lot of investors looking forward to taking a breather this weekend. >> yeah. >> and maybe disconnecting >> what a week we've h.it continues now as we finish the week up and round into the close. thanks for watching "power lunch. "closing bell" starts right now. hope you have a great weekend. >> yeah, another big intraday reversal this time to the downside. stocks are pulling back as we wrap up this wild week on wall street we are sitting at session lows right now. this is a make-or-break hour for your money welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand, down 350 or so on the dow. started the day higher as you can see. it's been dropping ever since. the s&p 500 is now down 2% which means we are weaker overall for the week, just giving you the week-to-date right now, down 1.17%. nasdaq sent 2.5%, also weaker overall for the week the small caps down 2.25% as well check out the bank stocks. some mixed action today after

reports from jpmorgan, citigroup, morgan stanley and wells fargo. morgan stanley is the loser today, down5%. wells fargo one of the winners, up 3%. we'll talk to the cfo in a first on cnbc interview in just a moment from now. also the man at the center of the big deal news. ceo rodney mcmullen is here to tell us about his $24.6 billion agreement to buy albertson let's break down the reversal in the markets are our senior markets commentator mike santoli and his dashboard. we're not giving back all the gains from yesterday. >> no. >> but still, it's an ugly turn. >> high compression and high emotion market and when you have the moves that shuttle from low to high in a hurry like we saw yesterday, it shows you it's kind of a quick money easy come and then, you know, kind of quick to discourse i'm not saying it's all

mechanical and technical but that's a certain element of t.yesterday ehlo in the s&p 500 was 3500 so we're above 100 s&p points above where we were and 200 points from yesterday morning's low to this morning's high and now we've given back, you know, let's call it a third of what was gained, so it's not comfortable, but right now you're still hovering right in the vicinity of the september 30 lows really not that far either from the june 16th lows so essentially over the past four months you haven't been any net progress but if you bought at the lows, you're also not quite yet a loser. treasury yields remain a big part of the story. equity rally yesterday in part was about yield backing off to a degree and not reacting in a very sharp way to the cpi number well, here is the real ten-year yield. this is the yield on ten-year treasury inflation protected securities, the nominal yield is over 4%. 4.02 that's pretty much a knew high for this cycle what you see here it's flattened out on the real yield side so

what this means is you get this yield over ten years, plus whatever the cpi that's the adjustment that gets made for the return here real yields is what restrict economic activity. it makes yielding instruments more profitable for the people who own them and for lenders and for borrowers it means there's a bit more of a hurdle rate. that what acts as a restrictive kind of a force on economic activity that's what the fed wants and the stock market valuation is pretty sensitive to this number here. >> if yields are higher on the day then the stock market is lower. >> that's a big chunk of it, yes, though i would argue it's sort of like a give-and-take process because the stock market can ultimately make its peace with higher yield levels at some point. keep in mind, june 16th, we did have somewhat lower yield and the s&ps at the same level, right, so it seems as if you can have a little bit of a loosening that have relationship over time i think the market just needs clarity and where the fed is headed, the destination level, right now it seems to be under

5% in terms of short-term yields and we'll see approximately when we get there once you have stability, bond market relativity can calm down. that's a pre-requisite for any sustainable advance in the equity market. >> we've been sort of obsessed with what's happening in the uk and whether that market dysfunction could really start to pill over or make the fed pause. the determination today is no, that it's not going to get in the way of the fed policy, but i do wonder if some of the political developments have quieted that situation or the guilt, their equivalent, still a higher yield. >> i think investors and the market itself doesn't know when it's on its own, when the bank of england is not in there, and they are not in there right now if it's going to get messier what that means if yields are going to get really disorderly to the upside and you'll have a lot more losses taken on the fixed income side of portfolios, and that's been a drag on stocks all along. i don't think anyone is looking at one particular thing and says uh-oh, that's going to be danger point. it's just this general unknown of we don't know exactly what sets it off.

we have demand for all of the supply. >> energy and consumer discretionary, worst performers. he will care is holding up the best but down half a percent see you later for market zone. mike santoli take a look at wells fargo, popping today after reporting third-quarter earnings which topped analyst estimates and the company's performance was hurt by operating losses of $2 billion related to litigation, customer remediation and regulatory matters joining us here first on cnbc is wells fargo cfo mike santomassimo welcome back >> thank you, sara thanks for having me. >> the markets are taking it well, and it looks like aside from some of the litigation costs it was a beat on the top and bottom line. how would you characterize the environment right now that you're operating in, consumer, credit, all of it? >> yeah. like it's a challenging environment overall, but i think what you saw is some solid performance when you looked through into the underlying, you know, fundamentals of the business you know we had strong net interest

growth driven by the higher rates and loan growth that we've seen we had really good credit performance that's continue, you know, for the last number of quarters across both the consumers and our commercial portfolios we've got really good strong capital ratios that continue there, and we've been continuing to execute on the things that we can control the most you know, our risk can control infrastructure and build-out, our efficiency program, and the products and people that we need to continue, you know, to grow across the businesses, so good solid performance a really challenging, you know, macro environment. >> the self-help story as one analyst told me today is very much intact here you mentioned net interest income it was up 36%. the margins were a beat as well. how sustainable do you view these kind of gains? do you think we're at peak, net interest income? >> well, i think it's hard to tell, right? the fed is on a path to continue to increase rates, at least

that's what it appears to be doing, and the market is pricing in a number of incremental rates from here. so that will certainly help, you know we'll continue to have to pass some of that along to customers through positive price, and we'll see how loan growth progresses for the rest of the year and we're in an environment where we're benefiting from higher rates as we thought we would coming into this, given our positioning, you know, that we've done over the last couple of years. >> you mentioned deposit pricing, and i wanted to hit that, too, because i know investors are really paying attention to the outflows right now happening in deposit your covers were less than some of your competitors that reported today first i'm wondering why is that and just how competitive do you think that's going to get, the pressure to raise those prices >> well, we certainly have different mixes of businesses, so that's probably part of, you know, some of the differences that you see across the peer set. you know, for us, as we over said for a while now, as rates continue to rise you'll see

deposit prices gun, and as they rise from here the prices will go up a bit faster than you've seen so far, you know it will happen most in our corporate investment bank where those are the most price-sensitive deposits we're also seeing that pressure in our wealth and investment management business and to a lesser degree on the core consumer side but from here as rates go up you'll see pricing definitely go up. >> you mentioned loans also growing, and we saw that across the banks, though your loan growth was a little bit below consensus and quarter to quarter was florida. why is that, and is that the end of loan growth >> well, well we thought coming into this quarter that the growth rates would moderate just a bit. what we saw in the first half of the year was the really strong growth, you know, coming out of first quart err and into the second quarter, and we knew that just wasn't going to sustain itself across -- across the book, but underneath that you're seeing our credit card portfolio continue to grow, you're seeing

the home lending mortgages continuing to grow, a little bit offset by our auto portfolio and then you're seeing some good stable loan billion dollars across the other businesses, our commercial bank continues to grow and it's offset a little bit by what's happening in the corporate investment bank, but overall we're about where we expected based on what we were seeing earlier in the quarter come out of the second quarter, and then from higher think it's going to be, you know, dependant upon what happens in the overall economy, and i think, you know, we're not past the utilization rates in our commercailal businesses, aren't past where they were, you know, in the pre-covid so i still think there's opportunity to grow here and a lot will be dependant upon what happens in the environment. >> are you guys expecting a recession any time soon? >> well, you know, i leave the projections of whether we're going to hit a recession or not like to oh, but i think from what we're seeing so far, like you're going to see some slowing growth as rates rise, but so far, you know, consumers are doing really well.

they are out there spending. we're seeing good healthy activity across our commercial client base as well, and so we're not seeing the impact of that yet for sure, burks you know, i think we're certain that the economy will slow as rates go up, burks you know, i'll leave, you know, timing and depth of a recession maybe to others to project, but -- but i think we'll certainly see that slowing happening over the coming quarters. >> i have to ask you obviously about the $2 billion hits. obviously you're still dealing with big regularity and litigation costs, and any sense of what inning we're in here >> well, i think, you know, these costs are just part of the process that we need to go through to put some of these past issues behinsd, and we're working really hard to do that we're making good progress on it, but as we've been trying to say for a number of quarters, still have a lot of work to do, still working through this with as much urgency as we can, and the costs we saw in the quarter are reflective of the progress we continue to make in that work

effort. >> investors seem to agree stock up 3%. mike, thank you for joining me today with some color or those results. >> thanks, sara. >> cfo welts fargo, money don't miss my first on cnbc introduce with bank of america ceo brian moynihan look at, that kroger and albertsons, both trading in the red today on news of a nearly $25 billion deal to combine the companies. we'll talk to the ceo of kroger about the strategy behind the acquisition and the potential concerns of regulators it's a cnbc exclusive. dow is down 350. you're watching "closing bell" on cnbc.

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huge deal news today kroger officially buying rival grocery company albertsons in a $24.6 billion deal both stocks are pulling back on the news joining me now exclusively from cincinnati, ohio, kroger ceo rodney mcmullen. rodney, welcome. thank you for taking the time. >> thank you hi, sara, great to see you again. >> you, too. i'm wondering how long this has been in the works because albertsons announced back in february it was pursuing strategic options. how did it come together >> yeah. if you look, it really started to get serious about i would say two months ago, and -- and the fact that the ceo of albertsons, we've known each other for years

and years and years, and it really was a conversation that the two of us had in terms of there should be something here that makes sense that ends up being good for customers, good for our associates, good for the communities, and really creating a new competitive company that really if you think about competing against the big box super centers and the online players, just improving that, so really vivek and chan, the chair there and steve feinberg, really you know are thinking about together how do we create something that really helps the customers and the communities? >> well, the stock reaction i wanted to ask you about, rodney, because your stock is down 8%. albertsons' stock is pulling back, either lack of confidence that this deal gets done or that it adds value for kroger what is your reaction to that reaction >> well, if you look, you know,

short term i always remember giving warren buffett credit one time about short-term voting machine, long term it's a weighing machine and we feel very strong over time that this is really good and creates value, and if you had a chance to listen to any of our earnings call, you know, this increases our tsr model or commitment of 8% to 11%. it increases it for the next four years, so it's a great value for shareholders and improves cash flow as well. >> what about the regulatory piece of this? a lot of concern that this will not pass muster with the antitrust authorities combining such big -- boast you have such big presences, huge employee work workforces why do you have confidence that you can get it through >> we've been working with our outside counsel from an ftc standpoint and we'll sit down

and be very cooperate with the ftc it real gets back to the conversation comments that i made before. we actually believe that this will increase competition. if you look at the synergies that the combined companies will create, we will invest half a billion dollars or $500 million in lower prices for customers and especially in this inflationary environment it's a huge help. we also will spend $1.3 billion on customer experience as well which that also adds to it and it creates more solid jobs for our associates across the country, and obviously those are great union jobs, and between the two companies we'll have over 700,000 associates, so from all the work that we've done and working with our outside counsel, we really think and believe that this will increase and improve competition looking forward. >> don't you think it's going to be an uphill battle, rodney, to try to convince -- this administration that's already been skeptical of corporate

consolidation at a time where food prices in september rose 13% from last year and an administration that has been very friendly to the union >> yeah. that's one reasons why we shared that we expect the closing won't be until early 2024, and we believe that there's a great reason for the -- to allow the two companies to merge, and it really does, as i said before, allows the companies to be more competitive against, you know, the online players and the big super centers, so, you know, for us, we look forward to sitting down and having the conversation and feel that it's going to be very good for everybody. >> just want to point out to everyone, session lows for the s&p down 2.3%. the dow is down 400. another turbulent day here and a big turn in terms of sentiment throughout the day rodney you mentioned that as part of this you'll be investing in price or lowering prices of

albertsons and i think the math works out to about 1%. is that enough >> yeah. we think that's a great first start. as you know if you look at kroger we've been investing in pricing for the last 15 years and we've done it and looked at it market by market in terms of where to make the price investments and how, and we think the $500 million is an awesome first start, and if you look over time our strategy will always be to continue through process change, costs out of the business and then turn around and get some of that to the customer and certain in this inflationary environment it's even more important to try to help support the customer's budget even more so. the other thing that's really important is if you look at the combined company our brands is $43 billionairia, and, you know, it also provides a great opportunity where you don't have to give any compromise in terms of quality, but you're able to

stretch the budget as well, and when you look at the two companies, we have an incredible our brands portfolio. >> the other concern that i've heard today from traders an analysts had to do with the plan to divest some stores in order to appease the regulatory authorities, and just who is going to be the buyer for some of these stores, and at what price? you're spinning that off into a separate company what can you tell those that are questioning what type of deal you're going to get on the other side >> well, we feel very comfortable that we'll be able to find buyers that are strong great operators for the stores, and obviously we didn't have any conversations with anyone before the announcement, but i know when talking to our investment bankers they already had people reaching out, and if you look at the structure and deal in terms of being able to create spin co, that's one option as well to make sure you have a strong

viable competitor that's able to compete and do it successfully in the future. >> i think there's a clause in the deal that if the government does require more than 650 divestitures then you, then kroger can walk away from the deal why did you choose that number >> it really is -- you know, if you think about everything within the agreement is a negotiation in terms of trying to balance the risk and the shareholder return, and it was really the -- the number that made sense overall now we don't think and we'd be surprised to get anything close to that, but you always have to have some type of out in the agreement. >> so -- you've been making the case about price what would it mean for the consumer so walmart still has 22% or so market share as of last year in grocery. your combination i think would be around 13%, but then the next pure play grocer would only be, i don't know, 5% or so ballpark numbers, but what -- what would it mean for the consumer why is that not

anti-competitive >> i think you have to look at it two ways. one is the way you did and then market by market and, you know, if you think about in certain markets you have an awesome local competitor in heb other places "politimix and theu have aldi and leadle that's more broad-based across the country and then costco as well. it's really important and you have to look at it market by market, and as you know you have followed our industry a long time there's tons of competition and over time the customers are always going to get a better and better deal. >> what about the investors you? know, interesting track record when it comes to historical comparisons on deals there's albertssons safeway, that faced a number of issues. albertsson tried to go public a number of times, the amazon whole foods deal wasn't all that it's cracked up to be. have 3% market share and everyone is scared that they are going to take over the whole sector, so how can you ensure

long term that this -- that this one is right >> yeah. if you look for us and, you know, we -- several years ago we merged with fred my yes, and fred meyer has been an awesome merger and if you look at many so of the things that fred meyer had with the marketplace store and like that we've been able to scale it across kroger if you look at harris teeter, it would be another example on their fresh areas and on their online business. we were able to scale that across kroger, and if you look at roundees it would also be fresh, so we have a great track record of merging with companies, and i call them reverse synergies in terms of things that they do awesome and bring it into the whole company, and what we find is when we merge with companies everybody can learn from each other and how do you get the best of both, and we have a strong track record of being able to do that with several previous mergers and expect to do the same with albertssons because they have great talent, great leadership

and they do some things amazingly well and we'll be able to share those ideas and take it even to the next level for the customers and our associates. >> well, we know it's not set to close until 2024, so hopefully we'll have a lot of time between now and then to talk about how the integration is going rodney, thanks for joining me on the big announcement >> thank you, appreciate it the. >> rodney mcmullen, chairman and ceo of kroger. take a look at the markets, down 2% in the s&p 500 and down 332 hit session lows a moment ago, still down more than a percent on the s&p with every secretary ore lower held down by services holding up the best the uk has been at the epicenter of market worries with market watchers watching the headlines surrounding prime minister truss and her u-turn and as we head to the break check out today's top

tickers, ten-year yield right on top, center of the action. bonds are selling off, yield a bit higher and ten-year goes above 4% followed by jpmorgan, an earnings winner, the s&p 500, dow and tesla which is down 7%, wnad of dogred we'll talk about that later in the market zone. we'll be right back. the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.

breaking news. right now atlanta fred president fred bostic and steve liesman here with the details on the news line. steve? >> reporter: thanks, sara. president bostic has acknowledged making a trade that violated the federal reserve's competitive interest and trading rules. the federal reserve board's ethics office have found three specific issues, the first being that he helped treasury -- held more than $250,000 of treasuries and hex tensive trading during the blackout period and he

also -- sorry, one second here, looking at it, he emitted a substantial number of securities transactions from his disclosures. these are being reviewed by the ethics board they -- he has said that these were inadvertent trades, that he was unaware that these trades had to be -- that the manager of his trades had to be aware of following the federal reserve board's rules. he also trade, by the way, during a certain blackout period of trades during 2020. >> if so, clearly this reminds us, steve, the fed trading scandal that happened. what was, it last year that led to some resignations of the regional fed presidents? >> there were two federal reserve -- >> robert kaplan. >> and eric rosenbrand who both resigned as a result which don't know what action will be taken relative to bostic the board put out a statement they were stayed with the

explanation that these trades were ined a vermont sglent that they were inadvertent. >> okay. well, keep us posted on that, i guess how it unfolds in. >> steve liesman take a look at the market. the dow is falling sharply still on pace for a positive week after yesterday's surge here's the up-and-down action on wall street. it's been one of the stomach-churning weeks monday down 93 tuesday up 36. wednesday down 28. you get the picture and then thursday was the huge swing, quite a reverse a. we were down 550 on the back of a cpi report with mixed expectations and finished up 827 points, thanks in part to a rebound in the british pound. we're down another 1% right now, 294 points volatility, as i said, a lot of it can be attributed to what's happening in the uk, and today some big news. a major u-turn for prime minister liz truss announcing plans to now reverse part of the government's controversial tax plan, including abandoning the plan to prevent corporate tax rates from rising.

at the same time, also firing her finance minister after just six weeks on the job investors have certainly been following every twist and turn of the saga with bond and currency markets especially seeing huge amounts of volatility we've got a special guest, our old friend wilfried frost who is now a sky news anchor and cnbc contributor joining us welcome back to "closing bell," wilfried i've been waiting for this day for a long time. >> my pleasure i'm sorry it's not better news to be joining you with. >> tell us are these actions going to be enough because it doesn't look like the bond market has fully calmed down. >> no. i mean, look, today we did see the prime minister reverse that corporate tax change, only saves about 15 billion points. we did see her appoint a new finance minister, someone who is expected to be more orthodox and less cavalier, but we also have to remember today, sara, that that bank of england two-week long special expiration did expire that was designed to lower the

long end of the yield curve to try to help the uk pension funds exposed to liability driven investments, ldis to lower their leverage, and we hope over the last two weeks that they have done that, but that move in the long end of the yield curve higher, particularly into the close today is a little bit of a worrying sign, but i think the takeaway today is monetary policy and the expiry of that bank of england scheme has outweighed anything that the government could announce on the fiscal side. >> so -- but what happens to her? is there going to be pressure on her to resign still, or how, she i don't know, fixed it >> i mean, today, she's bought herself more time. the question genuinely is it days or is it months, and i think what's fascinating it's markets that have pressured a new prime minister after just 38 days to u-turn on her signature policy and to fire her most senior minister, someone who is a close ally of hers, and it

could well be markets from here that decide if she does get days or months. her mps who will ultimately decide her fate from here are dissatisfied and disenchanted, not least because of terrible poll ratings but if the markets improve. if the markets show confidence in her government in the immediate turn, it might buy her a little bit more time from here this reset today. >> yeah. >> it wasn't a careful reset in the middle of the government it was a desperate attempt to keep the wolves at bay in the short term. >> well, clearly she got the message. so you mentioned that the bank of england policy has been outweighing the fiscal policy. you know that's what sparked here in the bank of england. are they done with this emergency bond-buying thing? >> well, their current policy which was two weeks long has now ended and expired, and we wait to see if it was enough. i mean, the encouraging thing was that the -- was that the bank of england governor was

very clear it was going to expire today so pension funds who had exposure to ldis had no excuse if they didn't deleverage worthying thing is yields only load for the first half of that period so there is a risk that some pension funds, despite being given that window, may not have successfully de-leveraged we'll wait to see next week, and the question, if they fail to delever de -- fail to deleverage, or will it be confident enough to see rising again on monday we'll see son monday. >> fred, we missed you you didn't make the best trade when it comes to getting paid in pounds versus dollars. >> don't remind me. >> not good timing for you. >> and i miss you, too, thanks for having me. >> all right maybe i'll come visit you, wilfried front let's bring in former jpmorgan chase chairman jacob inningal

where all the discussion is on central bank and how they should respond to inflation and now to financial stability concerns like the uk and whether those things are going to be at odds and this is going to prevent them from moving forward with the inflation fight. what do you believe? >> the last two days have demonstrated again that financial markets are extremely sensitive to news, extremely judging without conducting a referendum on a basis on what is coming to them, and this means, therefore, that policies must be presented to the market in a very clear way, transparent and clear, and i think that what is happening there now, in addition to the fundamentals that we are not going to go into, i think that the communication with the markets do not pay enough attention that the market reads

through on the lack of depth in the preparation and in the presentation in any event, the fact of the matter is that we are part of a more global scene. central banks all over the world, and whether it's in the united states or the forever, for example, clearly have been behind the curve, and i think it's not just behind the curve in the sense that inflation came as a surprise, but really behind the curve in a much earlier sense. you spoke about financial markets. for a long time interest rates were kept too low for too long, and, of course, it was a good reason we need to make sure that the economy recovers from the pandemic and all this kind of thing but unconventional monetary policy must be temporary by definition, and i think that what happened here, by pushing interest rates down

excessively, investors were pushed to chase after yield. they have taken excessive risk, pricing of risk was salted corporation engaged in buy-backs instead of investment and equipment, and it has become as a result a disconnect between the financial sector and the real economy, and for a while, people felt that there was no inflation anymore but there was inflation. it was not in the cpi. it was in the stock market >> you were warning about that for a long time, that the asset markets were showing the inflation and that the central banks were staying too long at the party and not anticipating it i think the question now, jacob, is how the fed reacts as this point. it's trying to catch up, and there are now calls for -- for it to potentially moderate or slow down because of what's

happening in the economy and in the markets. what would you say to do >> yes, well there are two parts of your remark you said how the fed reacts and what should it do. i think as a general rule the fed should not be a reactive body it should be an anticipatory leading body, should drive the car through the front mirror rather than the back view mirror it should look forward, and, therefore, the statement that says we're data dependant and will not move until we see the data forces us to be behind the curve. everybody realizes this was a bad strategy and we need to look forward, but the question is what now first, there is a large gap that has been created from where the fed needs to be to where it is, so it is clear that that's why the steps were very welcome of raising interest rates with significant steps of 75 basis

points each round, and i expect it to continue in the next announcement the question is now, however, what next? should the fed yield to the cause of saying be careful, go slowly >> you think not. >> well, i am sure not and the convenient that one of the important instruments of central banks is credibility, credibility and clarity, so, therefore, by being behind the curve for so long, some credibility was eroded, so one of the purposes of raising interest rates now is first to move to the right direction, to the right operation but also to rebuild credibility. i want to say one more point we are focusing on the interest rates as it is this is the manish u it's an important one, but during the period of qe a lot of

assets were accumulated in the balance sheet of the central bank, and now we're going into the phase of qt, namely quantitative tightening instead of quantitative easing when you're talking about qualitative tightening, the quantities that we need now, fed need to transmit to the market, the quantities are huge, and, therefore. >> yeah. >> and really unsettled equilibrium. when it's here it wants to go slowly but in a very clear way and the path needs to be declared in advance. i would not in any event give up today the fight against inflation because this is the sine qua non for monetary policy let's admit, much of the trouble did not come from monsy policy, we have war, we have food and energy and all of these things have nothing to do with policy.

>> true. point received thanks very much for coming on and sharing your views of what you think central banks should be doing i know you're doing that all week long at the imf bank world meeting. looking at the dow down about 323 points or so s&p is down 211. you've still got every sector lower, a little bit off the lows of the session which we hit a moment ago nasdaq comp down 2%, getting hurt the most on the higher yields down about 3% overall for the week tesla's tumbling that's not helping following a big price target cut coming up, the one headwind one wall street firm is warning about here next.

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and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity we are are now in the "closing bell" market zone and senior markets commentator mike santoli here to break down the crucial moments of the trading day, plus leslie pick on bank earnings and phil lebeau on tesla's move lower mike santoli, dow down 330 and the 2% decline in the s&p, i

know bond yields are higher and the dollar is stronger that seems to be the story here. >> yeah. >> but it comes on a day when paining results are mostly better, and those stocks are reacting positively. >> for sure. it's not a one-way move through the s&p 500 has spent time every day this week under this 3600 level which it had only been below once before so clearly there's a heaviness here because yields have that pressure on oil and energy stocks down today. i think they are one of the pieces of the puzzle that's not always been in place this year so that's certainly a weight as well it doesn't necessarily undue whatever was achieved yesterday. we can argue about what that was, except to say that it found a lot of automatic buyers with the s&p around 3500. people were leading a little bit too negative, and you clearly got a big flurry of short covering and people saying enough is enough today you would like to see it follow through to the upside we're not getting that it leaves everybody apprehensive about what there is from here.

october starts getting a little bit seasonably but it's hard to just lean on that alone. >> let hit the data point of the day which was retail sales it is a consumer economy out this morning, flat in september, but if you look under the hood, a more nuanced picture of the consumer so strip out autos and gas and retail sales were up .3%. resilience consumer, higher prices and boosting groceries and clothing sales, and department stores were big winners. sales there up more than 1% from august shares of major department stores having a pretty good october so far macy's, nordstroms, kohl's all outperforming the broader market and the rest of the retail space, and we should note the holiday shopping season has started even earlier this year amazon, target and walmart all with black friday type sales events this week, but independent cheques on amazon's two-day prime event pointing to weaker spending. some big declines. target down 5% and bath and body works down 5% and amazon down 5% mike, a lot of the growth is really happening in inflation,

right? >> yes. >> and the higher prices what sort of view does it give on the consumer as it relates to some of the stocks >> the year-over-year increase in retail sales at the top line is basically the same as the recent annual cpi number, so it is mostly priced consumers have the wherewithal to cover it. there's a little bit of a bridge from credit, no doubt about that i don't think there's really a sense out there that there's pent-up appetite for a lot of things it seems as if the goods, you know, binge is well over what's also interesting is this for the second time this week, vice chair of the fed brainard pointed to the fact that there were fat profit margins in the retail sector that could be a cushion for how you can essentially kind of slow down the economy, bring inflation down and not cause a lot of unemployment that may be good news ideally for the economy and for the fed's goals. not great news for retailers, so it just sort of keeps the pressure on. >> no question about it. let's hit the bank stocks because they are big movers today after earnings from some

of the biggest names on wall street jpmorgan chase, citigroup, wells fargo all beating estimates thanks to higher net interest income thanks to the fed morgan stanley is under pressure after mission on both the tom and bottom lines following a 55% plunge in investment banking revenue. leslie picker joins us investment banking has been a tough space all year any green chutes from today's results? >> yeah. you could see just from the price reaction there morgan stanley has about 17% of its revenue coming from investment banking relative to about 10% for some of its peers, so as a result the weakness there led to a miss on both the top and bottom line and declines on both the top line for the quarter. we have a nice full screen which shows just how poor investment banking has been this quarter for morgan stanley it was down 49%. jpmorgan down 43%, citi down 64%, and, you know, i spoke with some executives about this

sharrona shia, the cf offmorgan stanley i asked what the pipeline looks like hand whether we could see some improvement and because we've had several quarters that look just like this and the ceos, the c suites across corporate america are ready for the markets to stabilize before they consummate some deals in a big way. jamie dimon said he urged analysts to mold lower their investment banking revenues next quarter compared to this quarter based on what they see in the pipeline today green chutes, not too many on the horizon, at least in the near term, sara. >> overall in terms of what's driving the better results, i guess the net interest income and margins which we talked to wells fargo about at the top of the hour is a big story with the feds raising rates, though first republic is having a pretty awful day. the worst performer in the s&p, down 16.7% on the idea that interest margins may be peaking. what are you hearing about that?

>> yeah, you hear kind of the tale of both sides of that, this idea that potentially on the deposit side they could start to see more significant outflows from deposits which would require them, of course, to raise the interest that they paid to depositors to hold those in their banks and loan against that and that, of course, would cut into their margins for loan-making and that's something that would completely shift the dynamic. however, among the bigger banks, those with the scale, those that you show on the board right there, they actually by and large raise guidance, beat analyst estimates for nii and that's been a very clear bright spot for the banks the question becomes now that the terminal fed funds rate appears to be a little bit higher or a lot of people are expecting it to be higher, you know, what does that actually do for markets because this is such an unprecedented environment that we're experiencing right now. >> leslie picker, leslie, thank you very much. let's hit tesla because it is among the worst performers in

the s&p 500 and draggin out the nasdaq, part of a nearly 3% drop for that index wells fargo slashing its price target on tesla to 230 from 280 citing headwinds from rising interest rate. phil lebeau, what do you make of that call? did they highlight anything new? >> reporter: they said if the interest rate is behind their call on the price target being slashed, but if you read the note it's pretty bullish from what they are expecting from tesla over the next couple of years. in fact, they raised their estimates between 23 and 26, so even though they cut the price target, they are raising their estimates and they point out the inflation reduction act is a tailwind probably best suited for tesla among all the companies trying to take advantage of the rotation fordsor towards electric vehicles here in the u.s. >> mike, tesla is down arc innovation which has tesla is down 5% and the nasdaq is down 3%, so clearly the rate

story has more to play out here on this sector. >> right it's the rates and really it's just a matter of, you know, where the greatest, again, crowding and valuation premiums were in this market. tesla is sort of experiencing the recoil from exactly what spring it higher in that 2020 to 2021 powered do i think the results are pretty solid in tesla's terms, but they are not really accelerating, and there was a massive premium in here all along based on hopes and drones and jeanus and all the rest of it, and, you know, that someone swha has been muted and when you don't have price momentum in the stock it's tough to keep up the enthusiasm i think more broadly, you know, for the name. >> looking at new 52-week lows today. tesla is one of those trading at lows we haven't seen since june 2021 match group all-time lows, generak and sea gate we're going into the earnings

season and for bank result, mike, it doesn't seem like the market is the too focused ton with all the hubbub around interest rates and currency. >> the bank stocks themselves are responding to the numbers. we're going to get a greater critical mass of earnings. i don't know that you can craft a story line out of whether earnings are good market-wide or they are not good, but usually what happens is you're going to get pockets of strength. you're going have in general better than forecast and then you see how it shakes how the not a couple of weeks. i think that the welcome break would be if we can just concentrate on things like the flow of earnings as opposed to the macro stresses again, we keep talking about it. yields in the dollar are going to dictate whether you can take advantage of those kinds of things. >> we're seeing the ten-year about 4% we're in the final half hour of trading. where do you see it going? >> yesterday was an 8 1/2 to 1 up day and today it's the reverse of that. sloshing back and forth. yesterday a lot of focus on the

eatus of take a look at small versus large this week. small caps ton do okay on a relative basis they have really kind of led the market lower, and they have kind of outperformed a little bit that's one of those little glimmers you can look for. the volatility index not doing much, but it's still above 30 which is still an agitated situation, and the vix futures are showing that we expect continued unsettled markets, so off the highs but not very much, sara. >> we are, just about the lows of the day right now take a look at the nasdaq in particular that's down 3.2%, continuing to sink all the big cap tech names are weighing right now apple the worst of the group tesla right down there with t.amazon almost with a 5% move lower so some pretty heavy selling here, almost like a delayed reaction to the hotter than expected cpi inflation report yesterday off that big rally we got intraday when the british government changed its tune on policy and the pound real

there's the s&p down 2.6%. every sector is lower here into the close. the worst performer, consumer discretionary, energy and materials there at the bottom of the list as well technology though getting hit pretty hard. down more than 3% for the nasdaq on the week. the s&p 500 down 1.5%, and the dow is positive on the week, up 1.2%, but, still, down 360 at the close. have a good weekend, everyone. that's it for me "overtime" now with scott wapner >> all right, sara, thank you very much. welcome, everybody to "overtime. i'm scott wapner just heard the bells on this friday we're just getting started from post nine at the new york stock exchange in just a little bit. i'll talk to all things musk from the latest on the twitter deal, tesla's earnings next week and whether more major stock sales are coming if you own shares, you can't afford to miss that conversation, and we begin though with our talk of the tape that massive rally followed by tailed's reversal, and what next week might hold for your money