even then unclear on the commercial side whether we can bring people back to the city, then added layoffs not just in tech increasingly in the financial sector. >> true. >> the convention bullet is just not going to save the commercial space and some of these reits. >> right pulling back as well, perhaps mondays and fridays reflecting a new normal robert frank that does it for "the exchange." "power lunch" begins right out in. thank you. welcome to "power lunch" i'm tyler mathisen what we've got in store for you today. a central bank surprise. the bank of japan's, last holdout onultralow rates shift policy overnight and could mean a fed pivot in 2023 is off the table. we will hear the argument for that case later this hour. plus, the greatest corporate

controversies of 2022. from twitter's chaos to disney's florida fight, to cutting ties with ye. that's adidas' story which stories topped list and what was the one big success of the year our power rankings later in the hour. >> hi, everybody stocks off session highs seeing green here half percent gain for the dow only 13 point gain for nasdaq. over in the bond market yields, trending lower, snapping back higher after that doj cap raise tyler talked about, just a hair under 3.7% at the moment and shares of tesla are sliding again. down almost 6% to date 27% month to date. market cap, look here, below 450 billion dollars from a peak what was it $1.2 trillion or $1.2 trillion more than later in the hour. general mills raising its 2023 forecast saying supply chain and inflation disruptions could last that's pressuring shares down

about 4% one of a handful of earnings could give investors profit growth will be as bad as feared, bob pisani has more from the new york stock exchange. >> hello a lot of fear and trepidation about earnings in 2023 three big companies reported this week and a much better indication what to expect in the new year fedex reporting after the bell today. could there have been a more epic disaster than fedex's earnings last quarter? the company blamed global macro economic trends for the poor showing and guidance, and announced cost-cutting plans find out how that is going after the close. many saying this is a particular problem for fedex. u.p.s. never fell apart in the same way fedex did nike also reporting after the bell today high inventory and margin issues have been an issue second half of the year. analysts lowering guidance for months now nike gets about 20% revenue from china. almost 30% from europe expect a big focus on inventory

issues, and that aggressive reopening in china may be a tail weind. want to hear more about that as well micron, a big company, different area, a serious air cut in earnings projections earnings expected to be negative this quarter due to kearconcerns about week e demand for d chips. down second half of the year and issued a warning on november 17th again, bar here is very, very low. this process of lower expectations is playing out in the whole stock market right now. earnings for the fourth quarter are now expected to be down 1% compared to a year ago, but two months ago is was expected to be up almost 6% this quarter. a quick move to the down side. the good news here, kelly, expectations are very low. bad news is, we don't know if they're low enough yet. >> bob when i see that earnings will be down year on year, when

do we start talking about earnings recession >> yes typically in an earnings recession, in a severe earnings recession, they can decline as much as 20%. the hard landing right now we're kind of flattish at this point. a lot of the strategists on wall street, top-down guys, expecting earnings to be down about 5% call that soft-ish landing kind of recession for earnings, but you would expect earnings to go down anywhere from 5% to 20% in a recession in general. >> all right box thank you very much. bob pisani reporting. so how hard will the brakes slam on earnings growth in 2023? and what will that do to stocks? talking about that joined by lorene gilbert, wealthwise financial ceo. just heard what bob said there, and what lots of people have been talking about you've got earnings growth slowing or maybe turning negative got potential for a recession of some severity over the horizon

here you've got interest rates that are higher and rising and may well continue to rise. well into 2023 that does not sound like a recipe for people to make much money in equities. agreed disagree i think we do not have lorene's audio. i think she was -- kelly, getting ready to agree with me. >> how could she not >> i made the case so trenchantly there. there we got her did you hear my question, lorene >> i did heard it all. >> let's hear your answer now. >> yes we know that 2022 has been dismal both in equities and fixed income now as we look to 2023 we know that those earnings per share are going down what i think people often miss is that the pes will start to expand and multiply therefore, when we really look at next year, we see the

potential of the s&p 500 being up by the end of the year. somewhere in the range of 9% to 13%. >> why will pes expand because investors will be in a more speculative mood and pay more for each dollar of earnings >> well, looking back since 1901, we did a regression analysis and analyzed what happens, and just as earnings per share numbers are coming down, the multiples start to expand and go up they go up ahead of what people expect that's oftentimes why people miss that rebound in the market. they're going to be focused on recession, focused on the bad news we're hearing, but the markets as we know are always ahead of all of that so i would say for investors to beware and note that next year could see that expansion and could see the market going up. i would say in all of this, immediately we see more of an

opportunity in fixed income right now on the shorter term, than we do in the equity market. >> because rates are higher now, and you think you can get between the yields, you get and the, and the potential i mean, if rates keep going up you're not going to get price appreciation in bonds. >> but what we do think as we're closer now to the end of the fed raising rates. not done yet made a clear closer to the end than beginning of rate increases. with that, lookingality more duration and fixed income, we're looking a little bit above the benchmark there, and we think that the earnings are about 2.5 times on fixed income than what we've seen over the last decade. that's definitely an opportunity for investors. >> there is an alternative, as we've said, lorene, to the stock market, but you do still like some stocks. what do ww granger, packard, thyssen foods, what do they have in common? >> one of the things our theme

here is on value stocks. looking at specifically industrials where we expect cap x to continue to grow, and there will be cap x spending with that looking at granger and people diversifying on their manufacturing all over, and granger authors kind of a one-stop shop for helping project manage, for companies to get what they need to get, and get it distributed then with picard, as we look at transportation and looking at how they have been very competitive, paccar, and looking at their other competitors, pe ratio is lower when we look at their spending, they've spent a lot of money on technology for their future, and their return on capital is good. we see, we like all of these names being value stock 2345i72345i78 names and value the place to be in 2023. >> lorene, thank you happy holidays hope to see you next year.

>> thank you. coming up, the bank of japan blindsides traders essential bank's policy shift rippling through bond markets and could have an impact on the fed strategy in 2023. plus, wells fargo makes the case for disney to spin off both espn, and we have the trade in today's "three stock lunch." heading to break look at shares of wells fargo more times, tyler. $3.7 billion now to resolve auto loan customers and what they've suffered "power lunch" back in two. the stock down 1%. the right mo. get decision tech. for insights on when to buy and sell. and proactive alerts on market events. that's decision tech. only from fidelity. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”.

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welcome back to "power lunch," everybody. the bank of japan catching markets off guard overnight by weakening its so-called yield curve control policy something it had in place since 2016, now let its ten-year bond move 50 basis points a half point on either side of its 0% target. now, treasuries and currencies reacted strongly to the news and rick santelli is here to put it into perspective for us at the cme. rick >> hi, tyler indeed look at a two day of u.s. rates you can clearly see how we jumped up, and at the current pace we're on right now a ten-year note yield on pace to close at highest yield in about three weeks. reason

yes, s, jgbs up near 45 closingt 40 basis points and keep in mind that one of the main issues here, many are focusing on, is the cpi. many believe that the bank of japan and the head of this doing wild central banking encounters to try to raise inflation. they purchased since 2010 about 7% of the total stock market in the form, 80% of all etfs and in 2016 when that didn't make inflation go up, as tyler pointed out, they went to negative rates and yield curve control. their stock market is well below 1989 highs, which was almost at 40,000 when we consider that their cpi is highest since 1991, the question is, is this a pandora's box they'll never be able to close? finally look how it affected the currency side of the equation. indeed right now the dollar yen is at levels, well, haven't seen

around since the, six months call it six months, and considering its only, what 1 pe 13% of the dollar index? a leverage move to pay attention to back to you. >> looking at keeping an eye whether bank of japan is selling bonds or etfs, right >> yes many believe there's no way they possibly can sell. ownership especially in etf space is so large and probably own almost half of the jgb market so selling probably isn't an option the real issue is what happens when the bank of japan isn't buying how do interest rates move and with cpi now year over year approaching 4% this is really going to make many investors nervous as to ultimate value of the yen. >> well said lots of reverberations here. rick, thank you. move of back of japan says while

our move may be far away oh so says our next guest. brings in president of beyianco research what's the big message here? >> bank of japan expanded their range that they are trying to target the ten-year yield by 50 basis points to let interest rates go up. they claim it's a technical adjustment, and i guess it is, but the real reason they did it is they've got inflation. let me repeat that japan has inflation nap is the country we've been associated with deflation for the last 20 years. if japan is joining the party of raising interest rates, because they've got inflation, as rick said, you know, approaching 4% doesn't sound like much for us, but for them it's a, generation plus high. something they've been trying to do then it tells us inflation is a lot more persistent around the world and especially in developed countries, and this whole idea that the fed's going to pivot, because inflation goes back to 2% and all over with

e e even coronavirus might be above the rate. that's japan. >> spent so long, years and years and decades, trying to get inflation back up to target. now it's over target so isn't this what they wanted wasn't this the whole point of their policy >> yes but it's not necessarily what we want. we want to see our inflation rate go down to 2% and stay there. europe wants to ski its inflation rate go down to 2% and stay there you're not going to do that if japan's going to be at 2.5 you did it in the past when japan was near 0 if japan has gotten success and their inflation rate is hundreds higher than it used to be, then to make the case -- doesn't matter to us we're going back behoe japan's inflation rate that's a tough argument to make right now. so the takeaway i saw from this

was, japan is joining the inflation flight, because japan has an inflation problem on one respect, that's okay for japan, but for us, who are desperate for the fed to pivot and see inflation go down, that can be problematic. >> isn't it ironic, alanis morissette, a situation where both central banks in japan and the united states, not so long ago in the united states, were troubled by the fact they couldn't get inflation up to their 2% target? japan the same thing couldn't get it up high enough, and now it has overshot, and so you have both of those central banks taking action aggressively to address that. >> it is you know, you can also throw in the ecb. pres president, spoke with hawkish and eastern bank of england. that telling you that this

inflation problem we're seeing is global, and if it is global, it is much more entractable and probably more persistent than we think, than one country can fix and the fed alone it cause inflation to go back to 2% they're going to need help, need everybody to join in on the party and japan just did, yesterday, join in on the party. remember, too, this also might mean something about the end of cheap money. we for 15 years auked zero interest rates and quantitative ea easing it when did it start started 20 years ago in japan and now japan may be exiting that era of cheap money as well. if that's the case that era, don't worry cut rates to zero and quantitatively ease on the next downturn, that might be over in an era of more perp assisten inflation. >> you make a strong point the u.s. central bank will not be

inclined to or maybe able to do what is scribed as the pivot to turn the other way sometime in 2023? explain the nexus or the connection between what japan did and the fact you think this stay is the fed's hand so that, even if it slows its interest rates hikes or hold rates for a long time, you're a ways away from any point at which the fed actually turns in the other direction and begins to lower rates? explain the connection. >> first of all, the market really what it's focused on is what we call the pivot it's nots that the fed might hike rates to 5% in the spring or early summer. it's that the market believes it will only be there for a temporary time and then will turn around and start cutting rates second half of the year. that is what is at question. not how high but when do we start cutting rates. >> right. >> if japan is joining the case, they've got an inflation

problem. if the ecb is being very worried. bank of englanded they their inflation rate goes high into the teens if not higher. germany has inflation rate in 309% range because of energy crisis, then if the fed is waiting for signs that our inflation rate is going to go to 2%, and you recognize that inflation is somewhat global, it can only go 2% when everybody else goes there and not everybody else is going there right now. so our rate's going to stay high, so, yes, those that think that the fed's going to start cutting rates second half of the year, even if the economy was slow or the recession forecast came through, might be disappointed that the fed might be very slow to do that, if at all all. >> yes. >> japan joining the case worrying about inflation weakens the case we'll see our rates cut because of the downturn in the economy. >> you point out the fed is under no obligation to go from raising rates to

immediately in the next meeting starting to cut them they can sit there and let those rates linger at a higher level for a long time for a year maybe longer who knows? but that's all we have time for now, jill. i know we'll return to this topic, i have a strong feeling, over the next weeks and months jim bianco, thanks. coming up, a losing charge a new report showing auto execs losing confidence in ev adoption that's not stopping one analyst from getting bullish on a struggling ev maker. further ahead a fast-growing start of the businesses building ecommerce systems. that's in today's "working lunch. we'll be right back.

welcome back to "power lunch," everybody. calls to ban tiktok growing louder once again. the massive federal spending bill to be voted on this week in washington includes a proposal to ban tiktok on government

devices. 19 states already have bans on the app on state-issued devices. louisiana, west virginia joined that group yesterday and senator marco rubio leading a push for a nationwide ban on the app for everyone the issue is fears that using the app will give the chinese government, which has a big stake in tiktok or its parent. give the chinese government information about american citizens, but here, kelly, i, the undersecretary of agriculture can't get tiktok on his phone or her phone that's not a big thing, but i suppose it's a toe in the -- >> i wonder at the margin if every user not able to use tiktok is a user for meta. a user of instagram reels, facebook reels that platform. >> drives people there away from tiktok >> there's an alternative. not as good. tried both algorithm needs to get better. seems inevitable deploys this technology on meta much like

with stories, a risk cam ballize tiktok especially if seeing bans state, local and eventually something more broad i think it's a reason al bull case for exposure to shares of meta. >> of other, their kpecompetito? >> absolutely. most addictive enjoyable social media type of content out there all right. go and get our news update it's not kristina partsinevelos. no, no, no brian sullivan. >> and something exactly a little taller. happening at this hour city of buffalo, new york, sues parts of the gun industry buffalo's mayor calling it first lawsuit of its kind. the lawsuit manufacturers and gun shops fueled gun violence crisis in buffalo. the masters tournament will allow liv golf players to compete at augusta national next year club chairman saying he is

disappointed by recent actions that have divided men's pro golf but will not exclude players taking part in the saudi-funded golf league. in afghanistan taliban banned women from attending universities taliban previously banned girls from middle school and high school u.s. and british officials condemned the move and the u.s. ambassador says the taliban cannot expect to be a legitimate member of the international community until they respect the rights of all afghans especially women and girls. i don't think anybody's surprised by this move, guys, from the taliban not known exactly to be a warm and inviting group. >> painful to watch the clock 1234i7b reverse. >> disaster. unbelievable. >> self-sabotaging to leave half your population out of education. >> of course and to do so -- again, on the national -- on the international stage watching this play out. ahead on "power lunch," looking back seems corporate america's new full-time job is

dealing with controversy and business is booming, by the way. ftx crashing, twitter drama, the list goes on the biggest controversies as well as moments when corporate managed to come out on top stay with us.

- the past few years have been a challenge for our physical and mental health. - join kate and me as we get personal about our own journeys and how the conversation around mental health has changed. - watch our conversation on peacock.

all right. got 90 minutes left in the trading day and get you caught up on the markets. stocks, up higher across the board for a change off the highs of the session right now industrials up about a half percent smaller gains in percentage terms for s&p and nasdaq energy, leading sector only sector up more than 1%. slb, hall la burten, schlumberger and halliburton, conkoco philips up and oil up $75 a barrel. economists weighing on tesla market cap down to about $450 billion. falling behind johnson and johnson. eighth largest u.s. company by market cap quite, kelly, another decline for tesla today, but i read something over the weekend that even at its now reduced market value, it is still larger than x

many of the other traditional automakers combined? >> exactly. >> or gm, chrysler -- >> while those legacy automakers are trying to pivot, we acknowledge heading into a future more powered by evs than not. that to contendky. the price drama. david faber reporting this morning tesla trying to find another ceo at twitter and you have, go on twitter. still people like the arizona senate master whose have mooted as a possible ceo contender, explaining, no, i don't want the role what i might do if in charge of the company. musk is not out of the picture yet and the amount of wealth he's lost in tesla while trying to fix twitter and make it successful is an, brought the market cap of tesla back to where -- >> and if musk were your boss -- >> well. >> because he's still going to be controlling owner the company

and chair of the board i assume? >> right the question now i guess is, what can he get for the company for twitter? the problem as we all know from -- he overpaid. he's overpaid, it's going to take years to figure how to monetize that and it's clatterized obviously what happens with tesla i think the most important thing for him to figure out, how does he make it more profitable try to recoup what he paid, and then -- >> why doesn't he make twitter something that is truly vital or entertaining and not tinged with the sort of -- anger that i thinkit is twitter is, seems very important to us in the media we talk about it we eyes it and so on and so orth what is it fourth or fifth place social media? exactly. why valuation was struggling when he bought it. he argued twitter put itself into a box not as relevant as it

could have been. one thing a lot of overs say is, make people use their real names and real identities on twitter, and that's something obviously, rather facebook, has taken so many others, if you then are able to pull back a lot of the negativity perhaps more people would get on it for the truly fun serendipitous and educational platform it could be. >> could be's right now feels toxic more than anything to me kbrop know i'm not on it. not a player there. >> when tyler gets on -- >> that's clearly either the peak or the bottom one of the two. >> speaking of tesla's fall from grace, power rankings continues with biggest controversies, mistakes and successes in business during a very challenging 2022 from disney's fight with florida. remember that? adeidas and gran breaking up wih kanye west, taylor swift from fans never for political as

well and with us, morgan school business professor and cnbc contributor. americus, great to have you. what jumps out to you as the peak of corporate battlegrounds this year? >> appreciate the opportunity. happy holidays to you, kelly and tyler. i think a couple things jump out. we're in a year of crisis, clearly. from my perspective, one of the things really important is that now companies are getting involved in these political partisan ideological components to attempt to try to build purpose into what they're doing. look at, for example, biggest controversies of 2022, you have to, i think, start with florida and disney a venerable plabrand, iconic br coming out mishandling a kind of important aspect with respect to taking a -- a very sort of strong stance on the lgbtq+ laws kind of coming around with

desantis and others, and really sorting misplaying that. i think, you know, the biggest controversies come about when brands are not really sure about what they're trying to do, and not really focused on coming out with a clear message i think you saw that with florida and disney going back and forth with respect to this battle now of trying to maintain a kind of corporate culture, but also be very clear about signaling to -- employees and the world about what you stand for. so i think that's a big component of what we're seeing around a lot of controversies, kelly, and tyler, that's the idea companies are basically going on saying decision calculus is quite clear and we need to take a stand on these issues and we need to be very clear about what that stand is, from jump. don't want to wait until the votes are in, if you will, to use a pun. we want to be able to be very clear about our mission, our values, our statements, all of

these things and can avoid situations like disney saw in that particular instance. >> i guess what's running through my mind, americus, here, is a question whether silence is an option in these cases where a company like disney is pulled into a legislative controversy like what took place in florida. and so is there an argument that companies legitimately can say, we're just not going to get involved in this discussion, or must that? because of the nature of their constituencies, whether, stakeholders whether employees or shareholders or customers who are -- impacted positively or negatively, by a law like the one that was in florida? >> it's a great point, tyler i think the answer, we're in a new world a new playbook the answer, you can't be silent. what's going to happen is your

rivals will fill that silence with information about you that probably is going to do more damage than just coming out and being forthright and being very clear about what it is you stand for. so i think the research is very clear on this, tyler that's the idea that you're better off, even if you come out and you go in opposition to very clear political and ideological lines, that's better than being willy nilly and wishy-washy, trying to hide behind the scenes i think especially consumers now are demanding to know what do you stand for? and they want to know and they don't want to wait around to see what happens they want you to be very clear for better or worse as to somewhewhere these lines are drawn. >> call me old school, americus, but i worry about -- if all companies feel like they have to make a choice, that fundamentally comes down to painting themselves red or blue and maybe that's culture related but i hate to see it proceed

further that way let me ask you what have we learned from the adidas example here? is it a case they should have moved more quickly or awe played going one way then pivoting the other? sort of talk about that one, or move on and talk about what elon musk shoal do here in the next chapter of tesla and twitter such a unique situation. not sure there's larger takeaways to glean from it >> a great point ye, unfortunately, didn't have a good ye year because of what's going on i think adidas was clear on seemed like a late move, kelly but i think what was going on there, in that situation, at least, was that the lawyers wanted to make sure when they dropped him this was going to be airtight and all the contract true ual aspects cleared up one it went wayside in

perspective, no choice, no degrees of freedom for adidas to, but to change and sort of get rid of ye, so to speak talking about a personal brand billions of dollars disappear overnight and you got to be careful about that. >> exactly right i forget $2 billion, or 20% of revenue came from ye ye, as you point out, ye gets a boo. have a great holiday season, my friend. >> thank you, sir. appreciate the opportunity. what do you, the view, think was the biggest corporate controversy this year? according to our guess, twitter poll ftx takes the top spot followed by the months-long musk twitter drama. holiday shopping may be coming to a close. it's just beginning! >> last night. >> but even if shoppers have stopped clicking, retailers can't stop clicking. jon fortt will bring us his

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♪ ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward. because if it's connected, it's protected. cisco. welcome back, everybody. still a challenging environment for start-ups but a good time of

year to be in the shipping business, and this week jon fortt brings us up close with a ceo of a company trying to simplify ecommerce shipping by focusing on shipping labels. jon? >> yes co-founder and ceo, late-stage shartup reaching unicorn status during the pandemic's online shopping boom. the company helps small business offer the most affordable and efficient shipping options and makes money on business subscriptions and usage volume laura started the company after an online store showcasing designers flopped. >> built a market, curated marketplace for people to discover products. and, yeah. it didn't take off but as part of that we did a lot of shipping ourselves. we were taking on the risk and shipping out of living rooms, and realized just that shipping was really lard to do. you have to scan line, the usps

store, only open certain hours and we were faced with this problem ourselves. suddenly it clicked. >> shippo is adjusting to turbulent economy that laid off 20% workforce last month and focusing on helps core north american customers save money now instead of serving larger customers or expanding overseas. >> this year it is really much more about cost saving, making sure that shipping costs are reasonable that there's, yeah, our customers are focused on that part significantly more, and than going to another country or adding more challenges a big change in our value prop, that resonates with our customers. everybody offering capital is cheap, grow at all costs, grow fast as you can, and that's been a big reset. we're trying, like everyone in tech, making sure they have

enough to last until early 2025. much more focused on efficient growth, and profitable path. >> laura told me black friday and cyber monday shopping was strong a relief for her and others. you heard her say. preparing to survive two-plus years without raising new capital. just heard from john thompson, investors also on microsoft's board, rupert's board, same thing. expecting start-ups to survive for two years without raising rates. >> and rrecently raised $150 min in capital >> they did. >> might be able to ride that wave let me understand you correctly. is there bread and butter prying for small businesses, the technology to create shipping labels >> shipping labels and options for the most efficient type of shipping, for the area where that small business wants to ship so kind of making a marketplace of, here's exactly how you want to get it there. >> use this provider usps or u.p.s. or fedex for this

and so on so forth >> lowest cost, fastest delivery. >> integrated with a payment or ordering platform is a big part of this. which is why a shipping label company gets a billion dollar valuation? on its face, preposterously. >> right look at shopify, become a platform for small and medium businesses to offer services for broadly. okay sold it. now get it there what's the most efficient or reliable way to do that and continue in your business? shippo is one of those providers layering on top of that smb revolution happening now where they're able to get more entervis entervised-grade tools. >> my favorite segment, but do they have a moat are there other shipping label start-ups trying to do the same thing? >> there are some, but their moat is that deep relationship with the shipping providers also technology on the back end allowing them to be reliable apps they've built that work on top of the platform.

>> fascinating thinking about that when those packasms come to the door. still to come, three calls thretres, e adtoday's three stock lunch" is next. well-bei will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

three big calls the focus of today's stock lunch. we've got wells fargo and making the case for an espn/abc spin-off we've got jeffries removing amazon from its pick list and jpmorgan naming bank of america a top 2023 pick. let's trade them all with jeff mills, a cnbc contributor. jeff, let's start with disney. i want to know both your take on the stock and the spin-off idea. >> hi, kelly the spin-off is something we've looked at and i don't know what it does long term. i don't know that it drives as a catalyst for the stock in the near term. i think having streaming become net flow positive is what's going to move this stock the next couple of quarters. the company starts to pay a dividend again ofand the pieces are in place for that. the increase in subscription fees, even if that comes at the

cost of slower subscriber growths are that's what the market is looking for. i think we see some pull forward in the disney plus profitability estimates. if there is clear evidence of that, i think the stock moves high hi higher, given the current valuation. >> you say amazon, why >> i think more than anything amazon they're managed to the short term we've learned that the last number of years. the key to the story is gross margin expansion, the growth in services subscriptions this is not walmart post 1990s where the stock had a massive run and was then flat. amazon is a much more dynamic business and the growth in these businesses, aws, prime, advertising and the better margins associated with that that's why you've seen close to 4% close expansion margin. it's transitioning from the hardware to the services, that

becoming a bigger piece of the pie. with that price to sales, i think there's value there for a patient investor. >> that's a very compelling argument all right. so what would you do with bank of america at a time when banks have had a tough year. people are pretty sour on their prospects for 2023 what would you do with b of a. >> yeah, so i agree with jpmorgan in terms of credit quality. i think bank of america is interesting, but it was a jpmorgan top pick overall going into 2022. one of the things they said was they're especially rate sensitive. so i think that that's true. i think a lot of the rate tailwind is probably behind us if anything, we probably have a continuing flattening yield curve at least in the first part of next year i just don't want to be heavy into bank exposure heading into a recession, which is our base case we've never had a recession without 6% unemployment. jpmorgan said in that scenario

loan loss reserves goes way up that's a headwind to earnings so i don't think it's a place for good relative performance. >> so joining the choir there i'll say in some down feelings about the banks. jeff, thanks for all your picks and for your time today. we appreciate it jeff mills. >> thank you. >> the glasses are empty. coming up, rivian getting a bullish car but the ev market losing a little spark. that is next as we bring it across the finish line ugh, this rental car is so boring to drive. let's be honest. the rent-a-car industry is the definition of boring. and the reason can be found in the name itself. rent - a - car? you don't want a friend. you want the friend. you don't want a job. you want the job. the is always over a. that's why we don't offer a car.

we offer the car. ( ♪♪ ) sixt. rent the car.

the push for automakers to go all electric may be losing a little bit of its charm. a new cnbc.com article says global auto executives are less confident about the rate of adoption than they were a year ago. according to a kpmg survey, the median expectation for ev sales is 35% of the new vehicle market by 2030, down by 65% but there's one ev stock that our next guest says is worth buying despite the chart you're looking at right there he said rivian's 79% decline this year offers a, quote, good entry point. let's bring in andre shepherd. you've just initiated this stock with an overweight rating. >> yeah. we have an overweight rating and a $30 price target as you alluded. we see that 79% underperformance this year as a good entry point

for new investors who have a long-term investment horizon and who are comfortable taking on volatility the thesis for this name is as follows. number one is we actually do expect strong customer demand. the company has over 114,000 reservations currently available. they are on pace for producing 25,000 vehicles this year and we expect that that capacity will increase to about 150,000 by next year. as you know, they're making the pickup trucks and the suvs, which are two of the most commonly sold types of vehicles in the u.s. at starting prices of $73,000 and $78,000 respectively the company also has on the commercial front a strong partnership with amazon, who is a 17% stakeholder in the business the two companies combined have agreed on delivering 100,000 electric delivery vans for edvs over the next ten years, which is a great way for the company to ramp up revenues faster

>> andres, i feel bad for rivian this capital environment, this is totally different from 2010 when tesla had to fight hard to get as big as they did how are they ever going to scale profitably >> that's a great question so the company currently has over 13 billion in cash on hand. management has reaffirmed that they believe that cash on hand is sufficient to fund the business through at least 2025 as you alluded to, raising capital in this environment has been incredibly difficult. however, again, we see that partnership with amazon, that strong demand for those vehicles and the company, and this is our view now, the company is developing a soul proprietary charging network which we expect they will open up to the public as a way to qualify for the funding that's provided from the infrastructure investment act so that's money that the company will be competing for or bidding

for and that's a great way for them to fund that additional rollout. >> clever if it works. >> andres, thank you very much have a good holiday season, my friend. >> thanks very much. take care. >> thank you and thank you. yes, thank you for watching "power lunch." >> we've got some great arrows hand it over to dominic chu for "closing bell. dom? >> no, thank you, tyler and kelly. well, stocks are searching for direction early right now before picking up some steam as the bulls hope to break a four-day losing streak. this is the make-or-break hour for your money welcome to "closing bell of." i'm dominic chu in for sara eisen today. the dow industrials up by one-third of 1%, the s&p up by 0.2 of a percent. small caps up half a percent and the 10-year benchmark treasury note just a hair