week. >> it's still throwing a hissy fit about the fed. until any signs they might ease off and say you know what we've had so many inversions and forward leaning indicators, maybe we should back off, until we hear that talk, you'll see this kind of market. >> until there's really a pivot. >> yeah. >> good to be back with you. >> it's great to have you back. >> great to have you back. >> great to be back together. >> thanks, everybody, before watching "power lunch." >> "closing bell" starts right now. that's very much, kelly and tyler, stocks under pressure in monday trading heading into the final two weeks of the year, sitting right now at or near session lows now, this is the make or break hour for your money, welcome to the closing bell, i am dominic whic chu, in for sara icenen. the dow industrial is down 1%. 30,618 the s&p, down 1.25%. nasdaq down .75%

the small caps, 1.5% declines, ten-year benchmark drifting higher to 3.58%. here's a look at the biggest nasdaq 100, laggers, those decliners today and lastly, splunk, airbnb, metashare platforms. today's show, rockefeller's ruchir sharma, a warning for private markets, saying they're more vulnerable in this tight money era, he'll join us to explain why. plus, meta's mounting headaches, regulatory issues surrounding the company, diving into those incoming new objections from the european union and mounting pressures from our own regulators. begin with the market as well mike santoli is joining us with the dashboard. what are you watching as things

lose metropolitan umm in this final hour of trading? >> dom, i mean, unfortunately some familiar levels getting retouched. we hadn't been down this low in close to six weeks i mean, to keep it simple story story is that a downtrend is in place until proven otherwise the rally off of that october low did not prove otherwise, right, it stopped right where it would have been gaining the benefit of the doubt if it had crossed above it didn't get there we're down in the s&p 300 points since the high on tuesday, after that positively received cpi report, so we sold the good news of the cpi, got through the fed meeting, and it still became a matter of worrying about growth and downward pressure on the big tech stocks. that stuff matters and back to that level of november 9th before we got that previous good cpi report in other words, you've unwound the relief from the positive declining inflation news, and now it's a little bit more about growth and year-end pressures, perhaps, on some of those losing

stocks with downside momentum, such aztec take a look at apple, another name that's in an interesting spot right now, it is now declining, it's a three-year chart of apple it's declining to just about where it was at the june lows, and then you go all the way across, early 2021, that was kind of the speculative peak in the smaller cap, high growth, nasdaq, and this, right here too, is interesting, that's august 31st, september 1st that was the momentum peak, and relative outperformance peak of the nasdaq apple, 4 for 1 split, all that stuff is right in the in the zone apple is recently, more than 20 percentage points, it's basically underperforming since then it's clearly done its job to some degree, and a source of stability. but it and microsoft are having outsized influence on the downside of the s&p today, dom. >> mike, it's interesting when you point to the charts, for the broader s&p 500, and apple as well individually, you mark those levels of kind of the support that we are seeing is it then fair to say that some traders are looking at this, in

the broader s&p, and in key -- in key stocks like apple as a place where if we don't hold, things could get worse, then we test the lows we saw this fall? >> it seems that way, dom. for example, in the s&p 500, the close the day before that november 9th, you know, level where we got a boost on the cpi, it's around 3750 you go down one plus percent from here. you'd be testing that, and if you -- if it were to hold it would actually look okay it would look as if, okay, that's the new trading range, perhaps, but if it breaks, then you have to open up the possibility of getting back to those old lows 3,800 interesting, too, because that was a downside target from back in the early part of this year for a lot of traders. we obviously have gotten there, and through it but have only spent, i don't know, ten weeks or something all year below that level. that's a fair amount of time it's not as if we've mostly been below that this year. >> all right, mike santoli see you later on thanks for the update on the markets. turn to the key stocks driving

the action meta, as regulators on both sides of the atlantic ramp up pressure on that company today the eu is saying that metahas breached anti-trust laws surrounding classified ads, and that comes as meta faces the ftc here in the united states in court over its merger and acquisition strategy steve kovach, our tech correspondent, latest developments. >> hey there, dom, start with the anti-trust complaint, centers on marketplace, the classified ad section of facebook everyone has. the eu is saying it's making it hard for third party services to compete with that marketplace product, eu saying it gives facebook users no choice but to use marketplace to sell -- meta tells us eu claims have no merit and they're going to work through the process with regulators, but the fine could be hefty, dom, up to 10% of meta's global revenue. $117 billion for context the eu has been far more aggressive with tech regulations, allowing aim to

have third party apple stores. let's go to the u.s. in san jose, california, where u.s. regulators going after meta as well ftc is suing to block meta's acquisition of the vr fitness app called within unlimited. meta's ceo andrew bosworth was testifying in that case today. meanwhile, mark zuckerberg may also make an appearance defending the deal this week as the trial winds down, dom. >> steve kovach, stick with us here, bring in for the conversation brent -- covers meta, and social media names, he's at jefferies. steve lays out an interesting case developing right now. it feels like de ja vu with microsoft back in the day with the european union, some of the problems at alphabet and its subsidiary google has had with european regulators in the past as well. put it in context, how significant is meta's problem with the eu compared to

microsoft, or alpha. >> it's hard to cap, it's impossible, but we can say this, that meta's stock is embedding a lot of key concerns, trading at low earnings, chief name in large cap internet a lot of these concerns are already embedded the number one question we get on the internet side of jefferies is what about regulatory for amazon, facebook, you go through the list. and ultimately, no one really knows exactly what the outcome will be. i have a hard time believing that 10% of their global revenue is fair for trying to put classified into social media network, where if you're looking for something, you should be able to find something that you don't want to buy or sell. seems kind of common to do that. so i think the eu has probably been a little too overreaching obviously you have the u.s. issues, and i think the u.s. regulatory is not going to get any easier, and may even get more difficult here as well.

so i think this is an overhang for the group and it's something investors should consider when they're coming into the group. but again, i think it's really impossible, covering tech the last 20 years, it's impossible to handicap these situations other than to say, they're there are trading at discounted multiples, the fear of recession, the fear of resets of numbers still. we think a lot of that's in the stock today. >> brent f that's the case, you have in essence in a way handicap, you're trying to play the odds as best you can with the information that you have so, in your mind, at what point does meta become that screaming buy if things are already built in, and the stock has lost a tremendous amount of its market value over the course of the last 12 to 18 months >> i think everything starts to become more banked in, in early '23. the reason why is all these companies still have to clear to deck for the pending recession we're in for a hard landing, not

a soft landing, our forecasts have forecast a bigger pullback later in the year in terms of the overall environment. if that's the case and it's worse later in the year, this could be stretched out, and it could recovery could be 2024 we hope that's not the case. but in that situation, investors will start to look at clearing the deck of numbers for the back half of '23 and early '23. and we'll start looking at these names probably until '24 numbers. that would mean it would be until the fall of next year would be a scenario when tech investors start to come back in. is it a possibility? we think it is based on the overall environment. but i think ultimately q1 and q2, for overall tech, are going to be very difficult earnings periods. and the realization of the head winds coming in at usa, i think, will have to be put in now, the multiples have been compressed we need all the companies now to really fully cleanse the numbers, if you will, and once

that happens, tech investors will jump back in full until that happens, they're not touching it. you can see it today with all the tech down again. >> i mean, so steve, i mean, it's a fair point, if you look at all these stocks right now r they are all down, and they're moving lower they're losing momentum. for meta platforms, in particular, though, this is about leadership, this is about the person at the helm, the guy whose grand vision has led to the two-thirds of its value being lost over the course of the past 12 months this is about mark zuckerberg, and what the metaverse holds for facebook facebook/meta platforms. what does he have to say to the benchmark met, to say we're moving in the right direction? >> some of hiez own people don't think he's moving in the right direction. last friday, john carmack, the ceo of oculus, if anyone believed in it, he quit, he

criticized mark zuckerberg the way he's ex-cutting. believers don't believe in the way he's going about it. our colleague andrew sorkin interviewed mark at the -- conference, all mark zuckerberg had to say we're focusing on the core business, we're focusing on and reels, people start liking it, eating it up as long as he can refocus the conversation to the core products, the money making products, then it works out for him. >> there are some investors out there who have given a lot of companies like amazon or meta some runway to look at these things steve kovach, thank you for the thoughts there brent, always great to get your thoughts. coming up next on the show, ruchir sharma is raising a red flag about the private markets in the op-ed in the financial times. he will join us to explain why he says there will be nowhere to hide in a tight money era. those are his words. you're watching "closing bell" here on cnbc here on cnbc keep it right here you can age on your own terms.

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welcome back to "closing bell kwls, a new op-ed in the financial times, yes, with recession risks, sticky inflation and rising debt among private firms a bubble may soon burst. so joining us now is the author of that op-ed, ruchir sharma from rockefeller international ruchir, thank you for joining us here the first question is, if these private markets are a bubble right now what then does cause them to burst?

>> well, i think if you have a protracted downturn, easy money has truly come to an end, which i believe it has, which is that the biggest beneficiaries arguably of the easy money era have been private investing. because a lot of these funds have taken on large amounts of debt on the back of the debt, and also i think a lot of people today are hiding i'm just shocked to know that you have some family offices, public funds, which to me have a target allocation for private markets, possibly higher than the public markets the reason they're doing that is because they're living in the past and thinking that that's where the excess returns are and also, i think, to avoid volatility, which is that, because in private markets you don't have the ddpl. they want to sort of think that they are taking a much less

volatile option, and once those adjust, i see that volatility in these assets will go up dramatically so yes, i do feel that the private markets are a bubble, and are the process of -- by the end of this easy money era and the persistence of high rates. >> ruchir, the rising rates are a big part of the story. i wonder how much of it is investor psychology. for the longest time folks wanted to get into private markets because there was a velvet rope mentality. they weren't allowed in, everyone saw the returns from decades ago, saying i want a piece of that. now i can get it do we think that there is still that appetite for that kind of private investment, especially when there is still that kind of gate up there for certain investors out there? >> oh, yeah, i think that many people have to seek private investments. but as i write in the piece,

there's no good story which too much money can't spoil what began as a pretty sound idea, led by legends such as david swenson at yale university, he invests in private markets as a way of providing long-term capital to get long-term returns. when he was doing it, he was one of the very few people doing it. then he got great returns out of that the problem is, in the last few years, you have a rush of capital. so you have so much money chasing the few deals out there because everyone wants to get in, that there's a massive valuation premium on private investing now. and i think that that's where things have gone wrong that's -- there's far too much money chasing the few deals. and they're all looking at past returns without realizing the fact that it's a different story when you have little money out there, and that selectively

chasing deals. so, you know, at the top of the hour you had a great discussion about, for example, tech companies. i think that this is what's really going on. the big winners of the easy money era were the u.s. market as a geography, tech funds as a sector, growth investing as a style, and private investments as the vehicle i think all four of these are going to be upended by the change of the regime towards a more hard-money era that has begun. and weave already seen the effects of that in the other markets. and a lot of people have been hiding in the private markets because they're not being forced yet to market-to-market. the longer the downturn lasts and the more protracted this rate rise cycle lives. >> sure. >> they will have no choice. >> all right, ruchir sharma we didn't get to talk about the transparency aspect of

mark-to-market, we'll have to save that for another discussion ruchir sharma. the dow is right now down, slowing just above the session lows, just down about 1% or so, the s&p 500, you can see there, also down roughly 1.25%. we are, again, near the session lows, not exactly at them, but the tech heavier nasdaq composite down about 1.75% shares of derma have gains, but michael yee from jeff vees says viis like li an old story. he will join us next to break down his brand new upgrade on mrna when closing bell comes back after this.

welcome back to the show take a look at shares of madrigal pharmaceuticals, serging but 250% in today's recession. the company is reporting positive study results for a

drug used to treat a certain liver disease, sending their shares to the highest level since 2018 they are currently $223.71 to give you an idea they closed at $63.80, just yesterday. now speaking with biontech, shares of moderna in the red today, down 25% on the year. but jefferies sees an opportunity in upgrading the stock to a buy rating, saying covid is the old story and that their pipeline for drugs is the new story. so joining us now is the author of that report, analyst michael yee of jefferies, thank you for being here let's start with the big question about moderna why is it that covid is now part of the past and what is in their future >> greet to be here with you covid is definitely a bit of an old story. certainly we're now into year three or four of the outbreak, and as you look at what the stock has been doing it's already been down 75% over the last couple of years after reaching the highs, and people are quite fatigued on wall

street about talking with the covid sales. so looking forward, we tell you about the extremely positive, personalized cancer vaccine data last week in partnership with merck, and a whole other wave of pipeline programs coming now investors are looking forward to what's around the corner, not talking about the old covid story, which everyone's pretty tired about talking about. >> now, the big part of this story, in your mind, is pcv cancer, we're talking about basically a -- it's not extremely rare, but it's a type of blood disorder. and the possibilities that mrna type vaccine products could help solve that issue how big of a market are we talking about? and could this lay the blueprint for other types of cancer treatments down the line >> that's a great question, and it's exactly what we're talking about is that the cancer vaccine, the personalized cancer vaccine, which was partnered with merck, showed stunning melanoma data last week. and merck is quite bullish

the point is, is that merck is also starting a lot of new studies, including in lung cancer, and essentially this program could work in many, many tumor types. it could be a $10 billion type of opportunity so if you take the cancer indications, which obviously show the power of the platform as well as imminently soon rsv vaccine data coming up imminently, and of course i know everyone in new york and around the world are hearing about rsv. there's a lot of stuff coming over the next month and next year that are going to be important to send the stock a lot higher this year. >> before we let you go, mrna is a big deal we know that we know that the technology being used has also been used by pfizer in concert wbiontech wit regard to other covid vaccines what could beneficiaries of this kind of cancer advancement >> the bottom line as merck, as i'll say again, is keenly interested in it, paid them a bunch of money and was quite

bullish on the last earnings call they've spoken positive about that other big pharma companies i'm sure are taking a close look at this given the recent data. going forward i think the bottom line is a story that has obviously come well off the highs, poised to rebound in 2023 as people look to the new pipeline. >> all right, michael yee on the upgrade over at jefferies, thank you very much, we appreciate it. it's been a rough year as well for the banks on the whole with names like citi, bank of america falling more than 25%, and some regionals, down a whole lot more than that up next, rbc capitals gerard cassidy lays out why he's optimistic about the banks in 2023, even in the face of a potential recession.

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the kbw is in the red today, it's been a rough year for the sector having underperformed the prodder market our next guest says he's cautiously optimistic with theout look. joining us now is rbc's gerard cassidy, covers banks for a living gerard, i've got to say the financials have been in call for a lot of folks for a long time and they haven't really worked out for a long time. so why are you optimistic about

the banks, what's changed in your mind? >> dom, i think what you're going to see is that the bank stocks should do pretty well once the fed reaches its terminal rate from the fed funds rate you go back to the last four tightening cycles, including the 1994-95 cycle. you'll notice the banks do well once the fed reaches its terminal rate for fed funds. you're calling for a terminal rate sometime in the spring of 2023 between 5 and 5.5% i'd also point out the banks are doing really well from june -- or july 1st, through about three or four weeks ago, and they outperform the market. but since, to your point, th last three or four weeks have been really rough for the banks. >> so gerard, there was a point in time when people used to look at this steepness of the yield curve, as a way to kind of gauge whether or not the banks would be generally speaking healthy. meaning if higher rates were higher, and low-end -- shorter

duration rates were lower, that meant the spread they could make was bigger, bs been inverted for a while now. what has to happen, does the yield curve need to uninvert, basically, before we can get the banks tail wind? >> no, there's a good point, dom. i would suggest that the banks, when you look at the sensitivity to interest rates, they're far more sensitive to the front end of the curve than the long end of the curve now, granted, of course, when they make commercial real estate mortgages it's often the 5 or the 10-year, auto loans are off the 5 or 7 year. but most of the lending is done off the front end of the curve and so banks will tell you that when they see rates go higher, 75% of the benefit of rising rates comes from that front end of the curve so the yield curve itself, yes, we'd like it to be steeper, but it's more important that front end of the curve stays high. so if the fed raises rates, let's again say 5, 5.25%, and

they stop, and they don't move on rates for 12 or 18 months, then you're really going to see the banks do quite well. the margins are going to hang in there like they've done in the past. >> is there any kind of mean reversion in your mind with regard to bank valuations? right now, despite the underperformance, jp morgan still trades at a healthy premium on price to book value basis versus, say, bank of america, or citi, other money center type banks. are you playing for better times ahead for b.a.c., or citigroup or regional banks versus jp morgan >> the regional banks may be the better place to be initially everything is focused on what i call the right side of the balance sheet. it's been 15 years, dom, that anyone's really had to focus on deposits, in deposit costs, because as you know since the financial crisis, the cost of funding has been zero to 25 basis points, with the exception of 2018. well, if we get a fed funds rate of 5%.

wholesale funding costs are going to be quite expensive. therefore, banks with concentrations of consumer deposits even though those deposit rates will move higher, they're still going to be considerably less than wholesale funding so banks like bank of america, or some of the regional banks, like a key corp or a third, these companies are considerable amounts of consumer deposits which will benefit in an elevated rate environment, which is likely what we're going to see for most of 2023. >> gerard, before we let you go, we know there's a lot of talk about recession. jp diamond from jp morgan is bracing for a big recession in the coming year, are banks okay if a recession comes >> that is the $64,000 question, it's a very good one and it really comes down to the severity of the downturn if you think it's an '08-'09 recession as a bank investor, that's the severity of this one, don't own a bank stock on the other hand, if it's a mild recession, like '01, own

bank stocks because their review knew growth from the net interest income they're generating, even with a stable interest rate environment will more than cover the cost of higher credit. so we would say it's really going to come down to the deepness or shallowness of the recession, a shallow recession, the banks will do well. >> all right, gerard cassidy is covering the banks, thank you very much, we appreciate it. >> you're welcome. we've got the dow, the s&p and the nasdaq drifting lower here, by roughly .75 to 1.75%. disney shares are dropping today following the release of "avatar 2" over the weekend as box office results missed expectations coming up next, we'll discuss why the movie is so important to disney's future. 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.

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today's self-mover investors are trashing the talk after stifel downgraded the resickle company to a hold 171 bucks a share, citing a revised free cash flow outlook the stock has been anything but a dumpster fire this year, it's been outperforming major averages, around 6% or so, and so far in 2022, the s&p is down 20% in that same time. so you can see, pretty decent move relatively speaking now after the break, richard bernstein adviser says the fed will not be the main driver of markets next year. he tells us what the key tcnglyst will be, and what he's wahi instead, that story, plus the latest on tesla, and disney when we take you inside the market zone.

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so you won't miss an opportunity ♪ all right, you know what that means, we are now in the closing bell market zone we have cnbc senior market commentator mike santoli breaking down the crucial moments of the trading day, plus alex sherman on the disney and avatar story also dan suzuki fromrichard bernstein advisers let's start, mike santoli, with the way this market has set up we were looking like we might find some stability post-fed in that post-fed selloff and we've

kind of just been losing steam throughout, nothing panicky. but downside motion. what do you make of the price action >> it's that continued drip. we were down -- talking about this 3,800 area in the s&p 500 it happens to be exactly a thousand points off the all-time high set january 3rd of this year preside pretty unrelenting decline a pretty well developed sense that inflation is now the mode that puts a floor of things above the october lows, at the same time you have this recession anticipation, which no matter how high the conviction level is, or low the conviction level is about a recession on the way in the next several months, you can be the just prove it in advance. that's the capper on this market the big mega cap growth stocks, though, continuing to leave the downside also just says, look, the valuations continue to bleed lower from premium levels, and maybe there's some tax law selling in there and it's a prolonged give-up phase in that trade. >> all right, so there we're

showing what's happening with the mega cap stocks in the markets. we're talking about what's happening with disney at the bottom of the dow today, after avatar's debut, missed box office estimates, the big sequel to 2009 in that james cameron film that took in $134 million in domestic sales, versus, by the way, an expected $175 million this past weekend. china sales were no better it was expected to make $100 million there, but reported only making $57 million that's a big part of the downside today in the dow and the disney side of things. cnbc.com's alex sherman joins us now. so alex, this is a big deal from a story standpoint how important is it to disney that avatar 2 succeed? >> i mean, it's super important when it comes to their film business there's no question avatar is right at the top of their list for high budget intellectual property that disney owns.

i mean, "avatar 2" cost at least $350 million to make, that is a wildly high number in terms of costs and movie production and remember, this goes beyond box office avatar after gets -- through its theatrical release, then goes to disney plus. it has legs on that side of the business too while the early numbers don't look very good the question will be, what type of lasting power does "avatar 2" have if you look back to the first avatar, it did well in weeks two, three, four, five, we'll have to see if the same things happens with "avatar 2". >> mike santoli, we have a specific catalyst, right, company-specific catalyst for the downside in disney today but there are a whole heck of a lot of macro head winds that have been facing media for quite some time now. how much of this is bigger downdraft for media overall, and how much of this is specific to just disney, and that story with

avatar, and maybe other parts of its portfolio? >> yeah, disney, in some ways, sort of exemplifies in the most prominent way all the other forces that are driving media, right, so is the streaming -- economy going to actually reach profitable scale that's a big one what's the fate in the pace of decline of the overall cable bundle they have exposure to linear networks and then the reliability of these event franchise block buster releases that still do go to the movie theaters i think that's the secondary concern, although there's another little wrinkle with this one. the avatar franchise came to disney by way of a fox acquisition made a few years ago. it was one of those pieces of ip, that came along with it. i agree it's too early to say that this is some kind of a bust it's still going to make a lot of money but it's far from the days, though, when you can look ahead to an annual slate of disney releases and say you could just pencil in $500 million to a billion for any of the various, you know, animated

or marvel type releases. >> good points, mike alex, i'm going to give you the final word here. social security not lost on me, and i'm sure others out there in our viewership, that this is coming at a time of transition for disney, with the old ceo, now the new ceo again, we're talking bob iger, how much is bob iger's ten-year going forward at disney going to be complicated by what's happening with just the avatar release and the movie studios in general going forward? >> well, the unique thing about avatar is we already know an avatar 3 and an avatar 4 are in the can here, or are being worked on. so this is not your normal film. so that's concerning right, if this doesn't pan out, you're already committed to two more movies, at least. so there's -- i think there's real concern among the disney crew that avatar holds up. but you have to remember, disney is a very diversified company. so the fate of disney does not rise and fall on avatar.

it's theme parks, it's streaming business, these are the things that investors are looking at closely in terms of the future of disney, trying to get that valuation up, disney trading at a 52-week low today. so look, i guess bob iger walks into a situation where he hopes there's nowhere to go but up. >> all right, cnbc.com's media reporter alex sherman, thank you very much, mike santoli sticking with us. tesla has been volatile in today's session as well. that stock did pop at the opening bell after twitter users voted, in elon musk's poll yesterday with a majority advising him to step down as ceo of the social media company. tesla also getting a downgrade from openheimer to a neutral rating the reason, musk's management at twitter. colin rush who wrote the note says banning journalists without consistent standards puts the tesla brand, twitter to test a last, at risk. here's what he had to say earlier today on "squawk on the

street." >> the brand and the backlash from consumers is substantial at this point, and certainly the foray into twitter is not helping that brand as we go into a period of time where we see more competition, and folks have more choices because we've been supply constrained for so long on the ev side, we think there's real risk around what that means for tesla. >> so, mike santoli, the concerns of -- and colin rush is basically echoing what a lot of people have been concerned with for quite some time now. is there a resolution if in the hypothetical world elon musk would step down as ceo of twitter, for tesla shareholders? >> you know, potentially, dom, i think part of what colin is doing is essentially articulating why tesla has performed so poorly in the last couple of months since the twitter deal closed. i would assume that you have to not only have somebody else running twitter day-to-day, but you have some kind of assurances that that company won't need a

ton more capital, won't drive further sales by musk of tesla shares, and all that, you know, kind of negative spiral the stock has been caught under, what is interesting, too, though is colin rush did not cut his earnings forecast for tesla, so it's essentially like a fundamentals of tesla, even if there is punishment of brand, he's not saying it's visibly hitting volumes in the coming year, it's really still about tesla shares coming down to meet where the fundamentals always were they had been puffed by, to some degree, a lot of excitement about the next thing musk does and about the poemt umm of the stock and the fact that it remains up 4, 500% in the last three years, even with this drop. >> all right volatile trade today, started out big, went negative, went positive now just about flat. costco shares are lower and trading today. ceo craig jell nick painting a mixed picture on the consumer, saying there are signs inflation

is easing, and prices are coming down but also saying the company is slowing down purchases on some big-ticket items. >> i think we're being very careful in terms of what we buy in jewelry, televisions, and probably furniture, and maybe relatively careful next year of what's going to happen in apparel. i think right now, you know, unemployment is still in a relatively good place, but every time you turn around, particularly in some of the technology jobs, people seem to be getting laid off, and i think people are saying, wait and see, and lets see what happens going into next year. >> all right, so it's a retailer, and some folks like to look at it kind of akin to walmart, like a consumer staples-ish type play because of the nature of the products it sells and the regularity with which people go to it, mike. how much is costco a barometer for the consumer economy, and maybe more so for the broader markets, if at all

>> i would say a bit more than walmart is there is a kind of a bigger ticket, small business discretionary type aspect to costco that's not quite as fully present in walmart, which is much more grocery. but i also think what he's essentially saying is echoing a lot of the color we're getting from a bunch of retailers. people spent a few years coming into this year buying a whole lot of stuff they don't need as much stuff. even though incomes remain higher, substantially higher on average, and gasoline prices are way down from the spring and summer, that would seem to enable people to continue to spend if they choose to, especially with inflation coming down but being more careful makes sense. so all that stuff, i don't think it clears up the outlook for next year, but for costco it maybe plays to their strengths, they keep more thanes very thin on purpose to basically pass along value to the customers, they pay their workers better than average. so they've always had these structural reasons why they're not maximizing profit today. they're playing a long game.

and it's supply chain and all that stuff comes back into line, it's probably a help for costco, even if the consumer in general remains, you know, less aggressive. >> and of course there's that recurring revenue from the membership fees every single year, mike santoli, i pay those every year thanks for being with us, let you go to get ready for overtime back to the broader market, stocks on pace for their fourth straight session in the red. let's bring in dan suzuki, the chief investment officer at richard bernstein advisers thank you for being with us. throughout the course of the hour we've explored big picture, and company-specific themes, generally speaking it is not panic, but it feels as though the market is heavy, and it wants to go to the downside, what can get this market stable, and back to the upside again >> yeah, dom, i think, first of all, thanks for having me. you know, i'd say right now there's a tug of war going on between, you know, the slowing growth dynamic, and the pace of that slowdown. i think we all -- i think the

general consensus is that growth is going to slow into next year, but people have gotten really confident about the idea that that's going to be a pretty dramatic first half slowdown it's very, very possible that that slowdown takes a lot longer than what people are positioned for, and that could actually result in a near term sort of dynamic where things aren't as bad as they seem, and things actually surprise the upside i think there's way too much focus on the fed, you know, i think more or less, the market's pre-priced for that. that's why you're seeing a very different dynamic in terms of the reactions of the fed function, because i think that's not going to be the surprise going forward. >> what will the surprise be dan, going forward because it begs the question. >> well, yeah, dom, absolutely, i think the big surprise factor is going to be growth. and the trajectory of that growth i think right now, you know, you have basically people that think we're headed for a soft landing, that this is basically as bad as it gets, and things are going to reaccelerate here, you have another camp that things are going to completely collapse in the next three months. i think, you know, both ways you could see, surprises or you

could see something in the middle as i was alluding to, something that drags on for a lot longer than people are positioned for, which could actually hurt both sides of the that trade. >> if you're looking at the growth side of things, then, that means you have to be scrutinizing what the earnings story is going to look like, especially for this all-important fourth quarter, for many of the consumer companies out there, because we are a consumer of a nation in america, with a lot of our gdp tied to that consumer picture. so what do we have to look for in this upcoming earnings season to validate that view on slowing growth, or surprise you and say, hey, maybe things should get better from here >> dom, i don't think it's going to be a rosy earnings season we're going into an earnings recession that's what the fourth quarter will bring with it and at the same time companies are seeing this slowing environment, seeing the profits recession and they're going to have to set guidance for next year you'll probably see a lot of companies pull guidance and say that the environment is too

uncertain. and you'll have a lot of companies actually set the bar a lot lower than where the analysts are from that if he were theive that's something you have to be mindful of the may not be that bad. you ashrewded to the idea that markets are pessimistic but over the course of the next couple waters that's a continual drag, a tough head wind for markets. >> we've got about a minute left here, maybe a little less, the key parts of the market we have to talk about, we have to scrutinize is it tech and com services, energy and oil, is it that resurgent health care trade that's kind of played out over the course of the last several months here? >> dom, obviously i think you have to scrutinize every part of that trade that you just mentioned. i think tech, innovation, and growth, you want to continue to avoid that area of the market. i think we're in a bubble that

continues to deplait there's more air that has to deflate, and the act in a we've had the bear market tells you that's not the leadership of the next cycle we should be thinking about what that leadership is, but for the very here and now, given that we're going to a profits recession, given that lick quiddity is continuing the tighten, the number one thing you should be focused on is defense, high-quality defense and looking in the next couple years into where those value and long-term opportunity trades. >> dan suzuki, thank you very much, great to get your thoughts, see you soon. all right, now as we take a look at what's happening with the markets right now we do have a situation where the dow is down 150 points. that's important because that is well off the lows of the session. so we saw that slowing picture throughout the course of the interday session, only in the last half hour or so, a real reversal, trying to gain back some of that ground. it's been more impressive in the dow and the s&p 500, less sew in

russell 2,000, less so in the nasdaq composite we have seen a little bit of performance in terms of overall picture with technology leading some of those declines to the downside and of course metaplatforms, a key focus we've got rockwell automation ringing the closing bell at the new york stock exchange. that does it for us here at "the closing bell," we'll send it over to "overtime" with michael santoli. welcome to "overtime," i'm mike santoli you just heard the bell. getting started for post time new york stock engs change you'll hear from one cop technician who's sounding the alarm on apple where he sees the stock headed into the new year. but we start with our talk of the case selloff in stocks, all three major averages erasing early gains to finish in the red but closing off their session lows with