good day, welcome to "power lunch. busy hour for you here today coming up, stocks mostly lower as the markets prepare for an important week it is the biggest week of earnings, believe it or not, with 20% of the s&p 500 reporting. we will look ahead to some of the biggest names with market moving potential >> plus we've got the fed meeting on wednesday what will they do? 25 50 no way will they cut? just kidding

what will they say about conditions for ending rate hikes in the future? dennis lockhart will tell us let's check the markets which are trading to the down side a lot of what worked in january is not working today the nasdaq going from the biggest leader to the biggest laggard down 1.5%. the russell 2000 is in the red >> let's check in with bob pisani for more color and data on the markets >> you know, there's three big things we'll be watching this week can we end january positive in you know the january barometer, so goes january so goes the year we end positive for the month, that's a psychological boost for the markets. number two, big earnings week coming up. we'll hear from the big industrial and big technology names. caterpillar and u.p.s. on ted c tuesday morning. amd and apple and alphabet

mcdonald's we'll hear from tuesday morning. big economic data. we'll get the employment cost index, eci on tuesday that will show you how employee compensation is growing or not growing. the fed meeting on wednesday they are not going to declare victory over inflation finally the jobs report, we'll see probably the lowest print in a couple of years. talking to the traders here, if there's no got you in the eci or jobs number, a lot of people feel the tape could still be going up >> thank you very much let's turn to one of those big earnings reports due out this week. seema mody is watching caterpillar, especially with all these questions about the reopening. >> will there be a stronger demand for tractors and excavators wall street will want an update

on its mining business the company is continuing to invest in autonomous trucks that go down into the earth denise johnson telling cnbc that the rebound in commodities will strengthen demand in equipment and caterpillar repurchased about 23% of its outstanding stock for 21 billion over the last ten years that's more than any industrial. we're wanting to see if that continues. busy week ahead for the markets. some key earnings reports to watch. in addition to apple, amazon and google our next guest has a few others she's watching here is stephanie link from hightower advisers she's a cnbc contributor let's start with caterpillar what are you looking for here in that company's shares?

>> good to see you this is a huge week for earnings and economic data. caterpillar is one that i own. what we doe no that backlogs are high inventory is low equipment is worn out and nonresidential spending is down 13% from prior peaks there's more room to go. demand is here they have pricing power. komatsu raised prices 10% just last week. the story for caterpillar is their margin recovery. but the other thing is, energy and transportation is about 35% of ebita way back when it used to be 50%. >> is there a china story here as with another stock you're following, starbucks >> yes there is a china story with

regards to caterpillar it's about 10% of their total revenues has a china personality. starbucks will be great in the u.s. comps -- i expect about 10% in the u.s. there's some whisper numbers at 12%. they have done a good job in the u.s. in terms of pricing, better food attachment. that sort of thing it's the international comps that will be challenged, probably down about 3% to 5% all dbecause of china last quarter they had a comp down in china. now that you have china reopening, you should see better numbers going forward. the only problem with starbucks, it's expensive i think this is a compounder with a great brand >> that's not the only way it's expensive. >> let's talk about one with a little bit less china gearing, that's meta.

it's been interesting to watch the stock is cheap and their social platforms will still do quite well as we pound the table on tiktok. it's been fascinating to watch how different the response is to microsoft's own $10 billion efforts in the ai direction versus meta, which seems to be flowering. >> meta has been all over the place. this stock is up 68% from the november lows. yet it is still down 50% from a year ago >> wow >> it's been a roller coaster. unfortunately i own it i'm glad it's recovering i think the setup for 2023 is way better than last year. i think you'll see solid daily active users, monthly daily active users reels will be the issue. last quarter they did 3 billion in rev new run rate. i think they have to get to 5

billion to see things improve. and whatever they talk about monetizing whatsapp. we always ask the question and they never answer it and the cost-cutting story they're doing. 13% of the employee staff getting cut. 11,000 people, but keep in mind for the last four quarters they hired 19,000 people. there's still a lot of room on the cost side they can do. >> talk about some of the economic key data. we have the fed report on wednesday. a jobs report on friday. >> it's a busy week. not only the fed, it's the ecb, the boj. i think the fed goes 25. ecb does 50. i think boj keeps the pedal to the metal. in terms of the jolts number, that will get a lot of attention. 10.3 million is expected then the unit labor cost that's a metric of inflation that the fed looks at as well. that's expected at 1.6%.

down from 2.4% last quarter. that's important you mentioned the non-farm payroll numbers. i always look at average hourly earnings numbers, expectations are for 4.4% over the year >> more content per square second of delivery than thin stephanie link, thank you. >> speaking about squeezing things in, the semiconductor stocks have been on a rally despite some cautious remarks. christkristina partsinevelos ha on that. >> as wall street analysts agree, a recovery is under way for the second half of the year. this despite cautious rumors

from texas instruments, seagate and others investors could be snapping up games from the last eps cuts you have strength in auto and industrials which you know we talked about in the previous hour, nxp earnings are out today. that could shed some light after the bell microsoft increasing cap ex, that could be good with big cap tech coming in gpt bringing back names like nvidia the largest component of the stock is up 33% right now. might be too cheery too soon amd is reporting tomorrow and is expected to get hit by server concerns samsung will report on earnings. and on thursday, big cap tech and any changes within their capex could be a negative sign

>> let's talk more about trading the tech stocks. vijay, i'll pick up on something we talked about with kristina partsinevelos. it feels like the shortages are turning into gluts >> i think they've executed well we're seeing a lowdown china was soft in the december quarter. going into 2023 as well, in the first half, what you're seeing is orders slowing down sales are slowing down affordability is tough we've been more cautious you've seen some cutting pricing. where we had supply support taj last year, now you have a demand slowdown

the supply chain is down as well starting to see some things go the wrong way. we're more cautious. the industrial side is also a little bit softer. the soft guidance is there as well >> you point out several things about how semiconductors tend to outperform most years the s&p 500 and the nasdaq and so on and so forth this year you say you see a more favorable investment entry point likely in the second half of the year explain your reasoning there and how does that translate? do you expect these names will decline a little bit more during the first half of the year and then hit a bottom and then that's you're moment >> eah i think what you see in the first half is basically a situation where things are softening. the top line is coming down, but

inventories are going up we hit that peak in the first or second quarter in terms of peaking and revenues declines. by the second half we start to see a recovery that's how we look at semis broadly. key names we like on the play, on the long side, nvidia, amd, bro broadcom, even allegra going the back half what he would see is some data center names. you see the consumer pretty stretched because if they have these high rates continuing through the end of the year, it will be a headache for the auto supply chain >> i might worry that the smh is up 17%, if i follow your advice

and i think the second half will be better, i might think the train will leave without me here >> near-term you have had a significant run in the stocks. it's kind of run a little bit too far too fast you'll be more cautious dipping into the names >> finally as we just discern what's happening with the cycle more broadly all of these are cyclical, right? any way if you wanted to side step things, can you do that in the world of semis >> these higher dose names, they have gone to correction much faster somebody like nvidia has a bottoming of entry in some of those markets, especially when you look at nvidia and the data

center guys, they've been cutting. amd cut 50%. you're seeing some cuts in those markets. you should see those segments stabilize faster what you're seeing on the auto side is names picking up more and demanding is slowing down. so these lagged some other markets. >> if we hear something worrying from nxp, we can say some of these named moved ahead more quickly. >> thank you coming up, we're less than two days away from the fed again on interest rates. what will they do this time? what will they say about future plans? we'll talk to someone who used to be in the room when it happens. and johnson & johnson contributing to the dow's losses

today. what sent that normally relatively stage stock tumbling three% look at the cliff it fell off. "power lunch" will be right back (vo) give your business an advantage right now, with nationwide 5g from t-mobile for business. unlock new insights and efficiency, with leading ultra-capacity 5g coverage. t-mobile for business has 5g that's ready right now.

welcome back to "power lunch. investors counting down to the first fed decision of the year it comes wednesday the fed widely expected to raise interest rates by a quarter point following an aggressive pace of rate increases over the past year. here to weigh in on the next

move is den it's in lockhart, former fed president we're also interest the in what the fed does you are in the camp of thinking they'll raise a quarter point but a half point is not completely off the table what really interests me here is the calibration or recalibration words that the fed might use on wednesday in its statement on in its press conference what will you be listening for as a telltale of what may come next >> i think you have to listen for the elements in the data picture that really are going to dictate where they stop. that would be the confidence they have that the inflation data are actually showing the kind of decline and inflation that they hope for and they need and that it is beginning to

convince them that inflation is headed in the right direction. that's one example demand data as well. i think those are important to the overall picture. they have been trying to slow the economy. some emphases on the data they'll look at to make their decision when they determine a stopping point >> what they say about what inflation is doing and how enduring that change in inflation direction may be and the demand data. those are the kinds of things you'll be listening for most acutely. do you think -- whether they stop at 4.5, 4.75, or 5 or 5.25, do you think they'll stay at that stopping point for an extended period?

>> i do. i think what they're going to try to calibrate as they go through the next two or three meetings is a stopping point that they think will be durable. that will hold up for a hold period and all signals are that as of now they're thinking the hold period will last most of the year, if not until yead en let effects that bring inflation much closer to target without necessarily doing -- going into recession or doing much damage you know, it's not an exacting thing, but i think that's what they'll be trying to do. >> you probably know, and it's great to have you here, the market is betting on a different outcome. there's a chance they have to

make big cuts. do you think there needs to be a wider range of views of the fed? last year when they were wrong to the down side, basically everybody held the same view this year when they insist they're going to up to 5% and holding, basically everybody has the same view. don't they need a wider range of dispersion to indicate more intellect cal flexibility if things don't play out as they expect >> a wide rang desirable. i have to say there's a bit of tendency to group think as you get closer and closer to the meeting. at the same time they want to present a united front in the sense that the committee is together, there's not a lot of, let's say, real difference of opinion on the committee that would be something that

would undermine confidence i don't think they want to show that what goes on in the room and the views expressed there may not be known much until the minutes come out in three weeks. it may show there's a variety of views. but coming out of wednesday, i think they're going to show very much a single position, a single point of view. >> without divulging some of the secrets of the temple, i'm curious, there's a jobs number that will come out on friday with average hourly earnings, those kinds of numbers, is the fed private i have to those numbers ahead of time? >> my experience, no the chair gets some numbers, i think the jobs numbers, the night before they're announced, but the chair does not share that information with at least the presidents and

may not share it with the governors. so the fed is getting the data at the same time the markets are getting the data >> obviously this would be 2 1/2, 3 days ahead of the release. the release is friday. in the fed chair gets it the night before, that's moot, because these meetings are taking place ahead of that thank you for taking us inside the room >> and you make a very good point. the meetings take place and often there are key data elements that come in two days later. they simply don't have access to that information when they make the decision >> could you imagine if they hiked rates and we had a negative payrolls number >> you know, these kinds of things have happened where you had disappointing numbers or surprising numbers they have to make the call it's a system built to get to a decision by noon of wednesday. and that's the way it works.

>> all right >> fantastic thank you very much. dennis lockhart, thank you. further ahead in the big picture, the early days of the gig economy, everybody had the same motto, but after the pandemic, an economic slowdown, now it's a different story time to separate the weak from the strong who is best positioned for this new gig space? we'll be right back. nope. how do we show that we'll stand tall through the storms? nah. (thunder) how do we make our clients feel secure and- ugh... not lions. (lion rumbles) we do it with our people. people who've been looking after people for over 170 years.

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welcome back to "power lunch. the dow down 180 points. pretty much session lows the nasdaq is leading the way with a 1.6% drop chips in china are among the drags as we discussed earlier. a lot of these names have had big profits this year. the chinese stocks up sharply from the fallows getting hid hard alibaba down 5.5%. reporting its moving its headquarters to singapore. you can see jd.com and pinduoduo also down. let's get to rick santelli in chicago.

>> the equity markets are trading below the previous day's lows, the dow jones in particular that's pushing yields down a bit. if you look at an intradays of tens, it's more than -- it's been a lively yield session. if you open up the that is right to the last unemployment report, even the spreads have come into consolidation mode we want to pay attention to any of the moving parts.

kelly, back to you >> thank you now to shares of johnson & johnson taking a sharp turn lo lower. meg tirrell is here to explain this is what we talked about yesterday and the talc liabilities. a court of appeals dismissed j&j's attempt to dismiss the claim. j&j is saying they'll appeal or challenge third circuit ruling they say we continue to stand behind the safety of johnson & johnson baby powder which does not contain asbestos or cause

can cancer >> i assume they did a texas two-step >> that is the legal name for the way they sacarved out the liabilities and filed that company for bankruptcy the idea they said was to create this pool that would take care of all of this together and sort of a neat and tidy way they put $2 billion into that. we don't know what the liabilities could mount up to if they have to go through them individually we have seen up to $2 billion

for that one award lone. these could mount and get quite large. >> let me be inpolitmpolite here >> johnson & johnson seized this spunoff company with $2 billion and says it's going bankrupt to limb the amount of liability they would have to pay that seems a little too cute to me >> you summarized the third circuit court of appeals decision that was the argument. they say you have to be in financial distress to get the protections of bankruptcy court. this company was not in financial distress this has implications for other companies. trying to use this >> they're not the only ones who

have used this, i'm sure, or would contemplate using this kind of maneuver to avoid a large litigation risk. thank you for indulging me let's get to contessa brewer charges in the "rust" movie trial will be filed tomorrow this from the fatal shooting of cinematographer hell halyna hutchins freezing rain is forecast for tomorrow from texas to tennessee, across the country about 50 million people are under some kind of winter weather alert. hockey hall of famer bobby

hope has died. he helped lead the blackhawks to the stanley cup in 1961. to this day, he remains the blackhawks top scorer with 600 career goals he was 84. one of the best players i ever saw contessa, thank you. ahead of "power lunch," is wall street ignoring too many warning signs? big tech layoffs, conference call warnings. investors are still jumping in on that tech rally now getting distracted by the street's shiny new toy a.i. we'll be right back.

welcome back the first month of trading for 2023 nearing its end on the surface, things looked p kind of promising. december pir

despite that, the nasdaq is closing up is the market smoking a little too much hopium? >> too far, too fast is no good. that's the way i can see it from this perspective everybody has their charts and wheels everybody has their opinions you can look at either side and they all make compelling sense right now, there are people saying we're off to a great start. interest rates are not going to go much higher we know the earnings are coming out this week. this is a market with zero conviction the market just has a mind of its own. it needed this big breather, this big upside breather we've seen this before right now i come back to zero conviction and, you know, as goes january, so goes the year we'll see. >> yeah.

but you say there's zero conviction, but there's a kind of conviction, is there not, that maybe the worst of the inflation moment is behind us. whether that turns out to be correct or not, there seems to be a general consensus that's the case and that we are in the later innings of a rate tightening cycle. and there seems to be at least -- i would call it if not conviction, consensus that's the case >> tom lee has this great chart, he says this is 1982 it's a compelling chart. tom may be right i wouldn't bet against him but i just know from here to there, there's a lot of fits and starts we're not off to the races i can't believe we're off to the races. i think we're into a period where you have digestion you need more digestion, and i think people need to understand there's risks involved in the market >> so many different stocks to talk about

you like sherwood williams here. there's like a fan club of people who like nvr. it's such a -- >> it's such -- i write two newsletters. these are totally the most boring companies, one is big stocks, one is little stocks they're made for me. i love they're the counter meme companies. they were left for dead. nobody cared about them. you get a company like nvr, probably the single best run housing company out there that nobody talks about because the company itself doesn't talk about it sherwin sherwin-williams, it's like watching paint dry it's a great company extraordinarily well-run business that doesn't get people excited. i have this company called hub group. you never heard of them. hub group is the second fiddle to jb hunt it's a trucking company that trades at a fraction of what jb hunt trades for.

those are the companies that are out there. there are thousands -- there are thousands of companies, but many companies that are great companies that people discover every holding is like a fintech play on the casino industry. it has great cash flow, reinvesting in itself. he has a games component no one talks about it. one of the most speculative stocks i like, triumph financial. >> how do you bubble up companies like that? what are the one or two metrics that cause you to find a sherwin-williams, a hub group? what are you looking for on your screens or in your research that leads you to those >> i have a screen process i use to screen out companies. that's thefirst thing i do what i'm looking for, especially for the smaller names, i'm

looking for free cash flow yield, companies with strong free cash flow, strong balance sheets that rank high in the database we're using they rank higher than others that way at least we can get a head start on finding companies that we think will do better over the next year >> if the important thing you just said to me is it's as much about eliminating the bad ones as it is about finding the good ones >> you have to screen out the bad ones >> you eliminate the 80%, 90%, whatever percent that don't make it and then drill down and concentrate on the 5%, 10%, 15% that do. great to hear from you >> thank you we'll argue about this, i think he's right about everything, but not chat gdp he's casting doubt on it we'll have to talk about that. ahead on "power lunch," the gig is up.

the gig economy stocks are rallying across the board to start the new year the bumpiest part of the ride is in the rearview mirror they'll be here to make their they'll be here to make their case next. or... [whistles] we can make a change. [clap] we can make work, work for our communities. because it's not goodbye, world. it's hello, team earth. [clap]

welcome back moffett nateson bullish on the gig economy saying the bumpiest part of the ride is in the rearview mirror. it's great to see you. i don't know if tyler shares my skepticism about the long-term model of doordash and others >> they are expensive stocks and from a consumer perspective and from a multiple perspective. we estimate $4 trillion in addressable spend when you think

about mobility, rideshare, and then delivery, like food delivery from your favorite new york restaurant or grocery delivery due to the size of this market, it attracted a lot of venture capital dollars. we estimate $125 billion that led to some irrational behavior and growth at all costs from pre-covid, food delivery companies delivered $60 billion. we are focusing on profitability, we see this expanding over the next several years and i think it will cause investors to reconsider the views that they've held around the gig economy stocks for several years, which have been a correct level of skepticism until now. >> is there the level of demand to compensate for what i

perceive as a customer of these the rising prices? >> yeah. so there's different levels of demand we looked historically about how these industries behave. there's no example, like, uber didn't exist in prior sessions, neither did doordash we looked at how consumers reacted with taxi cab spending in prior recessions. there was decline in previous periods. restaurant spend is mind blowingly strong when i to the macro spending. it was low single digits if you go back over the multi generational trend, consumers spend more on having food

prepared for them every year there will be ordering from doordash that is more money than picking it up yourself, looking at this gives consumers -- >> i confess, i'm lazy >> you are not you're not the only one balking at some of these prices. >> the other night, i have a favorite restaurant in town. there's one in your town as well i got so tired of waiting for them to deliver, i went down and god it myself. that's too much information. michael norton, thank you. we'll see you soon. still ahead, ammonia is for more than cleaning up your bathroom could also be a game changer for clean energy that's next when "power lunch" continues.

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welcome back in the race to find cleaner fuels, the heavy duty transportation sector is way behind because batteries don't have enough juice to power trucks and ships and researchers are turning to ammonia for a potential solution diana olick joins us with the details on her series on clean

start-ups. >> yeah. heavy duty trucking accounts for a quarter of greenhouse gas emissions for transportation batteries can't replace diesel but new technologies from ammonia are emerging and big money is pouring into the startups at the helm from tractors to trucking to shipping, ammonia may be the answer to a clean energy future. companies like mab energy solutions, and brooklyn based amgy founded in 2020 are working on it. >> our technology enables efficient conversion of ammonia to hydrogen so you can use that process on board in the vehicle to produce hydrogen anduse tha to run the vehicle using the fuel cell. >> reporter: amgy tested its technology on a semi truck and made it work on a john deere tractor as well as at drone. the next step is clean shipping and a tugboat. >> we are partnering with the

industry stakeholders in shipping and heavy manufacturing and heavy industries, so certainly the collaboration is the key to scale the few technology like ours. >> reporter: investor saudi aramco is one of the largest petroleum producers in the world but sees ammonia as part of its future. >> it's going to be a growing market in a carbon contrained world. such products are going to be val valuable and the demand will rise. >> reporter: in addition to saudi aramco amgy is backed by ap ventures, sk innovations and dcvc total funding $70 million. the process is more expensive than just using diesel but the saving to the environment is what's at play here. the hope is that when this scales sufficiently, the costs will come down back to you guys. >> wow thank you very much. diana olick. still ahead, fin tech,

financials and evs we're trading sophie, goldman and lucid. look at sofi up 17%. melissa lee is live in miami beach with a preview wow. >> lots of fun maybe too much sun we've got a big show coming to you for the iconnections global conference headliner, jim chanos his takes on the prospect of a conflict with china in 2025 and we will f. you tonight here 5:00 p.m onast money. much more "power lunch" coming much more "power lunch" coming up your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown

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all right. time for three stock lunch sofi higher after reporting a narrow than expected loss for quarter number four and upbeat outlook as well. lucid up amid speculation it could be acquired and goldman sachs up 2% on the day let's trade them with the head of the technical analysis at oppenheimer. let's start with sofi, like it or loathe it >> you could trade it higher but not tactical right here. i think what's notable it moved above the 200 day moving average for the first time since falling below '21. that indicates bred is broadening and you're getting the rotation in the laggards

the next position at 8 if you're in the you're looking to buy close to 6. >> there we go now we're showing sofi there 13% nearly today what do you make of that what would you do with the stock? >> the sofi is the one we'd really -- that's the one i was just mentioning there. i think what's notable is it just moved above the 200-day for now you're sticking with it. i think, again, market breadth is broadening out. >> yes. >> $8 is the resistant. >> i apologize, but you well state rhee stated your case. what about lucid group are they doing price cuts next. >> let's go the other way. this one reversed lower on its 200 day moving average that's notable, upside fatigue here we see that as a near term opportunity to sell long term. cautious below the 200 day average. >> your clock is 10 minutes behind

i just want to point that out to you. never mind that. let's go to the final question and that is goldman sachs. >> yeah. i like this one, ty. the -- we're bullish capital markets, youwant exposure to what is going to be more market upside here and this pocket of financials is a great way to get that exposure. it's a broadly strong group. here's a stock that had a great run and since softened and building a base above its 200 day around $340. i think really just stands to benefit from this next round of bull market rotation you will go from the laggards to what we've seen to what were the leaders. >> thought on the markets, down 202 on the dow after what has been a very good month are we just seeing run-of-the-mill profit taking or something to do with the fed >> yeah. i think this is consolidation after a big run. it's -- the trend improvement has been there

it's been with a broadening amount of stocks and the right amount of stocks too for all those reasons, i think it is strength that should continue over the coming months. >> ari, thank you very much. it's actually really almost 3:00 not 10 of 3:00 as the clock says. >> unless he's on a delay or some other time zone. >> thanks for watching "power lunch." >> "closing bell" starts right now. stocks are pulling back. in fact, sitting at session lows as we kick off mega cap earnings and the fed decision this is the make or break hour for your money i'm mike an toely in for sara eisen. the s&p sitting on a 1% decline up 2.5% last week, up 6% year to date, which is month to date, coming into this week, the dow slightly outperforming defensive groups, doing better than some of the leaders of the past month which include te