it's so close to a breakout. i think $90 is the trigger it struggled in that area a couple of times, but the more times it attempts, the more likely you're going to finally get that move higher i would keep an eye on this name >> all right so we're going to keep our eye on the markets for sure. dow is now down about 380. goldman obviously a big weight there. we'll see how things finish up when i see you in o.t. the s"the exchange" is now. >> reporter: thank you, scott. i'm melissa lee in for kelly evans today. here's what's ahead. big banks back in the spotlight with morgan stanley and goldman sachs reporting. the stocks taking off in opposite directions. goldman seeing its biggest miss in a decade. morgan topping estimates we'll break down all the headlines and look at how to position plus, china's growing pains from a slowing economy to a slowing population, and a resurgence of covid cases. we've got the latest and what means for the china investing pieces and united airlines on deck to report we've got the action, the story, and the trade on all three ahead

in the earnings exchange but we begin today with the markets and dom chu with the numbers. hey, dom >> melissa, markets were mixed earlier in the day, but they are pretty much in negative territory at this point right now. the nasdaq is outperforming a little bit for that tech-heavy side of things, which is still close to the flat line, maybe up about a tenth of 1%. about the middle of the day's trading range. meanwhile, the s&p has retreated from that 4,000 level, down just marginally right now but it's the dow that's the big story today close to session lows, down over a percent so far in trading. that's due in large part to the financials and the bad news first. dow component and investment banking giant goldman sachs is not only the biggest percentage decliner in the blue chip index. it's also the biggest point drag after its worst earnings miss since october of 2011. now, revenues also fell shy of estimates. goldman also set aside more money than expected to cover potentially bad loans in the future meanwhile, you've got shares of

morgan stanley, which were a real bright spot today, sharply higher after the investment bank posted a beat for both profits and revenues earlier this morning. and that was thanks in part to record revenues at its wealth management business, a fee-based business that has been moving more towards over the last several years, that helped offset some relatively weakness in its sales and trade operations, but still, melissa, those bits of data, an interesting story painted not the same thing for two parts of the investment banking market. >> dom, thanks so much come on over join us here at the desk we'll continue our conversation about the banks, also joining us, men don capital advisers president and cio. great to have everybody here on set together anton, what is the picture for the financials now that we've gotten all of them out >> well, the banks, good enough. valuations were cheap. and everybody was wondering, they were down, they recovered, because they got cheap enough. and the regional banks were even

cheaper. the smaller ones were even cheaper. at the end of the day, that's what we're going to get. people will look and go, where's the value. loan losses are not a valuable we may have peaked in terms of interest rate margins. earnings estimates went up all year last year rates kept going up, and stocks went down. now we may actually have the opposite earnings estimates may be dropping, not radically, because there'll be some credit and some lack of margin increase. but the stocks are cheap i mean, there are all sorts of financials that are seven, eight times earnings, that are potentially takeover targets and -- >> let's home in on goldman sachs, because that's the one that's really losing today has goldman lost its way, to an extent with the losses associated with the consumer unit, that seemed like a detour that did not pay off. when you see morgan stanley, they saw all of these accusations along the way. they really proved that they were planning for this sort of environment, in a better fashion than goldman >> well, i mean, it's really clear that also some people were

wrong-footed, right? some people were on the street were short morgan stanley and long goldman but look at the return on equity look at the return on assets substantially outperforming. and, you know, we talked about this earlier, but every decade or so, someone says, i've got a better credit mousetrap. and you know what? the underwriting credit is still, you've got to know your customers, you know, there's no new algorithm that actually makes it work. look at all of those tfinteches out there. at the end of the day, deposits matter, and that's what banks have they have deposits goldman doesn't have branches, doesn't have retail deposits in a big way, doesn't have core funding, and so, it's more wholesale type funding, much more expensive >> that's one of the interesting things about the goldman call. david solman addressed it specifically during the earnings call this morning. basically talking about the pullback that they want in certain parts of the consumer markets, particularly the markets lending side of things they expect that book to ail off, just let it roll off. but what was curious later on in

the call, you know, goldman very closely associated with the apple card, right? that apple card business and you think that they would address that in some kind of a negative way but solomon went out of his way to talk about how that is a long-term play and that it will pay dividends over the longer term so even with the consumer pullback in certain parts of the market, they're going to still keep that lending business in certain key parts and certainly focus on the deposit-taking side of things. that's going to be a key for them >> how does that fit into goldman's strategy >> it's paring back part of the consumer really what they're not saying is subprime consumer the apple card is not subprime, it's a better tier, a better credit look, at all of the things we did, all of that stimulus made credit incredible for everybody. so there were lots of outsized profits made credit was better behaved than ever, even in the subprime, because everybody was flush. you know, now the consumer is starting to tap into savings, starting to tap into credit more the only good news throughout the consumer is they have jobs

there's still jobs out here. so that ability to pay still exists but the subprime consumer is stressed >> they still have jobs for now. i don't want to be debbie downer or anything, but when the fed says unemployment will go higher, it will go higher. >> so the key part about that is goldman has been a big part of the job loss story on wall street so far. 3,200 jobs for the record, that they say were eliminated last week, as part of that kind of process of job cutting there i spoke to the ceo at morgan stanley and asked her specifically whether on her side of things, they've already cut jobs, they announced them back in december. >> 2% or so. >> she basically said that of course things can change, but they feel as though for right now, given the state of play that they see, that they feel like their job force is the right size that they feel that their cost structure is the right size. now, nothing is set in stone, but she feels as though this is a good spot for them with the letting that they've had in their jobs, which is significantly smaller, right than goldman sachs' total number

of jobs cut. >> what can we learn about the economy from what we've heard so far, in terms of the environment that they will operate in and the environment we will exist in >> sure, sure. they're all cautiously optimistic i think brian moynihan is the only one who said, a mild recession. we didn't hear the word "hurricane" out of jamie this time, thank goodness because that moves market. the reality is, no one has seen it yet the only place we're seeing the cracks is subprime consumer. everybody's being cautious you're seeing slight reserve building going out there yeah, the economy is still pretty good. >> by the way, if the economy does get better somewhat even morgan stanley's ceo said it on this call, if things start to become more clear, ceos get more clarity on what's happening. if inflation has peaked, all of a sudden, you could start seeing deal flow come back. we're talking ipos, all of those things could be significantly higher once there's a clear

macro economic picture >> in terms of what you like here, anton, you like the smaller banks? >> i like valuation. i think regulation will be tough on the big guys, right we've got all of the biden administration's regulators in place. and they're going to be a little tougher. they'll want more capital. they'll be suing them. we'll see what happens may go to the supreme court, whether that gets funded or not. but in the meantime, they're showing their teeth. >> is there a geographic overlay with the kinds of banks that you like >> absolutely. >> that's absolutely right i mean, it's almost scripted it's not, but, for the audience, you're absolutely spot-on. you have better economic growth in parts of the country. v v you could have a national recession, but still have growth people are leaving for lifestyles, for taxes, corporations are moving there. we've seen a lot of wall street move to miami. so there's no doubt you're going to have better growth there, even if we have a recession.

>> okay. antoin, thank you. dom, our thanks to you as well and don't miss goldman sachs' ceo david solomon live from davos tomorrow 7:45 a.m. eastern time on squawk box also making headlines today, china with the exception of 2020, china reporting its worst year for economic growth since 1976 also seeing a ulti-decade slowdown, china's population growth all of this as the country could see a resurgence in covid cases, as it gears up for lunar new year's celebrations. for more, let's bring in deryk scissors and john rutledge, chief investment strategy and a cnbc contributor gentlemen, great to see you both derek, i want to get your take on what you think is going on with the chinese consumer, because what we will anticipate most likely is that there will be a resurgence in covid cases when people are traveling throughout the country for chinese new year and interacting with other people and family members, et cetera and that, of course, would have an impact on gdp >> right, i think that's what you should expect. i also think that there's going

to be covid. we just talked about the u.s. being big and regions being different. that is also true with china the coastal cities may get over covid, may already be past their peak but inland regions where there's a lot of production, and of course, consumers, they're a ways away. the consumer boom that people are expecting could happen the conditions are in place, but people are getting ahead of themselves we could be talking into the second quarter before it starts. and of course, china consumers are notoriously pro-saving and cautious about spending. >> sure. john, i want to ask you, the parallel is often made between the u.s. reopening and that sort of revenge spending way that we saw here in the chinese consumer things are a little bit different. during the pandemic, the chinese consumer didn't get the kind of stimulus checks that u.s. citizens got, for instance and also going into the pandemic and through the pandemic, there was a property market implosion that is still in place the property market is still down and out for the count at

this point, despite some of the more recent efforts to revive it so i'm wondering how you think about the chinese consumer "boom," i put that in quotes, as the country emerges from covid and will it have parallels from what we saw in the u.s.? >> melissa, let's remember, two months ago, we were wondering whether they were ever going to get rid of zero covid. and the uncertainty stretched far into the future. that's over now. they flipped, there's huge covid crisis in china now. and many more people dying than the government reports suggest but that means, you're going to have this tsunami wave and after that, things calm down a bit. derek's right, there are people, migrant workers, especially, who have moved from the cities back to their villages, which is why the labor force reduced, which is why the unemployment rate fell but truth is, this gdp report is better than anybody thought it was going to be. and for the next two years, people looking at like five next year, and maybe seven the year

after. so i think this is a story that says, we're going to see more demand for copper, for coal, and for other commodities. and that's going to help the commodity prices going forward >> derek, how do you think about the boom that we should be expecting and whether or not we should model it after anything that we saw elsewhere. >> first i should say, i don't believe the current gdp report, so that's one prop with one difference, perhaps, between -- among people analyzing the situation in china i think you're right, i think the equivalent for china would be one, as john said we need to get through to covid. some people say that's -- oh, it's already happening other people like me say it's more like april. but the second one you already mentioned, which is we need property stability property is a big source of wealth in china, bank deposits are the number one way that they put their money. if you can get -- you don't have to have a wild property explosion. that would be unhealthy. if you can get consumers thinking, oh, i understand the

value of my property assets, that's a condition we need for saving i think that will occur later this year. if it doesn't, it will occur next year. so i'm comparatively bullish this year and next year will be better than 2022 i don't think i'm as bullish as john is. >> john, do you think that they're doing enough to revive that property sector you know, policies like eliminating the three-line policy, for instance, is seen as potentially helping it, but should it do more in order to get that going there's a fine line, obviously, because they want to ignite the property sector once again, but they don't want it to reinflate, as we saw before >> let's remember, it's not that long ago that we had runs on chinese banks because of the property loans and the book rents. but i think that -- i think that there's not that much they can do, beyond what they're doing. it's a huge mess it's a huge net worth problem. and as derek says, if it just flattens out a little bit and

stops being such a drag, last year, those numbers were down like 30%, the property sector numbers. so i think that going forward, you're looking at capitol spending and consumer, but it's consumer goods spending, which is something like the u.s. example. services spending last quarter was down 14% and goods spending was up you don't have to go anywhere to buy goods. they bring it to your house. >> right derek, going back to what both of you had addressed, and that is the slog of covid that china still has to get through, do you think that other parts of the world aren't necessarily thinking enough about the potential, you know, for instance, supply chain snarls or factory shutdowns on the mainland that will happen, because it feels like at least for u.s. corporations, we've seen the worst, it's behind us, without factoring in that another wave of covid in china could, you know, bring back all of those problems that we had dealt with before.

>> i do think this is an ongoing problem that people are underestimating. with zero covid, with all of its harm, and it did a great deal of harm, you need the pandemic situation pretty well. it was hard to have factories just randomly go out of business it happened, temporarily, but it was rare now we're going to see travel bursts, we're going to see possibly and very worringly new variants you're going to have more unevenness in chinese production, whether they report it or not. and i think, so there's the wave now where, are we going to get a supply chain disruption in the next two months from china it's also the case that without zero covid, we could get one next fall. these things are going to become more common for a while, as china transitions from stability first to, you know, more openness >> in your mind, derek, is that all but certain, having more supply chain issues as china gets through this first wave in the first half of the year >> yeah, i think we're talking about details. it will happen

where? where is where are supply located? has it already gone through covid? what are their practices, what are their alternative suppliers if a factory shuts down. firms should be thinking about the detail in china, given that there are going to be supply chain disruptions for most of this year. >> all right derek and john, thank you. appreciate it. and while we're talking china, we want to quickly mention a big move in alibaba. gamestop chairman and activist investor ryan cohen is reportedly pushing for more stock buybacks after buying a stake worth hundreds of millions of dollars in the ecommerce company. shares are slightly slower today, down more than 60% from their all-time high in october 2020, but the stock has had a nice run recently, up 30% to start this year and doubling off its recent low, thanks in part to some bullish commentary on wall street in just the past week morgan stanley naming baba its first pick in chinese tech in the last three years it's currently trading at around 115. goldman sachs adding it to the

firm's conviction list, saying it's the best way to play a rebound in the internet sector, and the worst is behind the stocks after two years of downward earnings revisions. you can read more on both of these calls at cnbc.com/pro. coming up, this earnings season is just getting started united airlines is on deck with the stock having its best month in over a decade is it all tailwind from here but first, one money marketer says this market is nirvana for a stock picker we'll take a trip to the land of mispriced stocks ahead the dow is now down 376 points, we are better than the lows of the session, down 400 points or so "the exchange" is back right after this another busy day? of course, you're a cio in 2023. but you're ready. because you've got the next generation in global secure networking from comcast business,

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welcome back earnings weighing on the dow and the s&p today while the nasdaq hangs in on postterritory. our next guest says this year could be an inverse of last year, meaning we could see a slowdown in both earnings and the economy, but stocks could post some pretty decent gains. joining us now, james crumpleman jeff, great to have you with us. does this mean that the lows that we saw last year, in october, for instance, that actually priced in the recession

reset that so many are anticipating this year >> i think to a large extent, that's true. i think that with the peak trough decline of 25% and ending up the year down about 20%, that's generally what happens around mild recessions, which is what folks expect to happen. and as you know, the stock market moves in advance, so in '23, when perhaps we finally do get that slowdown that everyone is expecting, both in earnings and the economy, the market is going to start looking to '24 and what's happening in that period and we think as a result, this is the time to start, you know, putting your buy list together and really look for opportunities. there's a lot out there right now. >> so are you looking towards 2024 at this point is that how you're thinking about things, that 2023 is sort of, i mean, david solman said that 2023 is still highly uncertain. there's a lot of anticipation

that earnings revisions will still be marked down, and we still don't yet fully know the impact of the fed's tightening campaign and so i'm wondering how you think about 2023 when you're talking about 2024 already >> well, so, you know, i think in some of my notes i mentioned, everybody ought to read in the audience an article written in the "wall street journal" that says, for your new year's resolution, say "no" to negativity and you know, i don't want to paint the picture that you were whistling by the graveyard here, but, yes, i can show you many years in which earnings are finally revised down and the economy is soft, and it's a wonderful stock market, which is the inverse of what happened last year. so the data is just not that terrible out there you still have the consumer employed spending, balance sheets are strong, both personal balance sheets, corporate balance sheets, and what happens is, our audience reads all of

these awful headlines, which absolutely are terrible. but in line with this thinking about, you know, move away from this negativity bias that we all have, the trend is getting better and i would argue that going from horrible to terrible in data and then on to bad, and then to ugly, and then not so bad is all that needs to happen here for the market to do well i think that's what we're seeing, inflation is coming in and the fundamentals are just not that bad so if we have a recession, it's going to be, i think, milder, and the impact less worse on earnings than folks expect, and valuations become attractive in that kind of an environment. >> and you do like a number of consumer discretionary names, deckers outdoors, starbucks, booker holdings, active and tesla. for a minute, let's focus in on tesla and what they did in terms of the major price cuts. the impacts we saw, negative the impact we saw in terms of

the start-up ebs, next tesla obviously is a market share holder at this point, the leader and what they say, pretty much dictates the pricing for the industry so was this like a genius move on the part of elon musk to cut prices so deeply, even though in the near-term it impacts margins certainly and profitability? >> so, you know, what i would say about tesla is, let's put this in context. it's a 1% position in our portfolio. so it's not like a big bet on tesla. i have all kinds of stocks in here that are both old economy, which i think is beautiful, and new economy that i think provide great entry points so tesla falls in that new economy kind of point. and our argument is simply this. they've got 80% plus share of electric vehicles. and the article in the "wall street journal" today just points out the fact that evs are now 10% market share of vehicle sales, going to double that over

time they've got 80% share and it's not just a play on evs it's charging stations, advanced driving systems that they make, and riddle me this i would pose a question to anybody and say, if i told you, and ignore the name tesla, and said, we have a company that has leading edge technology, 80% market share in a growing end market, you think you want to own that and i would say, at a 1% position, that's kind of a no-brainer to do >> we've got to go, jeff, but i've got to ask you, if that's a small position, what's your biggest position what position do you have the biggest conviction in at this point? >> so i would have to think about largest positions, but, you know, we certainly in technology, there are a number of names that we like, not in the f.a.a.n.g.s. in terms of large positions, sure, we're going to do apple, because it's a big position in the s&p 500. but the names we like are the ones you see there, now, cloud

strike, synopsis coherent is probably my favorite name within technology right now. >> all right jeff, thank you. good to see you. jeff crumpleman. >> thanks. coming up, the s&p 500 restaurant index hitting its highest rate in years, but a rising tide may not list all restaurants. plus, david zervos says that j. powell is in no rush to declare a victory against inflation. what it will take for the fed to take its foot off the gas. as we head to break, take a look at the dow heat map with goldman sachs dragging the dow, mcdonald's leading the way, caterpillar touching an all-time high "the exchange" is back after this ♪ a cyber-attack can grind everything to a halt. cisco security keeps your company moving forward.

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exchange." markets right now are close to the flatline with the exception of the dow we're off the worst levels of the session. we were down 411 points. right now we're down 361 the s&p down by four points, just 1/10 of a percent and the nasdaq is holding on to its gain up by about 17 points. apple is higher after posting its first positive week since november amazon on pace to snap a six-day winning streak travelers among the dow laggards after preannouncing catastrophe losses of $459 million that's nearly double what analysts were expecting. the stock is on pace for its worst day since june 2020. meantime, disney is firing back at activist investor nelson peltz and his bid for a board seat the company saying he has no desire up 15% to start the year, making it the number one name in the dow. sticking with media, shares of snap are lower after jmp securities downgraded the stock a market perform

the firm says time spent on the app is decreasing due to competition from instagram's reelz and youtube's shorts darden, cheesecake factory, bloomin brands all solidly in the green. pippa stevens joins us now with more >> this all comes down to the health of the consumer looking forward, we could start to see outperformance from limited service restaurants at the expense of full-service names, as pinched consumers opt for cheaper options. we started to see traffic slow last year, wells signs of trade down reduced savings, rising credit card balances, still-high gas prices and a possible recession means this could be an even bigger trend in 2023 within this backdrop, analysts say that investors need to be selective. mcdonald's restaurant brands international and yum brands could outperform on the flip side, full-service restaurants like darden and brinker international could be challenged that also includes bloomin brands and cheesecake factory,

which research firm gordon has ket downgraded today based on demand headwinds citi cutting cheesecake factory as neutral today >> have we already seen this in terms of commentary from restaurants themselves and i'm wondering, also, if there's a mall component to this in terms of the worst-positioned restaurants in the past, we've seen as consumers cut back on trips to the mall, they cut back on spending in other places. if they're not there, they're not going to go to the restaurants there either >> we did start to hear some of this commentary last quarter, saying that while check average same-store sales still look good, a lot of that's because of that menu price increase versus foot traffic on the flip side, commodity prices have also come down that's been a key headwind for the restaurant industry that could be improved looking forward. but right now, that's also comparable there are favorable comps based on covid headwinds and now that we're seeing some of that pent-up demand starting to relax a little bit, maybe

trips to the mall are going to slow, and that could impact some of those more franchise models so there are a lot of factors here to watch in the earnings kick off next eek. >> pippa, thank you. now let's get to tyler mathisen for a cnbc news update. ty >> melissa, thank you very much. here's what's happening at this hour another patriot missile defense system may soon be on its way to ukraine. this one from the netherlands. during talks with president biden at the white house, dutch prime minister mark rutte says he intends to follow the u.s. and germany in sending patriot missiles to ukraine. police in washington state are still looking for a man who tried to kidnap a increase that through a drive-in window. a security video shows a man trying to pull the coffee shop employee into its pickup truck he even tried to get what looks like a zip tie around her neck when the woman was able to break through, attacker sped off, leaving his money on the ground. and madonna has announced dates for her next tour.

the celebration tour will feature four decades of hits it will start in july. she's publicizing the tour with a video of her playing truth or dare with celebrities, including comedians amy schumer and judd apatow in a nod to her1990 film, "truth or dare." melissa, back to you >> four decades of hits, wow i feel old tyler, thank you tyler mathisen still ahead, wayne's wheels and deals. the key things to watch as united j.b. hunt and prologis get ready to report. earnings exchange is next. ust a. wait. they make a treadmill with an intuitive speed knob? yeah. want to try? 92% stick with it, so can you. start a 30-day home trial today. terms apply.

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welcome back to "the exchange." we've got some names on deck that will provide a read on consumers and the economy. it is time for "earnings exchange." united airlines reporting after the bell today, shares lower, but climbing more than 30% this month. we've already seen strong results from delta and american. it raised its guidance well, united followed suit our own phil lebeau has the story, chief market strategist for lido advisers has our trades phil, we'll start off with you the other airlines really set the bar high here. >> and i think most people are

expecting united to report strong results whether or not that means they beat the street remains to be seen they raised their guidance not too long ago it was a strong fourth quarter for the entire industry. so, if these are better than expected numbers, it's not going to come as a huge surprise i think the focus will be on what they report for guidance for 2023 there seems to be, melissa, and we've talked about this on "fast money," there seems to be a bit of a disconnect between analysts who are saying, hey, further out, if there's a recession, we see perhaps a drop in demand for commercial air travel. we are not hearing that from united, american, delta, none of the airlines are seeing a drop in demand. it will be curious to see what they say about 2023 guidance and what scott kirby tells us tonight during our exclusive interview on "fast money," after the results come out, what does he see in terms of demand? they can definitely tell us about the first quarter, but further out, what does he see? i think that's going to be the real focus >> the airline industry seems to

be much better-positioned than in past downturns in what we've seen so far. american airlines for instance reported revenue per available seat mile, up 24%. even if demand lets off a little bit, if they're not expanding capacity tremendously, the revenue per available seat mile will still be very strong. >> great pricing environment, melissa. you hit the nail on the head when you talked about the capacity constraints that is not changing anytime soon they would love to add more capacity, not just at united, but other airlines, a lot more than they what they already scheduled, but there are limits, because the airline makers, boeing and airbus, they are not up to the level of production that they had in the past. so what you're looking at right now is a very unique environment and the question becomes, how long does this pricing environment last does it last all of 2023 does it last into 2024 that's going to be one of the questions that i think people are trying to figure out when they figure out, okay, what type of a multiple am i putting on future earnings?

>> you know, the challenge for the srector, because there have been a couple out of the gate, the entire sector ran up on the back of those earnings at this point, gina, the positioning is not tremendous going into this set of earnings. >> well, yeah. you've already seen that in the pricing. the pricing has been pretty aggressive with expectations that are lofty and has phil said, all eyes will be on the guidance you know, what they guide for next year for 2023 is going to matter, so they're going to have to carefully word smith that because that's what most of this pricing has been pinned on and i agree with phil on the disconnect between the expectations that we're going into potentially soft, you know, potentially a soft demand season, if in fact we go into a recession, because the numbers that are coming out of united don't reflect that at all, and the other thing, and you talked about it in a roundabout way, which is that margins have been rising so even if they lose a little bit of that demand, you're

absolutely right, melissa. they will still be in a great position to continue to grow profitability. and there are expectations that travel budgets in 2023 will get back to normal and that still represents an upside for the entire industry, united and american included >> have we heard airline ceos talk much about china reopening and what sort of impact? at what point in time, some of these airlines, the big ones like united and american airlines had a number of flights daily direct to china. and that, of course, all but stopped. so what sort of tailwind could that be, potentially >> i was just discussing it this morning with one executive who said, look, we are cautiously optimistic, as we will look over the next couple of months at adding back some flights, but they're not going to go back to where they were pre-pandemic, when, you know, china was a huge growth area. that's going to take some time in part because china is coming out of the covid restrictions,

and also in part because while corporate travel is going to increase to china, it's not going to go back to pre-pandemic levels immediately a lot of things have changed in corporate america when it comes to travel to china >> that's true phil, we'll see you later. thank you, phil lebeau and united ceo scott kirby will join us tonight on "fast money" to discuss the results that's at 5:00 p.m. eastern time meantime, next up, j.b. hunt reporting before the bell tomorrow, down about 13% in the past year, as an economic bellwether, the street is keeping a close eye on shipping volumes and demand as well as any boost from the holiday shipping surge gina, what's your take on this one? >> you're right, j.b. hunt is definitely a bellwether, not just because trucking is a bellwether for the sector, but j.b. hunt is a bellwether for trucking and what we're seeing is that they have continued to show positive growth. next year, we're expected to see further single-digit positive growth, both in eps, in

earnings, also in profitability, and even as much as 11% ebitda growth and so that expectation is not being reflected in the pricing, because there's still a lot of caution out there with regard to the recession. and you know, this is -- this really get to this idea that the recession that everyone's expecting, it's not showing through in terms of trucking think about it, j.b. hunt managed to grow while there was a shortage of drivers, a shortage of trailers and even a shortage of goods. yet, this is a company that has still managed to continue to go, which tells uh that demand is actually still healthy >> and let's move on to prologis, also reporting before the bell tomorrow. the nation's biggest logistics reit is down nearly 20% in the past year, as demand for warehouse space cooled following the online shopping surge during the pandemic the street watching demand, rental growth rate, and cash flow into the end of its fiscal year >> lito owns this in our portfolios, as well.

yes, there is a huge expectation that rental rates, which have been growing for the last several years at over 20% have to cool, you know, at some point. and so, even though that's expected, it's still expected to be strong. and i think all eyes in this earnings season are going to be on their development plans and so as they make development starts, then that kind of sets the pace for how much they're going to be able to, you know, derive rents from. and so right now, i think the expectation is that there's going to be a slowdown that is already being priced into the stock, but we still think it's going to be -- continue to be a reasonably strong sector. >> gina, thanks for your takes on these earnings movers gina sanchez still ahead, bitcoin is up more than 21% over just the past week, and with prices on the rise, the cofounder of failed hedge fund three arrows capitol are pitching on a way to capitalize to bankruptcy claims

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welcome back bitcoin has climbed more than 28% so far this month, back above the 21,000 level for the first time since early november. and even as they navigate their own controversial bankruptcy, the co-founders of failed crypto fund three arrows capital are now pitching a new distress debt marketplace. kate rooney joins us now with that story kate, so they want to let people trade bankruptcy claims, basically. >> yeah. that's exactly it, mel and there are a lot of bankruptcy claims out there. three arrows is one of the companies that last year during the summer filed for bankruptcy. and this hedge fund was really one of the biggest names in the space, in the industry it managed about $10 billion at one point. and then became one of the biggest failures of last year. filed for bankruptcy in july, is still in the middle of its own liquidation and dragged down a lot of other big crypto

companies that were counterparties for three arrows. flash forward to this weekend, the founders are now trying to woo investors for their next venture. i got a pitch book sent to me over the weekend, and it outlines a crypto exchange, essentially, that they're calling gtx. potentially a play there on ftx. it's looking to make a marketplace out of all of these bankruptcy claims. there are a lot of different companies that have filed for bankruptcy this year, ftx among the biggest. you have celsius, blockfi, they're looking to really make a market out of this there's people that have claims locked up and want liquidity for other things seems like a risky venture to make a derivatives market out there, but they're putting it on paper, they're pitching it to investors, they're looking to raise about $25 million. but the irony here that they are one of the biggest companies that went bankrupt themselves and liquidators at the same time have said that these guys are not cooperating with their own

unwinding process. and the two founders were served subpoenas over twitter last week because the liquidators said, they're not cooperating, we don't know where these guys are, they've pushed back on that, but some of the latest drama in crypto playing out >> it's amazing the vitriol unleashed on twitter towards these guyses first of all, gtx seems like a horrible name to choose given the similarity to ftx. any play on ftx seems like a bad play and the gal for them to offer creditors an equity stake in the new evenventure in exchange for those claims there's so many things about this that just seemed, i don't know, wreak of hubris. >> that has definitely been the feedback and the takeaway from this, is that these guys have not unwound their first failed company yet. they're looking to launch a derivatives product for the bankruptcies that are still unwinding. it's unclear that any investor would want to take on that risk. and they peg it as something like a $20 billion opportunity

and it's really hard to wrap your head around this idea, working and not to mention regulators or bankruptcy courts nonetheless saying, that's fine. you can sell off your claims and use it as collateral for other loans. it seems like there have -- if this is the case and people are interested in this idea, backin the idea that you would go ahead and make some of the same mistakes that led to this, which are leverage, derivatives. it seems like deja vu while we are getting this pitch book. we will see if they have any success raising money. >> thank you. still ahead, with inflation pulling slightly the last year, puinvatiput is on caon ttg money to work now next rgy c? with operations in scotland, 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.

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there is an alternative to stocks right now our next guest says corporate bonds are the best way to find yield in the current environment. david, great to have you with us not just corporate bonds, but junk you think the reward is there. you say double b or b high

yields i assume there is a fineline here you want to go to the riskier part because the yields will be higher but at the same time, you don't want to play in bonds that have any sort of risk of not being able to service their debt? in a recessionary environment. >> i think the important point, melissa, here, great to be with you, always hanging with you, what we're really saying is that the equity of a company is always the most dangerous part of the capital structure that's the first piece so what we're saying is why not go to the debt of these companies, a lot of them are in much higher yield positions than a year ago because rates are higher and spreads are wider take a more senior position in the company and get something that looks very similar to equity-like returns. high/single digits to double

digits possible capital gains if rates or spreads come in i think that's the story it's a fundamentally different position for those higher yielding bonds i would say this is structured credit, muni credit, corporate credit i am not particular saying you have to go to the company level. i think there is a lot of beaten up stories in credit after last year this was one of the wide receivers years in decades, maybe centuries, depending how you look at, for bonds and it was definitely not in equities we get 15 to 20% pull backs all the time. >> so you think that there are values in this bb sort of b high-yield section >> i guess what the important thing is, and i think a lot of your guests earlier said the same thing i don't see a lot of movement in the equity i think this is a year where we are going to bounce around and torture people, up to 4,200, down to 3,700, maybe 3,300, the fed will be mean and nasty at 4,300, sound nicer at 3,700, not too nice, and a chop fest and

it's going to hurt you can sell vol and equities. but why play around if that when you have got the yields that you have for a market that if it's largely unchanged is going to pay 10%. i don't see the reason to take equity risk for me >> yeah -- >> equity-like returns you don't have a great story for big, like, 20% returns this year. >> you make the point that the s&p is going to torture us as the fed is doing what it's doing. we have seen interestingly volatility overall, the vix has remained under 20. it's just -- it's gobsmacking almost how low volatility is i'm wondering what you make of that as any sort of a read and whether or not there are better, you know, measures of volatility we are seeing volatility in bonds, volatility in currencies. much higher than in equities

>> yeah. no i think there have been a lot of volatility selling strategies. that was our strategy leastary least /* year. you know, managed to recommend to clients the strategy that -- but i think take it with a little bit of a grain of salt. we were here a year ago or at the beginning of 2022, vol was pretty low back then if you were selling at the money spot calls in s&ps you were getting 7% today if you are selling the 4,000 calls you are getting close to 9 or 9.5% you are getting a much bigger number than when we were at the highs 4,700, 4,600 but, yes, coming from this year of high volatility, it seems low, but it's been a lot lower and it was a lot lower a little more than year ago, a year ago a couple weeks ago, and, obviously, the year started to tumble quickly in 2022. >> we have to go but i do want to -- one last question within bb/b high yield are there

certain sectors that are positioned better? >> i think what you -- you have to spend time in the debt markets with qualified people that know what they are doing. that's what we do at jeffries. we are a high-yield shop have been for many, many years you go in, look at stories and you and subtract where you see people who have done their debt homework and not done too much to be short term have long-term or termed out their debt and look at businesses that really have sort of done reasonably well through this period, are struggling to get the financing or the leverage that they need and that's why they are in the b b&b category so i think there is a lot of stories. you could probably add in aaa clos there are a lot of places to get high single-digit/low double-digit yields in the etf space and add some names on top of that. it's a little trickier it's not as easy as pressing

buttons on your accounts, your online accounts. the bond world is where i think a lot of the opportunity is. >> david, thanks all right. that does it for us. look, there they are getting ready r ow lchfo"perun." they are back after this quick break. lcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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