and the creditors might be the ones that try to force something to ensure the value of their collateral. >> more than at risk he's a tesla shareholder and maybe repeating that to himself and eventually there will be a benefit here. >> say it enough times. >> maybe it comes law. >> "closing bell" starts right now. stocks under more pressure today as we wrap up another ugly week on wall street and we could see more volatility in the final stretch as a bunch of options expire this is the make or break hour for your money welcome to "closing bell." i'm sara eisen here's where we stand, down 348 on the dow, low of the day down about 550. s&p 500 down 1.25% every sector is lower. some of the commercial real estate places getting hit especially hard. we've also got groups like consumer discretionary and

utilities trading down more than 1.5% what's holding up the best communication services, still lower but names like meta and netflix getting a little bit of a rebound. t-mobile helping that group rubio a bit. the 10-year treasury yield higher, little bit of selling, not on the short end the two-year yield is shorter. the major averages for the week another down week, third in a he row, and since the federal reserve decision on wednesday, at 2:00 p.m. eastern, the s&p 500 is down more than 5% you've got most sectors lower for the week and the only one that will end up is energy everybody else down. consumer discretionary hardest hit. tesla one of the losers on the week we will talk to the former federal reserve vice chair richard clarida about this week's rate hike decision and the balancing act to bring down inflation. kick it off with the major averages down for a third day in a row as the fed hangover worsens. we are headed for a second

consecutive weekly loss here more on the market volatility let's bring in josh friedman josh, it's a good day and time to talk to you what is your takeaway from this week where we've got soft are than expected cpi and inflation and that was good news for the markets and then the fed projecting a hawkish message >> the way i look at it, sara, thank you for having me on the show again, i view it as certain market space headwinds and tailwinds and i think what we're seeing is some of the headwinds facing the equity markets. we're standing in the 75 to 85th percentile of any valuation metric you could mention for equities multiples are high, earnings are going to be challenged by higher interest rates, labor costs, margin squeezes. you have growth under attack by the fed which is trying to engineer a bit of a slow down in

demand and you no longer have the tina economy, where there's simply no other alternative. in this case you can put your money in treasures and earn in excess of 4% i think there are a lot of headwinds that face the equity markets whether a soft landing or hard landing or the fed oversteers or doesn't oversteer. on the other hand -- >> just because -- >> sorry. >> didn't mean to cut you off. just because you think the market is still overvalued at this point >> i just think there's not clear visibility as to when you resume some of the more obvious attractiveness in valuations or the catalysts that would spur things higher. we're coming from a crazy place in terms of valuations across all risk assets and the corrections that have taken place in the equity markets are not so enormous or great off the peaks to make that market clearly systemically attractive in my view clearly it's more attractive than two days ago, but i think

some of the challenges i mentioned continue to face that market whereas, i think if you look at the other end of the spectrum and look at credit markets, which have also taken a tremendous beating this year, you're already at a point where a half trillion dollars has been exiting from the mutual fund world, causing a lot of pressure on pricing banks are basically not lending to broad swaths of the economy including real estate which is immediately challenged high yield market is new issue markets down something like 80% year to date i think 78%. the fed is continuing to speak in a hawkish way pricing in the credit markets now is so different than what it was any time in the last decade to the point where there's debt yielding 12, 13%, 11%, 14%, and second lean debt or unsecured higher it's not systemically available, markets aren't perfectly fluid

and they never are there are headwinds facing the equity market. they have different types of optionality than what we saw any time before march. >> is that what we got a taste of this week, the equity market sold off hard and the bond market rallied with the fed talking about higher rates for longer. >> that's exactly what we saw and it would not surprise me terribly to see that going forward. it's very hard to predict the exact trajectory that the fed chair would like to map out. sometimes he says one thing and then walks it back in the equity market, i used to say the old market was to buy the dips market. the fed was there to protect you whenever there was anything adverse that happened. this is almost the opposite. instead of buying the dips, sell the peaks. any time there's good news, it's bad news because that gives the fed more license to take on even more aggressively the inflation that's embedded in the market. if the market starts to creep up

the fed chair speaks more aggressively. >> do you think they are going to make a mistake? do you think they're overdoing it >> i think they might oversteer a little bit one of the -- i guess one of the issues i see, sara, interest rates are a blunt instrument for addressing general levels of demand this is one of the reasons why the fed, i think, is jawboning as much to try to encourage people to contract their spending, to contract their hiring and cause more general slowdown in the economy. if you just use interest rates, certain industries are much more affected than others obviously, the number one industry that's affected is single family new home sales you can afford about one third of the house that you could afford before rates went from call it 2% to 6.5% that's not the same the way certain other industries are affected it's a blunt instrument. do you address the short end of the curve or sell the treasuries and address the long end of the curve. it's not a perfect instrument.

and i think that that's why the fed would like the market to do some of the work for it by continuing to speak in a hawkish way so that the market will restrain demand by itself. >> what are you guys at canyon expecting as far as a recession? is it in your base case next year >> it's hard to predict. people like goldman and morgan stanley talked about what they called an earnings recession, their way of saying, i guess, unemployment is exceptionally low levels and consumer balance sheets are strong and bank balance sheetz are strong so we can have a slowdown and endure it maybe it's an earnings recession where earnings get hit badly, stock market prices get hurt but not painful for the economy overall or so long or such an overadjustment to cause tremendous human suffering i do expect the fed is more likely to oversteer a little bit or to keep rates up a little

higher to be certain, especially given how much understeering they did going into this phase by missing inflation and letting it get this far out of hand. i think from our point of view, that creates an asymmetry because you have capitalizations where there's a lot of equity value and a lot of cushion and the debt is all retrading at basically recession levels with high embedded real returns. >> i've been asking about distress every few months here and i know you've been standing guard waiting for that to pile up do you see more opportunities if the new year from earnings season, from earnings outlooks, to create more distress opportunities for you? >> we're starting to see most of that the real estate industry is one area where i think many projects were awaiting refinancing at levels that can't possibly exist in today's markets i think certain companies didn't fix their interest rates and have burdened themselves with a large amount of bank debt at

this floating rate that yields more than it yielded before. we're starting to see those companies look more marginal and distressed levels of debt in companies that aren't necessarily themselves distressed but there's a mutual fund forced seller into a market that's not awash in liquidity. the high yield index is not as wide as it has been in certain past market downturns. i don't really expect it to be as low or trade as wide as it traded in the past part of that is because the average ratings are so much higher in the index today. there are fewer triple cs more double bs. it's a healthier index that being said, there are a lot of companies that are going to suffer margin contraction with increased labor costs and earnings and some of them will be forced with refinancing debt in a market where the new issue market is essentially shut down. we're starting to see an increased flow of that,

definitely. >> ultimately, what is the 2023, what is the most exciting opportunity in this tough environment for you in 2023? >> right now, i like floating rate bank debt i think it requires a great deal of attention to specific balance sheets and staying power and requires you to be opportunistic and not just buy the index it's more of a secure pickers market as opposed to a general market and i think that leaves you with a margin of safety. as we get closer to the brink of whether there's a real recession and how painful it is, at that point maybe there are opportunities to delve deeper in capital restructures and do true restructuring. i think it's to stay with fairly strong companies that have decent balance sheets, decent competitive positions, but where debt is trading under an awful lot of pressure in a fairly safe place on the balance sheet the risk return there is in the market. >> do you think the growth of private credit has fundamentally

changed the dynamics of the banking sector and made them more sound, more safe? >> i don't know if it's made it more safe or not it's clearly substantially changed the nature of the banking business you see mer shall banks that are worried about falling in tables as they compete with the private competitor who has different regulations, less leveraged balance sheet and doesn't have the same capital requirements as a commercial bank. these things have a way of correcting themselves. one of the opportunities in the market today is simply the banks have responded to the emergence and growth of private credit in real size by using their own balance sheet to bid aggressively to buy debt and the result has been that they've gotten the fed started to raise rate and banks hooked with exp exposure they never would get hooked with. the good news is their balance sheets are quite sound and they can take a loss and move on.

i think private credit will change the landscape for quite some time to come. i think it's here to stay and i think it's a product that has merit. >> josh be friedman, great to get your outlook, thank you for joining us. >> thank you very much have a good holiday season. >> happy holidays to you. speaking of real estate, the sector hardest hit down 3.5% all the sectors are down after the break richard clarida a global economic adviser at pimco will join us to talk about the fed's rate hike path and whether we can avoid recession in the year ahead. you're watching "closing bell. dow is down about 350.

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a number of fed officials on the tape today including in some comments from fed president mary daily says the fed is, quote, far away from a price stability goal, follows comments from the new york fed president john williams who said it's possible the fed will have to hike more than the 5.1% peak federal funds rate forecast, adding going to 6 or 7%, is certainly not his baseline joining us exclusively is the former federal reserve vice chair pimco managing director richard clarida. welcome. >> as always, great to be on the show, sara. >> so look at the reaction post fed meeting. the s&p is down more than 5% since the statement came out on wednesday afternoon, and treasuries have rallied and yields are lower what is the fed going to make of that >> well, it is an interesting

picture because really for the first time in this cycle, the market is not signing off on the path in the dots. the dots have the to5.25 as i look at my screen that's not priced in. we've gotten some good inflation data so part of this may be the markets are expecting the fed won't need to do what dots said. today we had mariey daily and williams pushing back. >> who prevails? >> i think the fed is going prevail. the chair said they will keep at it until the job is done i think that's what we will see. we will see the funds rate getting up projected in the sep a couple days ago, so i think eventually on this one the market will come up to the fed in terms of the peak funds rate. >> it can't be good, though, for the fed or markets that the fed and the markets are on different pages, as it relates to the

outlook for where rates are going? >> it's not good there may be a benign explanation the market has so much confidence in the fed and won't need to do as much as they say or the market challenging the fed's reaction function. i take them at their word inflation tize high, it's been too high for two years, not been transitory, and i think policy does need to be in a restrictive range for some time and what we heard from the chair and today it's not good, but the fed will do what it takes to bring down inflation towards the 2% goal. >> i guess then the question is how much damage is there going to be and whether the lower rates are a reflection of the fact that they will have to backtrack? you've got the yield curve most inverted since the early '80s and starting to get some weaker data including today's flash pmi. the odds of over steering, harder landing, rise, is that

the case >> i believe they do look, i think that, you know, the chair did say a couple weeks ago they don't want to over or under tighten and i accept that. there's a risk to the institutional credibility of the fed if it does not bring down inflation. you know, i think the fed's models historically have done a pretty good job, but, obviously, they and i and others misseda lot of other folks missed the surge in inflation some of that is ukraine, but some of it is the economy is overheating and i do think that if there is a risk it may be a risk of over steering. i do think if there is a slow down next year i don't think there's any reason for it to be particularly severe or sharp whether or not it turns out to be a recession or not will be in the data, but i do think the fed is trying to engineer a slowdown and that's what we're going to get in activity. >> why not look at the falling rate of inflation, which is good news, especially in some core categories which drove us higher like lumber and others, and the

fact that we're starting to see some of the rents lower, that's a big component of cpi, a lagging indicator? why not look at that and pause to see how much damage was done by the very aggressive tightening that's already been done they've raised ratings every meeting since march and had four triple rate hikes in a row. >> you're right. sara, i do think they're looking at that, but as the chair indicated in his remarks a couple weeks ago and reinforced in the press conference this week, they're also looking at the categories of inflation that are very sticky, what they call the nonshelter services part of the basket i do think they expect good prices to come down, used cars and the rest, and i do think we're seeing some evidence that housing and rent inflation will come down. that's all good. but that leaves about half the basket that is right now not yet returning to levels that they want to see and i think they

will be looking very closely at that nonhousing services component and in particular at wage inflation relative to productivity. >> so let's talk about wage inflation. for those that don't understand why the fed has to target lower wages and higher unemployment, which is not good for america to deal with the inflation problem, how do you explain that? especially with the fact that real wages, you know, they've been falling >> it's an excellent point let me be clear the fed wants everybody to get a wage increase if it's commensurate with productivity and price stability and, indeed, sara, what we saw before the pandemic is that we were cutting rates in 2019 even though wages were going up quite nicely because price inflation was too low. let me be clear, the fed does not -- is not targeting wage inflation, it's targeting price inflation. wages are going up depending on your index between 5 and 7% and that's just not consistent with the inflation objective.

we will see some rise in unemployment that's what the fed has penciled in for 2023 about a percentage point increase, and the fed is expecting that that will do the trick in terms of bringing inflation down the labor market is hot. we have two vacancies for every job. and we have -- we also have a reduced labor force compared to prepandemic. the labor market is overheating. >> so your view is that they do get up to their target rate they're expecting, above 5%, in what in the first half of next year and then pause or do they pivot? do they have to cut? the market is now starting to expect cuts. >> absolutely. and we saw some of this back in 2006 and 2007 when the fed said pause and the markets heard done and cut. as i said at the beginning, i think this is an ongoing part of the tug of war between fed communication and the markets. i take the dots at their word,

they're dots they will get to 5.25 and hold there for some time the length of time will depend on the data and if we begin to see underlying inflation moving down sharply, i think they will respond to that. that would be a good thing i think it would be justified then the fed indicated in the long run they think the fund rate be will be around 2.5%. this is a restrictive policy and as the economy responds they'll have an opportunity at some point to reduce rates. >> what about financial conditions you wrote about that in your post yesterday how ultimately they might need to continue tight tong keep financial conditions from loosening too much every time they hint otherwise the market rallies and dollar sells off and it's counter productive and rates go down. >> sure. we've had a little bit of tightening in fci. as you point out in the last two days, obviously, in equity values and other parts of the spectrum, so i pointed out just

a general consideration for the fed is that very few people, including very few banks, borrow at the federal funds rate. the fed transmits policy through broader financial conditions financial conditions continued to ease and ease substantially, other things being equal would mean the fed would have to do more i think we're a long way away from that, but it's something to be watching. >> so ultimately, do you think we can avoid recession with this outlook? >> i think that there's a chance, you know, that we'll -- that we can avoid a recession. i think there's a greater chance that there will be a sharp slowdown that may ultimately be declared a recession and might not know it as we're going through it i don't think there's any necessary reason for a hard landing here the fundamentals of the economy were good going into the pandemic households have a big cushion. banks are in great shape in terms of liquidity and capital, and so no, i think we could avoid a recession.

i think most likely there will be a recession given the inverted yield curve, but it doesn't need to be a deep or long recession so i think that's the way i characterize it. >> well, it's great having you after this big week of fed meeting and market reaction. thank you for your time. >> thank you you bet form federal reserve vice chair. the dow is down 270. started down almost 400 points s&p 500 still down a full percent but again, climbing off the lows into the close. you've still got every sector lower but not as sharply communication services are about to go positive and materials are doing better real estate down about 3%. the nasdaq down 0.8. adding to the losses week to date more than 2.5%. the nasdaq for the month down as well almost 7% tech's terrible year gets worse.

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check out today's mover. darden restaurants wall street taking a bite out of this restaurant today. the owner of olive garden and longhorn beating estimates raising the mid year of its full-year profits but rising food and wage costs pressuring margins and leaving a bad taste in the mouth of investors. stock off 2% tech stocks under performing the broader market all year long this week no exception a pair of top analysts on whether a tech turnaround is on the horizon.

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markets are coming back. dow down about 221 points or so and actually within the s&p 500 which is down less than a full percent, still down for a third day in a row here. communication services popping into positive territory. that group driven higher by meta, t-mobile, netflix and some of the big media companies like fox and comcoast. the nasdaq down 0.7% still down on the day and week, down 2.5%. apple an amazon haven't been spared in the sell-off with the exception of meta, higher from the upgrade of jpmorgan today, joining us is mkn partners and gene monster of luke ventures. my main question to both of you, and gene, i'll start with you, is where earnings expectations are for this group

have they come down enough to reflect the reality of what we're looking at next year >> the simple answer, sara, unfortunately, i don't believe they have. in the case of meta, i think they have, but for the most part, all these large cap tech companies, most of them are going to need some downward revisions. the market, for tech investors, moves at a more rapid pace and i think when we think about the december quarter specifically, i will highlight one example of the work that i think the buy side needs to do, apple, i think their business is doing exceptionally strong, however there might be softness to that iphone number. they said as much on november 6th and you need to look at the iphone number in the december quarter in the december plus the march quarter. that is an exercise that i think investors are probably not going to want to go through. they're going to probably sell first and ask questions later which kind of speaks to i think some of the vortex that a lot of these tech companies i generally think it's going to be a messy december quarter for large cap

tech. >> what are you doing with your expectations for some of the names you cover? >> yeah. i'm with gene. i think in pockets, i think expectations are coming down but not fast enough. we think the outlook would be the steering event 1 q outlook, people still need to come down in pockets, public cloud computing is decelerating. you have e-commerce headwinds. the main lanes of internet we are seeing headwinds and i think when do estimates bottom out, i think 2 q outlook. i think as gene said it's going to be a messy 1 q outlook event and probably going to be bracing for more downside here whether that's in the stock right now, in some cases probably we are getting there. in amazon's case probably we are getting there. amazon closing at $82 is

probably where the bad news is priced in. >> that's what i was going to ask next. >> go ahead, gene. >> my experience is that i agree it's going to be tough but my history is that it's really priced in. as much as bad as it's been for tech investors, feeling it every day, as bad as it's been, i think that -- and much anticipation around negativity, three quarters of the time it's not priced in. you might get lucky and the numbers go down and the stock goes up. i think it's largely not priced in. >> so i'm looking at your picks. you like meta and apple, not surprising, gene, take two interactive, why are these the best opportunities in the space? >> when it comes to apple, i think that, again, this is the near term versus long term near term buy side needs to have their coordinates correct going into the march quarter, understanding that, but i think demand is strong

this is the fabric of our tech so i think that apple and -- is going to continue through. i think they will show a headset next year. i think that's a catalyst for innovation and multiple expansion, and i'm inching up and just standing right at the 50-50 line on the car. but i -- it's going to be something that ultimately i think in the next couple years can be a massive triple the size of their business and so that's apple. meta, i think that - >> lot of analysts love meta lately. >> surprising, that wasn't the case a month and a half ago. in the case of meta zuckerberg's comments at the deal book on december 1st, suggests that the engagement is strong i think that's the most important piece. the only company to make -- those are two i would focus on. >> rohit for you, you mentioned amazon, all the negativity on earnings is priced in. i assume that's one of your top picks and uber is on your list

too? >> yeah. amazon, when you are having shrinking markets i feel amazon gains market share all three markets they operate in, commerce, advertising and public cloud, i feel they are going to be getting share throughout and we'll start see evidence of that i think amazon is probably six to nine months ahead as far as cost cutting is concerned and we start seeing that leverage as the quarters progress. as i said probably one more quarter of haircuts for amazon we need to go and as the markets start to stabilize i feel amazon is the one that has the most upside in mega caps in my book uber i feel fundamentals have been improving throughout the year, but stock has had negative sentiment lately, so i feel as fundamentals stay stable and they continue to execute, i think there's a catch up here where valuations are extremely

disconnected with what uber has been executing over the last 12 months uber is the only large cap company in my -- in the 20 companies we looked at that have had upward revisions of revenue throughout the year. not a single company we looked at has had that yet uber stock is down 40 i feel that disconnect doesn't last too long. i think that's why we like uber as well. >> rohit and gene we'll leave it there. thank you for joining me another week where tech has gotten slammed a look at where we stand in the markets 20 minutes until the close. off the lows and climbing sort of into the close well off the lows down 200 points here on the dow. s&p down 0.75% as i mentioned communication services higher. materials also coming off lows only down a quarter of 1%. real estate the drag the nasdaq down 0.6%

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we are now in the "closing bell" market zone. chief investment strategist chris is here to break down the moments of the trading day and jmp security devin ryan on the banks and fairlead katie stockton in the sell-off we'll kick it off with the market coming back a little here into the close but still capping off another tough week overall getting some new fed headlines crossing the wire, fed mester, the period is over and they're chiming in with hawkish comments saying expects the fed to hike by more than the median forecast, welcomes the inflation data, but not willing to call a peak it will take time for inflation to ebb you get the point. they don't want the market

thinking they're getting ready to pause just yet. >> indeed. it's been -- >> so does that mean more pain >> it's been exhausting since the fed chair powell's press conference, all the speakers have followed hawkishly. i think powell misspoke back at the brookings institute, at least the markets interpreted it that way hawkish speak. they want the labor market to be weaker and wages to fall and stocks are going to remain a risk off. >> you've been bearish most of the year, right, chris >> we have. >> anything changed in terms of the outlook? >> nothing has changed in the outlook. we've been more bearish and we think we will have a deeper recession next year and the fed will go too far because they will have to, the only thing to break the wage growth is to really get into a deeper recession and break that wage price spiral we're bearish and issued our outlook last monday for 2023 an think there's at least 20% downside from here for stocks.

>> wow we're going to talk about that more, but first let's hit the banks. news on the financial side goldman sachs planning to cut up to 8% of employees in january according to reporting from cnbc the stock is downnearly 10% year to date rough year but out performing the kbw bank index down more than 25% let's bring in security research analyst devin ryan any reason to think the goldman cuts are not happening across the other sector and other banks too? >> i think the whole space is going to see some reduction. goldman was alluding at their conference, they have to get tighter on expenses and a lot of uncertainty we heard about in the macro outlook. you will see others do similar there's a little bit goldman centric aspect here. they have their financial targets they're focused on and operating margins they're trying to live up to.

think about 2021, which is strong, and if they take out 8,000, the rumored number, up to that, that would get them to where they were starting 2021. you know, it's a little bit more than they normally do every year, but i wouldn't look at it as a drastic shift in strategy or something that means that there's a much bigger shoe dropping here. we're comfortable with it and i think they've alluded to it and look beyond middle of next year. >> i think what you said about the growth is really important the perspective coming off a period of strong growth where, i don't know, they didn't do layoffs last year like this did they, in the last two years, and grown the bank and grown the assets and so have others. >> yeah. so exactly i think when times are good and you need people to help execute the business you don't take as close of a look at your head count. i think that you look again, they've grown their head count by over 8,000 from the beginning of 2021.

this will just get them back to that level and i think that, you know, again the macro backdrop is challenging and, you know, we're in our opinion kind of in a choppy trading range for a number of these stocks here. we knew they were getting closer to the bottom end for financials making the broader market trading at 50% of the s&p 500 for the p/e multiple i think it's going to be choppy going here for the next couple quarters but beyond that we get constructive here. >> brian, thank you very much for joining me appreciate the outlook on the banks. let's talk about the consumer staples. they're lower today but out performing and holding up well in december. analysts at bank of america revealing their top picks today in the sector heading into '23 the bank likes coca-cola, mondelez and procter & gamble saying peak u.s. dollar, peak u.s. interest rates will boost

those stocks in value they're going with kraft heinz and philip morris in quality it's monster beverage, hershey and pepsico. bank of america saying staples could be one of the top sectors next year as prices remain high but inflation and costs are moderating leading to margin expansion. chris, i know you can't talk specific names but is it a group that you favor >> they have defensive characteristics, we do agree with the dollar weakness call. i think that will be more back-end loaded rather than front-end loaded they have durability of earnings the fourth quarter of next year only names that have earnings resistance and aren't going to see the negative revision cycle. we like them they're expensive but they have pricing power and their input costs are moderating >> what other sectors do you characterize as defensive? real estate is traditionally in that basket but real estate has been pummeled really hard today

and other day's warnings with what's a happening with the commercial outlook getting lending. >> real estate we would avoid. it's a mixed bag there's maybe headwinds. the group is not cheap enough. we like health care. it continues to be our favorite sector as we look into next year valuations aren't stretched. not a lot of risk for the time being. given the divide in congress and they throw off real cash flows investors today that we speak with, want to own businesses that throw off real cash flows and health care does exactly that. >> all right health care and staples. let's turn to broader level -- broader markets and talk about key levels to watch. with us katie stockton, manager partner of fairlead strategies and a cnbc contributor everybody was watching on the s&p the 3900 support level

closed below it yesterday and looks like we're going to close below it today what does that mean? >> it's a minor level but does show momentum that was really evident at the start of last week we now have widespread over bought sell snalgs looking at individual stocks are seen, over bought, over sold measures rollover we had counter trend signals in the majorp indices confirmed yesterday. a lot of indicators point lower. the breach of the 3900 area is certainly a setback. the next for the s&p is around 3500 i don't think that's relevant between now and year end i think we'll see some stabilization next week, perhaps a little bit of a santa claus rally before a down draft in january and that 3500 level it does look in jeopardy. i don't think it's a real -- we can be convinced it's going to hold on the way down we're looking for a volatility

event to liken the current setup in the volatility index at 2008, unfortunately. we're bracing for more downside but where perhaps not between now and year end. >> i had a question for you about technology and the nasdaq in particular and the relationship with rates because for most of the year the story was, as rates went up, technology was in the eye of the storm. nasdaq is still under performing and the 10-year below 3.5 way off the highs. how do you make sense of that and what does it tell us for next year? >> i think it's all about the mega caps. we've actually seen a short-term breakdown in apple stock this week and that's something that i think is going to be a big drag on the major indices and that's been a big drag on the nasdaq 100 and the s&p 500 technology sector it's the influence of these mega caps that's been so difficult for the overall sector it's kind of set the tone, whereas if you look from sort of like a small and mid cap growth

perspective those names have done in some cases better in relative strength terms. nice relief rallies. nice to say they won't also see sharp retracements here but you can make a case for them longer term that perhaps they already have an important low in place you can't make the case, you know, the same case, for apple, tesla and the others. >> so would you tell people to buy small and big cap growth names? >> i think perhaps on the next retracement, yes, but here there's too much risk. with the overbought down trends we have and so many names came up against their 200 day moving averages, it's been such a reliable or resistance level in the environment, and now they're reacting to the over bought conditions and i would give them room probably aim to wait until end of january, perhaps early february, and then revisit and see if we have breakdowns in which case i would still avoid them or if you see some additional support discovery

those summertime lows are remaining intact and ideally also seeing divergence to the upside in the indicators, momentum gauges, over bought, over sold measures making higher lows even as prices come down. >> is there a particular sector, finally, that looks ripe to you for a comeback a good opportunity right now >> i don't know about a comeback, but i still do favor the defensive sectors as you've been discussing. health care does have really among the best relative strength posture. we've seen a little bit of a down tick outside of defensives and energy, i think it's still one of the best sectors for right now from a longer term momentum and volatile strength perspective. staples are fair game in relative terms utilities have staged a bit of a recovery and i would say utilities if i had to compare them versus reits which they tend to kind of stay in sync utilities over reits. >> utilities over reits. got it katie stockton, thank you very

much appreciate it from fair lead strategies chris, want to ask you about dividends and what the strategy is should you buy payers into next year as a way to remain defensive if yields are falling now? >> yeah. dividend stocks tend to be inherently defensive because of the yield and the growth and the cash flow to support that. our favorite strategy is the dividend aristocrats, widely known and an area where you have companies that have a 25-year consistency of increasing their dividends over time. there's some staple names on there. utilities among others that's where we would be putting new money into the dividend aristocrats to what we think will be a choppy market in the first couple quarters of the year. >> just a minute or so left in the session. few 52-week lows since we haven't seen 2020. signature bank and backster, high for arch capital group.

what would change your mind and have to happen next year to make you feel like it's time to buy >> well, we stick to our market bottom check we have indicators we're looking at the first thing is leading indicators need to find some type of bottom you saw the s&p global manufacturing indices out earlier today weaker than expected i would argue in recessionary territory. that needs to find a bottom. the vix spike about 40 not a lot of fear in the market. we have to have a better sense about what the fed is going to do and how high they are going to go, where the pause ultimately occurs. and there's just too much uncertainty around that to start to think about a market bottom obviously, as prices fall naturally we have to get a little bit more optimistic we're not there yet. >> chris, thank you for joining me as we head into the close here we've seen the dow come off the lows, it's heading south again it is going to be a down day the drag is mcdonald's, home depot, united health care and microsoft. in fact, it's a pretty broad

sell-off just a few winners, caterpillar and am again and boeing. s&p 500 will close down a percent the. that means 2% for the week the nasdaq losing almost 30% for the week down about a percent today. you did have some relative strength today in names like meta, adobe did well, netflix did well, but overall, a tough week and the second down week in a row. that's it for me on "closing bell." have a good weekend. into o"overtime" with scott. >> welcome to "overtime. you heard the bells. we are just getting started from post nine here at the new york stock exchangep in just a little bit vantage rock's avery sheffield will tell us why she thinks this week marked a significant shift for the markets. a new trade idea from guggenheim's scott minerd what he's suggesting. we begin with our talk of the tape, the battle between what fed is saying and what the b