back up into the high 14 million. potentially if things go well. 15 million range but again, you never know what happens when you have a recession if a recession hits. >> absolutely. phil, thank you. and that does it for the exchange "power lunch" begins right now >> indeed, it does welcome to "power lunch," everybody. we are just seconds away from the release of the fed minutes from the latest meeting. ahead of that report, stocks are higher let's go to steve liesman for that report. >> minutes from the december fed meeting, tyler, show that no fed members thought it would be appropriate to cut interest rates in 2023. all of them in their forecast for rates raised the path of their funds rate relative to where they were in september they believed it was needed until they were confident inflation was coming back toward their target several said history warned against loosening monetary

policy prematurely still, fed officials said they were flexible in setting policy in certainty of the outlook. they were still data however, they emphasized just because they slowed the pace of rate hikes did not mean their resolve was weakening about fighting inflation an unwarranted easing of financial conditions i'll come back to that they did acknowledge in a small section the risk of tightening too much, but dismissed that by saying that inflation is the biggest risk to the economy and the one that ought to be addressed. they cited the possibility that price pressures could remain elevated only a couple saw the inflation risk coming back more into balance. the labor market was tight. the context was that consumer spending had been pretty high in september and october. finally, just a couple of things on the outlook of fed officials. they say economic activity in 2023 likely to be well below

trend. of course they did forecast that half a point increase in gdp and said that a below trend economy is going to be needed in order to bring inflation back in the balance. two sort of positive or dovish comments that were really not backed up by much. they said housing deflation accelerating and risk to the positive this is not a positive here. >> just looking at the market. the market, i don't want to say dovish but what do you make of the fact that stocks -- anything you want to add before we move along, steve? >> i think you would make a mistake to take a dovish ininte interpretation of these minutes. they're pretty much on the hawkish side it's almost like they're tailored to send a very strong message about how hawkish and serious is the dow's dropping even as we speak.

it's going okay, wait a minute maybe not. let's get more reaction from an economist who got it right with his call for seven rate hikes. actually, he was too dovish. ethan, people want to know about the minutes so i won't dwell, but again, you were way ahead of the rest of the pack with your call last year what do you think about what you're hearing from the fed right now? do they have it right? >> i think they're doing the right thing and i think steve's right. they are trying desperately to convince the markets that they're serious here it's amazing the bond market doesn't believe them bond market's only pricing in peak funds rate of 5%. it's got the fed cutting steadily starting with the second half of this year equity market has looked good. markets don't believe the fed is serious about fighting inflation. i think they're wrong. i think the fed will deliver more than the market's expecting. >> wow, so the market's expectations are already pretty high, e tthan, and we have a lo

of the forward indicators sending signals. the price to ism is collapsing yield curve, pick your poison. they're all terrible how far are they going to go >> yeah, so what they've done is they've told us that they want a weak economy i think that's a friendly way of saying they want a recession you've had almost 10% inflation in the united states you are seeing it drop due to a reversal of some of these goods price spikes as commodity prices come down as we see in the ism supply chains reinganl the fed, that's not what we're looking at we're looking at the parts of inflation that are going to be hard to get rid of how do we stop all this labor cost pressure that's driving service prices that requires a much weaker economy and the economy just isn't cooperating.

look at the jolts data this morning. the number of job openings is still through the roof so they've got a lot of work to do and ucnfortunately, i think they end up creating recessions. so the fact the signal a recession is coming isn't going to stop the fed. >> you see inflation in 2023 of the 2.5% on the headline pce that's one of the other measures the other core coming down to 2 p2.5% that is not far of the fed's target of 2% if inflation is going to go there in your view, does that mean that the fed is almost done raising interest rates do they need to continue raising rates to get to that level and if so, by how much and when do they stop doing that >> well, i think they've got to finish the job here. i mean, if you agree with powell who's saying that the major

sticking part of the inflation process is rising labor costs then you look at a job market that is still red hot there's no way you're going to get inflation down to 2.5% with this la labor market it's unfortunate the fed let things overheat and now they have to take back the punch bowl we've got another 75 basis points of rate hikes by the way, if the labor market continues to defy gravity here, i would think we'll see a further hike beyond what we're forecasting. so there's a lot of work to do they have to finish the job. >> another three quarters of a point to a point of rate hikes, but you can do that pretty quickly. that could be two meetings that could be the february meeting and march meeting and you could be done. >> you could be done i think what you need to see, they need to see clear evidence that service inflation is

cooling. the labor market has stopped growing. unemployment rate is rising and most important, that job openings are coming down to earth again. they need something to grab on to that says to them they're winning the war. getting you know, the used car prices to come down after having them go up 50% is not winning the inflation war. winning the inflation war is getting the service side of the economy under control. you have to have both. lower goods price pressure and lower service price pressure so we need to see convincing evidence in the labor market and in the service side of the economy. >> steve, is there a risk that they wait to see the whites of the eyes of that slowdown, which is responding while setting monetary policy with conditions that are going to hit 12 to 18 months from now. i know we don't have great forward looking data, but it feels a little scary that they want to wait for two of the most lagging data points, cpi and

la labor market, to respond with labor policy to set a course from a year, year and a half from now >> there's a likelihood of that. i think the fed is kind of telling you that in they are not that concerned about it. i read these minutes looking for some kad ray kai ball fed officials who were more concerned about that than the rest of the group and there really does not appear to be one. i think it's instrucktive what neel kashkari said i'm at 540 or bust mary daley says he's over 5% and we have the chart which show that 17 of 19 officials are over five this is a risk they're willing to take. they feel like the risk of higher inflation is one that outweighs i guess by a long way, the risk of going too far and doing too much i think you know when i read these minute looking for any

sign of any sort of nascent, do dovish wing on the fed, there's this paragraph in there, guys and some of these issues are brought up but they're quickly and decisively dismissed chltd let's not forget that all the doves in the fomc have been voting with the policy hasn't been a single dissent >> i was trying to figure it out, ethan i think there was one and it was george who's hardly a dove and i'll be interviewing her tomorrow but i think that's right, ethan. i was trying to total up this entire time of the historic 75 basis point rate hikes, there's been a single dissent. so there are no doves in the fox hole of inflation right here >> yeah. >> and i thought you said it for a different reason, too. was it financial conditions? >> it was concern about, what she wanted to do and i'll ask

her about this tomorrow, she wanted to protect the balance sheet runoff which is something we're probably not talking about because there's probably going to be $1 trillion worth of runoff and it's going to have a profound effect in markets >> absolutely. thank you so much. ethan, appreciate your time. st steve liesman as well. >> and new news on yet another vote in the house on the speaker. ylan mui has the story was the fifth time the charm for mr. mccarthy i sense not. >> so far, it is not, tyler. you're right we are on the fifth vote for speaker of the house, but the outcome is expected to be the same california republican mccarthy so far is coming up short. now, he can only lose four republican lawmakers so far, there are eight republicans who are voting against him and this vote is still going on now before this latest round began, we did see him speaking on the floor with some of the other republicans within his

caucus we also saw one of his top allies, jim jordan, speaking animatedly with matt gaetz, but so mar far, neither side has budged despite several calls from donald trump to rally behind mccarthy. lauren bobert took to the house floor earl yier today to say president trump should tell mccarthy it's time to stand down because he does not have the votes. that got some boos from other republicans on the house floor so far though, this vote is likely to end the way the other four did with no speaker elected at the end of this process >> what happens? at some point, somebody has to give >> we don't know as this point, they can just keep voting and voting and voting until there's a breaking point. both sides are saying they are not going to stand down here the longest vote for speaker of the house took two months to

complete and we're hearing that members might have to stay in d.c. through the weekend to get this done. mccarthy has said held like to adjourn, do more face-to-face negotiations, but so far, that hasn't been able to happen so we're stuck in this limbo until there's a breakthrough and the path is truly unclear. >> thank you so much ylan mui following the action on the house floor. coming up, two dow components on the move today first, microsoft falling on a downgrade. analyst as ubs worried about growth in the cloud business there. does our trader agree? we'll find out but first, salesforce rising after announcing thousands of job cuts workers that won't need as much office space the company cutting real estate as well. we'll discushos w this affects commercial real estate that's next on "power lunch. i would have hired actually talented people

from all over the world. instead of talentless people from all over my house.

markets watching the fed closely for any sign on how rate hikes will last. the longer they go on, the longer real estate could be in some dull drums. whether it's plunging mortgage apps or vacant apartments, robert frank is looking at manhattan. diana olick breaking down the mortgage numbers diana, what do the numbers say >> well, it's not a great look to start the year. mortgage rates ended last year on a high note and mortgage demand ended on a low note

that's because the 30-year fixed is starting the year around 6.5% it started last year just under 3.5% so big surprise that refinancing is just plunging those applications at the end of the year were down 87% year-over-year and mortgage demand from home buyers was also down 43% year-over-year so it seem that is the mortgage market and the home buying market is apparently frozen despite as we know, the unseasonably high temperatures at the start of this year right around here, tyler >> thank you, diana. stick around for just a moment >> manhattan real estate sales seeing their biggest drop since the pandemic and one of the biggest on record, robert frank. what's going on with this real estate freeze? >> this is the biggest real estate market in the country a lot of money at stake here sales down 29% in the fourth quarter. that was the biggest drop since the pandemic in 2020 the median price down 5.5% that's not a big drop, but it is the first time prices fell since

the pandemic you'd have to go back to the 2008 housing crisis to see the last time before that the prices fell and this is the danger sign when you look ahead at the pipeline into this first quarter. new contract signings down 42% so those are deals that are signed in the first, in the fourth quarter, but that are supposed to close in the first or second quarter of this year so this is a market that did $28 billion in sales last year that was a record, but it really weakened toward the end and if you look at what's happening with wall street bonuses, the stock market, it's not a very mortgage sensitive market. a lot of cash, but still international buyers are not back yet and so the question is what is going to fuel this market and keep it up or will prices fall enough to finally bring buyers >> i want to ask about listings both in manhattan and more broadly if i might diana, why don't you take it first. what are you hearing about

listings my wife was speaking to a real estate agent in our town, which is a very hot residential market, by the way and this agent said there is just nothing coming on the market period >> there may not be a lot coming on the market, tyler, but there's a lot sitting on the market so we have inventory up over 40% right now compared with a year ago. that's because it's taking a lot longer for the homes to sell an average of 15% longer than a year ago so you have this kind of steal inventory that's sitting around waiting, but as you say, you're not seeing a lot of new inventory come on to the market. that's what we're waiting for in the spring market, which unofficially begins on presidents' day weekend. so we're not that far off from that the question is what is going to move potential sellers to say okay, i'm not afraid of falling prices i'm not afraid of having to trade my mortgage rate if i buy something else for a higher rate what's going to push them to put that home on the market? so far, they don't seem to be seeing anything and again,

overall concern in the economy doesn't want them to make a big move either. so we have more inventory from a year ago that's the good news, but it's still not really fresh inventory. >> yeah, manhattan, even worse manhattan's such an investment driven market. more discretionary so you don't get distressed sellers like you do in other markets. normally, there are about 8 to 9,000 apartments on the market in manhattan. there are 6,000. so you don't see the sellers listing and that's just causing the sellers. >> why are the foreign buyers sta staying away >> i wouldn't say they're staying away so much actually, we have a report coming out tomorrow that i'll preview. the chinese, now that they have lifted the restrictions, may be coming back to the u.s. market so that's something to look forward to i guess >> we saw a little bit of that brokers told me they saw middle east and chinese buyers, very wealthy buyers, who came to do

luxury shopping. brought their checkbook and bought some apartments we'll see whether that, you know, and the chinese we're seeing travel restreictions bein lifted the chinese, even prior to covid, were not in this market the way they had been in 2015 and 2016 for all sorts of reasons. so it's a big question of how many of them truly return and buy real estate. >> let's move on to the question of salesforce, which announced major cutbacks in staffing within the past 24 hours cutting staff by 10% it's the latest in a score of tech company layoffs the company also saying it's going to close some of its offices to cut costs, which brings us to the non-residential side of real estate. diana, let's talk a little bit about that what are you hearing about central city business district rentals and activity >> well, we're seeing apartment rents come down and so that could bring more renters back into the market.

those who have left the market we're also seeing a lot, in fact, a record amount of multifamily apartment inventory will be coming on to the market this yeear so that could ease rents further. it's interesting because we're seeing the s&p real estate sector, which is all commercial riets. it's so beaten down. why would it be up today we did get an upgrade from mizhou despite the fact that literally i get something in my inbox every day of another survey about how many, what share of office workers don't want the come back to work today, i think the share was 12% wanted to be in the office so it's really, it's kind of crazy these numbers that you could actually be bullish on a rally in the office market >> and all the buzz is about this blackstone deal and the 11% yield that university of california is paying in order to reassure people about what's going on here. and i imagine a lot of people you speak with are big investors

with big exposure to these areas. >> and if you look at new york in particular, there are just darker clouds ahead. there are 40 empire state buildings worth of empty space in manhattan right now >> what? >> and marginal leasers were meta, it was amazon, it was you know all the tech companies like twitter that were getting space. now they're laying people off. meta just gave up a quarter million square feet of space in hudson yards that they had just leased the growth engine for -- >> how many? >> 40. 40 empire state buildings of empty space and it's just going to get worse as some of these leases come on for renewal >> like you said, it's expensive to do an apartment conversion. >> news corp. just renewed their lease so that was a bit of rare news on 12/11 avenue of the americas >> you hope they got a deal. >> i'm sure they did plus, they put a lot of money

into that news room. but there are not a lot of new leases being signed and there are a lot of new buildings coming online. we'll see what happens with prices >> very interesting. >> thank you both. robert frank, diana olick. still to come, today's working lunch. we'll hear from a ceo working to prevent and recover from ransom ware aac attksnd why demand is so high in europe. more on "power lunch," next. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. ♪♪ choosing miracle-ear was a great decision. like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones.

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hello, everybody i'm contessa brewer. here's your cnbc news update at this hour. the u.s. embassy in cuba resuming full immigrant visa processing for the first time in more than five years the embassy slashed services in 2017 after several of its staff suffered unexplained health issues it later became known as havana syndrome this comes as migrants continue to flow north. regulators are hitting meta platforms with hundreds of millions in fines for privacy regulations. they're also banning meta from forcing users in the eu from ads.

m meta plans to appeal the fines and the buffalo bills released an update on damar ham hamlin he remains in the icu and is expected to remain under intensive care as his medical team monitors his condition after he suffered cardiac arrest monday night >> thank you very much some news about a frequent guest on cnbc and "power lunch." brent beardall survived a small plane crash monday in provo, utah he's taken a leave of absence and kathy cooper has taken over. the plane was piloted by nathan ricks, a prominent business man in utah. mr. ricks sadly did not survive.

two others on board, including mr. ricks' wife, suffered only injuries we wish mr. beardall a swift recovery "power lunch" will be right back power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. only at vanguard, you're more than just an investor

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on the markets we've got your stocks, bonds, commodities and some strategies on how to approach the markets let's begin with bob pisani at the new york stock exchange. >> the market was not particularly fond of the minutes so we know about higher for longer, but the comments that nobody seems to believe rates are going to be lower in 2023 from the fomc sent the market down a bit lost about 30 points we were at 3860, now 3831. we need to close above 3822 for the santa claus rally. the rally is on the enl of working. the dow has recently gone negative in terms of market leaders, all of those travel and leisure stocks have been doing great today. carnival's raising prices starting april 1st norwegian raised the prices on january 1st.

the china reopening story is helping china stocks including wynn other gaming stocks are doing really well. the story is simple for this day. last year's losers, this year's winners. disney doing well. intel still holding up salesforce announcing a 10% cut in its workforce and boeing's been on a big tear probably the biggest winner for the dow in the first two days. of course, the opposite is true. last year's winners are this year's laggards. healthcare's had a tough couple of days. that's really been a drag on the dow. humana, also a big healthcare stock, weak the last couple of days and energy as oil is not that far from a 52-week low chevron weighing on the dow. we'll see what the jobs report looks like on friday 210,000 jobs that's the weakest in a couple of years and that they give more fuel to the idea that the

economy is slowing down just enough to close a modest recession. that's what the stock market wants to believe we're just going to have a very modest recession that's the debate. what side of the recession are you on >> thank you let's transfer to the bond market hi, rick >> hi, tyler you know, it was a fascinating response to the minutes of the december fed meeting because the treasury complex starting out with two-years and ten-year, yields starting to dip going into it and we know they ended up moving a bit higher how much higher is important okay, look at an intraday of two-year a lot of volatility. obviously with numbers this morning, but you could see we started to drift down just a bit before 2:00 eastern. that reversed. we were at 453 preminutes. we're at 437 higher yield lower price on the entire curve at the moment if you look at ten-year, for a couple of week, something should jump out we're trending lower

intersecting a range from the 23rd on pace to close at the lowest yield since the 22nd and if you consider the fact we're at 369, exactly unchanged from where we were preminutes. at 369 preminutes. we've moved slightly higher and came back down now, june fed fund futures, it's the fulcrum. where we stop going down in price and start going up june futures they're still implying a 513.5 terminal rate. they're still up a half a tick on the session and you can see there. pretty much in a range, although at the bottom. finally, the dollar index. more and more bulls showing up thinking the fed's fogoing to deliver thinking it's going to be tough on inflation, thus keeping rates higher as you look at this chart, the last couple of weeks, mostly sideways, but we're starting to see expanded ranges and higher option volatility. back to you. >> we've got a big drop in the

oil price today and pippa has the news >> well, crude is tumbling more than 5% today as global slowdown fears weigh with china demand concerns also hitting prices analysts at commerce bank noting the global economic outlook will play a much more important role than the production decisions from opec and others meaning this is squarely a demand story. futures dropping 10% as the continent experiences record warm temperatures. prices are at 65 euros per megawatt hour. back in august, they were above 30 o euros and here in the u.s., hub prices are catching a bid and back above the $4 level after yesterday sinking to an 11-month low that is boosting shares of gas producers. t >> thanks very much. our next guest thinks the recent

pullback in oil prices and energy stocks offer some opportunities. let's bring in art hogan a art, we'll get to energy and the opportunities you see there in a moment, but i want to start with a bigger picture look at the market in 2023 as you see it it is relatively uncommon for the market to have or at least in recent history, it's been uncommon, for the market to have two bad years in a row do you expect that this year or not? >> we really don't i think a lot of the things we were faced with in 2022 are behind us in 2023. for example, we tdon't think th ten-year is dwoikgoing to have move it did in 2022. we'll likely have a peak in fed hawkishness. we've seen a peak in inflation all those things will become tail winds for the market. we have to get through the choppiness of the first couple of quarters. i think when the fed gets to a place where they pause, the

market will take that as a positive and ignite risk on appetite and when we get to the fourth quarter, i suspect they're still going to be in a place where they need to pullback a bit i think they were going to have a five and a quarter percent fed funds rate and the headline level will be free handle. not entirely possible. i think the markets face a different dynamic in '23 and you likely have a more positive year >> let's move on to yor market for several of the energy stocks chevron, apa and cheniere. >> fully integrated, domestic exposure trading at a reasonable multiple paying a very nice dividend. one of the reasons we've seen a pullback in energy prices in general in the energy sector in particular has a lot more to do with fears of a recession. ignores the fact that the dollar seems to flat line and is

heading lower. a net positive for commodities and doesn't play into the china reopening story and demand for all sorts of commodities including hydro carbon i think china is one of the best ways to play >> does it make you nefrvous tht oil is off to a rocky start? >> mother nature played a nasty trick on nat gas bulls delivering warm weather for a couple of weeks and we ended the summer the first part of january. that happens i think when you look at the overall dynamics, we're oversupplied we just haven't had enough capex by any of the oil producing companies over the past three years. you're not able to make that up very quickly any need for new supplies is going to be met with a lot of demand i think the demand dynamics will outweigh this. remember, most of these energy companies are going to do just

fine wti at a 65 to $75 level we're not calling for a return to $100 crude. just talking about very profitable companies >> let's talk about what you describe as a barbell approach to investing this year on one end are things you say we need like energy, healthcare, consumer staples on the other end of the barbell, solid growth companies with the defensive leadership role in their sector the way their multiples have gotten contracted over the past year what kinds of companies are those? name some names if you have any, but give me sectors for sure >> yeah, absolutely. so on that front, you named it right. energy, healthcare and certainly staples. they've had a significant run. on the other end, you're talking about growth that is attractively valued and wave created that companies like apple, microsoft. to a certain extent, meta. if they put a lot of their spend on other things and address the

core business, but i think alphabet, microsoft, and apple are three great examples of a contraction. you've seen deflsable motes around their business. you've seen shareholder friendly managements and i think that the multiple compression we've seen in those three names alone and there's a host of other ones fi that bill of growth. >> thank you very much happen fi new year, my friend. >> thank you >> still to come, jon fortt bringing us his interview in today's working lunch and speaking of cloud, check out shares of microsoft. the stock is down more than 5% today, ubs downgrading them citing risks to azure. that's coming up in today's three stock lunch. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way

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tough times in cyber attacks. this week, jon fortt brings us up close with a company who specializes in data protection >> he's cofounder and ceo of

rubrik that's openly preparing for an ipo they speblize in data, back up and security restoration protecting against ransom wear attacks. in a way, he spent his whole life managing risks. growing up in india, he didn't go to a top high school and actually dropped out in an effort to crush college entry exams on his own he succeeded, got into a top college then got more risk averse >> after i got out of school and joined the job, my mom always told me to never risk anything take a job, stick to it. you want monthly salary, you want safety. and it took me roughly ten years in america to get into the mindset that i am not defined by the circumstances i'm in circumstances are driven by me it's like a little bit of a creative view and once i had that thing in early 2005, 2006 that's when i quit my job to do

my mba because i started to think about r risk differently >> then he started his own company and now he's very much back to making his own luck. microsoft invested about a $4 billion valuation. last year, rubric doubled its annual subscription level to 400 million. he told me even in this tough macro environment, customers are looking to minimize risk and secure their data. >> what we are seeing in europe is the demand for cybersecurity. demand for data security ransom ware protection, continues to be high there's no let up in that demand obviously, the foreign exchange rate and the government level issues in u.k., public sector, things like that so there are some impact, but in terms of the demand for cybersecurity products continues to be strong at the end of the day, every

business has to protect themselves and be in ongoing operations >> i had that conversation with him when microsoft's lead independent director, former chairman john thompson, announced he was joining rubric as lead independent director it's not security related, but we just witnessed what can happen when companies don't keep their technology updated with that southwest airlines system meltdown a lot of companies are doing the hard work of determining what software they still need to buy in 2023 to make sure they can operate, guys. >> he says there, i started to think about risk differently i wonder what he means there and i assume what he means is that he decided he was going to bet on himself >> exactly >> and if you bet on yourself, you can influence the outcome of the bet. >> yeah, and he did that in a big way in high school when he dropped out to study for that all important test and really, i mean, he shouldn't have passed it because the test prep

organizations, they wouldn't even give him, sell him a test, because they didn't think he could pass it so he had to get previous years tests, photo copies and he made it. >> can he come tutor my son? >> how about that. >> we need it. >> so impressive there are so many companies like this that try to help deal with ra ransom ware. what makes this one unique >> it's the cloud first model. not only that, but it has deep relationships and an approach that really encrypts in the cloud. so they're up against ko heesty for example with sanjay punin of vmware has just become the ceo the microsoft investment helps >> and i mean, the amount of revenue they're doing. last thing quickly, do they compete with the big publicly traded names palo alto, or are they in a different bucket >> not so much palo alto

some of dell's storage and security stuff a bit more. >> thank you very much jon fortt, appreciate it as always coming up, today's three stock lunch. i don't know where i'm supposed to look. who cares, really. we'ltre mel adso of the biggest wall street calls. "power lunch" will be right back but with upwork... with upwork the hiring process is fast and flexible. behold... all that talent! ♪ this is how we work now ♪

time for today's three stock lunch. we're going to take a look at some of the movers of the day, including microsoft, shares down nearly 5% today as ubs downgrades the stock citing weakness in the cloud. etsy shares up 4% after need ham upgraded that one from knewal to neutral to a buy, and alibaba surges 12% after ant group receives extended capital plant. to trade them all now is courtney garcia, senior wealth adviser at payne capital management and a cnbc contributor. let's start with microsoft, what do you think here? >> microsoft i have a hold on. they did get a downgrade recently which you just noted here, and that was because of their cloud computing doesn't have as much demand going forward. the problem i have with microsoft is it is trading at a higher valuation than the

market while it is cheaper than itself, the problem is in this environment, the war is higher, and as a long-term investor, something i want to hold, but short-term, i would not be buying into this currently. >> let's move on to etsy, what about this one, courtney >> etsy, i have a sell on. to reiterate the same point here, a high valuation company, trades about 36 times next year's earnings, mump more than the markets. the problem is we're also facing a consumer right now which is facing higher inflation, and they're having to choose on what they're purchasing right now instead of buying goods, which is what etsy sells, they're going to service it. think of going to a restaurant, they are pulling back on discretionary spending, which e etsy is going to be prone to shall we move on to the next

one, and that one is alibaba you know what i want to do one of these days, i want to do alibaba, and o'reilly auto parts. be that as it may, alibaba, what do you think >> that's going to be harder to compare. alibaba, i have a buy on here. they have been facing big head winds, number one is the zero covid policy in china, finally getting light at the end of the tunnel in. the regulatory scrutiny has been a big problem for them just told, we saw with ant groups raising money which just got approved that is starting to bring light at the end of the tunnel as well their valuation is dirt cheap. about nine times next year's earnings they're not close to where the high is. the price back in october of 2020, we are nowhere near there. the fact is dirt cheap, a lot of head winds behind them this is a buy. >> thank you very much courtney garcia, thank you. it's paying to be a pal with

paypal, the stock continuing its recent run more details on that next. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme.

welcome back to "power lunch," shares f paypal are continuing a strong run up 15% in the last week let's go to kate rooney with more what's happening, kate >> paypal up 15% or so for the week, led the s&p yesterday

following an upgrade at truist with a bullish note this morning, maintaining a buy rating they talked about paypal versus apple pay. apple pay has been seen as one of the big threats to paypal, especially on mobile they looked at some of the partners, so think etsy, nike, where people are checking out with paypal. they found that share loss is starting to stabilize. they're not necessarily gaining share against apple pay, but it's slowing down, and that's seen as a really good sign for paypal this was especially strong in mobile that's where paypal tends to be the most vulnerable to the iphone still a long way to go in terms of recovery. if you zoom out over 12 months, paypal is down about 60% but sentiment seems to be p picking up here on wall street overweight with $105 price target for the average analyst that's a 35% up side things are turning around here >> do you happen to know, and forgive me for asking and putting you on the spot, what

the relative shares are on mobile devices for pay pal, for apple pay and google pay >> so they measure this on web traffic. so if you look at that, it's -- in terms of google pay, apple pay is gaining share in paypal, i don't have the relative ones if you look at the web traffic, it did look based on the note earlier, even though it was stabilizing, apple pay was gaining ground, way more so in mobile actually on desk top, paypal tends to do quite well it's the incumbent checkout method that a lot of people are used to using, back to the ebay days. >> i use paypal when using a desktop or ipad at home. when i'm at a checkout place, i tend to use apple pay or google pay and i feel so proud of myself i feel like a millennial i feel so good

>> they say the friction to start using apple pay is really the big thing. you get nervous going up to the coffee shop with your phone and thinking is it going to work, but desktop is where pay pal has won, and venmo is trying to move more into the mobile space venmo is the peer-to-peer app people pay each other with that's been the play in terms o. in-person mobile payments. >> similar with coin base, up more than 10%. we have a couple of different things happening in crypto i don't know what's going on with robinhood shares with ftx maybe you can tie that together for us. >> different reasons but all within the fintech umbrella. coinbase settled a case with new york state financial regulators, a $50 million fine they have to invest 50 million in compliance. 100 million seems like a big number i think there's a sense of relief that this has been solved it's been playing out over the last couple of years here, and

regulators said it was about failures in antimoney laundering, seen as a good thing if they're going to become compliant and strict on who's using this platform. but helping us out here, absolutely. >> 12% gain for coin kate, thank you. >> thank you for joining us for "power lunch." "closing bell" starts right now. >> stocks mostly higher, following the release of the fed minutes. this is the make or break hour for your money welcome, everyone, to closing bell i'm sara eisen there's the dow up 63 points s&p 500 holding on to a gain of 6/10 of 1% the groups leading, you've got real estate in the lead, also consumer discretionary is having a good day materials, financials, second day in a row, doing well energy, consumer staples and health care, those are the three defensive