have owned trucks over the years and vans they tend to hold up well in terms of value compared to others. >> when you look back at the fall of 2021, there was such a dearth of inventory of new cars. everyone was pushed into used cars and pushed the prices up. thank you very much for watching "power lunch." >> i will order doordash and "closing bell" starts right now. stocks building on tuesday's gains with the nasdaq once again leading the charge here as wall street awaits tomorrow's inflation data this is the make or break hour for your money welcome to "closing bell." i'm sara eisen take a look at where we stand broadly in the market. nasdaq up 1.3%, dow up 200 points or so, the highs of the day, the s&p 500 up a full percentage point we're seeing more sizable gains than we did this time yesterday. every sector is higher right now except for consumer staples that's the only one under performing real estate up 3.3%.

some of the reits climbing back. consumer discretionary also strong amazon is a big part of that reason the small caps check out the names driving the strength in the nasdaq 100 today. you can see the comeback in tech here play out. lucid, airbnb, amazon, and illumina coming up, two key guests to give you an inside edge on inflation ahead of tomorrow's official government cpi report dennis mcgill from zelman and associates for his read on the rent component, housing, driving prices up lately and the ceo of kroger joins us to talk about the trends he is seeing in food prices, the nation's largest grosser. market commentator mike santoli, what is on your radar as we see another strong day >> strong day. the market continues to act as if people came into the year pretty defensive, not enough risk exposure. you have things like a strong,

you know, read on fourth quarter gdp. it seems like you have a sense building that perhaps inflation might have downside momentum and therefore things we were scared about coming into the year not as scary the riskier sectors are kind of leading the way. where it brings us to is right to the almost to that down trend line from the peak of the market in january of last year. what are we looking up at? it's around the 4,000 mark 200 day average of the s&p is 1% hire u from here the early december highs 4100. we're in the zone where it seems like you have a cluster of significance in terms of the levels buyers and sellers equally indecisive about the direction and the magnitude of the next move. probably a more balanced footing going into cpi it's getting stretched in the short term the five-day rate of change starting to get hopping, not as extreme as in august consumer discretionary, equal

weighted basis with industrials. over the past six months leading the s&p 500. it's really hard to get too worried about an imminent breakdown in the economy when these sectors are performing like this. in the first half of last year, under performed by 10 tore 12 percentage points. yields are helping it's an interesting i said split sentiment between that and what bond market is trying to, perhaps, tell us in terms of the deeply inverted yield curve between short and long-term rates. >> what i brought up to the world bank president yesterday, would caterpillar be trading at an all-time high if we were worried about an imminent recession. >> not global recession. you have the other factor of china back in the game copper is running. i agree and i think it's worth noting, if you look at past cycles, the deepest inversion of the treasury yield curve happened ahead of the onset. it starts to reverse higher

before you get to the point where you're talking about a recession being on the doorstep. >> the other interesting factor is gold making new highs, multimonth highs here. >> it is. >> and the dollar has been weakening. >> dollar has been soft. you know, arguably, the fed's done a real yield is going to top out here i think that's part of what's going on it's a metal the other metals are going too. >> highest since may 6th thank you. markets bracing for the december cpi number out tomorrow morning. one factor in focus is the shelter index, the largest contributor to inflation for november rising 7% from a year ago. the question is, could we finally be seeing a peak in december let's bring in dennis mcgill, director of research at zelman and associates you guys do your own rent trackers that come out before cpi that everyone pays attention to, especially the macro funds what are you showing >> yeah, thanks, sara. we do have surveys both for the multifamily and single family

rental sectors we're doing every month and importantly, they include both new move in rents and renewals and the different data out there is unfortunately limited to new move-in our data is showing like others that there is deceleration for tomorrow we think the seasonally adjusted sequential change in overall housing cpi, rent and oer, 54 basis points. that was 70 basis points for the november reading, so you are starting to see that ease a bit. we do, however, expect over the next couple minutes it's going to stay elevated in the 40, 50 basis points range our view is that deceleration is almost for sure. the question is how quickly that deceleration unfolds. >> so just to be clear, you think we have already seen the peak in those rent prices? shelter prices >> absolutely. and i think that the peak was ultimately in the true market was about three or four months ago. what we find is that the actual

fundamental data leads the fed's data by three to four months, our data that captures both renewals and moves in. operators started to take the gas off around the july-august timeframe and that's starting to firlts into the government's data in november and december. >> how fast do you guys see it coming down from here? >> so we do expect, like i said, it's going to ease over the next couple months. think about that on a seasonally adjusted basis you're going to be over 5% by our math in the first quarter. part has to do with the lag of the government's data. the other factor, wages are important undertones to what happens with rent prices and our view or work historically has shown you tend to have a bit of a lag from when wage growth rolls over before rent growth and you're seeing strong wage growth out there we expect deceleration by the end of '23 we're looking at 4.5% increase

for the fourth quarter it's not until 24 we thing think you get back. >> what about the supply issues that kept housing prices vaccinated here. it hasn't all been about the fed, has it? >> well, clearly mortgage rates were the biggest driver by far of the excessive price appreciation we saw. we don't subscribe to the same type of pent up demand and housing shortage others do it was a mortgage rate driven factor and that affordability hangover is real today and significant so home prices by our math are going to be down double digits over the next six quarters sore and we've seen about a 5% type decline in the second half of this year and supply across single and multifamily rental and for sale is going to be significant as you move forward through this year and 24 as well. we're not arguing there's going

to be undermining of the growth that we've seen on the rental side supply will be a big part of that one thing to keep in mind occupancy rates on the rental side have been under pressure in 2022 throughout, and that's on a seasonally adjusted basis and with all the pressure that there was on for sale affordability. other factors going on, underlying from the pandemic related to people getting back to one residence instead of two, remote place and permanent place, and we think that's been undermining the demand measures as well. >> home builders are having another good day up 2.2% thank you very much for giving us an early read on what you expect to see in the rental cpi numbers tomorrow dennis from zelman associates. it's been a rough day for american travelers after the faa issued a ground stop this morning, pausing all domestic flights following that system outage check out the front page of the drudge report this afternoon calling it the biggest grounding since 9/11 flights resumed just before 9:00 a.m., but thousands of trips have been delayed or canceled,

complete mess. phil lebeau joins us with the latest i don't know, phil, does it snap back or is it going to be chaos for a while? >> i don't think it's chaos. i think it's already calming down, sara. it was not funp and i was at o'hare this morning and it was not fun for the people scheduled to fly out, not just at o'hare but around the country those flights didn't take place. slowly the system is getting back to what you would consider normal there's still delays and a lot of cancellations today here was the outage that happened this morning. it happened shortly after 5:00 a.m. eastern time, went to:8:50 due to statement outage, a part of the system that sends critical information to flight crews, airlines, everybody who is involved on the regular process of flying every day. they get these alerts. they couldn't get those and the airlines decided and the faa decided it's not smart to be flying as a result, what you're looking

at, airlines canceling more than 1200 flights in the u.s. today for a point of comparison, a little over 150 yesterday. delays, now totaling more than 8300 we're seeing less and less of the delays as we move further into the day, but we're still seeing them right now. transportation secretary buttigieg wants a better understanding exactly what happened and a lot of people in the airline industry, if you look at the stocks, mixed today, united having a nice move higher peernlgs in the airline industry are saying the same thing, which is, it's a robust system they invoesed in over the last several years but it could be more robust and that's the focus of any investigation could this be a system that is far more robust and one that would not have to deal with this type of an outage. by the way, it's not hacker related. no indication that this was a cyber attack that caused this. >> after southwest and this, it feels like there needs to be a

lot of examination into the systems and technologies and potential upgrades here. >> true. but totally different, sara. keep in mind, this is the national air space and the faa's equipment having a system outage with regard to southwest, that's strictly with one airline, with its investment in its technology so that's -- >> yes. >> i understand the frustration travelers are seeing, but they are completely different in that regard. >> sure. but same industry, same similar issues that affect people. >> sure. >> but important to point out nonetheless. thank you, phil. keep us posted after the break, kroger's ceo rodney mcmillon joins us with his read on food inflation ahead of tomorrow's cpi print and the latest on the albertson's deal and much more the dow up 211 points. highs of the day the nasdaq once again in the lead as tech bounced back. you're watching "closing bell" on cnbc.

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a new new york fed survey released this week showed consumers expect food inflation to rise 7.6% over the next year, which is only down slightly from the previous month's expectations joining us exclusively ahead of tomorrow's cpi report is kroger ceo rodney mcmullen. great to have you. welcome back. >> thank you, sara hi. >> hi. well, we're wondering about food inflation because it's been one of the biggest problems and one of the most stubbornly high parts of the overall inflation story. what do you think is happening

right now? is it decelerating >> i would agree with your comment about being stubborn our expectation is early in the year the inflation will continue to be higher than what it had been, you know, a couple years ago, but as you get later in the year, we do expect some moderation there but it's still going to be a while before it really is -- takes some pressure off the customer and we're doing everything we can to make sure that we minimize that impact. >> but just to be clear, rodney, about what's happening now, are prices accelerating? are they staying high? are they accelerating less >> they're staying about the same there are some cpgs that continue to pass cost increases through. people that were a little slow early on the inflation on passing it through but if you look in terms of year on year, the -- it's a little bit lower on a rolling, you

know, 12-month basis, but it's still very high. >> so how do we get it down? it's not like the fed can control supply chains for food, which has always been one of the issues here. how does that come down later in the year and into next >> yeah. it's a great question, sara, and, obviously, from a farm standpoint on a supply basis, it's hopefully, you know, this will be a great growing season and hopefully as you look across the world it will be a good growing season when you look at corn prices, wheat prices, all the raw ingredients. it's really a supply and demand and if you look at the grain prices the hope is that you'll see some moderation there. from a labor cost standpoint you still continue to see some inflation there as well. >> and then there are other acute issues likeswhat's happening with egg prices. in california last week, $7.37

for a dozen eggs where it should be 2 to $3 because of avian flu and the other issues when does that come down >> yeah. and if you look, historically, it really takes a growing season on chickens and chickens have the fastest replenishment of any of the livestock items hopefully there's not another avian flu outbreak and assuming there's not, you would expect over in the next several months the new chickens will be hatched and producing. we would expect some moderation there, but that's really -- it will be driven in terms of having more hens laying eggs and, you know, it's not the first time that we've had this happen in the u.s. obviously, much bigger this time than previous issues. >> all right well i guess good, they replenish faster rodney, what are you seeing from the consumer how much resistance, if at all, to these high prices

>> yeah. ours customers are telling us they're doing a lot of changes in terms of how they manage their money. we see customers continuing to engage in our promotions more than before, downloading electronic coupons, things like that, continuing to move to our brand products versus some of the national brands. everything they can do to stretch their budget but they're still continuing to, you know, engage in spending money, but making sure they're stretching it anywhere they can and balancing their budget in every way they can also, what we see, and as you know, it's a lot cheaper to eat at home than going out to restaurants and we continue to see people eat at home and using some of the skills they used during covid to stretch the budget. >> it's been somewhat of a surprise a lot of people that followed your stock expected there to be give back on the eating from

home lifestyle, but doesn't seem like you've seen that that much, have you >> not at all. when we talk to our customers they tell us a couple things one is they've learned how to cook, but two, they really enjoy eating as a family and eating with family and friends. and those are longer term trends that we would expect to happen, you know, to stay in place one of the things that we view that we're responsible for is how do you keep it inspiring, how do you create and share new ideas for somebody to try something new at home, and we feel as long as we continue to do a good job there, people will continue eating at home. you know, it doesn't -- it does help stretch a budget. it also helps the family stay as a family. >> so rodney, you're in the middle of the huge lift in terms of acquiring, trying to acquire albertsons where are you right now in those -- in that process and the talks with the regulators?

how is it going? >> in terms of the overall merger, first of all, a huge congratulations to the albertsons team yesterday in their earnings release and continuing to do a great job on connecting with their customers and associates and communities we're still an active dialog and it's similar than where we were several months ago and we expect this will take several months to play out the timing and things are tracking as we would expect. >> what about the unions they still have their opposition they still have concerns what are you telling them about what would happen to the stores that have to be divested, whether they will be competitive against some of the bigger players and what will happen to their jobs >> yeah. when you look overall, you know, this -- the merger will make sure there's more job security for everyone and one of the things that we're an active sharing with the various unions is helping them understand how a company that is

able to continue to better compete against a walmart, costco, many of those other non-union players, will be better long term and create more job security for everyone. if you look at the stores that end up being divested, those stores will be divested to somebody that is really a good operator, good, viable, strong competitor, and will also provide good, solid, union jobs. when we look overall, the majority of the unions, obviously, we still have ongoing active conversations we're sharing all the information as we have it, and we just know over time, our associates will have better job security and we find so many people come for a job and make it -- discover a career because there's so many advancement opportunities and this will create even more. >> keep us posted, rodney, on

those discussions. obviously, a huge one. >> will do. >> kroger ceo rodney mcmullen, thank you very much for the time let's check on the markets right now. up 252, building on the gains we've had for the dow. the s&p up over a percent and the nasdaq 1.5%. as far as what's driving us, it's a broad rally and every sector is higher, consumer staples joining the party. consumer real estate in the lead materials, information technology, that is what is powering this market higher as far as the nasdaq, illumina is a big winner ulta shares hitting an all-time high after rallying nearly 12% since late december. up next a top analyst on whether the stock can keep a strong unti f yr rtlifodaonoroupofoo. be right back on "closing bell." so cdw helped us deploy mac, supercharged by apple silicon. ♪♪ built-in security protects me from malware

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check out today's mover ulta beauty, the stock has been climbing higher for a while now. now trading at all-time highs going back to the ipo in 2007. joining us to talk about what is driving the move is michael baker from d.a. davidson what is the story here ulta making new highs on days that market is rallying but also on days i've seen it lately where the market is selling off and worried about recession? >> it's been a great performer it's been a top idea of ours checking all the boxes that we look for butte beauty is a great category benefitting for people going out more than they were during the pandemic and using cosmetics as they do that they really don't have any inventory issues which has been a big issue for others but not a factor in the beauty space they are best in class which means they're taking market share and they have the right mix of new products, new

innovation they have [ inaudible ] which helps them regardless of the economic environment and from a financial standpoint, they keep beating system and raising guidance and beating that. despite being a really strong outperformer last year and year to date so far this year over the first couple weeks it's not that as expensive as a stock. >> that's what i was going to ask you after the rally of 30% in the last 12 months, how many companies can boast about that what has that done to the valuation? if you missed it, is it too out. >> it's going down because the strimtsz gone up, even a little more than that ulta is never a cheap stock, but relative to writ typically trades it's not out of balance, it's below average about an average multiple for the broad line and hard line i cover around 20, 21 times next 12 months consensus. despite the performance, which has been spec tack clark up 22%

last year in a terrible market and outperforming again this year with the valuation still makes sense to us here. >> how vulnerable is it to a sharpe consumer slowdown if that is what we see as a result of these rate hike changes in the market how discretionary versus staple? >> we wouldn't want to say anything is recession immune, but we think they are a little bit more resistant than others it is a relatively low price purchase for cosmetics people still are going out, going to work, going back out to restaurants, doing all those kinds of social things which typically require some cosmetics. as i said earlier, their mix helps them where they have prestige categories but also have a lot of [ inaudible ] and that's the beauty, if you will, of ulta that diversity and mix perhaps we'll see a trade out. we haven't seen much yet

that is something that we think will help keep them strong in a little bit of a bigger economic environment. >> you clearly still love it a top idea for you for 2023. michael, thanks for joining me for the special stealth mover segment here on ulta michael baker. up next, jpmorgan asset management on whether he thinks this market rally is for real or just a bear market bounce. be right back.

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stocks are building on the strong start to 2023 but our guest says he is underweight u.s. equity for the coming year. joining us phil camporeale, jpmorgan asset management portfolio manager. good to see you. >> good to see you. >> why are you not convinced >> so we're still underweight right now because the fed last year did their quickest monetary tightening they've done. they moved by 450 before but never that quickly there remains uncertainty about what that lag defective policy does however the 60-40 portfolio that was so painful last year, last year was the first year since 1974 that 60-40 portfolio was down by the both stocks and bonds down it's so hard to manage risk in that environment. >> that you think changes.

>> so the bonds work i think one of the things that was underestimated last year was the fact that there was no to hide unless you said i'm going into cash, nobody thinks about that now, what this sets us up for now is, we have the best forward looking return on the 60-40 of 7.2% we have had over the next decade since 2010. right. the cost benefit analysis for the fed here, all right, what's the benefit of them continuing to move so aggressively if the cost of those hikes puts undue and uncertainty on the economy in a world where inflation is moving in the right direction? we have evidence, lot of evidence, ism prices paid, services prices paid and a wage report from last friday that tells us - >> you think the fed is close to wrapping it up >> we think they're close to wrapping it up, and i'm going to convince you they're not going to move by 450 basis points this year, right. >> do you think they're going to cut? >> cutting, we would need a real sharp pullback in the economy for that. >> you're not bullish on the fed

pausing because you think recession is not priced in. >> fixed income is a nice place to go. the dollar is important. the dollar weakens which introduces a bunch of asset classes outside of the u.s. and we're long some calls on the s&p. we're underweight but long calls on the s&p that can get us back into the s&p if that underweight is - >> it did feel toward the end of last year that everyone and big funds and strategists were bearish this year. they're worried about the world falling apart because of the fed tightening and we haven't seen the recession yet and the fed still bent on tightening, and it became contentious. >> it's a race between growth and inflation. if we're getting evidence now that inflation is heading into the right direction -- it's not going to be 2 any time soon, but heading in the right direction and tomorrow we get a cpi number that's likely going to seal the deal between 25 and 50 - >> rodney mcmullen didn't make me feel like food inflation is coming down. >> there's three pieces, it's

goods inflation, coming down, everybody can afford a car again, shelter inflation, you talked about that, shelter inflation -- >> not coming down fast either. >> i think the more anecdotal pieces of rents look like they're coming down and wage inflation is so important, it's services x shelter going to hotels and things like that, restaurants and all that stuff, that's the part that we need to head in the rightdirection to be really bearish here, sara, you have to have the view the fed has taken a policy rate to 6% that is not priced in, a microcosm of where we're last year and puts pressure on the market that would keep us up at into it. >> sounds like you're feeling better about the situation. >> put it this way, at one point last year in the heat of the summer, we were 40% equity now we're 58% equity yes, technically still underweight but closer to home the other mears, is if you believe that economy is going to stay between plus or minus 1%,

ooigsz i guess that's a soft landing where stocks can do okay importantly, investment grade credit and carry and yield and all that stuff makes snens a portfolio. >> lot of people are talking about that too i just -- it's becoming -- >> they're back. >> how many people tell me bonds are back and to get into high yield or investment. >> i didn't say high yield i said investment grade credit and parts of the treasury market a 4% treasury note looks like an attractive place to be in a world where the fed is stopping at 5%. >> thank you very much for joining me with your world view. >> yeah. >> on 60-40. phil camporeale, jpmorgan asset managent. >> where we stand in the markets we're rallying off the highs of 177 on the dow s&p up less than 1%. we've taken a tiny step back from where we were a few moments ago up 1.3% and still have big winners like amazon rallying 5%.

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welcome back rally day on wall street, stocks and bonds and here are the top tickers at cnbc.com. the 10-year note yield in the top spot, yield down to 3.54% on the 10-year.

tesla up 3% today. bed, bath & beyond, on the brink of bankruptcy, rallying 60% to $3.25. amazon is having a very strong day, that, of course, is a huge company, so it has a big weight on the nasdaq and the s&p. and apple, coming back 1.5%. a little less than the overall market it's a broad rally consumer staps staples are down. the meme stocks are up today what is driving the gains for names like amc, i showed you bed, bath & beyond, gamestop amc up 17% and apple andral tve stocks rallying when we take you inside the market zone and, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping find new ways to unlock energy around the world.

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we are now in the closing bell market zone commentator mike santoli here to break down the moments of the trading day and steve covac on apple and seema moody tracking the travel stocks. we're up 200, holding steady gains, bonds up, dollar is strong, gold is strong today one of those days where there are buyers in the market, making it a tougher setup for a big all-important cpi report tomorrow. >> more balanced setup people remember that, you know, we've had both kinds of reactions to big cpi numbers i think right now you can look at some of those leading signals where people are going, people gaining confidence the burden of proof is shifting to people who

think inflation will be sticky at high levels as i mentioned very short term the s&p is getting hot and stretched to the upside but nothing too crucial. it's not as over bought as it was last august. i think people feel like they can't be too negative if the fed is almost done the earnings look pretty beatable given what fourth quarter gdp was shaping up as and people came in light on risk into 2023. >> right a lot of positioning here felt bearish going in it's been a bit of a surprise. amazon up 5.7% look at the meme stocks. here we go again number of retail favorites getting a bid, gamestop, amc, bed, bath & beyond rallying. we need to keep it in perspective and the perspective is the air has come out of these stocks big time, but it is interesting to see when it reignites. >> it's definitely a faint echo of what we saw toward the height if you look at any kind of a two-year chart of these types of

stocks you're going to see this is barely visible as a bounce, but it's part of the same process people feeling as if risk assets got washed out at the end of last year yesterday the heavily shorted stocks in the market were some of the biggest leaders to the upside you have the rolling squeeze going on at the same time maybe people being enticed back into the game three months removed from the last low in the s&p 500. rates are down maybe people feel like their risk budgets are big enough going into a year they can grab at these things. i would say, you can expect it to be fairly fleeting in terms of this rally in the absolute pure meme stocks i would imagine. it's not something like the big picture story has changed and i also wonder, and, you know, we've had this discussion, about whether the fed is going to look at these indication of animal spirits rising and not love the picture. >> right it means people are still willing to get into the

speculative behavior, chasing an almost bankrupt company like bed, bath & beyond. >> it's sort of the funny games that happens at the margins of the markets. really builds into something, then you might be more concerned. >> some big short squeezes going on there bed, bath & beyond up 67%. apple, it is out performing the dow despite barclays cutting its price target to $133 from $144 citing app store growth concerns as apple rolls out an update to its maps service and reports the company that will start making it owns screens for iphones which look a blow to samsung and other third-party suppliers. all these threads watching the stock which underperformed so much toward the end of last year what we learned yesterday from apple in addition to what barclays put out, the app store, a huge chunk up to quarter of the services business, was

likely flat year over year from data that apple gives out how much they pay developers and you can do some back of the envelope math and figure out how much they made off the app store and backs up what we've been hearing from tim cook. he told me last quarter the fall in gaming spend is hurting the services business and backs up what barclays is saying. what we need to be on the watch for, sara, is if that demand slips on the hardware side too is iphone demand going to slip or still as strong as apple said it was back in november when they warned about the production cuts or looming recession, are they going to be in trouble there. then the question is talking about the maps news today, what other levers can they pull in the services business if the app store is weak. we've been talking about advertising across apple's ecosystem for the last several months and they announced a new feature for apple maps that would let businesses create their own pages like on google maps and that is seen as a foundation to adding paid

promotion and advertising within the apple maps. >> so some worried about services slowdown, sounds like not as much demand concerns but more on the production concerns, what's happening with the numbers and outcomes part of the barclays call they cut the forecast. >> we've been seeing cuts down, most people had it in the $200 range i would say and analysts have been slowly trimming away at that. i've been seeing theories 125 is going to be the ultimate bottom. maybe that's true or not they were close there last week during the fall they had it's all over the place. this is going to be in a couple weeks, february 2nd their earnings report and this is going to be just a huge report for them to get an idea of not just how bad last quarter was, but what they're seeing in the coming quarter and also note, tsmc fabricates the chips for apple's iphones reporting earnings in the middle of the night our time and their guidance is important as a read into apple as well.

>> something to watch. thank you. mike, is apple your bellwether, amazon at the top of the market? microsoft? what are you watching now to get a good read on sentiment and where we are in the growth trade? >> i mean, my sense on apple has always been it's not the greatest bellwether macro sentiment or conditions. it's somewhat of a bellwether of retail investor excitement and comes down to what multiple you want to put on steady earnings it's fiscal 2022 this year and next year, $6 a share plus or minus. you want to pay low 20s multiple for the safety and security and good performance of the quality of the balance sheet that's where it comes down to other stocks i'm more focused on things like the industrial stocks, the steel stocks, some of the consumer cyclicals acting better giving me more of a read on whether you have soft landing moving somewhere closer to a consensus call as opposed to a fringe one.

>> although i got in trouble for mentioning caterpillar matt melay says be careful with that one because it made a new high in the middle of the great financial crisis june 2008. >> that is true. >> not necessarily a bullish development. >> that was on the china boom and everything else. exactly. >> right but you can look at groups like industrials, like consumer discretionary you said rallying not necessarily things you buy into a recession the airline stocks included. they're climbing today despite the faa grounding flights across the u.s. for several hours this morning following the critical computer system outage transportation secretary pete buttigieg says there's no evidence a cyber attack is to blame, but the department is not ruling it out. expedia, one of the winner in the s&p 500, oppenheimer upgrades the travel company to outperform from perform on expectations of improving revenue and margin growth. seema moody joins us for more. tracking the travel trade which has bounced back to start the year i think also confounding a lot of expectations.

>> that's right. we initially saw airline stocks fall today after the faa outage grounded u.s. flights but names like united arlsz staging a comeback, up over 4% separately we did see barclays raising its price target on the stock. more optimism about the return of international travel. then draw your attention to expedia. now up about 13% in the first two weeks of the year. oppenheimer pointing to margins improving as more people travel and they're bullish on expedia's cfo who came over from williams-sonoma. on the china reopening, expedia, air searches for travel from china to the united states, increased by roughly 40% compared to the week prior to the announcement that quarantine was ending that's been a positive catalyst for the broader industry will we get the recovery that so many are anticipating? >> yeah. absolutely thank you very much. chinese stocks doing well today also some of the internet names thank you. housing stocks are on the move after a bank of america

call the firm naming nvr its top pick, upgrading toll brothers and pulte group to buy from neutral and lennar from under perform. analysts saying valluations look promising if mortgage rates have picked we are watching kb home. street consensus for total sales to climb nearly 20% in its fourth quarter i think the question we've been asking for a while, is it too early to get into the home builder on the idea that rate have peaked? >> yes i mean, by the way f it's too early now, then i guess just a perfect moment several months owing when 20, 30% lower you can basically argue that rates and mortgage rates have peaked, but how low do they have to go to find a really good equilibrium for supply and demand to kick in again in favor of the home builders

i would say folks feel like mortgage rates maybe have to get below 6% by some margin, affordability doesn't stack up that well, but there will be -- there's enough pent up demand in stuff that's under way there's enough cost advantage now versus a year ago for the builders that maybe they can make it work they look cheap on current earnings there's a fairly decent basis for believing they can work. it's going to be rate sensitive and affordability seems to stand in the way of another push higher in demand for homes. >> session highs minutes into the bell s&p 1.25%. the reits are flying this is an industry beaten up on concerns about higher rates and it's across the board. residential rooetsz, office, retail rooetsz at the top of the market today. >> the combination of yield sensitive and cyclical exposure. credit sensitive, credit markets have held up pretty well in the first part of the year so far. it does make sense that again,

laggards of 2022, getting a fresh look, and the yield sensitivity is working in their favor. really, most things that are a little bit cyclical, a little bit, you know, more aggressive, riskier, finally have a refresh bid this year. >> also note commodities had a good day too everything getting bought today. oil prices, copper prices had a strong day two minutes to go in the trading session at the highs of the day. what do you see in the internals? >> strong again. this is definitely one of those rallies that has broad participation. been the case for a while. 2 1/2 to 1 take a look at the new 52-week highs versus lows on the nasdaq. this is starting to turn of course, we're more than a year beyond the peak in the nasdaq index you're starting to have higher prices roll off of these calculations, but last few days, highs started to eclipse lows. that's part of the process of building confidence that maybe a

meaningful low could perhaps be formed and then, of course, the volatility index even with the indexes up, is a little bit perky today. that's because of the event risk of the cpi tomorrow. we know there's going to be a two-way risk after that number comes out. low 20s is a little bit different than what we met the previous cpi report mid 20s. we'll see if this can deflate after we get the cpi heading into a three-day weekend. >> markets feeling good about the number going into the report phil camporeale from jpmorgan told us watch that services x shelter component because that's really something that the fed has been concerned about it attracts the higher wages as well and been an inflationary problem in this economy. there's the s&p into the close, 1.25% higher real estate on top close second is -- we've got consumer discretionary stocks. amazon having an up day. technology working well. every sector will go out with a

gain the nasdaq in the lead up 1.75%. really zooming thank you amazon, microsoft, apple, alphabet and tesla rallying today as well bonds are up the dollar stronger. and commodities also having a good day that's it for me see you tomorrow, everyone now into "overtime" with scott wapner sara, thank you very much. welcome, everybody, to "overtime. i'm scott wapner you just heard the bell. we're just getting started from the new york stock exchange. i'll be joined by pimco's erin browne, her playbook for 2023. kind of loud down here they're cheering it into the end. we begin with our talk of the tape the road ahead for stocks with that critical cpi report hitting in the morning how might the markets react? let's ask josh brown he's the co-founde