or worse, they're not all the same, who have gotten so far on believe me, believe me, believe me. >> right. >> trust me in this environment is a different argument. >> and we can bring it full circle, the less fed liquidity we have the less any will be left standing. >> thanks so much. thanks for watching "power lunch," everybody. >> "closing bell" starts right now. a hotter than expected inflation trend weighing on sentiment this morning, but investors largely taking it in stride as we await next week's fed decision this is a make or break hour for your money welcome to "closing bell." i'm sara eisen where we stand in the market holding up i guess the dow down about 94 points we were a lot lower earlier down 140, but higher up 63 at the highs of the day s&p 500 down about 0.1%. off lot of pockets of green. real estate, communication services, technology, financials and consumer discretionary are all remaining positive right now. energy, health care and

materials under pressure nasdaq comp sort of up and down around the flat line it is higher because technology is stronger. netflix and tesla bouncing back. take a look at the picture for the week and it isn't a pretty one for the major averages the s&p 500 down about 2.75%. all sectors lower on the week led down by energy the worst performing on concerns about recession. that's a cyclical sensitive group. coming up bank of mark's ceo brian moynihan will join us. we'll get his read on the consumer, the economy, and much more plus we will talk to the ceo of saks mark metric about concerns around the high-end consumer let's get to the market action with cnbc's senior market commentator mike santoli yields are higher. the dollar stronger. you expect both on the back of a

hotter ppi stocks are holding up. >> i would say the yield move and dollar moving are coming off of pretty depressed levels they were down a lot into the week really nothing out of the range. take a look at the s&p 500 it really has been pretty sticky in this general location between 3900, 4,000. you can go back a month, go back seven or eight months, it has traveled this ground quite a lot right here in terms of what would represent a break, significant one higher or lower, it's plus or minus 200 points in the s&p 500. if you get well above 4100 that would convince some people this is more than a bear market bounce under 3700 and you start to say that rally is is really just a false one at risk of breaking down again that would violate something like that. this one, sara, a lot of conflicting signals about the consumer university of michigan sentiment bad, but better than expected. lululemon a little bit of disappointing guidance, costco missed but wages are strong

this chart of various retail specialty chains and the brands they sell because it's a stark difference you have ulta and dick's sporting goods massive outperformers and similar trajectories for this year, whereas estee lauder and nike, global branded goods, more expensive, have suffered this year obviously, global slowdown, dollar, big pressure points on that it's kind of interesting that domestic focus and just essentially playing off the top line of the u.s. consumer has been okay. ulta, by the way, makes a new high every day. >> every day i get that because cosmetics as a category has been strong you hear that from the retailers. >> and sporting goods. >> i don't know. you don't see it in the other stock like a nike or adidas. >> pure footwear not so much it's more other sporting goods >> the hockey sticks i have to buy my son for his fifth birthday today. >> happy birthday. >> thank you mike santoli. let's talk about the ppi print which we do that often but

it came in hotter than expected and surprised the market 0.3% in december the data ahead of a huge week of economic news. you have cpi, consumer prices out on tuesday and the fed decision on wednesday. joining us now is chief market strategist tony dwyer. did it surprise you to see a hotter ppi which could signal a hotter cpi market has been excited about inflation coming down. >> it is coming down, inflation part of in the ppi what's interesting the prior month was revised higher if you had that revise print a month ago we might not have had a great narrative around inflation. the s&p 500 is at this very moment it's where it was november 10th. even with all the stloolts we've had and the potential of breakouts and browneakdowns, we been going sideways since.

>> december is supposed to be seasonally a strong month. not so much. what does it tell you? >> so as you know, coming into this quarter we were looking for a year-end rally any year you have the s&p down 20% through the first three quarters of the year, outside of 2008, your expected range is set, always 7, 7.9% to 12.1% that's our target range. coming into this week it was up 13.6%, which means it's honestly from a trading perspective a time to get more defensive, especially if you looking for recession. at this point now, we pulled back we're up 10% in the middle of that expected outcome. it's really not about the seasonals but what history tells us after you've had a weak start to the year. >> so you're leaning defensively, selling rallies, positioning for a recession to start really getting priced in here into next year? >> yep it's very interesting. you know, you know me for how

many years i want to be bullish. the problem is - >> many. and you have been for most of them, i think. >> i know. it's always about the money. here's the issue that we have and preventing me from, you know, wanting to go into 2023 without -- with a more bullish tone you've never had the indicators like the percentage of inverted yield curves it's at 87%. you've had a recession every time that's happened leading economic indicators down 2.7% any time at this level you've had a recession. neither one of those you didn't have a soft landing when the indicators were like this. you always had a recession if you've had a recession it would be historically, going into a recession, historically unique to have already made the s&p 500 low. so we're looking for, you know, a new low, obviously, going into the first -- a consensus call, but sometimes consensus is right. >> here's the argument and i hate to argue what you said about the inverted yield curve

and recession predictor. couldn't it just be a reflection of the fact that market expects inflation to come down pretty sharply here and we are seeing it at levels we haven't seen in decades. >> that was the idea, the fundamental backdrop that produced the rally is called the temporary sweet spot the fed rate hikes have slowed them down on the good side coming into this year we're going to transition to buying stuff to doing stuff goods to services. that's showing up in the goods inflation coming down which keeps it below peak. you don't yet have a recession, which means you can't disprove there's going to be a soft landing. in an extreme oversold condition that provides fodder for a sharp rally and we've had it now what we have to deal with, what happens when the indicators are telling you to go into recession but everybody is still -- they may be thinking there could be a recession but hoping for that soft landing >> yeah.

>> tony, thank you for joining me with the tactical moves as always. >> i was a hockey dad. those sticks, oh, my god, how much they cost. >> lot of hockey sticks. we're still on the plastic ones you play with inside thank you. tony dwyer bank of america's stock has had a rough week-long with the financial group rally today, but the group is down 3.4% for the week as recession chatter picks up on wall street. next up we talk to brian moynihan for his read on the consumer, economy and much more. dow down 63. you're watching "closing bell" on cnbc.

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. bank of america shares down 10%, underperforming the bank index as a number of financial ceos commentated this week on recession looming in the year ahead. joining us is bank of america's ceo brian moynihan who is in washington today for the council on competitiveness convenient he chairs brian, good to have you, welcome. >> it's great to be here, sara, and great to be talking to you from this important group of people here at the council on competitiveness. >> so on america's competitiveness, the story has been, i would think, a strong one. our economy has been in better shape than the rest of the world. do you see that dynamic continuing to play out into next year >> yes, we do. so this group is about how to keep that going for long term. but in the short term, america is the place to be we have an economy that's

bigger, more vibrant, the innovation and capitalism, pure capitalism lets investments get done we're all facing we predict a slight recession, a recession early next year, first, second, third quarter all negative but we'll fair better than most economies in the world because of the underlying capabilities of this country. >> what's the number one issue that worries you the most on our long-term competitiveness with china? >> well, at the end of the day we have a couple things. number one, we've got to keep investing in research and that's what we have here. we have the great research labs and universities we have to keep investing in the types of things that produce the moonshot as people say or the products that came off and we have to keep investing in that kind of research and provide the incentives for that research to be capitalized and then the people to build it the last piece, one of the things we're dealing with in this inflationary debates is the low impact growth in the united states over the past couple years and we need people and

that's one of the other issues we have to be competitive. fund the research, capitalize on the research and provide incentives for companies to drive that and then last make sure we have the capacity to bring people into this country over and above what we produce naturally to really help, you know, this country be what it could be by the way, the great thing about america is we share our success when we get it we continue to provide funds and capabilities all over the world that help the world be successful. >> you almost sound like a politician, brian, and i bring that up because the white house press secretary actually took a question today and your name came up at a briefing about you as a potential replacement for janet yellen is that something you've been approached about >> i've got the best job in the world, and i think that it's not on my mind i like what i do and that's why i'm here doing it today. >> would you consider it ever leaving private sector and going to government? >> it's not occurred to me

i have to run this big company 29 years with the company. it's a great company and honor to run it, and i'm going to continue to do it. >> let's talk about what you're seeing at the company. you expect a slight recession next year. what gives you the confidence that it will be slight or shallow, as you're talking about and appears most investors expect to? >> yeah. first of all, it's our research team and they're one of the best in the world and we -- they have a lot of talented people and working this question and so they have the first three quarters of next year negative, 1% or so plus or minus not a deep recession what gives us confidence in that it's the two-way question, the toughest thing about what the fed's job is to slow down inflation is the best thing about america. america consumers are spending more this year than last year. in the first week of december it picked up from november to a high percentage, 6% versus 5%, but still strong and consistent

with a 2% plus growth economy. that's a good thing because that's what makes america works. they have more money in their accounts, great shape from a credit perspective our industry is in great shape from a credit perspective. the draw of credit just won't -- is not on the table in terms of consumers and households that's what is great about america. consumers spending maybe not as much on goods this year you heard them say on experiences and travel, bookings are up strong in our credit card and debit card base. employed, spade, and they're spending that makes bringing down inflation tough because that means they can pay for things. you're starting to see the beginnings of the inflation question, and how long will it take to get it in control? >> what are your expectations how fast and far inflation falls from here, if it does? >> our expectations are that inflation gets in control really

at the end of next year into '24 more normal levels we start to see the gdp rates negative first three quarters and feds funds rates staying higher 4.75 to 5 through next year and the impact of all that slows down the economy, slows down inflation, you start to see it normalize into '24. this is not a -- i think that's one thing that's been clear that people are really focused on now. this is going to take longer than people would like it's not going to be so clear overnight. it's going to take a bit of time for the higher short-term rates to continue to slow down the economy and bring the inflation under control. so whether the terminal rate is 5 or 5.5 is not as important until we're sure inflation is behind us. >> one part of the economy it is hitting hard is the housing market, you know very well last night gary freedman on the rh conference call said housing market is collapsing at a level i haven't seen since 2008. how bad is it from your vantage

point and how much worse can it get? >> well this is the classic case if you follow the trend through the global financial crisis six, seven, eight, house prices shoot up and fall down and get back on the long-term trend. from the end of '19 to now house prices shot up and coming down and probably get back on the long-term trend. if you have to take the housing market in three components component one, people have mortgages, locked in to, you know, i think it's 90% under 5, 80% under 4 and 50% under 3. locked into low rates. that's good because that's, you know, makes sure their cash flow is consistent. the people that want to buy a house is being impacted. the builders and people buying houses, obviously, the purchase power is much less now but that's the intended outcome of the fed policy the third part is rent, represent increases are shooting up and now they tipped over and some cities are bouncing around. we have to make sure that's the part that affects one half of

the american households don't own their homes and don't have a mortgage, so we have to be careful with those people to afford their rate and you have to see tip over ultimately. >> what are you seeing in the commercial loan book, brian? commercial real estate >> commercial loan book you very strong there's going to be a long-term trend a lot of debate about that trend, the occupancy rate of buildings going forward. not the vaksy rate, that's traditional focus, but how much space a company like ours needs. 2010 we had 130 million square feet of real estate. today about 60 million square feet we've been on a long-term trend, as we trimmed the way people work work from home, three days in the office a week, you have an additional opportunity and i think that's a long-term trend but it will take a while to work through the system the second question for big center cities well, just had this discussion yesterday, how do you convert that excess office space to housing? there's housing shortages in major cities around the country,

apartment shortages and that's an interesting thing in new york and then boston and chicago and other places are going to convert those buildings to draw people back in the city to live which will be a good thing. in those citis we're still short of core housing units. our book is in very strong condition but a long-term question we have to keep watching. >> the stock price at the beginning of the segment your stock has taken it on the chin worst week since 2020. a lot of investors are reacting to what you and some of the others said at the conferences this week and warning of potentially lower earnings did the market get that right? >> i'm not sure that's what we said what we said is our net backup, last year was about $11.5 billion, will be about 14.8 or $14.9 billion this quarter this year but we told people early in the quarter when rates were

different and the situation was somewhat different that we thought it would grow in a single quarter by $1.2 billion and now saying it's going to grow between 900 and a billion that's a good growth i'm not sure i agree the earnings are very strong and returns are strong we feel good about that. that's what caused people to be concerned about what the future prospect going into a recession where the earnings are. >> what's happening with hiring and layoffs inside the bank? >> well, we had a management team for a long time that's managed to account carefully and, you know, when i became ceo almost 13 years ago now, we had 290,000 people, and we have about 215,000 today. think of that as 13 years we've been able to manage head count in the near term what happened, this time last year, is the attrition rates kicked up and the great resignation, all the stuff you talked about, you know, and that then caused us to turn on the hiring machine to make up for it what happens we come into this

year the amount of -- the turnover rate, the churn nate our company has dropped dramatically half as many people left us in the month of october than april and it's getting back to normal. went from 12% turnover to 6% and 12% in '19, 6% in '20 and now it's working its way back down during '22 we slow down the hiring. we can manage the head count down to where we want. when people get scared -- on the other hand we're investing, relationship managers, commercial banking, technology will spend $300 million next year and things like that, but we have the head count flatten down over time but won't take layoffs and things like that it takes discipline management. >> he yeah oo i guess what i'm trying to get at, whether there's a belt tightening as you prepare for bumpy times ahead in the economy? >> you've us, a corporate world is belt tightening to make sure.

if you wake up every day and people tell you recession is coming you're trying to do the things you can to make sure you don't get overly too far one way or the other i think i hear from our clients, you know, i hear from, you know, our team and how we're approaching it and continue to adjust our position as do corporate world. when the opportunity there is you go and other areas you're more cautious. who wouldn't be? >> what about investment banker bonuses. everyone is expecting those to be down this year. >> you guys team to have a better track than i do from other firms. when the business is down 50%, to 60% in revenues, which it is, will be this quarter across the industry, those teammates that do a great job for us, our teammates know, sometimes things go up and sometimes things come down. >> how do you read the inversion of the yield curve we were talking about it in the last segment and the fact that it continues to get more inverted does that make you think it's going to be a bigger

potentially more long-lasting recession? how are you reading the signals from the bond market >> well, you know, we've got lots of, experts that can give you what it means, but the reality is, the fed is trying to slow down inflation. the tool they have is to rate short-term interest rates and they're doing that meanwhile the world, america is the best place to be if you have money to put to work and can put it in the u.s. 10-year treasury and the strength of the dollar why wouldn't it come here? the money is coming because of the safe haven and real yields in the strength of the dollar. put that together you have to -- it's just different. the major difference that we -- that you talk about and know is between prior times when you entered recessionary periods or potential, what you did not have was the massive stimulus that went on in governments around the world around covid which is probably more stimulus than hindsight and unfair to judge it other than it's unfair to judge

it in hindsight but in factual hindsight we have a lot more stimulus than we needed. our customers have more money in the accounts before the pandemic that's causing inflation, and may be an inversion different, but long term it should work out and get back to normal it may take longer than people think and i think chair powell said last week and our economists think this may take us, you know, a year and a half to two years to get rates tip over and come back down. the long end will sit more where it is. >> aren't all those consumers savings dwindling as time goes on here and people spend money and inflation they're paying so much now for everything, including experiences like travel which is costing the most in years >> we saw for the first time in the last month those levels of accounts start to come down a bit. so, you know, because now you're -- the last stimulus was in march of '21. you're 18 months plus away from

that they're starting to come down. the interesting thing you look at cash flow of households still strong you have to be more worried about median households in cash flow but the credit quality of our customers is very strong they still have multiples and by the way, just year over year, the average account balance by the cohorts are up 10% it's not like it's even the last year it's grown. that's kind of the interesting question they will spend it down. you're starting to see it a bit. it will take a longer time than people think. >> got it. brian moynihan, thank you for your time from the conference. i know it's been a little noisy there. appreciate it. ceo bank of america from the council on competitiveness it's good to have you here as always show you what's happening. a leg lower. dow down 114 s&p down 0.2%. tech is still strong today, so are the banks and communication services and real estate everybody else lower we're still sharply lower on the week overall

coming up, concerns about the high-end consumer. earnings and commentary from rh and lululemon raising flags about the environment for luxury purchasing the ceo of saks fifth avenue what he's seeing from customers this holiday season. check out docusign as we head to break sitting at the top of the nasdaq 100 following strong earnings and better than expected billings. that stock getting a 14% boost still way off for the year wel rhtac'lbeig bk. ready to shine from the inside out? say “yes” to nature's bounty advanced gummies

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phil lebeau with the story. >> sara, stalantis is idling the plant in illinois outside of rockford where they build the jeep cherokee, has 1350 employees approximately starting in february 28th idling is expected to last at least six months so what does this mean for the cherokee and the employees at

the plants they're not shutting the plant down the cherokee is not discontinued what you're seeing here is a company, we're seeing this with other auto makers, they have to prioritize which models they continue building as they transition into an ev portfolio. so you will have some plants, and this is a good example, where you have a model that is not really a high seller at this point. the compact suv cherokee as a result they willidle this plant and at some point make a decision about the plant and the cherokee, but starting on february 28th, they're going to shut down this plant for at least six months sara, back to you. >> yeah. more layoffs, unfortunately. thanks. phil lebeau. up next, we will take the pulse of luxury retail when joined by the ceo of saks. dow down 121 stay with us on "closing bell.

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luxury spending in focus after lululemon and are rh reported earnings last night and both companies beating wall street estimates but had different takes on the consumer and economy. the ceo of lululemon on "squawk on the street." >> we haven't seen any weakness with our consumer. we're well aware of the macro environment. we're well aware that many other

retailers in the malls are heavily discounting. we have not. we don't see a need to regular price you driving our business. >> meantime rh ceo gary friedman predicting things will get worse thanks to inflation and rising rates hitting the company's performance. >> sales are down, so did we plan for sales to be down this far? no did we think that the housing market was going to collapse this fast? no did we think interest rates would go up this fast? no do we have more inventory than we would like? yes. >> always so blunt that mr. friedman. those comments reflecting a note from barclays that says luxury consumers are cutting spending and they used the word luxury recession in there for more on the state of luxury and consumer saks ceo marc metrick. what are you seeing out there, marc >> sara, so far, you think about the holiday season we've been pleased with what we're seeing for saks, delays are about two things, right.

it's about yourself purchasing and your gifting the consumer and the self-purchasing is really about going out and traveling and consumers have indicated to us through our research they plan on doing just that this holiday season and spending that way we're also seeing, you know, gifting working as well. really, on the luxury side that appetite is there to spend. >> are you -- where are you relative to prepandemic levels on spending? >> i mean, our sales for the third quarter at saks we're up about 115% online versus prepandemic and the sfa stores, i don't manage, but we consider an important part of our ecosystem are up about 15% versus prepandemic, that was third quarter. >> is there any sign of a slow down >> look, you know, it's very broad because we have a lot of different customers that shop at saks and i would say that the trajectory of growth is different across the different customer swaths.

the core luxury consumer is proving to be more resilient, while the aspirational consumer, certainly while still growing, is -- we're seeing a more moderate trajectory on that growth. >> how promotional is this holiday season for you >> you know, luxury, you're not going to win the promotional war there. i would say around the edges we might be a bit more promotional, but that's not what's going to win. i'll tell you, though, the consumer is certainly making a choice for the stuff that is promotional over the stuff that isn't. you're certainly seeing the consumer, maybe not the core luxury consumer, but the consumer at the aspirational end of the spectrum choosing the more promotional goods. >> so you sort of tied the high levels of spending to travel what about -- isn't the luxury consumer also tied to the stock market i don't know a lot of people got rich off crypto which has collapsed housing isn't doing well these factors, how do they

usually impact spending? >> sure. i think a lot of -- it depends on, you know, the customer that the pure and the luxury consumer that's been with us, our core customer, they've been through all these different cycles with us and they're here. some of that quick wealth that was accumulated over the last year and a half you are seeing, you know, that pull back a bit, but again, i think people overall once they choose luxury, they stay with it. >> what about inventories, marc? we've talked a lot about how it was tough, the supply chain over the last year or two, tough to get everything in, all the sizing where does that stand right now, since we've seen some thawing? >> i'm comfortable with our inventory levels now, and i think, you know, job one or two for every retailer is managing that working capital investment and everyone has a different cycle and supply chain i feel comfortable where we are now and job one right now at saks is being deliberate and

make sure six months from now i still feel comfortable. >> et what the number one gift for the holiday season >> if you're buying for yourself it's jewelry and watches if you are buying for somebody you kind of like, let's get some fragrances >> fragrances. okay if they really like you, they buy jewelry. got it. >> again, a lot of self-purchasing, shoes, handbags, luxury, selling well. >> always like to get that color. thank you. ceo of saks. when we come back how investors should be positioning their portfolios ahead of next week's key fed meeting with a guest that said the risk/reward is skewed to the upside. we continue to decline dow down about 200 points and the only sector that is higher, communication services we've seen financials, technology and real estate turn red in the last few moments or so the nasdaq has gone solidly into the negative klum down 0.3% adding to the losses amazon, lululemon and am again

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>> i'm here with sam johnson sam, so great to have you here sam, we know every business is seeking a competitive advantage. what are some of the ways they're doing so right now >> you know, over the last three years companies had to navigate a steady stream of change and chaos. i think the organizations that are making agility and change their core ecocompetency are outperforming their peers. they have to transform fast and use partners and ecosystems to get that done. >> talk about why they can't go at it alone anymore? >> i think there are three key factors. things like supply chain and covid. secondly, accelerating disruptive technology. their customer expectations are changing they have to use partners to pivot fast and navigate the new environment. >> how are you working with your clients on this? >> ey helping our clients every day use technology to change business model and processes we're also helping them use data

to turn that into information. for an example we worked with a manufacturing company to move from manufacturing to being a software company in the past that would have taken years. using ecosystems we're able to do that in months. >> thanks for sharing your insights really appreciate it. >> thanks for having me.

look what the cat dragged in. trust me. you call that cute? ooh! with the paws? with the hat? we've been seeing a bit of a deterioration in the market in the final hour of trade, at the lows of the session. the sector heat map for the s&p 500 which is down about 0.5% right now. one pocket of green is communication services thanks to netflix, paramount and warner brothers having a strong day today. along with some of the other media names. disney and comcast our parent company higher on the day. everybody else is down and at the bottom of the list you will see energy the worst performing sector of the week on concerns about the global economy, recession, down 2.3% health care is there at the bottom materials, industrials and

staples. for the week as a whole every sector is lower and the s&p down more than 3% as we look to close out this friday of trading two wall street firms turn more bullish about netflix's ad supported services we'll share the details straight ahead. walmart gets into the buy now pay later business when te weak you inside the market zone next. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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and we have melissa here on walmart and julia boorstin joins us on netflix. stocks sitting around session lows down 200 on the dow, higher than expected inflation reading this morning surprising the market brian moynihan told us this hour consumer bank balances look healthy. i spoke with him take a listen. the average account balance by the cohorts are up 10% it's not like it's even the last year it's grown. that's kind of the interesting question they will spend it down. you're starting to see it a bit. it will take a longer time than people think. >> mike, he pushed back on a lot of the gloom out there on the consumer, on the economy sounded a lot more positive than some of his fellow bank ceos and also on the stock price which has been hammered this week and said it was misinterpreted comments from the bank conference. >> yeah. the general message seems to be that the things that seem like they're challenges relatively in

control, banks have been relatively conservative and provisioning for credit losses and assume unemployment is going to go up a bit, but i don't think he can really look past the fact that, you know, account balances are higher than they were prepandemic, debt obligations among consumers are lower than they were relative to disposable income prepandemic you've seen all these stress points around the consumer but that's not really the center of where the they is struggling if you look outside of the mortgage business. >> he did confirm the u.s. will fair better than most u.s. economies which is the story theater this year as well. it hadn't occurred to him, i want to get the wording right, when it comes to treasury secretary, of course, the white house press secretary was asked about, he said i got the best job in the world replacing janet yellen is not on my mind. >> yeah. i don't know that that would be the job he would rush to it's been a long run he's had at bank of america, so i'm not sure he has to necessarily look for the next thing

i don't know if bank ceo is going to be the profile of a treasury secretary whenever one comes to succeed secretary yellen. >> leaving bank of america has not occurred to me according to brian moynihan that stock down 0.3%, but a rough week as we mentioned walmart, it is near the bottom of the dow right now the company is getting into the buy now, pay later business through a start-up called one, which is the majority owned by the largest retailer according to a source, one is planning to launch the service next year and can be used at walmart and other retailers. melissa joins us why would walmart want to get into the buy now, pay later business right now after all of these stocks have been brutalized in the market >> sara, there's two reasons walmart has been trying to get into newer businesses. one is advertising and another is financial services. it's got a lot of reach. the largest grocer in the country and private employer in the country. buy now pay later feels like a

market it may want to be in because it is seeing that consumers are stretched and feeling the pinch from inflation and another way to build on its relationship with them through the start-up it created. >> where is walmart in general in some of these moves to go into financials, payments? it's always been sort of a player in the space or at least trying to dip its toe in >> it's important to remember for years walmart has had money centers at many of its stores where people have turned for the services you associate with a bank many customers don't have traditional relationships with a bank and may not qualify for a credit card and so they've used the store to get prepaid cards in some cases or wire checks, get checks printed and so in a way, this is kind of a modern spin on this walmart also had layaway it did away before last holiday season and rolled out affirm, so with this start-up it's planning to go head to head with affirm and

some of the other services and cate are to those consumers who may need other ways to pay for purchases. >> yeah. apple is in there as well. thank you very much, melissa repko. stocks losing steam. dow down about 300 points right now. almost at that point look at netflix holding on to gains. one of the winners in the s&p today. wells fargo upgrading the streaming giant to overweight from neutral hiking its price target to 400 from 300 and cowen needing naiming it its top pick next year. julia boorstin joins us. is this all about the ad supported tier which analysts are getting excited about? >> i think that's really at the center of both of these analyst calls is ad supported tier which netflix launched at the beginning of november is driving this optimism for a couple reasons. number one, this idea that it could really reduce turn so instead of dropping the service entirely and people want to save money they would pay less and watch some ads.

also want to point out that wells fargo projects this new ad supported tier will drive around 23 million incremental subscribers by 2025. the idea you will get a whole new bunch of people who wouldn't be paying for the service otherwise, and then also, another thing which cowen delves into they're going to be making sure these new ad supported subscribers don't earn netflix any less than if those subscribers were not watching ads. you'll start to see incremental revenue from the ad supported subscribers in 2024. that's according to wells fargo. one other thing cowen points out the financial benefits of paid sharing. netflix has talked about how it's cracked down and going to continue to crack down on this password sharing that has been so rampant and they hope to turn some of those people watching netflix for free, into new subscribers through this paid sharing model. that's really what's behind this the stock was up more earlier but now it's up 3%. >> it's a split picture.

netflix an tesla on one side, amazon and microsoft lower. >> what are you seeing, mike, in the market internals here? we've deter rated and the sell-off is picking up. >> they've softened with the indexes. less than two to one overall volume is light right now. also the s&p still within the range of the last three days the lows of the week have been above the 3900 level u.s. dollar index has been part of the story earlier today it made a low that was at a level first reached back in may. it is basically flat right now under that 105 mark. clearly having rolled over the volatility index not doing a whole lot. it's been in the low 20s peshgds up slightly on the sell-off still under '23. it's tame but getting the look on the chart of potentially putting in a little bit of a bottom as we brace for the fed. >> we'll let you get ready for "overtime" at the top of the hour you're host it today. the markets ahead of the

week with the fed and inflation report adam joins us, founder of vital knowledge. what i like about your note everybody is warning about earnings headwinds and weaker earnings, pricing in a recession. you're talking about a number of earnings tailwinds in the new year. >> you're going to see companies have [ inaudible ] as the economy slows and going to weigh on earnings. i think there are three tail winds that are going to help earnings for next year come in better than people fear. the first one is supply chain normalization. a lot of companies talk about that i think most notably siena, which reported earlier in the week, a networking company, came in better than expected largely because they were going to ship more products than they anticipated because they're getting more chips and components in the supply chain a lot of other companies talk about improved supply chain

conditions that's one tailwind. the u.s. dollar is off from its recent high. the dollar crushed earnings for the last year and a half and been on a he relentless rally and to the extent you see that continue that will be another tailwind third one is very aggressive cost cutting you've heard on any given day you have a slew of companies coming out with hiring clauses, layoff announcements aggressive operating expense reductions that's going to be a bigger theme going into next year and contribute to the softness in the broader economy and preserve earnings for companies next year. >> do you think expectations are getting too low here for earnings do you think there's too much pessimism creeping in. >> you have some pretty dire numbers getting thrown around for next year. the s&p 500, you have the numbers are kind of all over the place. the consensus among south side strategists is 220 another bomttom's up forecast

others are mentioning figures 200 or $205 which would take a very dire economic scenario, you know, with ongoing margin depression et cetera and i don't think you really see the evidence for that taking place i do think that the narrative around earnings for 2023 has become a little bit too pessimistic. >> generally you're upbeat on your market outlook for '23? >> i'm not really too bull urb i just think that, you know, the combination of disinflationary forces will grow more intense. i think that's going to avoid some of the steep sell-off forecast that people are making, but i do think that the s&p is going to face a ceiling, you know, essentially around where we hit earlier this year around 4100 level until you see a sustained downward trajectory in inflation until you see the fed not only really pause but start

to outline possibly dialing back a tiny bit, you know, their -- the tightening policy they've been pursuing the better part of the year. >> adam we'll louvre it there. thank you for joining me as we head into the close we're near the worst levels of the session. s&p down about 0.75% we're adding to losses to the weak and breaking two straight win streaks for the s&p 500. looks to close down 3.4% actually giving back a lot of gains over the last few weeks or so only sector positive here into the close are communication services i mentioned netflix, we talked with julia about it, but the media names doing well today paramount and warner brothers. what's not working energy continues to sell off. tough week for energy stocks down 8.5%. health care is also lower today and, of course, for the week, materials, industrials, staples, all around the only new highs were actually we're seeing and continue to see

new highs almost every day, hershey, campbell soup, conagra. a lot of people say that's positioning for recession because the staples do better. merck is at an all-time high there goes the bell. nasdaq down 0.75% and the dow closes at the lows of the day down 310 points. that's it for me on "closing bell." have a good weekend. see you monday now into "overtime" with mike. welcome to "overtime." i'm mike santoli in for scott wapner we're just getting started in just a bit i'll speak with bank of america's top commodity strategist about the sell-off in oil and where he sees prices headed from here a top technician bringing us his three best looking charts in the market right now we begin with our talk of the tape the late day drop into the close, stocks selling off in the final minutes of the trading session here you see th