does, we will help, i don't know be careful out there >> we can only hope that maybe you won't fwring online. just one of the reasons cited by the hit to profit margins and were those big stock drops an overreaction we'll explain that on "power lunch" which begins right now. ♪ ♪ thank you, kelly welcome everybody to "power lunch. i'm tyler matheson here's what's ahead on another busy hour. searching for safety, many look to consumer staples and that sector now under attack, too is the group being unfairly punished and is it no longer a place to hide? plus, cheap, mega-cap stocks and well-known names have price to earnings ratios in the single digits these are big-name companies are they a bargain huntser's dream? we'll look for some opportunity throughout the hour. >> tyler, thank you.

speaking of opportunity, we have some green back on our screens it was looking dicey an hour ago. a little bit better right now. the nasdaq back in positive territory by 55 points the s&p only three points negative right now still to put this in context we saw the markets down 500 points earlier and it's on track for its eighth straight week of losses and its longest weekly losing streak ever and we are hopeful that at the very least we can get some kind of bounce today. apple is struggling and while other tech stocks are holding up, while netflix is higher beer 8.5%s and yield on the 10-year which was above 3% yesterday morning back to 284 on the session, tyler in let's take a look and and how

much we've fallen in yn jan. it is down to 37,000, it compare par lively, it is set on the second of trading this year. the overall market impact says more more than half of the constituents are down and 19% is the big number big-cap tech has come tumbling down and finally, we don't want to leave the little guys out there's the russell 2000 off 28% and a point less than the nasdaq so will this downturn be hitting a bottom any time soon or are these dramatic swings an overreaction and let's talk to lindsay bell and a cnbc contributor.

lindsay, welcome good to see you. >> great to be here. >> fantastic one of the things that typically tells investment strategists like you whether we are at a market bottom is volatility. it sure seems like we've had a lot of volatility, but is the vix, the fear gauge signals that we're at a bottom? >> yeah. the vix is the most obvious thing to look at when you're looking at a bottom and when the market's nearing a bottom, the vix is closer to the 45 range we're seeing it get that high although in the 30 rifrjieinge what we've seen in the last two ney nah, and then dks on 46% of days owe doesn't look comfortable and the vol ilis here to stay >> we've had intraday swings and

it's not whether you end up at 2% or more within days we've gone from 300 up to 300 or 600 down or vice versa. so you see, a lot of intraday swings that have been very crazy. the put/call ratio is another sort of tell tale. what is it telling us right now? >> yeah. the put/call ratio, it got close to extreme levels at the end of april and it's since come in a little bit, though, in the last couple of days as moving back up opinion the point to watch is the put/call ratio indzicator shows that there's also nervousness in the marketplace it hasn't yet reached really extreme levels in the 1.4, 1.5, say, range and we're keeping an eye on it and it's moving closer to there and it could be an indicator that we're starting to get washed out so we'll keep an eye on it and

we haven't reached extreme levels yet >> look for fewer of 20% of equities to trade above their 200-day moving average to suggest that we are at or near a bottom we are not quite there yet, are we >> no, not quite there yet either at 28% of the index is trading above its 2 h00-day average and move being in the right direction, indicating we're it's in mind and we need might need's 10%, 15%, in extreme pen crisises ands there op, are there any tell tales that you follow signaling that we have passed the bottom of this phase well, when i look at bearish

sentiment and maybe even the put call ratios it gets closer, but when i look at aaii investor sentiment it's been pretty bearish since the end of april just like the put/call ratio they mentioned and it's improved a little bit and it's very negative by historical standards and that could be an indicator that we're starting to get to this point where everybody thinks that the worst is here and that could be a point of turning and it all comes down to infla igsz and what fed policy actions actually turn out to be and there's no way in telling where that goes and volatility is here to stay for the next several months especially when wooe e we're entering an earnings period where it's wiended down and next week we're getting the pce inflation indicator, and that could be the next big thing that the market's watching and

could jump on and have another big intraday move on so you just need to be mindful of that. >> we have to wrap, but i want to ask you there are the numbers and the indicators, what does your gut tell yoi, real quick >> my gut tells me that we definitely ahead of us, we can move bf the $3800 level or 4,000 and we'll beably to move up as we head into the lat err part of the year. >> when we have to look for staples, consumer staples are it is first names we turn to, kroger, p & g, kraft heinz and jm smucker are down in the past week why? let's bring in rick modi,

consumer analyst nick, what's ailing them >> well, look, first of all, the consumer staples sector actually performed well year to date relative to the market and you see the valuations at roughly 20% that's double what the mister cal historical average walmart put a scare in those money managers and the portfolio managers that flooded all of that money into this risk and as we've been saying on the show and for the past few months it's going to get pretty tough for these companies as we get deeper into the year as pricing that they announced because of what they're feeling, and i do think just looking at some of the work that other rbc analysts have done that we could have more issues with inflation in the energy and agricultural side >> so tease that out for us, what does it mean for the potential further downside for the names that you cover

>> yeah. so, i think my biggest issue has been a lot of these companies have announced price increases that would be necessary for them to hit their guidance for the full year, and as we're rolling through the next few months it will be harder and harder for the price increases to get through. don't get me wrong we're now on the fourth or fifth round of pricing in some instances. as they get tempered it might create a p & l gap, and it's early and it will be more of a second half situation as we come back from the summer, but that's really what i worried and and that happens versus history. >> are there companies that are more insulated from price cost increases and cost rising than others and therefore might be

good places for your money >> absolutely, tyler coming into the year our theme was three thingses we want u.s. centric mobility and mobility in general because we do think that people will get out and about as covid starts to become more of an endemic issue versus a pandemic issue. >> we like companies that we recruited and are holding on to them and companies that have less exposure to these costs that are inflating most. out of that basket, we've come out with names and we've spoken about them on the show coca-cola, estee lauder, coty and those are some of the ideas that we've been sticking with for the year >> nik, do you feel comfortable at these levels, as you said, your team is a little concerned about inflation outlook and we have others concerned about the re recession outlook. what does the scenario analysis imply?

>> the sector will always be defensive, right the question for money managers is are there other defensive sectors that might have less earnings risk? >> i think that's the realization that occurred yesterday when we saw those results coming out of walmart and target here's an interesting point. we know the consumer is strong and we see it and hear it, but things are evolving quickly. there is something called revenge -- and use euro science to understand what the consumer behavior will act like and consumers have so much pent-up demand to mgo out and live that they'll spend on experiences for the next several months and when people start looking at how much they paid on the credit card and there will be, as we pass through the

summer in consumer staples. >> i like that revenge spending. i'd like some revenge lately >> going on any revenge trips -- >> well, undecided as of now nik modi, thank you very much. >> remember the spac index down about 40% year to date a look at what happens next as hundreds of spacs face deadlines to make a deal or return the money. plus big-cap stocks with a price to earnings ratios under ten are these bargains worth buying? we will talk j.p. morgan, verizon and novartis in today's three-stock lunch when "power lunch" continues here on cnbc. hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g. that's the one with the amazing camera?

yep! every business deserves it... like one's that re-opened! hi, we have an appoint it's not complicated. at&t is giving new and existing business customers our best deals on every iphone. ♪ ♪ new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

>> welcome back to "power lunch. i'm kristina partsinevelos we want to get a check of three key areas of tech after yesterday's sell-off and cybersecurity, names like sentinel one, okta, crowdstrike or fortnet, and you have cloud and enterprise stocks all jumping in digital ocean holdings, zoom video, and twilio and fastly is also higher. it is still down more than 20% in may and we'll end on some chips which are more mixed today

and seeing strong moves and synopsis, cadence design and monolithic power there you have it, tyler back over to you >> kristina, thank you very much. >> the ipo and the spac marketses have gone raid why silence. just 34 ipos have priced this year down 77% from this time last year. the renaissance ipo etf down 25% in the past month. the cnbc spac post deal index is down almost 20% for the month and a deadline is fast approaching for example spac deals to get done. let's bring in santosh rio with manhattan venture partners santos, welcome. good to have you with us >> before we get to some of the declines a little bit of background here. when a spac goes wanting for a deal after about two years in typical cases, what do those spac organizers have to do return the money to the investors? >> absolutely. they just have to return the

money and the cost of setting up the spac, you lose that. that's an invested capital and you can't get that back. so you just have to return it. you have two years to get it done that's enough time >> many of us remember what went in 2008, 2007, 2008 in the real estate markets and auction rate securities and other kinds of esoterica that cratered. is there any possibility that the spac market, if it falls apart could be the kind of tipping point to a real financial crisis in turn, what is now not necessarily an economic crisis and turn it into a much more distinctly financial crisis. >> i don't think spac market is that big to cause that kind of a turbulence in the market right now i have a credibility problem and they need to establish themselves and they

did not perform well everyone's turned off and no transparency and disclosures and all of that stuff. the proposed rules will change and it will make it much more liable investing in spacs and right now there is a credibility problem and they have to prove it and just for data, out of the 600 or so spacs of 121, that's a big thing, they have to find anywhere from seven months to get it done, so let's see what happens, and -- >> that was the question i was going to ask you how many spacs are out there looking for deals and you just answered you said two out of the three of the ones that were introduced last year are still vacant spacs, let's say spacless. >> absolutely. what's happening is these companies, these spacs will get desperate at one point moving down the line, looking at the

earlier stage companies and the international markets to get good targets so i think you will see all of that there are good companies and thera a lot of good work being done and great technologies out there and you have to find them. that's where credibility and performance will come in i'm sure it will happen. it's an option, but not for everyone and it needs to be well tested this is weird when ipos, and they're force that they won't be able to have an exit and at the same time, if investors take the note from these offerings, what is no lech witty prob, and

there's $200 billion out there and $630 billion was invested in the private markets and the start-ups. so there's lots of liquidity out there and that's not the issue the bar has been raised and the companies have to prove and the business models have to be sharpened and all of that stuff which is good. i think this pause is good in the long run, it's healthy and not only for spacs, but for other potential ipos and you need to clean up because you know what's waiting at the end of the line. the public market is not going to relent anymore. they'll be strict about certain things and a deforecast toe probability and they know all of the rules of the game and it will perform and this is a good thing in the end. >> we'll sleave it on that end. >> stocks are higher today although we're seeing another trying to climb back

more convincing is the move in the homebuilders we have them up 3% to 4% and d.r. horton and k.b. home, plus shipping and railroad companies are down again today and having a terrible week. what do these freight fears teul about the economy that's still ahead on "power lunch.

welcome back to "power lunch," existing home sales fell for the lowest month in april while prices don't show any signs of coming down diana olick has the details. diana? >> both higher mortgage and sales are taking their toll on existing home sales which were down 2%, down 6% from a year ago and the slowest pace since june of 2020 and that month was artificially low because it was at the start of the pandemic before sales suddenly took off the supply of listings continues to weigh on the market down 10% from a year ago, but rising interest rates also now factors in these sales numbers represent closings so signed contracts in february and march when rates were rising, the average rate on the 30-year fixed mortgage started at 3.66% ended in march

to 4.78 and it is hovering around 5.45 which is why the chief economist says he expects sales to drop further because higher rates haven't fully done their damage yet tight supply continues to fuel prices and the median price sold in april is $391,200 and a 15% increase from a year ago and that was skewed by selling mostly on the higher end, while there is more supply so far, we're not seeing any let up in those prices likely for that supply, for those that can afford the little, they tell us it's up. >> what is the report given with supplies and prices. >> if there's low supply to the existing market and buyers have

no choice, but to go to the new construction market. they are so beaten down, they have nowhere to go but up. they're down 30% year to date. >> diane a thank you very much diana olick. let's get to frank holland. >> what would be the nation's strictest abortion law is on its way to the oklahoma governor for his signature. it finalizes an approval of the bill that prohibits all abortion starting at fertilization. they can provide a civil suit for anyone who aids and abets an abortion the governor promised to sign any anti-abortion bill the head of the fda says the nation's baby formula shortage will start to ease in the next few days and it will be a few weeks before supplies get back to normal. the greek electronic composer vangelis is dead at the age of

89 he is known for his scores of chariots of fire two british runners at the 1924 summer olympics and he performed it himself on a bank of si synthesizer. >> he said i work like an aths leet. >> it was a great song ahead on "power lunch" as the dow is slip, sliding once again, down 1400 points in two days nearly 3,000 points in two weeks, but the nasdaq actually in the green today for a change. does that mean tech is going to turn around first? we'll stick with the defensive names as volatily ntueitcoins. that's what's coming up on "power lunch "and more we'll be right back.

miss allen over there isn't checking lesson plans. she's getting graded on her green investments with merrill. a-plus. still got it. (whistle blows) your money never stops working for you with merrill, a bank of america company. right now, we're all feelin' the squeeze. we're having to get creative. find a new way. but birthdays still happen. fridays still call for s'mores. you have to make magic, and you're figuring out how to do that. what you don't have to figure out is where to shop. because while you're getting creative, walmart is doing what we always do.

keeping prices low for you every day. so you can save money and live better. ♪

welcome back, everybody. 90 minutes left in the trading day as the market tries to rebound from yesterday's steep declines let's get caught up on stocks, bonds, commodities and a no-recession call. le let's begin with bob pisani and this choppy trading session. >> choppy, but not insane. the stocks are kind of right in the middle of a trading range. tech's doing better although an

cell down 2% keep an eye on that one and what everyone is watching is the boring old consumer sector which was boring and hasn't been recently clorox, 155 to 139 in two days that's an awful lot, folks kimberly-clark 128 or so these are low beta stocks. they don't move very much and that's why people are startled by the moves in the last couple of days. big pharma, the last hiding space. merck was at a new high just a couple of days ago a little bit weaker and i wouldn't say dramatically so and this group is holding up well overall. the best call of the day, citigroup talking about the railroads lowering the ratings on the railroads and weakening going forward and this is what they should be doing talking about lower earnings and it is up 9% this year. they're way too high and city is making a call. meantime, the metals have been bouncing and they've been a little more stable in the last fewdays and that's because the

news out of china has been much better about what's going on in shanghai and they're trying to re-open shanghai at this point and that's been a help s&p 500, just remember the intraday low and last thursday, 3858, who knows? we could go positive very quickly. wouldn't that be nice to have a positive day >> a rebound, bob, thank you very much. the yield on the 10-year is sinking as investors look for safety rick santelli is tracking the action rick >> yes rejected 3% let's look at the week to date of tens and you can see yesterday we literally popped slightly above 3% and that was it if you open the chart month to date, we've had three closes above 3% on this cycle it's good psychological resistance if we consider the fact that the there are is down over a penny

today and european two-year notes and closing at a high yield, what does that mean there's more hawkishness sweeping through europe and it's having an effect on the currencies and let's take a look at the euro versus dollar and it's on pace to close at the best level since the 5th of may and also if you look at the pound, also the best since the 5th of may if you look at the dollar versus the swiss franc and it's at the lowest level of the month and all of, that of course, is a big change as the european central bank seems to be getting pushed towards being hawkish along with the swiss national bank and the bank of england who has tightened on more than several occasions, kelly, thank you. >> rick, thank you very much now let's turn to energy oil closing with a gain today of about 2% what does it mean for gas prices >> pippa stevens, pippa? >> we did see a late morning

reversal for oil with crude climbing into the close and now on track for a fourth positive week and this comes after two negative sessions which richard bush attributed to broader market action on anything on the fundamental side and the firm pointed on margin selling and other commodities and assets as sparking those declines as well as harscher russian sanctions still support the bull case. wti and brent are around a gain of 2.5%. sticking with energy, we do want to see broad gains across energy stocks and the clean energy fund and the invesco solar fund with 5% and max onsolar among the top gabers all of those still well below their recent highs and the lithium fund ticker also advancing. back to you. >> pippa, you just showed brent

and wti. yesterday brent closed higher. why is it -- i'm sorry, wti closed higher, brent closed at a premium, why is it that wti has the higher price tag >> the one for july delivery is a little bit lower here, but also some of that premium is now built into declining u.s. stockpiles so we are seeing them trade in tandem, as you said, for the first time in two years. >> having interesting. pippa stevens. well, my next guest sees no recession this year although she is sticking with a defensive strategy that includes those staples we talked about earlier and healthcare and utilities let's bring in quincy crosby, cheer equity strategist at lpl financial. good to see you again and why stay defensive if you don't think we are going have a recession? >> well, we're in a -- what did i say, a soft patch? a soft patch can lead to a recession if things don't ease

up in terms was inflation. if things don't ease up in terms of the supply chain. so it's just a cautionary, but with that said, we're looking at the growth sectors and it's not a question of if, but it's a question that we'll start inching toward that. explain more about where you think investors should be pugzed right now. >> right now it's still very much a trader's market and i see it every day and as long as they're defensive and granted, they can lose staples yesterday and they should be able to hold up more during this volatile period until again, until it becomes clear how the economy is going to unfold and whether or not this growth scare will materialize into something stronger >> where do you think the best opportunity in the market is

>> i like energy i think we're going into the driving season there is a shortage and no doubt about it, as beijing comes back and as shanghai comes back, i know that they're buying russian oil, but, you know, the fact is there's going to be pressure on all prices and i think all prices will continue to rise >> energy remains a favorite despite the fact that it's performed so well. would you throw materials or commoditieses related into that, as well? >> i would actually look at another area which is the infrastructure area that includes all of those. the country, we're not going into an -- i don't think we're going into a deep recession. i think that we're in this slowdown, but the idea of having to rebuild the country remains that's been a premise for both the republicans and the democrats, and i think that will continue it may slow down a bit, but it

will pick up as it becomes clearer what the fed is prepared to do and how hawkish they're prepared to go i think infrastructure and the various components for it will be a good area to be in, not safe, and a healthy area >> quincy, it sounds a bit like you're predicting stagflation. a slowdown amid higher inflation. that's not good for corporations >> well, no, there's easy stagflation and you can argue that pockets of the economy, and it's positioned and if you were to get heavy stagflation and the kind that you had years ago, no, it isn't good and it's good for companies and there's margin compression and it becomes a much more difficult environment for the economy and we don't think that we'll be heading in that direction, but needless to say, right now when you see days

like yesterday, you can argue that it had the feel of force and that mra it doesn't have to sell marx incalls and investors seaing i'm getting out at any cost see i'll keep my eye on that, that you know how difficult the stock market is. i don't believe that one thing the fed does not want, they want financial conditions to tighten and how about not tighten too much if we lose liquidity in the market that tells you that the fed has broken something so they are following this it is important, but you know what right now the fed should be applauding the rhetoric because we're seeing demand starting to pull back and that should lead to lower prices. >> all right, quincy, thank you very much. quincy krosby, as always, we appreciate it. coming up, what the truckers

are telling us authebo t economy. "power lunch" keeps on trucking. stay with us

power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools, and interactive charts to give you an edge. 24/7 support when you need it the most. plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade from morgan stanley and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities,

24/7 support when you need answers, plus some of the lowest options in futures contract prices around. [ding] get e*trade from morgan stanley and start trading today. when traders tell us how to make thinkorswim® even better, we listen. like jack. he wanted a streamlined version he could access anywhere, no download necessary. and kim. she wanted to execute a pre-set trade strategy in seconds. so we gave 'em thinkorswim® web. because platforms this innovative aren't just made for traders -they're made by them. thinkorswim® by td ameritrade

welcome back to "power lunch. i'm kristina partsinevelos we want to look at e-commerce, one of the hardest-hit areas yesterday. farfetch, pfeifer and doordash, chewy and etsy are firmly in positive territory today after falling more than 10% in yesterday's sell-off two of etfs that attract those names and those tickers would be ibuy as well as onln and we'll see if today is a step in the right direction or a pause in the selling. tyler, over to you. >> kristina, thank you very much the dow transports extending their slide down 6% for the week and rising fuel costs and slowing consumer demand and they're the major concerns here, but there is a school of thought that those fears are overblown frank holland has a look at the freight fears. >> you can see that there are a lot of investors out there that

are believing that those fears are overblown, as well and we're looking at old dominion freight line up 8% and over to forward air up over 2% and will they help companies that put their freight in different ways as opposed to just point a to point b trucking and old dominion. it's the air lodgistics and they help people adjust their supply chain and something different from point a and point b we were nervous about it because the rates were falling at the same time, diesel prices were up and rail rates are still falling and diesel prices are still up and the term we don't talk about a lot on cnbc is the fuel surcharge and more than doubled. their customers pay to offset vo volatility in the fuel market.

however, most logistics players are much closer to sale prices let's look at how fedex handles the fuel surcharge diesel prices were just over $5 a gallon and that is at 43.5% and as the prices rise, the fuel surcharge. in it should -- in some cases they can help where you make money on the fuel surcharge because they're not paying the retail prices. >> the fuel surcharges are up, but the rates themselves are down how is this likely to shake out in profits >> that's a great question for some companies they can make a little bit of money. basically, they're selling diesel fuel to some of their customers because they're paying a much lower rate than you or i will see at the pump and there' a lot of disruption.

mystery creates margin there's a mystery to where it's going in different ports and make ways and a lot of different companies are taken to where they would and the rid down in the port ever april and that's really a lot of investors were nervous it's an opportunity for lots of different companies because guess what when our normal suspect ply chain is disrunned when you're a retailer, someone has to help you fix it. >> if we go back a slide to the surcharges is that what 40% of what? the total bill as my wife did yesterday a broken baseball bat to di morini >> the fuel surcharge is at

43.5%. >> it's based on the fuel price. >> absolutely on the fuel price. >> right >> because what trucking company wants to have the volatility, if de diesel prices are moving off, they can't keep the same price frank holland, thanks very much. >> so you're going through tons of bleach, breaking bats what is going on > >> he wasn't getting hits. that's the problem defective bat. >> that sounds like a monster out on that diamond. the dow is lower after yesterday's huge drop. we are still down 82 points and the decline was the biggest in two years and now we're on pace to close lower for the second week in a re we have big-name stocks with price to earnings ratios in the single digits. we will ask our trader in these stocks are a buy when we come stocks are a buy when we come back ♪ ♪ ♪ ♪

♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪

bonnie boon i'm calling you out. everybody be cool, alright? with ringcentral we can pull bonnie up on phone, message, or video, all in the same app. oh... hey bonnie, i didn't see you there. ♪ ringcentral ♪

time for today's three stock lunch. we're going to dig into some cheap mega cap stocks with price to earnings ratios under 10. first on the list is jp morgan the big bank down just over 1% today. also on our list today, the telecom giant verizon and health care company novartis.

both trading higher this afternoon. these are clearly mega daps with low pes. joining us to talk about them, david wagner, portfolio manager. let's start with jp morgan, shall we, dave what do you think of that stock at this price? >> yeah, we're definitely doing some dumpster diving today but you could not look at jp morgan from a pe perspective in my mind. given the volatility around credit reserves or if they're starting to build them like they started to do this past quarter. one must look at jp morgan through the price to book lens and if you don't that, i don't think the stock looks all that appealing. we remain underweight banks right now. we're expecting that credit spreads will continue to widen as earnings expectations see large hair cuts across the entire market and wider spreads could punish bank valuations and so typically economic growth

and rates move together so banks have either dual tail winds or dual headwinds with slowing growth and falling rates today we're seeing a divergence as rates are rising even though the pmi is starting to fall. and when it comes to banks relative to performance, slower growth fears, their more on after setting to the bet of rising rates in our opinion. >> so not necessarily scooping this one up. what about verizon dividend yield of 5% and super low pe what would you do with them. >> i think this is the first time i've ever said this, but i like verizon right now i love to see companies that are trading the a discount but i like to see companies trading at a discount with positive eps revisions. owning a stock because it is clean, that is never an investment thesis that you like to play. it needs some type of catalyst

verizon will have the first price hike in over two years so i'm expecting a eps bump of 3% this year and 5% next year and that will equate to a positive revision ie, a momentum catalyst. and of right now, i don't think the guidance is showing that and this is working well during recession periods. there is a lot of recession talk on the table but verizon is probably the safest teleconame out there and what tends to trade really terrible during recession because of the amount of leverage and the slow growth characteristics. and you couple that with the 5.5% dividend, at this juncture, verizon looks pretty, pretty good >> thank you, larry david. let's go to novartis what do you think of that one? >> i think here it is clarity.

we need clarity regarding the potential spinoff or sale of the generics business. about a month ago we found out there could be some private equate interest at 10-x ebidta but we need to regard the future of the pipeline. but the overall clarity need to be around the simplicity of what their business model could be look like going forward. the sale or spinoff would simplify the story a ton which is a valuation catalyst, something that we look for here. but honestly, in my opinion there is no strategic benefit of having a generic business if you're novartis. yes, the company has been catching a bid because we've seen cheap european pharma companies have been a place to hide and eps numbers will probably be just fine this year but i don't view this stock as cheap at 14 times earnings yes, it is cheap versus the history, but novartis, they've been trading at these levels because of concerns regarding their pipeline moving forward

and that the management team, we need to rebuild some credibility out in the market. so for us to get constructive, we need clarity around the generic business and the pipeline moving forward. especially because they have a record amount of cash on their balance sheet since they sold their stake in rush. it is been a heavily shorted name for quite sometime but that is not an investment thesis so i'm staying on the side lines here. >> dave, i love your kitchen it reminds me of the days i was bostoning from mine. those are the nice subway tiles. i remember i hated going looking for tiles. >> i love looking for tile that is the best part. >> fabric swatches, oh. all right, man thank you a lot. >> up next we're nout talking subway tiles, we're breaking down the lesatt signals about the recession probability. the recession probability. stay with us

that's decision tech. only from fidelity. in the future we'll travel to incredible places with the help of magical technology. but what about today? ♪♪ i can't wait for what tomorrow will bring, but in the meantime, let's enjoy the ride... ♪♪ (all): all hail, caesar! pssst julius! you should really check in with your team on ringcentral. oh hi caesar. we were just talking about you. yeah, you should probably get out of here. ♪ ringcentral ♪

welcome back to "power lunch", recession and no recession, that is the talk this week as the mashrket continues sell off this is the widely referred to, the twos, 10s and 24 basis points it is certainly not negative where we were a couple of months back more significantly, tyler, i'm watching the 3 month spread. and this keeps sending it.

look at how high the spread is we're off the highs of the year but still at 1.8 points which is about the highest level we saw back to the economy and the expansion for the latter half of the -- >> so this would be a flat or negative -- >> bingo >> and that would be an indication of a possible recession. and when you get up here, you have steepness and that is where you want things to be. let's look at the 10-year yield shall we just for today. it is come back down there is a 10-year yield no, that was the spread. 2.85 and it was above 3 not that long ago and people are going into bonds saz a safety trade. >> they are certainly are. but we're not back to below 2% 1.5%, any of those kind of levels that prevailed around the tart of the year so again, no recession signs coming from at least some of the widely or most closely watched yield curves.

>> the high pressure system over the ohio valley. >> record high temperatures coming your way this weekend. >> if you missed any of today's show or past shows, subscribe to the power lunch show-cast wherever you get your podcasts. >> we look forward to dom's return at thes telestrator. >> "closing bell" starts right now. >> and stocks have the worse day since 2020 we're gaining some ground in the last hour. s&p positive and the nasdaq is green. the most important hour of trading starts now welcome to "closing bell" and i'm sara eisen this is bouncing today, up .8% and the s&p up .3% and the dow about to cross the flat line we've had a few attempts at positive action and we were down 450 on the dow but nothing like we saw as far as the sell-off and the mood yesterday