>> apple close to turning positive the week began soggy but it is on a decided up note there is apple up four points right now. >> i would say ending soggy data now. >> yes yes. exactly. folks, have a great weekend. thanks for watching ""power lunch."" >> "closing bell" starts right now. it is the first big rally of the year stocks are off to the races after today's jobs report showed wage growth showing. what it all means for the fed and the market this is a make or break hour for your money welcome, everyone, to "closing bell." i'm sara eisen at the highs of the day right now. the dow is up 726 points we've got more than 2% rallies across the board nasdaq surging 2.7%. bonds are rallying as well there's the 10-year note yield all the way down to 3.5. wage growth on top of the ism

services number which is a big miss and showed a drop bad news is good news when all eyes are focused on the fed. it's a broad-based rally materials and consumer staples are leading the way right now but it is across the board and technology is bouncing back strongly after a rough start to the year the nasdaq up 2.7% information technology as a sector is up more than 3%. coming up this hour, legendary value investor bill miller iii and bill miller iv. le their topics and including whether they're still bullish on amazon and bitcoin as well as their fund succession plan senior markets commentator mike santoli. what do you make of the rally? >> it's impressive, actually it shows you the energy that got built up pointing it out around 3800. the market has refused to buckle

below that level that goes all the way back to midmay of last year. there haven't been that many prolonged periods of time in the last year when you didhave suc a period where the market really did just sort of churn sideways in this very, very narrow bend what does that mean long term? we're going to tag 3900. looks like we just did hasn't been at that level since december 15th of last year it is still obviously in a down trend. with the passage of time as we move along, the hurdle of deciding whether in fact we've broken the down trend goes lower. it's under the 4,000 mark. it's less than 3% higher that will be one technical test of demand. see if that's going to work. it seems as if late in the day so far this afternoon people stopped leaning on the big nasdaq stock big, big laggards for a while. in fact, you could say tesla and apple going towards multi-year

breakdowns and yet the s&p 500 holding strong maybe was telling you something, that there was something underneath there clearly the market has not given up the soft landing scenario that was part of the story we'll see if it plays out. here in terms of earnings, the next potential challenge this is from mike wilson over at morgan stanley what it shows is the pe ratio has come down a lot from the peak now under 17 times forward earnings his argument is earnings estimates have just started to roll over and they will come down and make it hard for the market to perform well in that scenario i would argue that possibility but it's not necessarily the only way this goes as you can see, the multiple has plunged in the past without earnings buckling and also it kind of leads the way. so the fact that the multiple is down shows you the market has already braced for the earnings levels to decline to some degree, sara. >> for all people saying earnings expectations are not low enough, market's already

sniffed that out >> sniffed out part of it. by the way, for the fourth quarter, which we're going to start to see the numbers, they've declined 6 or 7 percentage points over the course of the fourth quarter that was the same percentage they went down over the third quarter. company's report they beat the numbers on balance. you're a couple percent above that yes, there's been a decline. will be more of a decline. margins will be under pressure but i don't think it's going to be utterly necessarily a surprise to the market itself. >> mike santoli, thank you. this morning's jobs report showed wage growth slowing but this morning on "squawk on the street" atlanta fed president raphael bostic said the data doesn't change his outlook at all. >> i've been looking for the economy to continually slow from the strong position it was at in the summertime and this is just the next step in that. the question for me has always been how fast is it going to slow and it's going incrementally steady it's not super disruptive but because of that, it really says

to knee, you know, we've got to stay the course. >> joining me now is apollo global management chief economist. great to have you back on. welcome. >> thanks. >> so even though bostic says it doesn't do much from him, the market is taking it as a sign that the fed won't have to do all that much more or may be able to pause sooner than expected the forward wage growth, the weaker services. is that the right take >> what mike is saying, this is the definition of a soft landing. we have inflation coming down. the economy is not slowing dramatically it's gradual it's steady as bostic just said. all of that tells you that up to this point this recession that we've worried about so much for so long is not really showing up in the data. there is definitely recessionary tendencies in markets, but in

the real economy it is the case the inflation is coming down as the fed has been trying to achieve for quite some time and at the same time the labor market is holding up that's the good news from a bullish perspective. >> as far as a report is concerned, it really does speak to a soft landing. you've got the hiring and then the moderating wage growth on the inflation side the problem portion is that the fed not going to be satisfied. they are resiliently sticking to their 2% inflation target and their tough to being against inflation. so the risks for the market is that they way overdo it, isn't it >> totally the only thing here as jay powell has said, they will continue to go at it here is the quote, until inflation is well underway towards the 2% target. what does well underway mean you look at the consensus, by the middle of this year the consensus expects inflation will be at 4% and by the end of this year the consensus expects it

will be 3% is that well underway? is that enough for the fed to take a break at least the market pricing you look at the ois curve the fed will peak at 5% by the middle of this year. at least from a trading perspective, we are only four or five months away from the fed beginning to pause and the consequence of that, of course, is that the fed will certainly stay very, very attentive to all of the deals but so far today with the job earnings falling from 4.6 to 5.1 in november, that's a steady decline. if that trend continues and with cpi trending lower, that does certainly tell you that the fed is succeeding at getting inflation down towards and being well underway towards the 2% target >> i have a lot of questions about that, but we're going to take a pause if you would. we've been monitoring a story all day. biogen shares have just

reopened they were halted after winning approval for the alzheimer's drug let's get to meg tirrell what's the story welcome back to you, meg >> well, thank you, sara biogen stock looks like it's up about 6% there reopening some analysts had estimated the stock would go above 300 it's 288 now this is largely what analysts were expecting for the approval of this alzheimer's drug it is the second alzheimer's drug from biogen and its partner. this one was led by eisai with all of the clinical development and the fda process. eisai has announced the price of this drug, $26,500 per year per patient. that is in line with what analysts had expected. it was higher than what a pricing watchdog had said would be cost effective. they had said $20,000. we'll see how that is digested by people who will pay for this drug

that is the tricky thing medicare had come out from the last alzheimer's drug and said, we're not going to cover any of theis alzheimer's drugs targeting plague are buildups in the brain except for in clinical trials that limits how they get paid for. so that's the next key question. the second alzheimer's drug in the class now. >> i think that was a question, too, whether it would ultimately be approved. we talked to eisai throughout the process and there were safety questions about this. good news all around on the slowing of the progression of the disease by eisai ivan cheung will be on at 5:15 let's get back to talking to the economy and slowdowns. you expected the fed to pause along with the market's

expectations in the middle of this year. is your position that you are then bullish overall that that will cause a rally beforehand to play out >> the scenario is that the market has priced in is certainly a soft landing because interest does not expect deep rece recession. the consensus is also telling you earnings have gone down dramatically so from an investing perspective, this just speaks to the fact markets have been a bit more wobbly. we don't know how quickly inflation will come down if inflation is coming down a little bit faster than the market has been expecting and narrow to 2023 is that we'll not only know that inflation has peaked and now we also have a discussion about how quickly inflation will come down, that's very different from the narrative we had last year where it was all about how much is

inflation going to go up when will the fed be done with all of these rate hikes? now we have much more clarity in terms of the outcome that should be and is something that generally should be good both for credit and for equities. >> yeah. let's see if the fed buys it we haven't quite heard that pivot and tone from them yet thank you very much. up next, legendary value investor bill miller revealing his top stock pick and shares his succession plan with his son. high for the day, up more than 768 points we'll be right back on "closing bell."

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stocks are trading higher. we're at the best levels of the day. up more than 2% and the nasdaq is soaring up almost 3%. 2.8% joining us is miller value partners chairman and cio bill miller iii also joining us, bill miller iv who is currently the portfolio manager of the miller income fund he will soon be taking control of the miller value partners great to have you on good afternoon we want to talk about the succession story a little bit later. we've got a nice rally here. maybe i'll start with you bill miller iii on the market celebrating lower wage growth, weaker services number and this idea that inflation is falling

but we're not necessarily barrelling into some big recession. is that what you think the story of 2023 will be? how do you look at it? >> so i think -- i think basically that it's been all a macro for the past year or so. it's been about the fed. the markets tend to have days where 95% of the days it's up and 95% it's down. i don't spend any time where the market's going to be or where it's going to go i'm trying to figure out if there are cheap names out there, names looking out a year, two, three we can do quite well in. i think in this market that is absolutely the case. >> so more opportunities for you after what was a pretty rough year last year where todo you see the most val? are there certain sectors in the markets. >> the market is like a giant rorschach test everybody sees what they want to see. for us or for me i think it's a

lot like 1939 when john hamilton invented hamilton drug funds 1939 when hitler invaded poland john borrowed $300 and told his broker -- he was in his 20s. buy every stock on the new york stock exchange and trade it for a dollar or less he did that and that was the basis for his fortune. more than 30 of those names were in bankruptcy but only four ended up worthless if you throw 15 darts at the market right now, i think you're going to do quite fine if your time horizon is a year, year and a half. >> what about you, bill iv, i'll say. coming off a year like last year where all the focus was about higher inflation, you guys aren't necessarily macro but in such a macro market, how do you view the opportunities this year? >> i think it's really interesting to start with the market's expectation for things

and where there may be opportunity in for that. if you look at what the bond market has done over the past few months, their expectations for inflation are pretty clustered over the next 2, 3,s 5,s 10 years in 2.2, 2.35% analyzed some of the more near-term numbers. what have prices done over the past month when you analyze that, we're getting pretty close to 2% the fed's done pretty good job in terms of forward communication and getting the market to figure out what's going on macro wise, we're in a great environment. low unemployment growth overall, economy's growing strongly and some really compelling valuations there. so when i look around one of my favorite names is chico's. they also own white house black market, soma phenomenal, phenomenal management team. they're undergoing a great turn

around we have a position in our income fund even though they're not currently paying a dividend. we think they may eventually at the same time, it's an incredibly cheap stock and there are a lot of others out there. >> it's really outperformed over the past year. it's pretty much flat. is retail consumer a good place to be if we are going into a recession? >> it kind of depends on the name and the valuation going in. again, we don't look at buckets like that. another retailer that we own in the income fund is a name called the buckle, bke, jeans retailer. phenomenally well run. management team owns almost 1/3 of the company if you were to look at the company's profitability over time and what they've done, this is a really well-run company, very high returns on capital % trailing dividend yield. so recession or not, they're growing 7% yeah, we think there's a lot of

interest in stuff in retail. >> yeah. the that's been a great kind of quiet winner over the last few months bill miller iii, i was going to ask you about amazon in particular you've been with that from the beginning. it's coming off a year down 50%. have you been adding to that position do you think there's -- amazon is due for recovery. it was the same this year, you make 25 pe percent will easily be their market. 20 billion fl revenues 20 billion of profit aws would easily grow 25% a year the next three years they're 30% operating margins. we think aws alone right now is worth almost the whole price of amazon so you get the advertising business, logistics business which is relatively new

business, retail all for free. i think andy jassy is doing a great job, with unemployment like this, i don't think the people are going to have a hard time getting product there's been a big transition for amazon they were negative free cash flow we think they will have 21 to 22 billion in free cash flow. of 0 fwril of free cash flow in 2025, quality, upper management team is fairly easy for me. >> i was going to ask about your thoughts on andy jassy in particular the stock did peak right around the time where he took over and

whether some of the stumbles were on him or macro drivers. >> jeff bay zos story not terrific whe you mentioned stumbles when the pandemic happened, you had a massive surge in business. all stores were shut amazon ranks number one above anyone else. over hiring, new building in terms of the school supply they chose to over build and over hire. that's being rectified i think within a year or so amazon will be back at normalized levels. people are looking at the operating marge twins and don't understand that those are way

below what it would be in 2002 when a.m. pla zon was bleeding red inc retail business for 7%. i think longer term, even u.s. domestic retail might be able to get 10% operating margin. >> bill iv, any other opportunities, new opportunities for i as that has been the eye of the storm >> i'd like to mention, his big one. that is truly a new monetary policy that you've just seen with the ftx debacle the they've all been flushed out at this point. when markets are looking forward, it's 2024 when they

will become harder to produce. people will start looking towards monetary stimulation which has been going on for hundreds of years. le that is hey conversation for. >> your confidence has not been at all shaken by stx, the fraud, monetary stimulus, all these bubba lisch shus type of things. >> you can explain it as it is the network has never been stronger and more secure than it is today hundreds of millions of people around the world so we're still

very re -- >> we have a small percentage but, you know, personally it's a lot bigger than a small percentage >> and bill 3, dover gate was one you watched in headlights fs stocks from last year, that's a stock that has seen 43% yesterday after they gave an update of much bigger withd withdrawals. people expecting layoffs are you still bullish on that stock? >> the reason the tank was -- i bought the stock personally the day before that so that's why everyone went down there

we bought it at the ape and in public we sold it and doubled it we kept buying it. the with silvergate. we're in silvergate together instead of mrpt it they're completely different the coin base is more of a direct pay bitcoin, they'll fraud in bitcoin. go back to the pandemic when the fed had to come in and there was a scramble for lit quit at this, the fed had to come in and clean the markets. bitcoin trades 24/7, 365

i think it's very important to understand bitcoin is dramatically very different. a bitcoin has been really, really terrible because it was 60, 70 thourges dnd well, look at it thr way. the market was around 100. since the market's%. it has been more volatile except in the past week or so i'm optimistic on all of that. the coinbase has $7 billion market cap it has $5 billion in cash. its bond yield 58% i think of brian around strong, excellent ceo. much better than silvergate and it was an fdc.

the stock is 11. silver gate was i think around 130 a year ago and now it's 11 they met all of their deposit. they were too concentrated in the crypto space somebody came out and said they were too -- i think that's accurate i'm guessing a bank that is trading are thoir associates book a year from now silvergate would be tied to a book which is 60, 70%. ftx was $32 billion company and the second week in november and coinbase is a $7 billion company today. a dominant u.s. company. >> you're back in it, bill

i have to ask you about ce cecily -- you've been short the last year? bearish accounts on -- >> not for the past year i shorted more today. >> you shorted more tesla today? >> yeah. the look, i think tesla's been a phenomenal country moore than top five of the automakers left behind it's a phenomenal company but it's not worth $380 billion. bob wilson was carried out when he first got a license in atlantic city and he disappeared for six months they sold him out of a lot of stuff. one of the points he made -- one

thing he learned from that is never short in valuation alone wait until it breaks and that's the time to use a colorful four-letter word that's the time to be short. i've shorted recently. >> it's on the idea you think the valuation is still high and the momentum is to the down side basically? >> i just don't think it's worth more than the top five automakers in the world combined all of whom are coming with massive electric vehicles. there hadn't been any electric vehicles what killed resorts international is they gave more licenses to the companies in atlantic city. it was i haddiotically expensive they have a lot of free much

karch flow the difference between tesla and other technology stocks, it's selling into a bad business. the auto industry is a bad business got too much capacity and they irn long returns on capital. tesla is fighting a bad time. >> bill iv you don't short in the fund, right? you don't have the tesla, that's a personal pick there. clearly it doesn't sound like you like the auto sector rate now. i was wondering if there was any sort of related bet? >> one thing, general motors, i like that a lot. >> yeah. >> you mentioned it was a tough cycle now. >> well, cyclicals in general i think are really attractively priced at this time. one sector i think is really

interesting here are the home builders which have collapsed. home affordability reality is i put a piece on our website saying are we in 2008 again when prices started rolling over again last year and the answer is no there's a very strong need for housing in the country today so home builder stocks are super interesting. these are traded at three times this year's earnings estimate. about half of what it was last year and it trades at three times that so i think there's a really compelling case for home builders and stock >> that is all based on the fact it is done sooner than later. >> there is an extent to which they can hike rights if there's a succession happening at the firm, bill iii

can you tell us how it's going what it's going to look like in terms of the mechanics split into two companies bill be my morning and then the opportunity strategy will migrate over to patient capital which is owned by samantha mcle more. it's an interesting and positive coincidence. when i took over the equity

business, that was in 1999 my late partner was 79 years old. i was 40 we had had a very bad year in 1990 i took over the beginning of 1991 and so everybody said, well, gee, what's going to happen here? this guy isn't proven. then i proceeded to beat the market for 15 consecutive years. we've had a bad year in the fund and both are in the market in the early going here i think both of those funds are going to do extremely well the next several years >> tell us more about that, bill iv. >> active management has completely lost its way. the customer experience is terrible

it's not really about the customer, it's about the manager. for mvp 2.0, it's going to be about the customer because we are the customer we have a couple of strategies that we've been incubating they're aggressive i can't say too much about them today. i will say they're aggressive and unlike what's out there today. we are super excited about what we can deliver i think for the customer moving forward. >> we certainly appreciate the time you've both given us today to talk through that and a number of the picks that are interested in the market right now. bill miller iv, bill miller iii, thank you from miller value. appreciate it. >> thank you. >> take a look at costco one of the winners in the s&p after stronger than expected december sales what that says about the strength of the consumer stock is up 7.5% we're up about 750 points. stay with us

the holiday travel debacle not over for southwest in an sec filing they say they expect a fourth quarter loss they're looking at costs of up

to $825 million thanks to revenue loss from canceled flights and reimbursement to customers. joining us is karen seidman becker from clear. karen, it's great to have you on the show welcome. >> thanks. great to be here. >> so i was really interested in talking to you for perspective on what you're seeing as far as demand right now you've got a clear window. we had seen leisure booming. is that still the case is there any sign of a slowdown? >> no. we think travel is in major growth mode. last year we were calling it travel palooza this year we're calling it super travel palooza traffic in the clear lane was up over 215%. morgan stanley is talking about corporate travel up. hybrid travel, which is a hybrid of business and leisure. people don't want to stay in their apartment for the four-day weekend. experience economy, revenge travel, it is alive and well travel is in major growth mode

we are extremely bullish in 2023 >> how many travelers are using clear? where's the opportunity there for you? >> we have over 15 million travelers on the platform and today over 6% of the traffic across the u.s. in airports are coming through clear lanes in the airports thatwe're in. between 10 and 30% of travelers are coming through clear lanes we're now in 38 airports and adding more. travel is in major growth mode but i'll also say as you talked about with the past few weeks with southwest, travel is hard and it's getting harder. travel is coming back. we've seen secretary buttigieg and others talking about a passenger bill of rights we think a common sense passenger bill of rights makes sense. people expect it and the american travelers kdeserve it.

>> what does it mean, a bill of rights do you think more pressure needs to be applied in this case to southwest and the airlines >> i think a common sense passenger bill of rights broadly speaking there's airlines, there's airports, there's federal and the tsa and i just think that people need to come together on behalf of american travelers to make it easier you know, people expect it now when they go out and get an uber these are what they're experiencing frictionless experiences they deserve that in their travel experience and so not quite sure what should be in it. i certainly know a common sense bill of rights to protect travelers. if you look out to 2030 and it's not that far away, you'll have another set of travelers if this is where we are today, where are we going to be out a few years. i do believe innovation, partnership, collaboration and passengers should be protected again, common sense. >> right what's your perspective on this whole nightmare situation for the southwest flyers that are

had canceled flielts is it something that could have been avoided clearly the other carriers didn't have a problem? >> i can't talk to southwest specifically if you look at 2022 whether it be weather, whether it be air traffic control, whether it be airlines, it's a very fragile industry and so it's hard. people love traveling and we've got to come together as an industry to protect american travelers and make it safer and easier it's just -- there are going to be more passengers every year coming through airports so what are we going to do to provide them frictionless experiences. we at clear are launching new products like reserve lanes. we announced precheck, greater value, greater availability. get people into the tsa pre-check powered by clear solution it's easier experiences through airport security we have to keep launching

products, innovation and collaboration as an industry american travelers deserve it. >> i wanted to ask you about that new partnership you just announced tsa pre-check. how that works and how many airports you're expanding that to it's something the analysts have been working through tsa precheck will be clear and enrolling travelers in the tsa precheck today we're 48 airports. we have hundreds of enrollment locations and people will be able to enroll without an appointment. we're there 4:30 in the morning. our awesome a.m. pass is a doors are still there at 10:00 at night. easy, accessible, lower price. tsa will still be doing the screening but we'll be able to enroll people. we think there's tens of millions, more than 50 million who could be in the tsa pre-check. the number is something like 12 million. we have a ways to go it does make it easier for travelers. we want to make it real easy for them to enroll and so we're

really excited to launch that, either on a stand alone basis or bundle it with our clear plus lanes. these are the kinds of products that people have outside of airports and outside of travel and we're excited to bring it to them here. >> speaking of outside of travel, i was looking at your interviews and the discussion outside of the ipo and the potential for growth outside of travel and airlines. using the biometric technology in other places like health care and car rentals. can you tell us how that is going, that expansion? and what it ultimately is going to mean for the top and bottom lines and when. >> we announced our partnership with avis. you can verify in 54 locations with avis that verify with clear. you can skip the counter and go straight to the car. we have taken that nationwide in the back half of december and we're really excited about that. it's any place identity to have a better customer experience in this case the platform is in the avis app and so we'll be

announcing some other things in health care so stay tuned. identity is foundational online and offline to make experiences safe and easier, how it will help clear it will add members. free cash flow which are the three things we drive at clear. >> karen, thank you for the update, on the business, booming travel industry. >> thanks. we've got more breaking news from washington on the house speaker vote ylan mui now what, ylan >> sara, the house has voted to adjourn until 10 p.m. as kevin mccarthy gets closer to holding the speaker's gavel. they wanted to give themselves another time because some members need to get back in town for leaving for personal and family reasons in addition, they wanted to spend some time working on the six remaining holdouts to see if they could potentially sway them to vote for kevin mccarthy already today mccarthy has

flipped 15 republicans into his camp we'll see if he can seal the deal perhaps sometime tonight. we'll have to wait until 10 p.m. to find out if he can close the deal sara. >> got it, ylan. we are going straight here into the "closing bell" market with a big rally on our hands. up 757 on the dow. mike santoli is here to break down the crucial moments of the trading day. costco is an especially big winner today let's kick it off broad. the dow is up 760. the s&p is up 96 the tech stocks are up 2 3/4%. apple, amazon, microsoft in particular, mike if we got a flavor today of what to expect for the rest of the year, and that is slowing inflation and we saw that in the wage numbers flowing economy, we saw that in the services number. are they beaten down >> i don't know if that's the

leap i would make in that scenario because they have been punished so far. today was a real catch up. i'm looking at software stocks under performing today it is a handful of names semis were really spring loaded. they're popping. i would basically say today was a little bit of relief, added evidence for the softish landing camp that's out there. one of the dream bullish scenarios has been the so-called immaculate disinflation where you can have inflation decline to acceptable levels without a cost of lost jobs or negative gdp. obviously cannot declare that's the case today was pointing vaguely in that direction. >> i've got to say, another score for the bond market. the yields lower and the stock market not getting on board. bond market if we're pessimistic on the data. what we saw from the services number showed we're right. we're now at, what, ten-week

lows it feels like the bond market was out front here >> there's no doubt bond market was there. the bond market is telling you inflation is going to become more manageable and probably is going to come down hard over the next couple of years it didn't tell you whether it's going to happen the easy way or the hard way that's the part that we need the data stocks have to sort of wait for that to know exactly how to repress. >> what stands out in terms of the biggest winners beyond tech? everything is rallying today >> yes. >> you do have some notable performance reits. it's a lot of the names that have gotten beaten up on higher rates? >> yes that's basically what it is. staples was really strong and that's because costco was strong in general consumer-related have done relatively well you have industrials already been outperforming for a while you know, i don't know that it's all about these specific macro message of the jobs number and

the ism services number as much as people were leaning negative. there's a definite hesitancy coming into this year to add risk and today i think you basically had an excuse to do so over the course of the day, the way this market operates, you get all of these one-day option bets that people start to stampede into and therefore we run right to the next round number which is 3900. >> we're up for the week, s&p 500 up 2.5% today and for the week as a whole up 1.6%. let's talk tesla shares are getting a little bit of a boost still down 70% for the highs we spoke to bill miller earlier this hour. he told me he shorted more tesla today. here's why >> $380 billion market cap against the general motors at 50 more than probably the top five automakers tesla is lose being market share. byd over in china and it's a phenomenal company but it's not

worth $380 billion in my opinion. >> and then went on to explain, mike, you don't necessarily short because of valuation but it's already broken and the momentum is lower. thought that was interesting he doubled down -- they doubled down, both millers, on bitcoin and silvergate, the embattled bitcoin bank overall, what do you think of his calls? >> the tesla call, certainly valid as a premise in terms of saying that there should be some convergence in valuations between tesla and legacy owner makers when tesla was a trillion dollars it was a little bit more skewed i would argue tesla's kind of coming back in the zone of maybe even being able to grow into this valuation. that aside, i found it interesting that they were still very loyal to coinbase and silvergate and not just bitcoin because bitcoin as a premise is, you know, if you believe in it, it's more of a -- an alternative

asset, future kind of monetary technology, digital, whatever you want to call it. that didn't mean the business models like coinbase and that are in the orbit of crypto were in values before they crashed recently both have very much crashed down towards rock bottom levels, especially when it comes to silvergate. >> you know why it fell 40% yesterday? because i bought it the day before bill miller, i don't know, with a little bit of humility he has been buying let's talk about costco because we mentioned the staples are getting a boost. costco rallying. sales in december coming in up 7% to nearly $24 billion melissa repko joins us usually costco doesn't move a whole lot on these numbers so this must have been a lot better than i expected. >> sara, a lot of different pieces that jumped out in a lot of ways costco is

showing not just the strength during the holiday season, but the unique strength of the businesses it has a lot of services that drive traffic. traffic was up during december some of the things people were buying were tires. some of the things people consider largely a necessity, also coming to the osco store and it all bodes well for them being drawn in it has a unique business models. and at a time like this, people may see that number as sort of a downpayment that continues to drive them there even as they start to make tradeoffs about purchases. >> does it say anything about the competitors, target, walmart? what do you glean for -- from this to the others >> well, one of the things is that if discretionary purchases did well compared to what november numbers were so that may indicate we have a later holiday season walmart and target may have seen that as well they saw a lull in october and november potentially they saw a bounce in december we'll see how it goes for them

but it could bode well for target and walmart where it's one-stop shops and may see value in going to those stores as well we'll see if they've got a bit of a bounce back in december like costco did. >> melissa, where are the analysts going into the new year on retail broadly? last year was really the lower income that got hit and we saw that reflected in some of the stock performance. what is the idea this year about a slowdown in the consumer and where that's going >> really a lot of the names that analysts are calling outgoing into the new year is a lot of the value players walmart is one of them but also off price has become a standout because people are looking for that treasure hunt experience, still going to names like burlington, ross and so that's become a hot area. the so we'll see if those continue to hold up. luxury seems to be, again, more resilient. of course noting costco does have a higher income customer

than typically bj's or samsung does it may help it in the new year in general, value does still seem to be the name of the game going into 2023. >> the only two down are ulta and bath and body works. if you look at some of these consumer discretion nair ri stocks, mike, into the year, i mean, first of all, they've been strong and they've outperformed the market in a time where we're worried about a consumer slowdown and possible recession. >> for sure. let's keep in mind, you know, the bond market and the stock market are celebrating a deceleration in wage growth last month to a 4.6 annual percentage growth it's remained strong on top of a pretty good consumer cushion that was built up through the pandemic and the stimulus. the steady state of spending is there and also consumer discretionary.

they are not doing a whole lot they're up more than 5% for the week the 30-year mortgage rate is down 6.2 obviously well below the recent highs. a lot of things are working towards forestalling that moment when you get consumer fatigue setting in you don't want to celebrate prematurely. obviously there's a decelerating job market even if it's still relatively strong and you can't necessarily know what the numbers are going to bring because the leading indicators are what they are and they've been pointing lower. for now there's enough to go around in terms of income and revenue. >> i think the big risk here is the fed is clearly not as excited about the market of these lower inflation numbers and these soft landing numbers in part, they can't be, right? they don't want to see an easing of financial conditions. if they keep talking tough and they keep holding on to their resolve around inflation not coming down fast enough when inflation is a lagging indicator, then do we have to start talking about a harder landing? >> no.

i think that's totally legitimate if most of the committee at the fed believes that there is a particular number in terms of unemployment that they really feel is going to be necessary to decisively take care of inflation. now they're not going to say that they have their estimates of where it goes, but nothing is going to override the inflation numbers actually coming down into their target range. if that happens, then they're not going to say, you know what, but we still have to eliminate a bunch of jobs because we want to finish what we do. i think there is a risk the market can get overexcited you're going to want to have them not see financial conditions ease too much i don't think we're there too much 3900 and the s&p yields, corporate spreads have been fine but they haven't been back to the narrowest levels that's a risk out there. we have four weeks until the next fed meeting they can definitely take the opportunity to try to put the market back on its heels i'm not sure to me that there's this really fierce standoff between the markets and the fed

that we like to say that there is. >> the other thing to point out, i know you and i talked about this, just how strong january has been for primary market activity bond issuance especially in investment grade banks much stronger and a big reversal from december. what does that tell us >> right the first few days of the year the issuers were active. you saw flows come back into investment grade bond funds. that's something that's been in the negative column the last year so basically people are willing to lock in yields. companies are feeling like they can do fine if they do pay what the market will bear right now in terms of rates. so it's net bullish for risk assets in general when you do have that money flowing into investments. >> got it. we've got less than two minutes to go. we're just showing yields now down to 3.56 on the ten-year moving lower as bonds rally. the dollar sells off and stocks take off we're off the highs, 680 points

or so on the dow what do you see in the internal? >> they've been strong it's been a broad rally. it doesn't look like we're going to get to one of those true kind of mega up side breath numbers where you have 90% of the volume to the up side quite strong weekly basis at the s&p value versus growth. it's been the same story as last year where value has radically outperformed by almost 3 percentage points. last year it was more than 20 percentage points spread in performance catchup from growth. then the volatility backing off as you would expect with the big market rally with the jobs number in the past still in the low 20s, above 21 got the cpi number coming in four trading days on thursday. >> let's not forget that cpi number, mike thank you. as we head into the close, take a look at the dow jones industrial average, up more than 4.2% a celebration of slower wage growth, which is what the fed wants to see, weaker services.

the first contraction they've seen since covid sounds like bad news from the economy and good news for the economy. the fed won't have to raise interest rates as high as they potentially might. s&p up 2 1/4% into the close broad rally every sector is in it nasdaq is closing as well 2.55%. apple, amazon, costco and microsoft are your biggest winners. have a good weekend. that's it for me into "overtime." sara, thank you very much. i'm scott wapner getting started from post 9 at the u.s. stock exchange. richard fisher on whether the wages is a game changer. we'll begin with the talk of the tape surging stocks some say a soft landing just became more likely is that right? let's ask the chief market investment