like t wil-ball and corn hole. >> they've done it with international content. i don't know that's not what investors want to hear. >> maybe not they are probably reassured about his pursuit of profit at a time like this thanks for watching "power lunch." "closing bell" starts r now. stocks are just about near the lows of the session. more pressure adding to monday's losses nasdaq getting hit the hardest down 2.25% this is the make or break hour for your money welcome, everyone, to "closing bell." i'm sara eisen dow is down and s&p 500 down 17 p 1717 po -- 1.75%. the bottom three performing

sectors. take a look at the biggest decliners right now in the nasdaq 100 that's where the pain is being felt right now lucid is on there, atlassian, meta platforms getting hammered down 6.5%. still seeing weakness in apple, nv nvidia, biggest players taking pain today coming up on the show, one of the day's biggest winners. surging today on the back of strong earnings and guidance that is not the ceo of signet jewelers that is jared bern stein will talk about the american made chips bet from this administration let's get straight to the market downturn mike santoli tracking the market action mike, what are you watching? >> second straight drop in the saupd.

relentless drip lower. we hit the lows of the day may be what is a relatively significant effort too make a bit of a standing. first of all, i'm tiredof seeing a trend line that's been happening for months the market keeps obeying it. everyone is watching it. that's where this rally halted for a moment, that's where we pull back from as of friday's close. that's the down trend line from friday around 3900, just above there. late in october highs, mid november lows. in order to keep the look of a market in some kind of recovery mode, maybe sitting above that is significant what i think is going on here, sara, you know goldilocks, neither too hot nor too cold, we have anti-goldanti-goldielocks it does encapsulate this fear. too hot, services, labor, inflation reading. the fed has to do more in the

next several months. keep rates somewhat higher but they believe, the market believes that it's going to work inflation is going to come down. it may come down the hard way which is a recession that's what we don't love to see but that's what usually has ensued on an up to two years after this curve goes below zero also, sara, three month versus ten year is the one people say is the real predictable one. three month versus two year, same level same shape right here. i do think it's a relevant debate as to whether this is really saying, you know, recession in the next few months or it's just kind of saying we're going to get to lower inflation, nominal growth has got to come down and we'll see if it requires that retrenchment in growth. a lot of ceos talking about preparing for potential recession. >> this idea, anti-goldilocks, we haven't talked about it

we haven't been in this spot where it's too hot, where the fed has to -- it's a predicament about what to buy in the market. >> it's probably -- it's probably the ' le 0s, but also this was the case in the whole '94 soft landing scenario. the fed was concerned inflation was going to be running hot and labor market was going to be too strong the economy hasn't come back yet from the prior recession yes, i agree, we have not been here in a very long time we don't know how it plays out. >> thank you, mike see you in the market zone let's turn to the chips and news that taiwan semiconductor plans to invest $40 billion into arizona's chip industry up from $12 billion previously president biden slated to tour the company's arizona plant this hour along with tim cook and other executives let's bring in christina

partsi partsinevelos. they're supporting tmc's $40 billion investments. you had tim cook moments ago calling it a, quote, incredibly significant moment, a chance to usher in a new era and then i've just received jensen wang, the ceo of nvidia saying it's a marvel of manufacturing and it's considered made in america with a little help from taiwan. president biden will be speaking very soon as well. taiwan semiconductors new manufacturing hub in arizona is not only a representation of a triple investment but it's two fabs, two fabs producing four nanometers as well as three nanometer nodes used in high performance computing. that means potentially 10,000 tech jobs and 10,000 construction jobs just over the next four years. this is if all goes as plan.

this is not going to happen overnight. >> christinchristine -- kristink you. how long is it going to take, jared, before the u.s. can be self-sufficient chip manufacturer >> well, we used to produce 30% of the global chip supply. now we're down to 10% so nobody's talking about getting to 100%. what we are talking about is taking extremely seriously the lessons we learned about the non-resiliency of the chip supply chain it's sensual importance to both our economy and our national

security the largest foreign investment in history, $40 billion by tsmc, 10,000 construction jobs, 10,000 high tech, high quality production jobs, it's a very good day for american production >> no, but the question was how long will that take? is it ten years -- >> how long will specifically what take? >> until we can get those jobs, those manufacturing jobs in this country. >> okay. so the construction jobs have already started in other fabs. remember, this is the second arizona plant but there's also plants that have broken ground in new york state, poughkeepsie, in ohio, in syracuse, in north carolina so construction jobs are already underway some of these fabrication plants hope to be producing sometime probably towards the end of next year. >> got it. it's important for our national

security, there's awareness now of that and obviously for our economy, too jared, it's coming at a time where there are more worries about the sick crcyclical natur. recession worries. we're hearing it from a number of people lately semiconductors is a cyclical industry and it's been hit hard. questions whether it can be done without focus on the long term. >> yeah, i think the word you chose to use there is actually very important, cyclical versus structural when i talk about the deterioration in the domestic semiconductor industry in this country and president biden's absolute commitment to rebuild that capacity, that is a structural, not a cyclical idea. and if you talk to tim cook, you listened to some of the statements that were just made or the ceo of micron or any of the other guests who were there

today, they will tell -- from the industry, they will tell you that this is a long-term play. and that's precisely where we need to be in this space if we are going to stand up a domestic semiconductor industry, we have to think structural, not just cyclical. >> do we have the jobs do we have the engineers, expertise that we need do we have the labor economics that we need to stand up this industry >> another really important question one of the things that you see, i think this is an underreported phenomenon, there's actually a lot more on shoring going on than these announcements today they're obviously critical we're featuring them today the president is out there you see them in many other industries why is that? one is to deal with the problem of supply chain disruptions that we felt so acutely during the pandemic the other is america has a highly educated and highly reliable workforce now, yes, we need to build our labor supply and if you dig into -- under the hood of some

of the plans that we passed here, it's not just helped to support the building of these fab plants, it's also helped to train the workers. that's very much part of the bipartisan infrastructure law and the inflation reduction act. >> jared, another ugly day in the market down 450 or so on the dow. technology is getting hit hard getting a lot of commentaries from ceos on cnbc, at the various conferences that are going on about this belt tightening, about impending layoffs, about preparing for a recession even if it is a soft landing. how are you interpreting the data some areas are too hot and the fed is still going and some are too cold and they're worried about recession? >> i think if you average a lot of that out what you see is at least a path, we see a pretty visible path, to a pace of growth that's more steady, more stable but, yes, in fact slower, probably closer to trend than we

enjoyed in 2021. we had a breakneck pace of gdp growth no one considers that sustainable. if you look at the trend growth of gdp, it's close to 1.7, 1.8%. that's close to trend. as we slow do you know to trend, the mechanics, hydraulics mean that will lead to slower job growth and certainly a cut back in some vacancies. a year ago in november we added over 600,000 jobs. again, a great number for november '21 unsustainable over the long term this november, $260,000. the pooling i just described is essential if we're going to get inflation back down. >> yeah. the if they can get a soft landing, that would be good but the yield curve keeps getting more inverted by the day jared bernstein from the

inflation. talk about diamond in the rough. look at signet jewelers. more than doubled wall street. gina dross

young lady who was, you know, mid 30s, couple of kids, recently went through a divorce. she had a lot of questions when she came in. i watched my mother go through being a single mom. at the end of the day, my mom raised three children, including myself. and so once the client knew that she was heard. we were able to help her move forward. your client won't care how much you know until they know how much you care.

look at shares of signet jewelers on the back of results that beat on the top and bottom line updating the full year revenue

guidance joining me here exclusively is g gina where did the big surprise come from >> it was a broad-based beat we beat on the core business, beat on the blue nile on the top line and the bottom was strong enough to offset it. >> three times stronger. there was the strength -- the consumer strength came from the hig higher income level. >> we have 11 banners in our portfolio. we have worked very hard to widen our playing field so we used to have all of the banners on top of one another. if kay ran a promotion, zales declined we're targeting different consumer journeys, attitudes and

price points our inventory is very healthy. so we've been able to pivot our assortment and use our data to target higher end customers and as we anticipated lower income customers would be challenged and we pivoted to the higher end. >> is there any indication the higher end is slowing down what are you seeing for holiday? >> we've seen a strong consumer so far i hear the same news about you, potential recession. at this point let's let the economists determine that. we're prepared for a strong holiday season. >> do you think there's a strong shift? >> there has been an endearing shift. people are giving fewer gifts but at higher price points because they're giving to people they care more about gifts of love. that's been good for the jewelry business. >> there's been a wedding boom

is that still happening or has that tailed off? >> if you look over the last 40 years, engagements and weddings are very steady, both up about 2% every year, but covid caused a bit of a short-term blip so we didn't see wed beings, the - weddings then a record number no engagements, now they're slowing down two years from now it's back to completely normalized. >> still high and engagements a little bit lower yeah >> so you mentioned the inventories that are low that separates you from the rest of retail. is it because you didn't have the supply chain issues? >> no. no we've been very diligent be in bringing down our inventories. that's been great for us we've invested $900 million in acquisitions, $700 million in digital data and store refresh and given back $1.3 billion to shareholders over the last number of years.

so our cash position has been a big advantage, partially driven by healthy inventory our inventory was down 2% in the quarter. we have flexible fulfillment >> are there any problems with supply in the industry >> we haven't. a little bit on packaging but nothing in terms of delivering jewelry. we have 30% newness and our stores are well stocked. >> what about the pricing environment? we keep hearing retail is more promotional and what drove black friday and cyber monday are promotions are you seeing that? >> no. our margins were very strong over black friday weekend. it was a more promotional time we'vebeen able to give great value to all price points. we have an ability to flex in times like this to make sure customers are getting great value. so we haven't seen that kind of pressure. >> you have increased prices in

the inflationary period? >> we have increased prices somewhat we've mostly tiered up our inventory to higher price point product which is offering a great value to customers. >> what are you telling investors about profitability and blue nile, how dilutive it's going to be for how long >> blue nile was not profitable in the third quarter it won't be profitable in the fourth quarter that presents an opportunity, obviously, over time but it is the strongest brand name in online bridal retail we think there's a lot we can do with it. so far we're very pleased with the talent in the organization and the synergies we're seeing a lot of opportunity in the back office. >> gina, thank you so much >> good to see you. >> ceo of signet overall market, lower down 480 or so. s&p 500 down almost 2%

the only sector popped into positive territory is utilities. down 3%, for instance, for energy shares. down for technology 2.7% as well that's why the nasdaq is getting hit the hardest. barry sternlicht on the record weighing in on the recent concerns about the reit market we'll tell you what he said when "closing bell" comes right back. with gold bond... you can age on your own terms. new retinol overnight means the smoothing benefits of retinol are now for your whole body. plus, fast-working crepe corrector diminishes wrinkled skin in just two days. gold bond. champion your skin. did you know your health has more to do with your zip code than your genetic code? that doesn't seem fair. we agree. but where you live determines access to doctors,

green spaces and fresh food. that's why we grow our own. smart. we don't think it's right that some people are healthier than others just because of where they live. that's why we're delivering food to areas with less access to it, and helping schools teach kids about gardens. wish they'd taught gardening at my school. you would have aced it. introducing elevance health. where health can go.

let's hit pepsi. shares under a little pressure today. a lot of discussion about the layoffs after "the wall street journal" first reported it is eliminating hundreds of corporate jobs in north america. is it a time of coming recession, belt tightening and pain this isn't material or financial for pepsico. the business is doing quite well it's not a reflection of what pepsi is seeing with the consumer or the broader economy.

a person familiar with the strategy tells me it's more of a move towards efficiency, simplification, challenging the team to eliminate duplication. pepsi isn't cutting the front line, just at headquarters it's not cutting costs, for instance, the new tesla trucks are an example pepsico has over 300,000 global employees, 100,000 people in the u.s. we're talking about a few hundred layoffs. while it is a sign that companies are looking to preserve growth and also margin expansion by cutting out inefficiencies, it isn't necessarily a bearish statement about the health of the consumer or for corporate america when we come back, the tech sector getting slammed again today and tumbling more than 20%. our next guest is starting to see interesting entry points in energy topics when "closing bell" returns.

thanks to avalara we can calculate sales tax on almost anything, anywhere, automatically. avalarahhhhh. what if tax rates change? ahhhhhh. filing sales tax returns? ahhhhhh. managing exemption certificates? ahhhhhh. business license guidance? ahhhhhh. does it connect with accounting? ahhhhhh. item classification? ahhhhhh. cross-border sales? ahhhhhh. what about? ahhhhhh. ahhhhhh. do you have those budget markups? thank you. mmhm. [bubbles]

welcome back to "closing bell." stocks pulling back again today as recession fears bubble up on wall street. we've heard a slew of recession talk from top ceos on cnbc. >> rates are on their way to 5 inflation is eroding everything and $2.5 trillion will run off sometime next year when you are looking forward,

those things may very well derail the economy or close this mild to hard recession people are worried about. >> if i department watch cnbc in the morning, which i do, the word recession wouldn't be in my vocabulary it's not in our data. >> right now we're still seeing a pretty strong consumer >> signet gina droso said consumers are stronger than she expected as well luke barra is here from goldman sachs. how do you interpret what you were hearing from corporate america when you need to give advice to clients? >> sara, great question. we're looking out and next year still is critical. what we're seeing at the moment is some tempering about inflation and it gives people confidence on the inflation

front, fixed income markets you can find some level where you can price equity markets i would say inevitably the rally does bed in a lot of positive optimism we're seeing a little bit of a rollover as people are getting concerned be about the probability of a soft landing. maybe it's not 50-50 the when we're looking at opportunities, we still think that's more likely than not likely. >> your boss, david solomon said 35% chance of a soft landing not high odds. >> i have to becareful how i frame it we think the inflation print three weeks ago gives us some degree of optimism inflation is coming down. supply chains reopening. seeing some normalization of the one-time issues around second half auto sales. the point made earlier, we haven't seen it with the consumer that is where the risk is. if it hits household budgets,

that's when we worry still being quite favorable going into next year. >> decent entry point for stocks, technology even? >> cautious in the short term because we have seen a rally but as a long-term investor, some of the technology space looks inviting. >> which part? >> deflationary investment not stepping back from productivity whether it's inflation, white collar industries, where you're thinking about work from home, hybrid model improving the per unit capital o output from that investment. >> depends how long term you are. everything may be true but it's a sector that suffers when i.t. spending budgets get hit. >> that's absolutely correct software and technology investment is productivity based software solutions and cybersecurity. we can understand why.

it's hard for an executive to say we're going to roll back cybersecurity. yes, equity markets have a little bit of a challenge but selectively if we can take a view where there's fundamental strength and long-term growth and megatrends, that's an interesting place to be. >> software, biotech is on your list >> it is very selective around what type of biobiotech you want we're going to find solutions to critical health issues at this point are not being reflected in valuation as much as we have an ipo, as it relates to technology and m&a, we think going into next year, m&a in the biospace as big pharma uses that to rebuild the pipeline. >> there were some hopes that

biotech m&a has been back and it's been side lined chinese consumer companies on your list. isn't that risky to invest in china? no clarity on zero covid, geopolitical >> again, we have to be careful about selectively allocating capital. that heterogeneity is quite interesting as an active investor on china, we think the prospects of reopening with an mrna vaccine is a slight alleviation. >> you're betting they're going to use a western vaccine >> i think there's going to be a high probability of that it will echo domestic solutions. if you can roll back some zero covid and reopen the domestic economy, there's a good supply

increase. >> interesting idea. thanks for coming on and sharing that the luke barrs hovering around the 450 mark the s&p down 1.75% the nasdaq is getting hit the heartest down 2.3% amazon, nvidia, alphabet small caps down 1.8% wall street is buzzing about all of the money coming out of these reits in recent days we're talking about real estate investment trusts. starwood capital's barry sternlicht talks about what impact that could be you can listen to "closing bell" on the "closing bell" podcast on your favorite app coming up.

power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market.

so, you're 45. that's the perfect age to see some old friends, explore new worlds, and to start screening for colon cancer. yep. with colon cancer rising in adults under 50, the american cancer society recommends starting to screen earlier, at age 45. i'm cologuard, a noninvasive way to screen at home, on your schedule. and i find 92% of colon cancers. i'm for people 45+ at average risk for colon cancer, not high risk. false positive and negative results may occur. ask your provider if cologuard is right for you.

reits. two nontraded reits from blackstone and starwood capital. they had to halt withdrawals it's creating quite a stir because these funds are owners and multi-family apartment buildings. i spoke with barry sternal licht w -sternlicht. listen to what he said. >> we can't produce dividends at

4% which are almost completely tax sheltered. we can't put money in property we held about 90% in assets and 10% in liquid securities to handle redemptions there are caps which the sec has enforced and it's on how much investors can take out, 2% a month and 5% a quarter that's because we can't sell assets willy-nilly to meet redem redemptions. we want to protect all of the investors. there's no issues with the dividends. i'll speak with s reit i don't know that much about b reit they're paying their dividends they're secure and we -- this is in the best interests of shareholders, of all our shareholders which are smaller investors to manage liquidity for them there's a lot of noise, press, people think this is a run on the bank we have real property producing

real assets, this isn't ftx or anything >> isn't ftx or anything his main message overall beyond the reits is that the fed is destroying the economy sternlicht doubling down on the aggressive rate hikes and calls the fed broken even said that rent prices have rolled over and are starting to go down. i asked what his highest best was, he said japan mike santoli joins me. on this reit problem, as he explained be it, it's really largely structural it has shined a light into these nontradeable real estate funds popular among wealthy investors, which are up, blackstone and starwood double digits this year even though we've seen reit up 27%. >> private equity, they mark their assets as they see fit

periodically it's not daily based on how market prices are acting his point is we own a portfolio of i will liquid assets, buildings. you can't give daily liquidity now that doesn't really get to the question of whether it is worth what they say it is. the rents are what they are. the dividends are real i don't think it's that much of a mismatch except if they say this asset class is going to have trouble the you're going to see weakness rents are rolling over we want our money back and that could force you to sell the assets it could force you to have realized lower values on them. i don't see it as a systemic issue. it shows you there are pockets that have not felt the pain. publicly traded reits are down a lot. they've already kind of

recognized what's gone on or what's expected to go on. >> wait on blackstone stock this week >> that's right. the funds finished with very big fees. >> mike, thank you. up next, bank of america's jill carey hall. that story plus a mess for meta and a evw prieof toll brothers earnings when we take you inside "the market zone." they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay. ♪♪ we all have a purpose in life - a “why.” maybe it's perfecting that special place

that you want to keep in the family... ...or passing down the family business... ...or giving back to the places that inspire you. no matter your purpose, at pnc private bank, we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? ♪♪ well, we fell in love through gaming. just tell us - what's your why? but now the internet lags and it throws the whole thing off. when did you first discover this lag? i signed us up for t-mobile home internet. ugh! but, we found other interests. i guess we have. [both] finch! let's go! oh yeah! it's not the same. what could you do to solve the problem? we could get xfinity? that's actually super adult of you to suggest.

i can't wait to squad up. i love it when you talk nerdy to me. guy, guys, guys, we're still in session. and i don't know what the heck you're talking about. researchers believe the first person to live to 150 has already been born. it could be you! wow. really? of course, you'll have to eat your greens, watch your stress, wear sunscreen... but to live to 150, we're developing solutions that help doctors listen to your heartbeat while they're miles away, or ai that knows what your body will do before you do.

cool. introducing elevance health. where health can go. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless 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 now in the closing bell market zone mike santoli here to break down

the crucial moments of the trading day. plus web bush's matt bryson and jill carey hall on the small caps mike, the dow is down a little bit less than it was down 370 or so the s&p 500 still pretty sharp pull back. down a little more than 1.5% for the week that means we're down 3.3% or so the want to zero in on the financials the companies like bank of america down 4% or so. there was a goldman sacks financials conference. what did we hear what is that group telling you is. >> brian moynihan did have some comments about trimming head count and expecting things to weaken through next year i don't think it was particularly surprising as a general outlook. they did point out consumers have a cushion but that's not going to last forever. investors are very skiddish.

we heard about co-merica and just the sense out there that the banks are vulnerable and the fact that we have a weakening economy. investors don't know specifically what to be afraid of they're deciding on a given day to be afraid of both so i do think that explains some of the action or at least the lack of buying interest on this pull back so far. >> it's the whole anti-goldilocks? >> contragoldilocks, whatever you want to call it. >> president biden is touring the factory in arizona this afternoon after the company said it would increase the investment in the stage to $40 billion and then just moments ago apple ceo tim cook who is also there with the president said apple will use the chips built at that factory. joining us is matt bryson from web bush securities.

how much of a game changer is this >> i think it's a game changer they have been moving away from u.s. shores for some time. now you have tsm and a number of other leading vendors bringing them back to the u.s >> what i tried to ask jared bernstein from the white house is how investors should be thinking about this. obviously there's long term near opportunitily, in the near term we're worried about the economy and it's a very cyclical industry >> no, that's true i think because of increased geopolitical risk and because of the fact that so much of our semiconductor base is in asia, there was unseen risk to a number of industries should tensions between china continue and so when you think about tsm,

they are integral to almost any product you can think of so without them there are no more iphones, there's no more -- you can have a hard time producing automobile certainly their production has ramifications for military applications so i think not so much from a tsm perspective, there was nonunderstood risk for a bunch of other industries should we not have semiconductor production in the u.s. by tsm diversifying, that does a lot to remove that risk that i think investors weren't necessarily thinking about. >> we're looking at a live shot in phoenix, arizona, where president biden is touring the facility there that's being built talking to some of the construction workers again, they're with taiwan semiconductor, they're with the

ceo of apple with a number of other ceos. i know you're a semiconductor analyst. there's a message for china. >> yeah, i mean, there certainly is we are doing our best in our industry willing to diversify against asia and not necessarily what's happening in tsm but given the trade restrictions, we have this advantage and we're willing to use it in order to create economic advantage for the u.s. >> is it a risk to the u.s. semiconductors though what the u.s. is doing with the china export controls? we haven't really seen much of a retaliation or response from china. as i understand it, it would crush what china's trying to do. >> certainly when you think

about u.s. companies that export, there is a risk that at some point you haven't seen them ban u.s. products. it's been relatively minimal i guess so to some extent with u.s. exports, there's risk that china acts against that. fear is they're trying to at some point trying to take over taiwan and i view this action as essentially trying to insulate the u.s. against that risk whether it's tsm investing in arizona, building at ohio, micron putting money in york, samsung. >> matt, thank you very much for being here to talk through some of the live pictures we're getting from arizona. we have to hit meta. following a report that the eu's

privacy watchdog is ruling the social media company cannot run ads baseden on the personal daa of users if congress passes a new bill making it for them to negotiat with tech companies. the eu ruling feels like somewhat existential for facebook, isn't it >> apple put forth the i0s privacy safeguards you get the annoying pop-ups facebook is tracking your data this would be internally within facebook's own apps, within facebook, within instagram, within whatsapp. they would have to ask your permission first before they're allowed to use that data to target ads this would be worse than what

apple is already doing we already know that led to a decimation in sales growth for meta's app business. there's a lot of ways to go if this actually does happen. according to "the wall street journal" this was recommended by the eu to the irish regulator that's in charge of enforcing these roles. we're waiting until next month when the irish regulators decide whether they want to adopt it. even if they say, yes, we want facebook app's permission first, they can appeal and even then meta had put out a statement to us saying we're pretty confident we can find a legal way around be it. if this does happen, it's going to be months and months and months out and meta can find a way around it. >> certainly a legal fight is to come check out the small caps bearing the brunt of the selloff. the russell 2000 down more than

4% in december with rising inflation and our next guest is betting on a come back let's bring in the head of the u.s. small and midcap. jill, you've been expecting it for a while now. why should it be different with the recession fears really bubbling up. >> thanks for having me. we've been neutral on equities over the next year when we launched our 2023 youtd look we're expecting the s&p large cap index to end the year at 4000 really what we're looking at is seeing down side risks to equities near term our economists are seeing a recession. we don't think the market has bottomed near term you could see more down side risk to large caps than just small caps once the market bottoms, that tends to be one of the best times to overweight small caps even in the meantime we think small caps could hold up better. we think they're more adequately

tracing in a recession we think if you look back at what happened in the 1970s, 1980s, typically you don't want to earn small caps going into a down turn. they outperformed during the down turn during that period which is a similar backdrop when the fed was trying to tamp down high inflation. >> is that because they get hit harder on the way in, which is what we're seeing now? their valuations reflect it earlier? >> i think valuations definitely are reflecting it earlier. when you look at the ism manufacturing indicator, that's one of the most correlated indicators with small caps performance and valuations, but right now small caps are pricing in about 30 on the ism which is pretty much the lowest it's ever gotten in a recession. valuations are already reflecting it. we also think small caps are

positioned to hold up better they've historically held up well and when you look at periods like we're expecting so below trend economic growth, still high but slowing inflation, small caps have actually been the best performing asset class they've had decent pricing power. they've had more exposure to some of the commodity oriented areas. there is an oil price backdrop and some of the consumption exposed areas that are hit by higher commodity prices. >> jill carey hall thank you for the context and weighing in from bank of america. toll brothers, the big name on the earnings calendar diana olick with the number. >> sara, i'm less concerned with the numbers and more on the color on buyer demand. in august toll's ceo doug yearly said demand had dropped sharply and after that rates pulled back

in august. so he added that average weekly deposits in the first three weeks of august were up 25% compared to july fast forward a month and rates shot back over 7% again in october. then came sharply down recently well over 12 percentage points to the mid 6s. how is that going to change the guidance that's what we're looking for, sara. two minutes to go in the trading day, mike. that feels like that is what's weighing on stocks goldman's ceo saying only 35% and every single day we hear worries about recession. even if we're not necessarily seeing it yet. >> yeah, almost every verb saying first half of next year looks like it's going to be weak the good point is expectations have been beaten down pretty low. internals not as bad as you might think. market was for sale all day. 70% down side volume, not 90 as it was yesterday

so that's one slight advantage there. take a look at the banks over the last few months relative to the s&p. they were tracking pretty well they had a falling apart that's the current target of people's recession fears is some of the big banks and regional. volatility index not up much, above 22 the down side did not really get out of hand. s&p traded down to the powell pop rally of last wednesday began. so so far somewhat contained even if we're off the lows with the vix which is under 20 going into the weekend, sara. >> down 4% on the week on the nasdaq only tuesday here. nasdaq down 31% off the highs. take a look at where we stand as we head into the close down p 55 355. s&p 500 down 100 utility is down. energy getting hit the hardest

oil pliess closing at the lowest level since back in january on fears of an economic slowdown. communication services, i talked about that meta big slide. that's weighing on that. technology hit hard. consumer discretionary, industrials. all going to end the day lower that's it for me on "closing bell." see you tomorrow now into "overtime" with scott wapner welcome to "overtime." thanks so much, sara i'm scott wapner we are just getting started from post 9 at the u.s. stock exchange is an end of year rally dead after another rough day for stocks btig's chief market technician jonathan krinsky housing will hit we'll bring that up. timely read on that troubled sector the president is about to speak out in arizona as taiwan semimakes a massivin