for why some of these things happened, almost every asset that was picked was somehow down in value it's just it comes down to netflix. >> it does >> talk about bottom taking the whole thing. >> seymour had paypal and dash >> look who's going to be with us on monday, 2:00 p.m ryan reynolds. he will be accepting his award >> major award >> thanks for watching "power lunch," everybody. enjoy the super bowl >> yes, see you monday closing bell starts right now. it is a mixed session for the major averages to close out a mostly down beat week as attention turns to tuesday's inflation report this is the make-or-break hour for your money welcome to closing bell. i'm mike santoli in for sara eisen. here's where things stand in the market the s&p 500 really been kind of twitching around the flatline most of the day, now slightly positive, did have a bit of a decline, less than 0.5% for the day. dow outperforming some of the defensive issues the nasdaq, giving some back

tesla is a downside leader there. ten-year note bumping higher above 3.74% and here's the scorecard for the week on the major averages the nasdaq is faring the worst it was strongest year to date coming into this week, but it has shown declines week to date. the s&p 500 down about 1%, 1.2% or so at this point. still up more than 6% year to date coming up on today's show, we'll talk to content and advertising expert gary vaynerchuk, whose agency has three ads in sunday's super bowl he'll tell us why he thinks the record $7 million price tag for a 30-second spot is actually underpriced. all right, let's take a look at the s&p 500 where this week's action, a little bit of a payback week for the s&p 500 has taken it you know, we've kind of knocking around this 4,100 level. the highs for this rally, which started at the october lows, were last thursday, a week ago thursday, just under 4,200 so we're down 2 to 3%, it's not

that consequential a pullback just yet you're seeing some of the more defensive tone, though, some of the more speculative stuff that ran higher, heavily shorted stocks, have given back but overall relatively noncommittal. a lot of signs, too, that the committee itself is pretty sturdy, at least it was in january. take a look at consumer discretionary on an equal weighted basis relative to consumer staples this is a pretty good indicator of the cyclical or defensive tone of the market there is a three-year look essentially, you have consumer discretionary pulling out ahead again on this time scale from consumer staples and really look at the aggressive move off the lows from late last year in discretionary whereas you had more or less sideways action in staples, which no longer seem real beneficiaries of pricing power of inflation in the economy so this is one of those cues that people are leaning on to say maybe the market is sniffing out a better time for the economy, but really, a lot of conflicting messages coming

out of the markets and coming out of where we are in the macro cycle. our next guest says he sees a false buy signal flashing that could set investors up for trouble. one of those mixed messages. joining us now is 314 research cofounder, warren pies, and i really appreciate you coming on today to talk about your latest strategy piece, which i thought did a great job of sort of wrestling with some of these conflicting data points, some of which have a very long history of being reliable. such as the technical action in the market coming into this week, the tape looks much stronger on the other hand, you know, fed, macro, and some of the other stuff gives you some pause. so, where do you come down on how this shakes out? >> yeah, thank you for having me when you look -- step back and look at the market right now, i kind of feel like depending on what your philosophy is and how you attack the market, you could see a totally different -- have a totally different view, and so we come from a background where we have macro and technical, and

one of our old colleagues, ned davis, he was famous for saying his rules of research, and two of the big rules of research was, number one, don't fight the tape number two, don't fight the fed. and as i see it right now, i think these two big philosophies or truisms are really running up against each other, and so let's start with the technicals for a minute we have had the s&p 500 break above its 200-day. we have seen the 50-daybreak above the 200-day. we've seen on the nasdaq, it's broken above the 40-week moving average on record volume, volume we haven't seen for over a decade at the same time, we've had a breadth thrust, which technicians love, they have great track records, and this happens when you basically have a large universe, and you have broad participation. let's say 90% of all issues in the s&p 1500, for instance, have broken above their ten-year moving average so, all these things have great track records. that's the tape. but on the other hand, the fed is obviously doing the most aggressive tightening cycle that

we have seen in modern history, and then on the -- at the same time, running down their balance sheet, which i think is especially important at this point in the cycle and so, as we see it, when we start controlling for these two variables, what we find is that these technical indicators, they have long track records and they're good, and i know that price can see through a lot of things, but when you see them fire at this point of the fed cycle, while the fed is hiking aggressively or pauses following hikes, the track record is much less clear and so for us, we see the -- we were siding more with the fed. i think that's the dominant factor in the market, not to mention the fact that the market is now about 10% overvalued on forward earnings plus interest rate basis so you're not just fighting the fed you're fighting valuations, and i think an earnings outlook that's really baking in a soft landing. >> it is absolutely a fair assessment of where we sit, and i think why, in fact, both more bullish traders and investors and the bears are pretty well dug in, in the sense that

they're not persuaded necessarily too much by the alternate side i guess the question is, when you have such a transparent fed, they've told you they're going to be this aggressive, they've projected where the target rate has to go to for a while, and we've been living with that cycle, and it's slowing down, whatever the fed has left to do, presumably it's not too far from finishing, does that change the sense out there that you're not really fighting too hard against the fed if, in fact, you're bullish right here >> well, i would push back on that a bit i mean, it would be historically anomalous for october ultimately to be the lows of this cycle so, we've never seen the market bottom in modern history during a fed hike cycle, period we've only seen in the weird 1987 case one time where the fed funds rate was higher 12 months following a major bear market bottom and so, you know, we're not even at the pause phase yet the fed's still kind of pushing out this hike phase. the market's in the process of

pricing out the cuts they had for the back half of this year and then you have the balance sheet, and there is a lot of -- despite the fact that we think the fed is really clear on what they're doing, qt has not been totally defined, so will qt go for six months or two years? this comes down to how they define banking reserves. that's kind of technical, but the fed's targeting 8 to 10% of nominal gdp of bank reserves but governor waller has said this could include what's parked at the reverse repo facility, which is $2 trillion that could push qt out to next year and ultimately, we see qt as a huge impediment to housing affordability. mbs rates will not come down while the fed is doing this round of qt, so for us, i think the fed is a pretty big headwind at this point. >> clearly, it all comes together for you no saying the ri risk-reward for stocks doesn't look great up here what do you think we're in for is it essentially down to the lower end of the range are we going to break below the october lows, do you think

>> if i had to guess, i think that we're in rangebound trading. and and i think we will see new lows the near term, i wouldn't be adding to equity loans if you're riding this, you can still -- we've always said, we build conviction on fundamentals, but we manage risk on technicals, and so if you're riding long positions, that 200 acts as a good stop loss for you if you want to let this stuff run. at our firm, we have a risk model that judges the probability of a drawdown. it's showing low risk. that's mainly technicals and volatility, so we're telling your clients, watch the 200-day, watch our risk model if you break below that, then you really want to get defensive. i have no conviction based on the technical moves that we're seeing and ultimately if you ask me, i think we're headed lower probably back to the lower end of the range we'll see what happens >> we will warren, i appreciate you running

through all that with us we'll talk to you again soon, warren pies. >> thank you for having me after the break, entrepreneur and advertiseing executive gary vaynerchuk joins us to talk about this year's super bowl where some ads cost $7 million, and he says that's underpriced. plus thoughts on twitter, tiktok, and much more. all that next. you're watching closing bell on cnbc

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2021 and $6.5 million last year, but our next guest says $7 million is actually underpriced. joining us now from arizona, gary vaynerchuk, and he has -- well, vayner media has three spots coming in this year's big game, gary great to have you on initially, just tell me why $7 million is a bargain for an advertiser this year >> i mean, it all comes down to attention, right the reality is attention is the number one asset, and not potential attention, and you have the entire country actually focused on watching super bowl ads, which is unlike any other television commercial that runs in any shape or any form obviously, the commercial has to be good to make the thing happen, but the attention is underpriced compared to the cost

per attention in every other environment that we see in digital, television, or traditional advertising. >> is this just because -- i mean, if a hundred million people in the u.s. watch it, that's some of the estimates this year. if that's the case, that, yeah, it's always been the most widely watched event of the year, but compared to the single audience of any other program, show, any place you can find people assembled, it's that much bigger on a relative basis? does that actually translate directly into return on investment >> no, it doesn't. it's that americans actually want to watch the commercials. nobody wants to watch the commercials on the grammys nobody wants to watch the commercials on the oscars. nobody wants to watch the commercials in the afc and nfc championship game objr the nba finals this is the only time people in america actually want to watch a commercial, thus rendering it the best deal, while all the other commercials on television are groesly overpriced

>> if you're talking to your clients, you have some ads in this super bowl coming up, pepsi zero sugar, for example. how are they going to determine whether they got a good return on their investment? >> sales amortized over time. it's not like the next day but you look at sales in a window, and you look at what you're able to do with the leverage of the awareness, like right now, you're playing a mr. peanut piece of content. you have plenty of people that watch this show. i got previewed. i got 30 sectionstexts right no. you have a real audience here, and they're watching mr. peanut right now. that may lead to them choosing a planters product, but ultimately, this is about business this isn't about making people laugh or being too silly like, it's great to have steve martin in this, but we want people to really focus on considering to try pepsi zero, and so this is about business. >> yeah, it's interesting in the sense that the broader digital

advertising environment has, to a allergy degree, been about targeting and, you know, point of sale-type things and trying to be very actionable, and narrow casting in a way. so, this is kind of the opposite what are you seeing in terms of your clients right now -- let's say you're being a little more careful about overall ad spending what are they prioritizing in those other platforms? >> well, it's interesting. you just talked about the difference between branding and sales, and to your point, digital has been very focused on conversion, the meta facebook world really mattered and worked right now, what everyone's focused on is building brand in social people are starting to realize that your brand is built in social much more than in regular tv commercials, non-super bowl or in billboards or in print that social brand, not selling people, but putting out content that makes them interested in the product or consider the product is exploding, and so it will continue to gain market share, because social media is

where a shocking amount of human attention is being allocated to, but what we finally are starting to see is the branding elements enter the social sphere much more than just trying to make it a sales conversion channel >> which platforms are best suited for that in your view i mean, tiktok, obviously, now maybe the greatest number of minutes spent, but instagram, traditionally, being seen as friendly to that type of thing too. >> it's a great callout. i would say it's where your strategic creative lands, meaning, believe it or not, linkedin, for some consumer products, is overperforming twitter or instagram for certain brands because they understand how to make the videos or pictures or written words that hit that audience better it is a massive battleground for the advertising agencies like vayner media and the fortune 500 brands to outflank their competitors in creative strategy we call it s.o.c., strategic organic content. are you posting to just say, happy friday

or are you putting out content to build brand any of the platforms you listed on the screen can dominate for brands the punchline, are you good at twitter? are you good at instagram? are you good at tiktok certain humans are better at certain platforms, but the biggest brands in the world over the next decade will be built on the people that can execute best on all of the platforms so they're hitting as many customers as possible. >> just to bring it back to the stakes involved in super bowl for the advertisers, is there a risk at, you know, everybody the next day reviewing the ads that ran during the game and saying, wow, that was a clunker? that really misfired i didn't think that worked >> yeah, i mean, i'm less worried about the pundits talking about the content. i'm less worried about the opinions i'm more worried about the action but there's a massive risk a lot of super bowl ads arenot great. it's just a punchline.

they were trying to be too cute or clever, or the agency was selfish about making a video instead of actually trying to sell stuff, and so there's the massive risk when you're spending $7 million just on the distribution it's $7 million just to show up on the super bowl. what about the talent fees agencies the production fees? the out-of-pocket fees this is a huge bet for brands, and if it doesn't land with the 300 million americans, it's a huge risk. >> yeah. and i guess, look, last year, everything was so heavy with crypto and with a year's time passing, maybe it doesn't look like all of them were well timed. that was for different reasons other than brand quality we'll leave it there gary, great to speak with you. >> that's right, that's right. >> enjoy the game. >> cheers. thank you for having me. take care. >> all right let's check on the markets now. you have the dow up about 107 points on the day. s&p 500, right around the flatline, down more than 1% for the week nasdaq, underperforming on the day. google employees are sounding

off on ceo sundar following this week's a.i. chat reveal that cost the company tens of millions of dollars in market cap. we'll talk to the cnbc reporter who got an inside look at google's internal message board. that's next. as we head to a break, check out some of the top tickers on cnbc.com the ten-year yield on top once again, followed by tesla, lyft today, the s&p 500, and walt diey 'lbeig bk.sn you'll always remember buying your first car. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine. we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank

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president biden's billionaire tax on the wealthy outlined this week in the state of the union address may be dead on arrival in congress, but on a state level, it is gaining traction lawmakers from eight states, including new york, california, illinois, and hawaii are among those pushing bills to tax wealth and income. joining us now to discuss, cnbc's robert frank, and i mean, robert, those states i just mentioned are ones that are already suffering about migration, have already struggled to keep wealthier

residents in-house i suppose it's not an automatic easy trade to say they're going to get that revenue. >> you're right. that's why i think it's important for investors to really keep an eye on this, because even though it's not imminent, certainly at the federal level, as you mentioned, probably not even at the state level, the democratic party certainly wing of the democratic party is just captivated by this idea of taxing wealth and now taxing unrealized gains, so you have proposals in california to tax wealth over $50 million. in new york, you've got a proposal to tax all unrealized capital gains over a billion dollars, and a lot of those unrealized gains are stock, so if you own a lot of apple stock and it went up during the year, even though you didn't sell any, they would like to tax that. these states, as i said, some of the governors are going to oppose it so it doesn't necessarily mean it's going to happen any time soon, but as the sort of left fringe of the

democratic party continues to push this at the state and federal level, it kind of moves the moderate wing a little bit closer, maybe, to being more amenable to raising the overall tax rate or raising the capital gains rate because there's so much impetus and energy put on the wealth tax, which is an extreme tax. >> it sure is. or even a movement toward an alternative minimum tax that actually acts like maybe it was initially intended to on very, very large earners we'll see if any of that takes hold robert, thank you very much. so, what's wall street buzzing about? fallout from bard's blunder. google employees criticizing their own company after shares fell nearly 10% this week. messages and memes describing the effort as rushed, botched, and comically shortsighted let's bring in cnbc's jennifer elias, who broke the story about this employee dissent, and jennifer, i guess the question is, is this a new wave of

dissatisfaction? is this particularly targeted at this kind of fumbled effort this week, or is there more unease welling up in the ranks at google >> there has been unease for a bit that's been rising within the ranks. i would say because of the short span of time between the bard announcement and the fumble with that and then the layoffs announced abruptly last month, that's sort of creating this compounded reaction from employees who are really feeling dissatisfied, embarrassed a little bit by the recent bard fumble and just really calling out ceo sundar pichai, and the internal repository took a more serious tone >> it's fascinating. so, do you get the assistance that there's embarrassment because of how the rollout was handled or does it go deeper into maybe google's just not

prepared for this technological shift, and maybe the products themselves are not ready or the organization was not really in place to capitalize on it? >> yeah, well, i think that it's a combination of everything you had just mentioned particularly with the bard rollout, on monday, you know, today announced bard, confirming our reporting from last week, and that didn't have very many new details, and then they said they were having an event the day after microsoft's event, and then that also didn't have any details, and it was sort of disorganized and dishevelled then their own promotional video advertising bard has a mistake in it, so all of these combined really made for a bad week in how employees view leadership, but it's been, you know, they also threw some words back at ceo sundar pichai, saying, how is this keeping focused? this is seeming like a rushed reaction to what microsoft is

doing with chatgpt, and you just told us in december, according to an all hands meeting that we reported, that you were going to -- it was going to take time. they needed to slow down because they could do reputational damage if everything wasn't correct. so, they sort of felt like it was a little bit of a backtrack from that as well. >> yeah. it's all fair, and i guess look, the culture there is one where employees have a voice, and i guess this has got a hard edge to it sometimes. jennifer, thank you very much. great to talk to you about this one. >> thanks. all right, the latest read on consumer sentiment hitting a 13-month high according to new data out today but messaging on the consumer has been mixed on earnings calls. up next, mastercard's michelle meyer joins us with her view on the state of spending, including some surprising areas of strength we'll be right back.

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the american consumer has been under the microscope this week as wall street awaits tuesday's cpi report and retail sales data on wednesday. today, the university of michigan released its consumer sentiment number, showing it at a 13-month high. the companies have sent mixed signals about shoppers

ralph lauren, tapestry, affirm and capri all reported earnings this week, and saw their customers taking more precautions over the past quarter. ralph lauren says they're feeling the inflationary pressure and having to be more discerning on their spending on the other hand, mastercard, kellogg, mcdonald's and mondoleze are seeing the opposite meantime, mastercard's report came out today showing retail sales in january were up 8% from a year ago joining us now is michelle meyer. 8% is pretty strong by pretty much any standard. where is it coming from? does this look like a trend, or is it a blip in january? >> it's not a blip it's been pretty trendlike, strong spending on a nominal basis, but it really does differ by category. that's the big story, this bifurcation in how consumers are spending where certainly dollars are moving towards travel,

towards experience-based spending where some of those goods-based categories are seeing a challenge, particularly those in the housing market. >> yeah, and just to break it down, restaurants -- i guess we're a year past omicron, so january of '22 is maybe a depressed level, but still, to your point, where are you seeing the big jumps, and i guess what does it mean for the underlying conditions of households right now? >> well, the first big picture takeaway is that consumers still have the ability to spend, and that's very much consistent with the health of the labor market look at the last jobs report the lowest unemployment rate in 53 years strong wage growth. strong job creation. so, income is being created today, and consumers still feel reasonably confident they'll have income tomorrow, so that's providing a really big source of spend power. they still have savings, not as much as they had this time last year, but that's also some cushion. so, i do think consumers have the ability to spend, but they are being more mindful and

they're taking care in the choices they make right now. >> i guess december was a little bit of a lull based on the macro retail sales data, but here we are back strong. there has been some concern, i guess, i would say, whether it's placed correctly or not about the uptick in credit balances. so, this idea that aggregate consumer credit has taken a big jump, but if you look at it longer term, it's really just coming back to the trend >> so, that's what i think is important is to not look at the month-to-month or quarter-to-quarter changes but to think about where we are in this credit cycle. after the pandemic, consumers did an amazing job balancing their balance sheet, paying down debt they had disposable income really getting to a point where debt service and financial obligations ratios were really low. and then the last year and a half, in the face of higher inflation and less new stimulus coming in, we did see consumers start to adjust their balance sheet and if you look at the federal reserve's data, credit card balances have increased

but the overall picture just shows kind of a shift in terms of how people adjusted their balance sheet. >> i assume you would expect, if, in fact, the economy is going to continue to slow in aggregate, if somehow these recession calls look like they're more plausible in the next several months, i mean the consumer spending side has to slow down. that's the way the math has to work, right? >> right part of it is, think about it. we're looking at nominal dollars, nominal change, and we know that inflation is starting to moderate. some of the disinflationary tendencies are starting to show up that was apparent in the holiday shopping season, especially for some of the apparel names that were reported, starting to see those shifts in consumer behavior and also, the economy has to right-size it has to rebalance. it wasn't running at a steady state for the past several years partly because of covid distortions. we're going to return to an economy that is more normal, and the hope is that we can do that in a way that is pretty stable,

but of course, it's the hard job, and it's the job the federal reserve has right now. >> exactly yeah and i guess the question is, do they target those areas that most directly hit the consumer if they feel they have to soften up the labor market a lot more, there's even talk, look, inflation comes down, real disposable incomes look pretty good, so people are going to keep spending. >> right, it is this balance when you think about the federal reserve's dual mandate it's price stability and full employment they're not meeting either right now. inflation is still too high, and the unemployment rate is still too low when you think about a steady state or a stable economy. but they've done a lot already, and they are talking about the idea that they need to be more data dependent now they're no longer as behind the curve as they were before. so, you know, the fed -- listened to the fed speakers throughout this week they're not done they're going to continue to move accordingly until they feel like they've reached their mandate, but part of that does take out where there's been excesses in the economy, and a labor market, there's been some

excesses billed. >> sure, yeah. we'll see where it goes from here and housing, already feeling it but michelle, great to talk to you. thank you. >> you as well thank you. >> thanks for coming down. here's where we stand in the markets as we get toward the close. the dow is up 154. s&p 500 now again in positive territory. nasdaq, underperforming still, and the russell 2000, also peeking into the green adidas is sinking today as the company outlines the big break-up with kanye west and its yeezy brand. and you can listen to "closing bell" on the go by following the "closing bell" p.teodston your favori pca ap

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the split between adidas and ye, formerly known as kanye west, is starting to manifest in money terms as the company outlines the potential cost in its preliminary outlook for the year, sending adidas stock sharply lower. the unsold yeezy stock could lower revenue by 1.2 billion euros. adidas also expecting one-off costs of up to 200 million euros. newly installed ceo bjorn says the numbers speak for themselves, we are not performing the way we shaould we need to put the pieces back together again, but i'm convinced that over time, we'll make adidas shine again. this is not the only partnership dragging on adidas earlier this week, it was reporting that beyonce's ivy park clothing line is suffering from weak sales. shares of lyft losing around a third of their value today following weak guidance and a

slew of analyst downgrades we'll break down that quarter. that story, plus expedia's ceo eabrks down travel times and a new activist in spotify when we take you inside the market zone charging something like a hundred bucks a window when other guys were charging four to five-hundred bucks. he just didn't wanna do that. he was proud of the price he was charging. ♪♪ my dad instilled in me, always put the people before the money. be proud of offering a good product at a fair price. i think he'd be extremely proud of me, yeah. ♪♪

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more than 1% in the s&p 500 after a pretty good run. nasdaq coming off the boil a little bit too what's your read on it i guess all deep pullbacks start with modest digestion, but how does this feel to you? >> well, this does feel like normal consolidation it doesn't feel like a bear market is resuming and we're going to go even lower and deeper i think this feels normal after such a big start i mean, i think you yourself were annualized, if we kept up that rate, it would be 100% in the year we knew that couldn't persist. and i think the initial spring was because of all the cash sitting on the sidelines you had tax law selling, bearish positioning, and of course the numbers coming in, it's clear the economy is slowing, but cpi data is looking promising, and we're going to find out next week i think the 500,000 labor jobs last week spooked everybody, but there's indications the consumer is a alive and well, full employment, 3.4%, wages are high but moderating, and we've got by

some estimates a trillion dollars in unspent stimulus savings that is really boosting people's balance sheets. >> and yet within the relatively modest kind of churning action of the indexes, some pretty big moves in some pretty big stocks. alphabet down 10% on the week. tesla was up big before we got to today you've actually found your way to adding to google at this point, even after the doubts about the long-term competitive position of the search business? >> yeah. and i think, you know, maybe i'm a little bit early in adding it's been a core position for some years for me, but i really see this as akin to when elon musk inadvertently smashed the window on his -- the car he was demonstrating or the truck -- the cyber truck, which was rather embarrassing but the stock went on from $50 or whatever it was to much higher i see this more as an embarrassment. there's no question that google has the a.i. tech, the resources

to do this thing right, and they certainly botched this early thing, and the employees are upset, but i think that in the long run, it is going to be very hard to dislodge them. they've got the power and the resources to stay the course i think any more weakness, it's a good buying opportunity, particularly because the pe is down to historical lows. >> i was just going to mention, it basically trades at the broad market pe pretty much for the first time ever. lyft blaming seasonality and lower prices for their miss. total rides also well below pre-pandemic levels. that is a far cry from rival, uber, which reported earlier in the week, that company crossing 2 billion rides in a quarter for the first time ever and guided for at least 20% growth in gross bookings in the first quarter. let's get to deirdre bosa. what's the big conclusion we

draw >> the conclusion we draw, if there had to be one, is that uber is pulling away previously it was thought that maybe this would be a duopoly, but uber has just been pulling ahead. look at how both companies talked about being past the pandemic uber said that the pandemic effect was well behind them, and they're going to continue to deliver adjust ebitda profitability and free cash flow lyft, on the other hand, their active riders are still 11% below pre-pandemic levels. their adjusted ebitda targets were taken way down, shocking the street one analyst said this was one of the top three worst analyst calls that he has ever listened to, a debacle for the ages, and that's really what it was, mike. you said they talked about seasonality. they also talked about lower prices, but it comes down to competition, which is code for market share, and that is where lyft is losing, and that's why analysts are concerned about the long-term proposition of this

story, how it's going to win that back and at what cost and who's going to help them, maybe. >> you know, it's interesting, dee, because not only do you -- i mean, you see the relatively performance is really stark right now in favor of uber, and obviously the performance is better but i also wonder if there's an industry that's not big enough for two players that were both in early, are the underlying economics of the business actually any good? i mean, uber, from start to now, has burned billions of dollars it's not as if it's been sustainably profitable on a bottomline basis i wonder if they have the line of sight to when that actually does turn for them >> it is a great question. is uber just sort of a better house in a bad neighborhood? you're exactly right to talk about that gap profitability because yes, they have us. they have the street looking at adjusted ebitda, free cash flow. stock-based compensation still makes a huge portion of that uber lost $9 billion last year, to your point. lyft lost somewhere around a billion dollars, i believe, and

the unit economics, i mean, uber's tried to show us a path of how they get to bigger free cash flow and eventual gap profitability, but we don't really know how they get there and this raises questions about the competitive landscape going forward. it's always been a race to the bottom if lyft is out of this market, eventually, prices are probably going to rise for all of us and what kind of valuation do these companies deserve? does uber ultimately, even if it's number one, is it a transportation company or a technology company i don't know if the margins are there for technology in the long term >> a mobility utility of some kind barb, either of these stocks tempt you here >> well, uber, i have been a bull on for quite a while. i think the differentiating thing, if we remember when we went into the pandemic, both lyft and uber were vying very closely. uber had worldwide more share but going into the pandemic, uber had something obviously lyft did not which was food delivery, and that saved them

and i think it left them very well positioned for reopening in terms of having the resources and the cash and the smarts. during that, they started the loyalty program, cross-selling, all sorlts of ways to increase customer frequency and use i think it's going to be very tough. i don't see how lyft can catch up if they compete on price, you still have a big problem people will choose one or the other based on price but not the f if it's like a minute for an uber versus ten minutes for a lyft i don't see how they have enough cars and drivers to close that gap. pricing, they're going to have to be competitive on pricing, that means bad margins, and it is hard to see how they're going to turn this around any time soon >> yeah. lyft, down to under $4 billion in market cap versus 68 for uber pretty dramatic. deirdre, thank you so much meantime, expedia falling after an earnings miss, severe weather in december deterring travel and leading to a spike in cancellations, but ceo peter kern said he's seeing

improvement. >> trends have been really strong since january we said in our call that we're seeing over 20% lodging demand, which is considerably higher than where we were in the fourth quarter, even x the weather, and so, there's just been a ton of demand apac is starting to come back quite strongly that's helping in our b to b&b to c business. that's been quite strong and generally t market's been very robust across the board in the western world and asia and latam. >> seema modi joins us now pretty upbeat message there from peter kern however, the market is clearly not pleased with the results is there a disconnect here is it just last quarter's results are coloring the interpretation >> i think what's providing a floor on to the stock is the fact that expedia is guiding for double-digit revenue and ebitda growth in 2023, despite the fourth quarter miss, which peter kern chalks up to bad weather. the other big concern will be about the increase in marketing

spending in total of 20% compared to 2019 levels. there is some evidence that is working. they're seeing record app usage, loyalty membership is up over the last four years, but that will likely be a concern for wall street as it fixates a bit more on profit growth going into the new year one of the downside risk scenarios brought forward by oppenheimer this morning was if we start to see the airlines and hotels really push for direct bookings a bit more aggressively than we have seen in the past as they focus on this travel recovery and how that could change the market dynamics and put more pressure on expedia, not to mention airbnb, which reports next week, as well as booking holdings as they all sort of increase that marketing spend, mike. seeing the stock down still about 8% should point out it had a really good run, even prior to yesterday's release, up about 35%. >> it did have a bit of a snapback seema, thank you well, spotify shares, higher

today while other tech names drag activist investment firm value act has taken a stake in the company, disclosing it at an event today. the ceo calling spotify value act's newest investment but not revealing the size of that investment shares of spotify are up more than 50% this year, but still down 25% over the last 52 weeks. let's bring in julia boorstin. value act not always a hostile activist investor, and spotify, already, you know, doing some things strategically and on the cost side that investors might want to see. >> mike, this is all about cost cutting as it often is, and sort of echoing what we saw with nelson peltz pushing disney to cut costs around its streaming service. i want to give a couple more details about what value act said when it disclosed that stake today. this said that spotify's costs have exploded and now is the moment for spotify to

differentiate between what was built for the bubble and what was built to last. i think that's what it's really coming down to here. i think it's worth noting that spotify has done cost-cutting. they announced that they were doing layoffs and they're really focusing on building out spotify's platform, figuring out cost efficiencies. they have this big event that's coming up in a couple of weeks their stream on event is set for march 8th, and i think we're going to be learning more when it comes to that event about their road map, but i do think that daniel has made it very clear that he cares about cutting costs and focusing on profitability, which does seem to be in line with what value act is looking for as well >> are we expecting to hear much else aside from cost-cutting at that event coming up are they looking to get more aggressive on pricing? it seems like the model for success has always been somewhat netflix in terms of being able to try to get pricing. >> well, the key thing for spotify is they need to make sure that you have no reason to ever drop the service. so, if you're watching netflix, you might watch for your favorite show and then if there

isn't enough content for you to watch, you might drop the service until another favorite show launches a new season the thing about spotify is that music in many ways is treated as a utility. people want it all the time. they listen to the same songs over and over. spotify has tried to expand by having this big investment in podcasts, which seems to have really paid off but also now they've talked about expanding into audiobooks so that's the next frontier for them, and daniel ek hinted at there being other major verticals down the line, which would be similar monetizable opportunities, so i think the question is whether we get more granular information in their strategy around podcasts as well as this newer area of audio books and then wahat else we learn about future verticals down the line. >> we'll watch out for it. julia, thank you very much barb, spotify or anything like it appeal to you here in the content area >> well, in the spotify, i mean, it's up almost 60%, and obviously, that's because they're initiating -- this almost reminds me of amazon when

for years they didn't make money and they put all their money into building the business and that's what spotify is doing they're going to do a lot of cost-cutting but they have big competitive competition out there and you also have the big three record labels who have really controlled content, so there's bigger risks out there right now, i wouldn't chase it but i do like -- we were talking about expedia earlier. i think it's a great buying opportunity. 12 pe versus booking is just booking.com under 20 everything's accelerating. they're in a sweet spot for travel online travel right now. >> all right, yeah, certainly the value name in that group barbara, good to talk you. thank you very much. as we head into the close, little bit of an uptick in the indexes here the s&p 500 is now up a few points going to finish -- down is up about 0.5% so we are still looking at a 1% decline in the s&p for the week today was more of a mixed day in terms of market breadth. you did see about half and half up versus down volume.

so, that's something that's familiar vicks still going to go out above 20 they are looking at that cpi report on tuesday. it seems like the market as we head to the top end of the range, people bracing for a potential surprise on its way, getting pretty hedged up going into the weekend the s&p still up more than 6%, though, year to date that is going to do it for "closing bell. have a good weekend. i'll send you over to over"time" with scott wapner. thank you very much. welcome to "overtime." in just a little bit, i will speak to tom lee he's bullish on tech he's bullish on the markets, and he is bullish that the fed is just about done hiking rates we're going to test him on all of that. we begin with our talk of the tape just one more trading day before the next big hurdle for stocks the cpi. a read that could either confirm this early year rally or very well kill it so, what's really at stake let's ask malcol