♪ hi, everybody. welcome to "power lunch.

alongside tyler mathisen, i'm kelly evans. the fed versus the markets how the inflation fight is dividing them and what the latest numbers are saying that might make the fed a little unhappy. plus, a defense downgrade. stocks falling as lockheed and northrop grumman are cut to sell also increase tension on u.s. defense spending. first, a check on the markets, dow, s&p, nasdaq pack to positive territory, dom chu >> the bank stocks, this is the kickoff to bank earnings season, earnings season in general it has some crazy intraday movements. bank of america, wells fargo, citigroup, jpmorgan, now, they are all up around 2 to 2.5, 3% near session highs in positive territory after each was

markedly lower on the heels of their earnings reports perhaps driven by fundamental buyers maybe some short covering is part of that story they are big stories today and helping to drive in upside action keep an eye on shares of delta air lines in the opposite direction out with earnings that beat estimates for profits and revenues but delta said higher labor costs will hurt current quarter profits. they are down 3.25%, one the powers performers on the s&p 500. on the tech trade. >> thank you, tomorrow let's start with the change of tone coming from china this is important. chinese authorities are considering adding abdidy. the reason i bring that up the move is seen as easing of regulatory hurdles and helping other chinese tech names like

"pino pen duo duo, etfk webb higher on renewed support from chinese regulators ev names are the laggards after tesla cut places in the u.s. and europe a rare downgrade to sell from guggenheim, warning the numbers need a reset and there are five sells versus the 27 buy ratings. definitely a little change of heart. other ev names, lucid and rivian, 8% lower on the nasdaq 100. >> thank you very much as stocks try to stay afloat while investors digest big bank earnings results, the major averages are headed for a winning streak the nasdaq on pace for the second straight week higher and the best weekly performance since back in november inflation picture also helping stocks to rally as the outlook for inflation softens yet again. we will talk about that in a

moment with ron and sonna. mark, welcome. good to have you with us. >> thanks. >> i know ron is going to say that inflation is playing out pretty much the way he expected, which is to say that the tide seems to be going out on inflation. do you see it that way and, if so, what can we infer about how to invest based on that? >> well, i do largely agree with ron in that interpretation of the inflation readings we had for some time expected to see inflation begin to roll over some months ago as some of the feedstock to the inputs to the cpi were clearly the falling, in some cases precipitously they were sticky components supporting inflation well above fed target levels. so at this juncture now several months after seeing the inputs suggesting we were going to see some deceleration in inflation

has been confirmed by the headline and cadecor readings yesterday. i think that is a set up for the federal reserve to do what some of the fed officials just recently had said, which is step down the pace of hikes, although likely continue for one or two more before pausing. as a consequence of that perhaps relieve some concerns that investors have, legitimate ones at that, perhaps a recession could be averted and, therefore, stock prices have already discounted the worst of those economic conditions that would weigh on corporate earnings. >> do you think that we have seen the bottom for stocks >> that's a good question. obviously, everybody is trying to ascertain that. to the extent that we saw from the peak in early january of last year to mid-october a 27% decline, that is a typical drawdown in a non-recessionary bear market. in a recessionary bearing market the drawdown is 34% which suggests that perhaps if we do

encounter a recession, even perhaps a mild and relatively brief one, we could see dimunition in earnings which could cause a retest of that october low if not lower levels before a durable bottom is formed at this juncture, is teams as though there is some likelihood that we perhaps can skip past a recession, albeit by a trivial amount nonetheless, help to support the kind of earnings that wall street is going to be clamoring for in order to expect to see equity prices already have seen that discount into the drawdown we had in october and, therefore, maybe build more sustainable highs if we get to above the 200 day moving average that we flirt with over the last 12 months. dimunition is a great word ron, what do you say >> with respect to inflation, yes. i was combing through every inflation statistic to write the piece that i put out today and

that number has been in many cases cut in half where it was at the peak. for the last six months, inflation has come counsel consistently whether cpi, core cpi, core pce, the fed's favorite gauge we are seeing inflation fall off. to that word transitory, which the fed may have improperly used early on in so far as i think many thought it implied a couple months in a post-war or post-pandemic style environment it's usually a couple of years. that's the argument i have been make the data reinforced trans forenot permanent was the way to look at this it wasn't 70s and 80s. >> here is the thing it's gonna look like that, gonna look like wait a minute, the fed shouldn't have tightened in the first place. to put it fairly, we should say they had to ratchet things way up and that broke the back of inflation, why were gasoline

prices collapsing? not gabecause of the war in ukraine, right ets why it turned on its face. i don't want people to say they they have should have held off because their tightening turned things around. >> in a certain sense, yes supply chain disruptions evaporated over time things that drove goods prices in particular higher were the disruptions 'but as a result of the pandemic, as a result of the war in ukraine which, hopefully, that comes to a conclusion at some juncture. >> what does the fed do now? >> i don't think anything -- >> what does that mean >> at the end of this month they have gotten -- >> quarter point >> probably not. we are not seeing any signs that inflation is about to reaccelerate there is nothing in the pipeline that would suggest that's the next move for inflation. and then beyond that the yield curve is so steeply inverted somewhere close to 1.2 percentage point spread between the three-month t-bill and the ten-year note yield.

it is screaming recession risk. >> and they have done too much, right? >> i think they should have talked a couple of highs ago arturo estrella, former fed economist, did the work, three month to ten years, to 93% chance of recession sometime this year arjtsd it's deep it's not like we are down -- >> no, this is 1980s stuff. >> 1.1, 1.2 points why don't they pay more attention? >> i don't know. if you want to say service -- service sector inflation is high, the pipeline is coming down shelter high, that pipeline is coming down. we know that to be true. so there dshlgts let me ask you the question i asked mark a moment ago do you think the bottom has been hit for stocks >> that's a stuff call you don't get a secular bull market in stocks until the wind is by your back. a friendly first energy, right loosening for -- >> stopping. >> right one of those two possibilities then the tape is starting to improve. so marty, the late great money

manager, don't fight the fed, don't fight the tape, a secular bull market in risk assets, you need both those factors at august your back. >> could you explain the dynamic where we know the bad kind of macro thing that's coming. how does the market behave? in '08 we had the sell-off throughout the first half of the year now we see the opposite and i'm curious what you would say to investors? >> dip your toe into your selective high quality, those types of things-month t-bills and just wait. there is no rush particularly for longer-term investors, pick your spots i think for that kind of trigger where you want everything at your back, we are not there yet. the fed would have to capitulate for that to be the case. >> ron, thank you. >> we met on facebook, believe it or not. he asked a question about financial markets and i asked him a few questions about his

past that i won't describe here and we got -- >> yeah. >> we got to be fast friends america's funniest stock picks together, i that's a show coming up. >> we can introduce you to the right folks. good to see you. it's been 30 years since i saw tom. >> 30 years since i was here may least day was march 3, 2020. >> thank you we appreciate it. >> you are welcome. bank earnings today with rulgts from b of a, jpmorgan, wells fargo. investors were looking for be better signs that's not really what they got. the bank stocks that, i don't know, what a message this morning. now a different message. what dis going on? >> yeah, i don't know. so you are seeing all the banks after the initial sort of absorption of the idea that was

put out by jpmorgan and b of a number one and two market share in banks and banking saying that there is a recession on the way. jpmorgan saying that their base case scenario, most likely expectation for this year is for a recession sometime in the fourth quarter a mild recession, but a recession nonetheless, at approximately 5% unemployment. and so the fact that they are catching a bid now, maybe there is the expectation a mild recession is, you know, the quasi soft landing that people hope for i would point to the other thing, compared to a quarter or two ago, they weren't expecting a recession in '23 so the arrow is down in terms of expectations for this year deteriorating. >> if we are looking -- not that my heart fwleeds for the bank earnings

they are going from 5 billion to 3 billion. they are still making plenty of money, most of these banks are but if they are setting aside money for reserves if they are forecasting probable recession in 2023, why are the stocks up nearly 3% today? >> yeah, no, it's a bit of a risk on. i mean, i wouldn't say, you know, here's the thing with bank earnings there are so many cross currents and there are so many up arrows and down arrows that, you know, you could look at what the stock is doing that day and say okay this is the reason why what -- this is happening. i don't necessarily think that's the case i think basically what's happening is, you know, we -- you know, the investor classes is hoping and praying that they get the soft landing and they are looking at the result and they are saying, you know, maybe banks can -- can absorb these losses if it is indeed a mild recession, they could take the next two or three quarters, reserve -- set aside reserves for the credit card losses that are expect and be okay and still

be profitable adds mike mayo ta talks about. if you look at the other analysts, however, they think it's too early to get into bank stocks they think it's better -- there will be a better entry point later on in the year as we get closer to that recession so, i mean, it is impossible to say right now. you could say that there is enough to bolster each case if you believe in it. >> all right we will leave it there thank you. hugh son. two interviews coming up on the "closing bell. b of a ceo brian moynihan discussing results and michael, the cfo at wells fargo the fun begins at 3:00 p.m. eastern. we have a lot to do here on "power lunch." defense stocks trading lower goldman downgrades a couple of big names. could congress get enough streets to cut defense spending? plus, a recovery for amazon, up

12%. but new numbers show ratings for the nfl are down mostly because amazon took the thursday night package. anoxaudience there less prbu anrost d can streaming pay off long-term? we'll be right back. hi ladies! alex from u.s. bank! can she help? how about a comprehensive point of sale system... that can track inventory, manage schedules- and customize orders? that's what u.s. bank business essentials is for. (oven explosion) what about a new oven, can u.s. bank help us there? we can serve loans in as fast as 12 minutes. that would be a big help! huge! jumbo! ginormous! woo! -woo! finding ways to make your business boom. that's what u.s. bank is for. we'll get there together.

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after goldman sachs said that at current prices the stocks reflect a global geopolitical superpower struggle but not at possibility of grease refocussing on debt and selling. raytheon to neutral. that stock is lower by 2.5%. mo morgan brennan to discuss this one the points that i seem to pick up in the research is the idea that maybe defense spending has gone to a secular peak or a cyclical peak is what i'm trying to say. >> that is the question emerging in the first two weeks of 2023 because to your point we saw a record defense spending last year the fiscal 2023 budget here in the u.s. increasing by 10% on the top line. >> even more than the president asked for? >> that's right. you had all the increases tied to ukraine as well plus you have the defense

spending increasing the world over here in the u.s. you have now have this renewed interest in the debt and the deficit and potential talks about not only caps on discretionary spending and pushing back defense spending to the levels we saw last year, but also this idea of 2011 style price cap on defense moving forward the likelihood of that happening probably not very high if you talk to analysts but this idea of girding for gridlock in d.c. is very much what is the focus. it's a big focus of this note from goldman azls well as other >> if we go back -- we had guests coming and telling us how excited they were about the defense sector you have democrats behind it then the kevin mccarthy hit. did that change everything people said, wait a minute, this might empower a group of republicans who have no interest

in trying to pull -- like you said, pulling back a little bit. >> yes quote, a full year cr, continuing resolution or longer for discretionary spending may be the best outcome when it comes to defense budgets and how that's gonna impact the defense stocks continuing resolution would basically keep spending at current levels, looking to fiscal 2024, but no new initiation of new programs or new spending initiatives for the pentagon so it's still considered very debilitating when you are talking about military modernization. >> in the goldman note is there a company that is better positioned in their view than others >> so what's interesting about the goldman note, actually it speaks to what is playing out in the first weeks in 2023. the downgrades were lisa marie and northrop grumman some of the best performers in general last rear.

those are the fames that are selling off aggressively to start this year. the d.c. angst playing a role. near all time highs in terms of vaccinations and again to your point this idea of a peak plus inu uncertainty around supply chain and this is a little bit wonky for television but it's going to make earnings season in the coming weeks, this r&d tax credit change that didn't get reversed in the omnibus spending bill that company like the defense contractors that spend loot on research and development won't be able to write off expenses. so like lockheed martin, for example, you could see some very hefty multibillion-dollar charges baked into forecasts for this year now. >> a lot of headline risks. >> morgan, thanks. ahead, for those of you with a profitable side hustle you might be safe from the tax man for now.

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welcome back to "power lunch. at this hour the death tollhas risen from nine tornados and severe storms in alabama and georgia. seven deaths near selma, alabama, where a tornado left a 20 mile pass of destruction. rescuers are still there searching for survivors. parts of the california won't have long to dry out for the next series of storms. the national weather service is forecasting more sebastien over the weekend. they are sending swift-water rescue teams and firefighters to eight counties in central and northern california. and president joe biden will g give his second state of the union peach on the 7th the anu congress gives him an opportunity to lay out live goals at the midpoint of his four-year term. >> frank, thank you so much. time for our weekly et

looking at consumer discretionary etfs showing inflation showing and it could be a big boost for the group. they are techie kind of names as a practical matter amazon up 14% this week, tesla gaining, big holdings for these funds let's look at the specific etfs, spdr up a 5%, vinegared 6%, all having a pretty banner week. the data comes from track insight. more information is available on the ft wilshire ftf hub. why am i doing this? we have a tv star, from ame "america's funniest home videos" and "dancing with the stars" and with the windbreaker and sneakers on we can't let this talent go to waste, tom bergeron. >> i'm cnbc intern tom bergeron. on "power lunch," a thursday night fumble nfl regular season

ratings falling this year following thursday night football's move to amazon. it's streaming coming up short with sports? >> plus, apple's ceo requesting and receiving a 40% pay cut. why not after a shareholder vote we will discuss all this when ow lchrerns. where do i leave my resumé [ laughter ] , getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee, even if it received ppp, and all it takes is eight minutes to get started. then we'll work with you to fill out your forms and submit the application; that easy. and if your business doesn't get paid, we don't get paid. getrefunds.com has helped businesses like yours claim over $2 billion but it's only available for a limited time. go to getrefunds.com, powered by innovation refunds. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts

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. wrub to "power lunch." we have 90 minutes left in the trading day. let's get caught up on stocks, bonds and oil and look at the nfl's ratings ahead of a big weekend of playoff football. let's begin with bob pizani for a look at what's moving on wal street bob. >> tyler, the lows of the day were right at the open and the markets felt like it wanted to go up throughout the morning we are up, more importantly, bank stocks are up take a look. i want to emphasize jpmorgan chase is 135 at the open that's a huge move, a big move for jpmorgan opening on the bottom where at the highs for the dayli right nw a lot of general investors, not bank investors, general investors were looking at the

bank earnings as proxies for recession and what they wanted to look at was the loan loss reserves they wondered if the numbers were going to go up really, really high indicate concerns about deep recession these numbers are higher they have increased the provisions for loan loss, but not that dramatically. citi group a bill, a billion for bank of america. these numbers are not far from the normal numbers prior to covid, yes, they are elevated but not dramatically it supports to a certain extent the soft to mild recession story out there. i think that's what's going on the story for 2023 is going to be margin concerns and delta's a good example they said business is great. overall, business is great however, they are paying a lot more for costs, particularly for labor costs. so that's affecting their earnings and that's affecting their guidance and the stock is down interestingly, united and american, which you think would have similar issues, are not

down that much that's an interesting dichotomy. the big story margin compression for 2023 where are we on the s&p 500? we are in an upswing, folks. and i would not call this a bull market but it's heading in that direction, actually. 3981 is the 200-day moving average. we are above that today. we haven't been above for more than two days since april of last year. that's a very simple way of looking at whether or not we are in an upswing. definitely up, tyler and kelly, i wouldn't call it a bull market, half the s&p 500 are above their 200-day moving average right now. we will talk next week about that but you've got to get up past 60%. we are definitely in some kind of upswing right now back. >> bob, thank you. to the bond market yields are slightly higher today. ten-year around 345. no 350 on the nose, actually, right now. it's coming up a little bit. there are signs inflation is slowing leading some to believe the fed will hikepy a quarter

point at the next meeting. this is the area to watch to see if it can continue. >> let's bring in pippa stevens for a check on oil today do tell. >> a positive week in the last five with wti within that $80 level. in addition to the global economy looking a little bit better we have got the dollar at a nine-month low and wti is priced in dollars so it makes it more expensive for foreign buyers nat gas is tumbling again. we saw an injection into storage last week. that is unheard of >> usually time to draw it down. >> yes one trader said it was the most bearish storage report he had ever seen a lot of that was in the south central region but we seen saw an injection in the north. so this is - >> why warmer weather than expected >> yeah. >> simple as that? >> exactly. >> it's been warmer in europe as

well. >> exactly we have been walk around in spring jackets i mean, i have been in short sleeves. that has having a huge downward pressure on gas. forecasts are changing - >> the pippa indicator here. >> yes. >> the sleeves. >> the short sleeves. >> exactly, exactly, i know, i know, it's all about my clothing but, yes, temperatures are turning a little bit colder for the end of the month that could play a role, right now -- >> i know we have to move on, what ed said when he was correctly bearish on these fossil fuel prices he said watch out, there will be overproduction that has been a big part of the story. we have had big numbers on both the oil and the nat gas -- >> and facilities offline. that's 2% of daily u.s. demand. >> absolutely. >> exactly let's talk lithium this is the new oil because we are all driving evs now. what are the prices telling us >> one move -- they are 700 million market cap, took up 20%,

backing from the d.o.e., a $700 million additional commitment there are provisions, including securing necessary permits but the stock is flying -- >> buying lithium in the u.s.? >> yes, this is out in nevada. they are in the final stages of the fed permitting process but that loan is tied to securing all the -- as we talked about before, it's not always the easiest process to get through. >> they are big blue pools and it evaporates -- >> that's what silver peak is in argentina. that is brine. this is different lithium. we have clay and hard rock they say it's more economic and doesn't use as much water. >> you don't want to have to use in the southwest thank you very much. our pippa stevens. now to the busiest sports weekend on deck. nfl playoffs kick off tomorrow it comes as viewership during the regular season is expected to be down about 3% from a year ago but it's not the reason you might think unless you know it's

amazon they are being blamed for the drop as thursday night football moved to prime video this season here with more and the dstreami land gape, joe for "the wall street journal." joe, welcome you know, amazon says, listen, the demo numbers were fabulous and, frankly, i was surprised that many people watched it on prime video. what are your takeaways? >> i think the decline was always to be expected anytime a sport or any program is transitioning to a new platform. that said, younger demos aside, the drop in viewership is lower than even amazon projected they told advertisers they thought they'd have about 12.6 million viewers according to nielsen they had about 9.58 viewers amazon's own measurement through their first-person data came up with just over 11 million. to they did underdeliver some.

i also think there was some technical issues as someone who had to watch the amazon games on their computer because they didn't stream on my tv there was some bumps and i think a lot of sports will experience this transition because we will see more sports leagues doing bigger deals on streaming platforms. >> if you x'd out the amazon exacter and you merely looked at the legacy providers, how did the nfl do >> up on nbc, cbs, and abc a couple percentage points there. and espn was down slightly, but that is taking out the cincinnati/buffalo game. of course, what happened during the game, was canceled that audience prior to cancellation was on track to provide enough of a boost where espn would have also been up from a year ago. so this is really more of a thursday night football

situation than a general nfl ratings are down situation. >> joe, now we have this kind of one last big media rights deal, the nba coming up. i guess do we know the timing for that yet what is that gonna tell you about the value of both these sports rights and also what people are paying up for these sports teams >> well, the nba is going to be very interesting it's got a couple more seasons to go. the main carriers, as you guys know, disney's espn and warner bros. discovery's tnt. both really needthe nba. but you look at warners brothers discovery, they have a lot of debt they have been making a lot of to moves to try to reduce debt and be much more conservative on spending david, the ceo there, is already saying we don't need the nba but tnt relies on the nba not only for ratings but the big sub fees that they charge distributors so i expect they will fight to keep it.

but i won't be surprised if they end up with a smaller package and the rest of that gets carved off to an amazon, to an apple. now we eyoutube pushing into sports so that's what i would anticipate happening. >> speaking of sports generally, but specifically the nfl rights, to a lesser agree the nba thing, i wonder how the pay packages that are now being offered to the broadcasters like joe buck, like troy aikman, like tony romo, like al michaels, how are those affecting profitability? because those individuals are getting paid a heck of a lot more than they did five years ago. >> most definitely espn made the big move bringing in joe buck and troy aikman because they felt they really didn't have an "a"-list broadcast booth for that franchise. and amazon, of course, wanting to make a splash, they bring in al michaels. those costs are up then everyone else's cost go up

to keep talent around. so, yeah, certainly those costs are getting higher, and production costs seldom go down in sports as well. >> at least for now. >> yeah. >> and i think charles barkley signed a big deal with tnt, if i'm recalling correctly, which he earns, man. very entertaining program. i love the whole thing joe, thank you i call this the tony romo effect he was the first to get, what was it, i think in his cycle 18 million a year and then that, of course, raised what his partner was going to get, jim nance, what aikman got and so forth so i think they should all bow at the alter of tony romo. up next, why hustle money is stav safe from the irs for now. we'll be right back.

welcome back gig workers side hustlers and the self-employed breathing a little easier today, getting good news. the irs holding off on a

requirement for payment apps like venmo and paypal to report accounts with income of more than $600 a year but the delay is adding more confusion around the rules and robert frank has been untangling them for us. >> this month the irs was supposed to start and these payment platforms start sending 1099s to the irs for whatever income you earned on these plate. poultry farms, even airbnb and etsy it was $600. so if you had more than $600 in income on any of these sites, that was going - >> if i'm an airbnb owner and i rent my apartment out for $2,500 >> it was going to be reported to the irs now, you owe tax on that anyway. >> anyway, yeah. >> but a lot of people, you know, it's an honor system and we know how that works a lot of people were not reporting it the irs said we are going to

hold off on this because it created a lot of confusion and we know the irs is already inundated with problems right now just dealing with its own returns. to any transition this year will still be subject to this rule when they start next year. it's all been delayed. it hasn't been eliminated but delayed by a year. >> yeah. i think the confusion is also partly around what do people do now? does the delay they are coming for me that's where i think the confusion -- >> here's what you do now. if you have a business transaction, in other words, if you sell something for more than you paid for it or it's a service that you provide as your business, you have to pay tax on that and you should label it that way when you use venmo or paypal if you have a family friend, let's say your roommate you are reimbursing them for rent or reimburse kelly for dinner, those are personal payments and those -- >> kelly usually reimburses me. >> of course those are personal payments under family and friends and not

taxed. so make sure when you are using these apps that are labeling either personal or business. and theoretically, the payment platforms are only going to submit to the irs the business expenses, so you only get taxed on that. we will see whether that actually happens. >> so for my 2022 return i don't have to worry about it >> no. >> 2023 return, do i need to start worrying >> if you have a business, the best thing to do, accounts tell me, and they are dealing with a lot of questions right now, create a separate account. create two accounts for using paypal one is just business one just personal. that way when the irs comes knocking on your day and says why did you make this, that was personal, you don't have to go through every transaction, you have a separate account. >> is it a business risk for venmo? >> some people are switching to zelle and zelle is not subject to any of this they say they are just a bank to bank, they are not a third party. so a lot of people switched to

zelle. now, you shouldn't avoid taxes but people are switching to sfwlelz because it's not subject to the same rules. >> that's how the big banks win. trading some of the key sectors this week. our three-stock lunch is next. this is ge aerospace, advancing flight for future generations. ♪ welcome to a new era of flight.

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it's that time for today's three stock lunch. sipping on big winners like tesla lower today, on trac visa also on track for a third straight week of gains and rockwall automation. here to help us trade them all craig martin hi, craig. what do you do with tesla? >> tesla is 70% off its highs. it's had a steep descent it's oversold on an rsi basis. look for relief rally but i want to sell it because i think there are other things to buy. if you're looking in the automobile space, take a look at lq on the parts side or ferrari. they look a lot more attractive than tesla.

>> take a look at a ferrari, i like that advice how about visa >> that's a constructive looking chart. we are overweight the financial sector visa is one of those names constructive to us despite all the economic turns, the chart is turning higher and visa is a name that should be bought at this point in time. >> i have to ask you a follow-up. no ifs, ands or buts about it. how long would you be in it, by the way? >> when i see these kind of longer term downturn reversals, this looks like medium turn downturn the segment you were discussing where you have zelle and other places out there, credit cards are still going to be an important tool going forward i like the chart, it's starting to turn higher and it should be bought. >> when you hear all the recession talk and look at the charts in the market, like bob pisani, we would like to see the breadth a little more, do you think we could have more strength even even if things are

going to get worse >> thank you for the question. we are 100% at the point when this market should be bought when you look at the chart, the breadth measures, the metrics, what i'm seeing in our work is i'm seeing metrics in terms of breadth and new highs that i haven't seen in a year we're pushing up against that resistance line of 4,000 on the s&p 500. from my perspective, a break above that level technically is going to set this market up to a fomo rally and with $4.3 trillion of cash sitting on the sidelines, the market's going to go higher. >> beautiful let's talk rockwall automation. >> rockwall is another terrific looking chart. president whole reshoring theme our eco team keeps talking about is a powerful theme that will be around for quite some time when i look at the industrial companies, they are a key part of this. rockwall automation is going to be a key player in bringing manufacturing back to the united states, automating it, putting it in place. you look at the bottoming set up

in rockwell, again, another constructive looking chart we're buying and looking for a retest back to the old highs. >> all right kr craig, the glasses are empty two buys and a not so much buy on tesla craig johnson, thank you. still ahead, ceo salaries. tim cook asking for a pay cut. apple shareholders granting his request. will other ceos follow that particular lead? we'll be right back to discuss that and more. 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.

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amle shareholders agreeing to cut tim cook's salary, a move requested by cook himself. other ceos are still raking in the big bucks. steve kovach and dominic chu join us. why did cook volunteer for a pay cut or was this him responding to what he anticipated shareholders were going to ask him to do anyway >> it wasn't even anticipation a year ago when they had their vote on this issue, the shareholders' meeting, far fewer people supported his pay package. used to be something like 95% they would say tim cook should get paid what the board got paid they saw this dramatic drop-off in support for his compensation package. in the filing yesterday, apple says, we've been talking to shareholders throughout the year we know what happened to apple

stock price last year. they probably weren't super happy that so much of his restricted stock performance was tied to time not performance now it's flip-flopped around and more tied to performance than time he could retire tomorrow and still get the time rsus. >> this is the reason this is so controversial and the reason you had a number of shareholder advisory services come out in support of these reduced pay packages it's not necessarily these pay packages are too generous. it's the time-based units that becomes an issue you want to align some of these compensation methods and schemes towards shareholders making money at the same time if they do, there should be no real problem with the ceo making more money alongside of shareholders what's curious these days, though, is over the last five to seven years there's been a lot more focus on that governance aspect of esg. there's been a lot more focus on

ceo comp one thing a lot of folks have been focusing on for years now is that gap between ceos and the average worker and this is something the economic policy institute, which is obviously a more left-leaning think tank, but they look at pay disparity. as of 2021 the average ceo's realized salary was nearly 400 times the standard line employee, nonsupervisory role. >> that's total comp >> total comp. 400 times the average employee the reason that doesn't sit well is because it's 400 times -- >> it's 400 times. >> for apple it's about 1,000 times because of the retail employees. >> and amazon where you're comparing a giant tech company and cloud operation to someone in the warehouse i'm interested in the case of apple that this seems like such a big deal it's such a big deal that he cut his pay by - >> 40% >> is it material to their earnings in any way? he's still incredibly well compensated. by the way, most of us are

exposed with apple's performance because -- >> on the buybacks, so it's not like -- not like shareholders aren't getting -- the stock under his tenure, the stat they use is the s&p since 2011 is up 290% or 300% and apple shares were up over 1,000% in that same time period. they're like, look at the chart, this is why we're paying him so much money and still he's -- >> are we hearing other companies in tech or banking or in any part of the economy that are doing this >> there will be the reason why is because even if there wasn't before, the fact that apple is one of those publicized, public companies out there, this is a very high profile move made there. if you want to know what is going to happen elsewhere in tech, this could be one of those precedent-setters.

>> we can see it after the recession. even though tech has been an evaluation reset, it hasn't been that bad yet. >> no, definitely not. apple can definitely stick through it they've been holding up better than the rest. yeah, it's - >> the walk-off music, gentlemen. that's a signal. thank you. and thank you for watching "power lunch." >> "closing bell" starts right now. stocks staging an impressive rally off the early morning lows as we close out what is a solid week for the bulls with earnings firmly in the spotlight. in is a make or break hour for your money welcome to "closing bell." i'm sara eisen take a look at the turn-around, intraday dow, up 49 points. at the lows we were down 274 points the nasdaq up 0.3% it's really the banks leading the charge all weaker off earnings, all had a big intraday turn-around the banks and discretionaries are th