♪ ♪ good afternoon, everybody. we have breaking news to begin "power lunch." the minutes of the last federal reserve meeting are out. let's get right to steve liesman in washington. steve? >> tyler, thanks very much the minutes showed the participants of the fed meeting in may agreed that they should move expeditiously toward neutral. likely appropriate at the next couple of meetings that meant the meeting they raised 50 at plus a couple more and this is the line that stood out for me they said a restrictive stance

on monetary policy may well become appropriate that means raising the rate above neutral to try to reduce economic growth. the fed acknowledged the challenges of fighting inflation and keeping labor markets strong, a polite way of saying they could not assure a soft landing. they did say, however, they should assess the risk to the economy later this year for rate hikes and that is embracing this idea for rafael bostic has to getting to neutral and looking around a number supported selling the mortgage-backed securities and several saw potential for, quote, unanticipated effects in financial markets from the runoff of the balance sheet and there was concern also about treasury market liquidity and the risk in commodity markets or the risk from commodity markets from higher prices on inflation some word that inflation expectations could become unanchored and many expect the tight labor market and inflation

to continue for some time. new inflation pressures received from china as well as the u skra ukraine war and inflation risks were skewed to the upside. overall there was a positive outlook for gdp growth in the first quarter and this year that was seen moderating this year relative to last year. so i think the headline that stood out to me, tyler from the minutes here was this idea that there seems to be widespread support from the committee from the idea that it could be appropriate to raise rates above neutral and create a restrictive, and lindsay is here with us. she's the chief economist with steeple and will david katz is with matrix asset advisers bob pisani and rick santelli are here with us as well let's quickly, rick, start with the market reaction here it's interesting because the debate that steve is highlighting about where we're

going with fed policy seems less important to the market right now than how quickly we're trying to get there. and how quickly we're trying to get there is a very difficult question because the fed doesn't know the fed talks about neutral. neutral changes and almost every fed meeting they don't really have a notion of where neutral is and look how much has changed from the minutes and we're down 7.5% in productivity and we had 428,000 in jobs and continuing claims continue to drop and we had a consumer credit jump month over month of over 52 billion and the highest ever since 1905. the dow is at, what? 33,128 before the last meeting where they tightened and ten-year rates were 297 and the two-year closed at 278 i guess what i'm saying is that ultimately they are already taking some away in the futures markets, and i think the reason the fed is going slow is because

it talks tough and the market ramps up expectation and expectations are going down and that all gets encompassed in the slow-moving fed because they'll meet what the market truly expects what was overreaction and that's their interpretation. >> let's get what you think of what steve reported from the minutes today. any surprising revelations there or pretty much what you expected to hear? >> i think one of the most interesting things in the minutes is the committee's assessment of the economy and inflation. up until this point the chairman has been very clear that he expects rates to continue to rise until inflation shows a meaningful retreat because the economy is strong and strong enough to withstand a further backup in rates, but what we're already seeing in the data are cracks in the economy with slower consumer activity and weaker production numbers so i would have expected more of a conversation around an acknowledgement of the weakness

in the economy and even rising concerns surrounding the underlying weakness in domestic activity >> let me pause for a second and we're looking at retrospect at the minutes of a meeting that took place on may 4th and some of the numbers that you referred to i'm aware of amazon closing or shuttering or pulling back from some warehouses and some suggestions of personnel cuts in other places did any of those signals happen post-meeting >> i think we've seen a second round of weakness in the data, but even at the time of this meeting we are already seeing consumer spending slow we're still in positive territory or we were during the meeting and it's the momentum that has been waning quite precipitously for quite some time and the fed looking past that at the underlying numbers of the gdp report saying well, consumers are at least still spending and business is still positive and not looking at the

potential loss of momentum continuing to exacerbate that weakness that we do expect to be more evident as we move into the second half of the year. >> so, david, the fed seems to say, okay, 50 basis points now, plus 50, plus 50 more as a kind of forecast, but lately, the ten-year bond has been backing down in yield. that's number one, and number two, the stock market seems to be having a real spasm some days up like right now, but more days than not and many more weeks than not down. >> i think the fed is walking a tightrope where they're trying to talk a hawkish tone and hopefully they won't have to do as much as their tone is the first thing is they have to break the inflation psychology if they do that then they'll have more flexibility in today's fall or winter but we think the first priority

is psyche ol we and i would not want to derail it, but it's complicated. >> it certainly is complicated bob pisani, stock reaction it looks like we're still seeing some positives >> we're up about five or six points on the s&p, and i think with good reason i think people are smart enough to know that this report is stale in an unusual way because the world is very different than it was when that meeting was held since then we've had s.n.a.p we've had walmart. we've had target and weak regional pmis and we've had very disappointing new home sales, and shockingly disappointing and we've had the pmi numbers and the regional numbers are weak and this is a very different world and the relevant phrase here and they'll assess the risk for the economy later this year. the market seems to be betting on the idea that there may be a pause that we may not get two more 50 basis points and the

third basis point rate hikes and the third one may be 25. just even that, even that idea the market has calmed down a little bit we've seen the vix calm down a little bit so i think this is a backward-looking report in in a way that's very unusual. i think the world is very, very different and the fed is pinnings its hopes that the defend is under control and it is targeting approximately see just by moving, and the market reaction is reflecting this. >> bob, anything else you want to hit on particularly the idea that when the fed next meets on june 15th about two weeks in today, i guess, maybe it's three, they may be looking at a different kind of economic forecast than they were the last time they met. >> i, unfortunately, have to disagree with my colleague of

philadelphia with the great rock 'n' roll posters of the '60s i think this is not stale and this idea here is that there's this embracing of the committee of the stance on monetized policy that's new information, i believe, for the market. we know that powell has said that we may have to go above neutral. it was unclear to me at that point. it's been unclear since then how much the committee -- how many members of the committee and how wide spread that thought was what we're seeing now is not a different world from the one in may. i think it is the world the fed has expected and we have to have a conversation here and bob has a different opinion than i do, which is perfectly reasonable, i think. is this worse that we should have had expected out there? >> i think what is happening in

the economy, the fid needs, to know than this has dramatically changed the outlook, and the idea of the 50 basis point hike in september has come off. you've also come off the fed funds outlook in terms of next year and how high the fed goes and those things have softened and the near-term raced to neutral whatever that is, two and a half, two and a quarter and i don't see the fed backing off of that. >> david katz, do you want to offer a parting word trying to figure out what to do here and the s&p was briefly negative and positive again and you've been obviously looking more to the value side of things what advice would you give here. >> from an investment perspective and it's impossible to guess the near-term move six to 12 months from now. we think stocks will be higher and there are a lot of great businesses at ten to 12 times earnings and the best thing is to take the lower time horizon

and have companies on these dips and there are lots and lots of names out there. >> lindsay, you have the benefit of being the last speaker here sum it up. where do you think we're headed economically and in terms of interest rates >> to steve's point, i do think this is somewhat as expected from the fed's perspective of the overall economy. it will tamp down consumption and tamp down inflation and it is remaining stubbornly high they will have to make a choice. either to continue to raise rates and rein in an out control divide as to what the appropriate direction of policy pathway will be. >> all right we have to end it there. thank you, lindsay piegza, bob katz, rick and steve sticking with the fed we will have mary daly, the san francisco fed president tomorrow

on the exchange speaking with her around 1:00 p.m. eastern time for more color on these concepts >> we have more breaking news out of washington and the congressional budget office releasing projections moments ago. the forecast will shrink to $1 trillion this year from 2.8 trillion last year but will increase over the next decade. on inflation the report shows the economy moving past peak inflation saying elevated levels will persist this year and then ease as economic growth slows. we'll have more later this hour when we speak to the cbo director philip swagel in a "power lunch" exclusive. >> also ahead, dick's sporting goods cuts it's outlook for the year and nordstrom lifts its forecast and both stocks are moving higher and we will trade them and one more in today's three-stock lunch. plus tesla down 25% so far this month. the stock trading bilow its s&p 500 inclszug price

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>> we are trading in big movers in the three stock lunch dick's sporting goods up 10% after falling pre-market the company issuing a wobbly forecast and isn't seeing a dramatic shift in its business wendy's rising after it, mores a potential deal and nordstrom up 11% after the retail lifted its

annual sales and profit guidance let's trade the names with marianne montain is dick's sporting goods a head fake here. then the company said well, wait a minute we're just kind of predicting the worst-case scenario here and the stock goes up. what do you think? >> first of all, they cut their guidance for same-store sales from the mid popoint of 2% and t is a gain to now falling, a 2% decline to now falling closer to 5% or so i do think they are having problems getting the merchandise. i've had an order since november, and i've yet to see that, but i just think that in terms of valuation it isn't expensive at 7 1/2 times and we just don't see a catalyst here >> so wendy's might have more of a catalyst, depending on a

possible sale, marianne, do you know that stock here they've restated their intent to put the company up for sale when you know, they've been controlling the board for quite some time now, they could only produce a 1% increase in same-store sales and an earnings decline. i just don't see the stock should be selling at 22 times forward numbers when the rest of the market is closer to 16 times. i just have to ask the question where's the beef >> so that's a pass. let's move on to nordstrom, a company that has taken its punches in recent quarters and put up much better numbers this time where do you see it going? >> this is one that's had 17% sales growth and it's driven by that revenge travel along with revenge special occasions. everybody's throwing the party now for any reason whatsoever

and also return to the office because people don't want to look like they did in 2019 so we think management is being conservative about the coming quarter. they said sales would only grow at half that rate and it's something we have to see if the rest of their assumptions are correct. at less than seven times earnings per share we would say don't sell. it's not a screaming buy recommendation it does seem more attractive for an lbl remember management was talking about doing that back in the fall of 2020, but we don't own it because we can't time those things >> yeah. let's talk a little bit more here nordstrom up against target and walmart which are different kinds of stores. i get it nordstrom's numbers don't really square with the other guys why? >> i guess because of their dependence on,a barrel, clothing

and shoes and accessories as opposed to target which did such a great job with the at-home faangs adding inexpensive furnishings to make your place more livable when we were living at home more nordstrom is really your away from home kind of play, and as i said, people are dressing for more special occasions these are much higher ticket yets than anything target could sell right now i have to say, i was very disappointed with both target and kohl's and a couple of other department stores at easter time because they didn't have easter apparel. they just didn't buy it, and i think they just didn't read the consumer very well we wanted to be out and we wanted to be showing off how cute the kids are, and they just didn't have the right mix whereas nordstrom does >> mary ann, i was looking for a

pair of ears and i just couldn't find any myself. thank you. we appreciate it >> thanks, tyler >> ahead on the show, budget crunch the cb ore leasing its ten-year budget highlighting the inflationary impact and we have the cbo director coming up and is volatility in crypto with the chipmakers that power rd mining and during may, we're celebrating asian-american and pacific islander heritage and here is cnbc producer samit pasheti. >> courage is con stageous when i show a little bit of courage in my day i know that in the act of doing so i have perhaps inspired someone else. that might not be a direct act, but i have changed the energy of the world around me. we all are wracked with self-doubt, but all i say to young people out there is stay courageous

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>> welcome back to "power lunch. i'm dominic chu. we want to get a check on what's happening with zoom video communications among the performers again today and that stock is tracking for its best week since march after reporting earnings that got the top guidance back on monday afternoon. now despite this week's gains, big ones that they are, the stock is down 45% so far this year and more than 80% off its record high that we saw back during the pandemic in october of 2020. so kelly, yes. big day, big week for zoom and still has a long way to recover from the recent declines >> down to triple digit a share. >> let's get to contessa brewer for the news update. >> speaking within the last hour texas governor greg abbot told reporters the shooting deaths of 21 students and teachers at an elementary school was what he called a mental health problem

in the community. >> anyone who shoots his grandmother in the face has to have evil in his heart, but it is far more evil for someone to gun down little kids it is intolerable and it is unacceptable to have in the state anybody who would kill little kids in our schools >> the news conference was interrupted by democratic gubernatorial candidate beto o'rourke who stood up and shouted that it was predictable and accused abbott of doing nothing to prevent it. he was escorted out of the auditorium >> also in the last half hour, first lady jill biden told reporters of course, she is going to texas she was at the landing of a plane that was part.

shepard smith was at the scene that begins at 6:00 eastern time kelly, tyler, i'll send it back to you >> ahead on "power lunch," tesla had a strong run market volatility and the musk of it weighing on the stock. 50% off the highs with its 2021 run. the last dance for tesla we have a bull-bear debate coming up on that one.

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all right. we have 90 minutes left in the trading day. let's get you caught up on the markets, stocks, commodities and the whole kit and caboodle as we used to say. the government's projections for where the economy is projected and that's ahead of the rundown, as well. let's begin with bob pisani as stocks are higher, as well hi, bob. >> they're higher since the fed minutes came out, 15 minutes higher we have a growth is back to a certain extent maybe people are less concerned about a third 50 basis point rate hike from the fed, but growth stuff predominates again today. nvidia, we'll get the earnings out from them later on, but

micron, microsoft, even apple which has struggled a bit recently are in the green right now. specula tech, apple is up and the other big names are up and these kinds of stocks, your zoom, video, most of them were sitting near 52-week lows. another growth area that's up today is travel and leisure. these stocks were down more than 30%. caesar's just had a terrible time in the last few weeks and expedia, livenation, i complained about the ticket prices, thank you. all three of them are moving to the upside those are growth names, by the way. what's weaker is the more defensive stuff and the consumer names that are out there merck was up a 52-week high, and all weaker and this is all in keeping with we like growths more over value in defensive

story here which is good news for the mental states of the average investor that is out there. i don't like the fact that industrials can't seem to rally much many of them are still 52-week lows and these are big names they may do boring stuff, and they make the stuff behind the walls. illinois toolworks, another one. another electrical components manufacturer that's one component not making efforts to rally s&p 500, and the key is 39 -- oh, what was it, 3930 a little while ago, back thursday it seemed like a million years ago and we're well off of that and looks like we're sustaining the rally for today. >> let's check now on how the bond market is reacting to the fedminutes released an hour ago. rick santelli. rick [ no audio ] >> all right

i think we have -- for once rick santelli has lost his voice, but for now we're going to go over here to the energy market where pippa is ready to take us into -- delve into nat gas and oil and all the rest pippa? >> hey, tyler. here and ready natural gas is surging above $9 at one points to the highest levels of 2008 and there are a couple of key drivers to watch high lng exports and a drought in the west which is curtailing hydro power as well as the inability to switch to coal. all of this means that natural gas storage is 17% below the five-year average just as air-conditioning season is about to kick off. it is well off the highs of the day, up about 1.1% here at $8.89 per mnbtu and earlier today it did surge 7% and touched $9.40,

but it is still on pace for the third straight month of more than 20% gain. energy stocks are also on the move today conoco, chevron and marathon, petroleum all hitting had record highs. exxon has and philips 66 among those at multi-year highs. tyler, back to you >> pippa, very much. we had a technical glitch from rick and if we can fit him in later in the hour we doll our best the federal budget deficit expected to shift as pandemic wanes. showing the shortfall, the budget shortfall in 2022 will be a trillion dollars, but it will increase over the next decade because of higher interest rates and healthcare costs for an aging population joining us exclusively now on "power lunch" is mr. swagel. good to have you with us >> all right let's make sure we have phil

swagel's microphone on for us. my guess is your prediction seems to be getting past the worst in inflation and it will be decidedly moderated at 2.3% for 2023 what makes you confident in that and what signs are you seeing that that may be happening >> that's right. that is what our forecast has that it has the strong demand and powering inflation with the supply constraints that both of those are moderating and we see it in current law that the fiscal support that was enacted over the last couple of years and the pandemic is falling away sharply so that will work on the demand side along with the fed's monetary policy. we see the initial signs of the supply burdens waning, and some of these are the data and the

ports are diminishing and we also see the labor force is coming back and there's about a million people still out of the labor force who we think will come back over the next year or two. it's that combination that we see as moderating. >> i understand that this survey was largely conducted or wrapped up in sort of the march window so the question, obviously, is a lot has changed since march. we know more about the war in ukraine and its effects and we know a little bit more about china. are you still comfortable with the numbers that you're presenting or if you had one or two to change, what would they be, if any >> so we did wrap up the projection early in march, and as you said, the developments since then have been that the ukraine war. we saw the beginning of it in february, but the impacts on energy prices and supply chains have been largely than we

anticipated as the war's gone on and the lockdowns there look to be having effects and those effects are important and they're probable not as big as we might have feared i'm still pretty comfortable with our forecast. inflation early in the year will be higher than what we had and our story is basically okay. >> i wonder about the opposite effect it's kelly here, where inflation is low pressuring us deal with the debt and bring it down and to put it bluntly. inflate it away. how much of that effect are we seeing play out? >> it is an important effect we see that. we see that both in revenues revenues are very strong and it's partly because of the nominal wage base and nominal profits are both strong and it fits into strong revenues and nominal gdp is strong as well and it is a good recovery from the pandemic on the real side and nominal gdp is elevated because inflation and that makes

the debt ratio less worrisome. >> i guess my point is this situation would look a lot worse if inflation goes back to normal >> it would look worse on the debt side. the danger, and i'll say here, the risk is on interest rates and the fed spoke earlier this morning with the minutes and they were on track to remove monetary accommodation and the risk on the pickal side, and that would feed into interest payments over time and that's the risk that we face from the inflation spilling over into interest rates >> as you look out over the next six to eight years, the portion of the federal budget that is going to go to mandatory expenses, namely, payment on the federal debt which will be more expensive, not less if interest rates go up. payments for medicare, medicaid, healthcare spending will go up and their obligation and so is

social security. what kind of position does that put the country in when we have to presumably spend more on defense when we presumably have other programs that we need to spend diskregszary dollars on? are there going to be enough discretionary dollars? >> right and you're pointing to important challenges that face the nation as we look at the fiscal outlook. what we released today go out ten years by the end of the ten-year fiscal horizon. the debt ratio is around 110% and interest payments have doubled with the share of gdp. so these are real fiscal challenges, and as you middle, there are other important priorities and national security spending is one that you mentioned and those were required choices by policymakers and we're setting out the trajectory and it's up to the policymakers to act. >> phil swagel out of the congressional budget office.

>> up next, a one, two, three punch for nvidia the broader sell-off, weakness in gaming and the crypto's collapse what is causing the most damage? we will lay it out next. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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fsd pharma >> welcome back, everybody nvidia has been one of the hottest stocks in the market the past few years until recently. it's still up 350% in three years despite losing nearly half its value over the past six months kristina partsinevelos ahead of this morning and one surprising contributor to the recent weakness we know nvidia's stock has been the victim of a growth sell-off. the job looks even bigger when you compare it to the s&p 500 and the semietf which is exemplified by the white line on

the screen the boom and bust has put pressure nvidia. it is known for its gaming graphic processing units and gpus which could for 75% of its revenue and prices are dropping and they're sold to crypto miners who use it to perform complex calculations and so much so that the sec charged nvidia $5.5 million for hiding and how many gpus were sold to crypto miners, but the mining process for ethereum, for example is changing and will render some of these computer parts almost useless for those mining ethereum specifically and consumer electronics company asos recently pointed out that the demand used by cryptocurrency miners is growth and you have a high growth name that's a tough sell in today's environment which is why you have seen it sell off. strength in data center products and the rollout of new products

specifically of gpus that could spark interest in demand with customers. it's a great point about ethereum and it's not what's going on in bitcoin and that's a big change for its change of computing power. gpus is the number one everything's piling up 4.5% may be looking for a turning point. kristina, thank you very much. >> andy jassy making comments about lowering costs >> shareholders voted against all of these investor-led resolutions and they did vote, however, for proposals approving executive compensation and board members in the stock split now this is andy jassy's first meeting in ceo and he ran the q and a where the focus was on cost and profitability on inflation. they're focused by improving productivity and he has high

confidence that he can get back on track on inflation he said this, when the war in ukraine hit inflationary costs continued, he said they couldn't keep rung the business he said they passed those on to consumers by amazon sellers. he also took questions on worker safety and climate goals all in all, guys, it didn't feel like jassy was more on the back foot which shouldn't be a surprise because it has been rising from profitability to labor and perhaps the change in the tone from the days when bezos ran this meeting deirdre, thank you very much deirdre bossa. the stocks dos and don'ts. should you buy the dip we have a bull and bear debate going old school when we come back pull bonnie up on phone, message, or video, all in the same app. oh... hey bonnie, i didn't see you there. ♪ ringcentral ♪

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>> welcome back. one of the big debates on wall street is where tesla's stock goes from here the shares are down 25% this month and we're trading below the s&p inclusion price at $6.95. we're down to $661 this follows an incredible two years when the stock gained 700% in 2020 and across the trillion

dollar metric for the first time last year. joining me now is vijay rakesh and he has a their 1300 price target on the stock and he has a neutral rating and a $250 price target vijay, i'll just start with you. how much of this is with musk's twitter bid. >> i think you can look at tesla, a lot of the down side is with the macro sell-off and with the consumer, and shanghai is a big push with tesla. the output is 50% output there so i think a lot of those factored into the drawdown in the stock, and if you look at it including tesla, it's on a downtrend with the macro consumers down, and it's up and down the supply chain and have

the headlines been impacted? yes. there are concerns about lou he's going to fund that and some of the shares and on the cold basis, tesla by itself as an automotive company is executing well. >> $1,300 price target come from what is that based off of? >> based off the 20% market share if you look at forward in five years you're looking at almost $5 million plus based on an average price there. that's how we are looking at how you build the price target there. again, this stock was close to $1,100 early in the year due to concerns of the market, all have taken a hit >> you say we see the stock as

egregiously overvalued with serious competition coming fast. tesla may be the category king today but future share losses are just a question of timing. your price target reflects that, $250 you say you're neutral that sounds like a sell to me. explain why you think tesla is so vulnerable when all i see driving around my neighborhood are new teslas >> yes a couple very good questions in there. the easiest one is the valuation one. i think tesla is a phenomenal company. i expect china to be back online producing a lot of vehicles before too long. you have both austin and berlin ramping. yes, you see them everywhere when you get into the context of what are they selling and where are they going to sell it,

toyota is the largest, more than 9 million last year. about $300 million or has come off with the market. tesla was well over a trillion which was more than the rest of the auto industry combined or the auto producers combined, i should say that is maximum speculation for a company that produced less than 900,000 cars last year. there is nothing they can reproduce or sell. 45 new evs you're probably better off looking in other areas valuation is distorted and there are better places to invest in

the supply chain >> let's go back to vijay. how do you react to craig's point that there's a lot of competition coming and i guess implicit in what craig is saying tesla's era of market dominance may be passing >> let's take that one by one, tyler. thanks for that. production, shanghai is almost back to full production here it will be a full production end of may hitting much higher levels the back half. they have kept the numbers and shanghai is almost fully open now. that production is out, point number one, in terms of rebuttal number two, when you look at competition, look at the profitability on tesla they are already at 30% growth

margin toyota for 20 years, 30 years? tesla on the electric vehicles is better than toyota. and given the fact tesla has still not the batteries, 50% of the cost of the prior battery yet so a lot more cost efficiency coming down the pike. anyone can make an ev. they are a dime a dozen. can you make it to scale >> they're more than a dime a dozen. but at any rate, they're out there and more are coming. i'm sorry, craig, we have to go because of time. this is a to be continued debate for sure we'll have you both back

thank you both up next an etf that's a cash could you outperforming the market details when "power lunch" returns. i think dom is back with the telestrators i had so much fun with it i had so much fun with it yesterday. right now. and thinkorswim® is right there with you. to help you become a smarter investor. with an innovative trading platform full of customizable tools. dedicated trade desk pros and with an innovative a passionate trader community sharing strategies right on the platform. because we take trading as seriously as you do. thinkorswim® by td ameritrade - hiring is step one when it comes to our growth. we can't open a new shop or a new location without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians, service advisors, store managers.

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as market volatility builds with free cab flow, dom chu with the etf.

>> people are focused more on balance sheet, strength, ability to generate profit, that sort of thing. and this is one that shows in particular just that move towards quality. the spdr, qus. outperforming the overall broad market, the500 you can see there by 3% overall. this is focusing on things like, again, balance heet, strength. if you take a look at this new kind of way to factor etfs, that focus on free cash flow yield, you take a look at one in particular, the pacer u.s. cash cowz etf it's positive on the year on the s&p 500. now the interesting part about this particular etf is that it focuses, again, with the name cash cows on those that generate

free cash flow the ability to make money after paying off all of your expenses, all your debts and all your interest payments and everything else, what do you have left for things like dividend payments and stock buybacks and everything free cash flow has done really well the curious part about this particular kind of outperformance, these quality low volatility etfs, the types of companies that are in this particular etf, three of the top five holdings and five of the top ten are in one sector in particular >> let me guess -- >> i'm going to give you one guess -- you get two guesses but you'll only need one. >> it's right behind you on the screen >> take a look at this, right, it is valero, occidental and phillips 66. each within the top five exxon is also in there five of the top ten top

holdings >> are they in the s&p 500 or not necessarily? >> russell 1,000, screen them for the highest free cash flow yield. >> and soap the highest free cash flow yielding company would have the biggest percentage in the fund >> each is capped at 2%. >> he has all the answers and the best etf name ever >> listen to us on the power lunch podcast on your favorite ach. >> and watch "closing bell ". >> coming up right now stocks are solidly higher with the nasdaq taking the lead for a change at session highs as we head to the close the most important hour of trading starts right now welcome to "closing bell." i'm mike santoli take a closer look at the markets. the s&p 500 now up 1% building on modest gains earlier in the last hour or so after the fed minutes from its last meeting a few weeks ago did hit. nothing new, hawkish seem