netflix gears up for an ad model mentioned yesterday on foent. coming up, discussion whether the crackdown on password sharing could make a difference in the stock. made a big deal about that yesterday. and tesla earnings after the bell we'll take you inside "the market zone" next.

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that's a savings of over $500 a year. switch today. [sound of helicopter blades] ugh... they found me. ♪ ♪ nice suits, you guys blend right in. the world needs you back. i'm retired greg, you know this. people have their money just sitting around doing nothing... that's bad, they shouldn't do that. they're getting crushed by inflation. well, i feel for them. they're taking financial advice from memes. [baby spits out milk] i'll get my onesies®. ♪ “baby one more time” by britney spears ♪ good to have you back, old friend. yeah, eyes on the road, benny. welcome to a new chapter in investing. [ding] e*trade now from morgan stanley. flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. do you think any of us will look back in our lives, and regret the things we didn't buy? (camera shutters)

or the places we didn't go. ♪ ♪ we are now in the "closing bell" "market zone" commentator mike santelli to break down crucial moments of the market day and julia boorstin, and double sales of lululemon by 2026 dow and s&p in the green dow solidly so nasdaq trading lower, dragged down by big tech stocks, mike. clearly, the netflix effect. how do you look at the drop we see across faang, the advertiser names like a meta, streaming names like disney? justified? >> i think what's going on for months now, really, since the arguably november highs in the

faang-type stocks. just valuation compression giving up the pandemic premium kind of trying to reconcile the longer-term growth rates are i don't know if every dollar is j justified but telling a consistent theme outperforming. 0.8 percent now and late-cycle leadershi shp leadership take it as a net nettive on a macro basis. rotating towards the air to provide to stability the case again today. >> and huge damper on earnings season but not that bad. mmt bank at top of the s&p now regional bank. after citizens yesterday ceo on that stock shot up they are the real beneficiaries here of these higher net interest margins and higher interest rates overall, how do you characterize earnings season? ibm number two. >> exactly ibm and eyed health kinds of the

story on the dow today in terms of upside. better than feared across the boshd. different type earnings season this time mostly because stocks in general had a massive pullback going into them i think relief in the numbers. forward-going guidance definitely mixed i can still see the case for the second half of year earnings forecast a little too high but not at the point where that has to be the primary worry. very much in, have we priced in what the fed's going to do and what the likely recession or non-recession outlook is >> should talk about netflix what a nightmare for netflix shareholders today again the stock plunging missing estimates and subscriber loss more than in ten years downgrading as a result. julia boorstin joining us. how big a factor is the crackdown on password sharing? they really put big numbers around it? >> they did. netflix said in addition to

their 220 million subscribers, there an additional 100 million households that are sharing passwords with those subscribers effectually watching netflix for free might use the word "pirating" netflix. until now, not concerned testing a number of ways to convert those people to paying subscribers, but revealing that 100 million number just shows just how big an issue this has been and how much it is possibly weighing on that subscriber number preventing them from growing. people used to getting it for free. >> and change the competitive landscape. how do the other companies seeing their stock prices fall today look at what just happened in netflix >> the big question for investors is, are we going to see all the other streamers follow the same trend as netflix and see their subscriber numbers sufferer, or because netflix was the first mover, so much more saturated in the market and biggest player by far, will we

see the other players taking shares from netflix and able to grow despite the fact netflix knew is shrinking? key factor to watch here, ad-supported services's see more strength in ad-sported services as consumers facing uncertainty. want was watch more content but maybe for free or less expensive than paying for something ad-free. what netflix, stood by all of these years until just now they're going the opposite direction. >> mike, occurs to me there are, they're developing a credibility issue when it comes to shareholders, because first we saw a big decline. lowering the guidance last quarter. then this. a loss i think took everyone by -- is this the sort of thing they could have come out before the quarter and warned because, because it's so material then make a u-turn on ad supporting more confusing. >> yeah. >> what's going on here. >> always a judgment call whether to pre-announce a poor

outlook. i guess fall back on the idea the revenue and earnings for the trailing quarter were not a big surprise in fact, kind of beat on the bottom line. they probably felt they had leeway to wait until this date to say the next quarter's going down had to know that an absolute decline in subscribers last quarter would be unfriendly to the stock and i think the street feels bls blindsided maybe why so many analysts threw in the towel and downgraded. and sinking led lower by paypal, price target cut from 125 to 105 japanese bank smbc citing increasing uncertainty paypal announcing departure of its cfo last week. other players blocks, affirm, robinhood trading in the red today as well, mike. these companies should get a boost from inflation, when you think about it

higher prices are passed and and would benefit. i fess if there's a big economic and consumer slowdown, concerns there as well. what else is going on in this group? total volume supportive. a prolonged unwind of a super hot area of the market basically so much capital thrown at it people got excited about total addressable market story and kind of unspooling from there. paypal, concerns in general about ecommerce volumes, people's estimates of venmo way out of hand to the upside, reversed anything with a credit component, affirms, sofi, look at upstart they're down a lot today, because people are getting a little bit worried about consumer delinquencies and lower quality lending products i don't know if it's critical today, a recognition points of that, but i think one of the overhangs. >> paypal a story in itself. a lot of buzz and rumors,

executive koss follow suit after the cfo left is this an activist target >> arguably, a lot of ingredients are there. stock has a very good core franchise. still -- it's way smaller market cap-wise than it had been. still over $1 billion. not as if it's that easy to muscle around a company of that size, but sure there's enough dissatisfied shareholders out there to try and make a fuss at some point. >> and the analyst at wedbush, putting it out there could see a situation like an adp. bill ackman came in, made changes. and lululemon, doubling 2021 revenue in the next five years and quadrupling international revenue. despite the plan the stock sinking down 4%. more than that now almost 4.5%. matt, you like it?

what's with the reaction today >> sara, thanks for having me on stock up 25% into the event. i think the management did a great job today. key takeaway was early growth across every part of the business, but they embedded prudent conservatism in my view. meaning, beyond 2022, the plan embeds basically low teens revenue growth coming off five years pre-pandemic in the high teens, and right now operating the business at a mid-20s revenue. you have operating margin expansion. you have consistent mid-teens growth over the next five years, but back out 2022, and it's low teens revenue. despite, to your point, international quadrupling, digital doubling and men's opportunity to double, i think the plan is more than reasonable and presents a pretty nice opportunity from here. >> there are some execution risks in that they're going into new places doing a membership program

they're doing new categories, like sneakers and running. what did you hear about that and what gives you the confidence that this team can expand beyond the core product? >> so great point, and glad you brought it up, because it's actually the other area of clear conservatism they embedded virtually nothing for footwear, tennis, golf and hiking those are the new ancillary opportunities. what calvin mcdonald, ceo, most excited about, halo opportunity. what they've seen so far from these launches materially above plan. they're seeing traffic to the website, traffic to the stores and halo effect over to the core and organic of this, of the assortment the plan they outline today is really continuation of the core. they've basically doubled the revenue growth heading right into this plan relative to what they laid out five years ago and now more or less embedding beyond this year a similar top-line plan that involves, to

your point, men's digital and international material growth that actually realistically not a lot of additional embedded >> i want to ask you about valuation, matt. especially in comparison to a nike, which you published on last week send t the stock up higher, interested in china. a week spot for nike also concern there around the covid shutdowns lately where does a lulu stack up against a nike which you're also very positive on. >> glad you mentioned it nike was in town last week we met with them to me the two key takeaways were product and assortment, normalization by the fall. nike's second quarter globally, they expect inventory allocation across all regions will be normalized my opinion a huge takeaway for this company, which suffered on the footwear front especially not only in north america but

internationally. then secondly, they are much more encouraged, in my opinion, on the underlying demand they're seeing in china. they are mindful of the covid lockdowns and the zero tolerance policy, and they did cite relative to three weeks ago, more material than it was then, but they are seeing better demand on the ground, and the inventory allocation and the response they're seeing to innovative and new product on the ground in china is materially improving, and they're excited about that underlying momentum therapy seeing >> so if we are going into a consumer slowdown globally, heard it from the aim f yesterday that's happening get a more severe slowdown in the u.s. than maybe hearing from companies, which company of all of these -- you like both. which of all retailers do you like most? who's most insulated or defensive? >> selective stance. the way you approach it twofold. one, have value and convenience. to me that would be dollar

general, five below, dollar tree off pricers. to me where does the consumer potentially trade down where do they seek value where do they find convenience then secondarily, you want to position strong brands with pricing power, and expanding total addressable markets. that's active and your nike and lulu, you cited. to me includes levis, direct to consumer expanse the handbags and accessories. exit the pandemic stronger as well as companies positioned for value and convenience. >> matt, looking at retail etf down about a percent now appreciate it. from jpmorgan. don't miss an exclusive interview with lululemon's ceo calvin mcdonald tomorrow in the 9:00 a.m. of "squawk on the street" to talk about the long-term plan there for

investors. tesla, big name on today's after the bell earnings calendar stock falling. phil lebeau here with key numbers to watch for phil i have a feeling the conference call will be more interesting than the numbers. >> it will be, sara. look, aside from earningses and revenue, one number analysts will focus on is what tesla says when it comes to automotive gross margins. came in 29.2%. last quarter, fourth quarter expected to come under a little pressure in the first quarter. how much that remains to be seen on the conference call, what do they say about chip supply outlook? what's happening in china and most fortunately what do we hear from elon muck not only about tesla but twitter. you know he'll be asked about it back to you. >> oh, better be phil, thank you. phil lebeau. two minutes to go in the trading day. what do you see? >> positive breadth most of the day. mentioned earlier, outperforming, mega caps dragging things down

and 1.5 billion declining on the day. look at commodities index. proxy for it about 3% off highs taking a little pressure off this chart looks very much like any bond yield chart you want to see. slightly lower, but very strong uptrend and plenty momentum behind it likely longer term mod testily lower here on a monday a stable picture as the index a really did -- s&p 500 in the middle of its range and spinning the last few months. >> look at the dow strongest. ibm, unh, home depot, goldman sachs, procter & gamble, bigger contradicters to the dow up about 242 points overall. that stands in contrast to the s&p. just dipped into negative territory again. weighed down by communications services consumer discretionary and technology names weaker today banks in part to netflix, thanks in part.

selling in mega taps strength in real estate, stables, industrials and energy why russell 2,000 index small caps bounces a bit today up 0.4 of a percent building on gains from yesterday. at least for the small caps and dow. there goes the bell. 252 hiser on the dow that's it for me on "closing bell." over to "overtime" now with scott wapner. sara, thanks welcome to "overtime." i'm scott wapner just heard the bells of course, we at post nine just getting started. speaking exclusively today with former twitter executive ryan sarver on elon musk's bid to buy that company remember, today is 4-20. on the air at 4:20 and see if anything happens and by the way, speaking of mr. musk, do begin with our "talk of the tape." tesla earnings due out any moment another big day for the dow up more than 700 points in just the past two days few earnings as highly anticipated at these numbers as