show, his camp or no >> yeah, i think they started late and will go overboard at the end. they do that every cycle they'll do it again. >> we shall see. again, dow down 225. s&p, down a little less than half of 1% "the exchange" begins now. thank you, scott welcome to "the exchange," everybody. i'm kelly evans. ahead this hour, a five-star manager gives us his tension trades, and trading three big names with earnings on deck, and we'll dive into the cp ireport stocks have turned lower and bond yields lurching higher as the markets digest the hotter than expected numbers. take a look at the yield on six-month treasury yields. if we close above 5%, it will be for the first time in more than

15 years as i speak, we're getting headlines from philly fed president. >> hey, kelly, he said he expects the fed to raise rates a few more times, and in doing so, 25 basis point hikes will be appropriate in the future. policy rates he says will be restrictive enough sometime this year for the fed to go on hold notice he said hold, not cuts. the fed goal is a modest slowdown in the economy. he sees it growing 1% this year enroute to 2%. he does see unmistakable signs oh of a slowing in interest rate sensitive sectors like housing other fed speakers, basically towing the hawkish line in the sense that logan from dallas seeing more rate hikes this year, as well as earlier today >> i was going to ask, it's not

like they're going to change their speeches to cpi necessarily, but is there consistency with the data and what they're saying? >> i think so. i think today they're feeling good about where they are. especially when you look at how the market has come back up to where they are i think they're feeling good about their call for this average, 5 1/8 up to 5.40 rate forecast for this year the gap has really closed. there's the green line where the fed is i don't know if that should be green or red line, but that 507, guys, i don't know if we have the two bars, guys, but what happened is january 24th contract, which is the end of the year, had been as low as

4.34 and now it's 5.07 so what's the math there >> that's how much more hiking is priced into the market. >> that's a big move >> let's bring in dana today's cpi numbers plays right into any next guest thesis that sticky inflation will be a problem for the feds dana, welcome. what steve is saying is kind of, well, it raises an interesting question the margin has come around why do you think equities that held up okay in light of that? >> i think it's because of the labor market we continue to see strong gains. most of the losses that we are seeing in employment are in those pandemic -- among those pandemic darlings that don't surprise us, but we are seeing strong unemployment at 3.4%. people are still out there quitting, so i think that's probably why the equity markets are still rallying or at least

optimistic, despite the fact that inflation was sticky in january. >> dana, i'm glad that you are here, because you you guys in particular have the one thing that worries me the second most about the economy right now. my first most worry is the yield curve. the second is the leading index. it's horrendous. it's never been this bad without a recession of some kind how would you -- would you try to explain that away or do you say yeah, that's what is telling us could happen. >> we're not explaining it away. our leading index has been signalling a recession for quite some time. really landing right about now in the first part of the year of 2023 but also we asked ceos and consumers whether they think there is a recession on the way, and for the most part, there seems to be agreement. so the leading indicators is confidence, so we need the data to bear that out >> yes, the labor market is so

strong and it's the fly in the ointment and it's crazy, but dana is white. if we wait a little while, could it be telling us a different story? >> it's important to realize, these indicators are predictive but not causal in the sense that the inverted yield curve does not cause a recession. >> for sure. >> and the lei does not cause a recession, it just tells you when these things happen, it doesn't create it. there's an important number tomorrow, the retail sales number if i can just throw it to dana here, we have a cnbc rapid update, which the forecast for the first quarter at 0.6 i don't know where you are on that, but the consumer, the jobs have been stronger one of the details in this report is that real earnings were positive this month

>> on the month, but for the year it's still down >> for the month it's still higher, it was flat for december earnings are at least keeping pace with the inflation numbers. strong job growth. tomorrow, if we get a strong retail sales, are you anywhere close to that for the first quarter? >> yes, we still have roughly a half percentage decline in real gdp for the first quarter. some of that is going to reflect what we think is going to be slowing among consumers. certainly december we saw that consumers began losing momentum on spending on service so tomorrow's data, most of it is going to be on goods. we know that goods prices, they were still elevated in january but it's the restaurants are people stopping or pulling back on those discretionary types of activities?

that's what is going to bring down gdp growth. but i would add that you're going to have continued volatility and inventory as businesses are trying to rebalance. >> but you're negative, dana, for the first quarter? >> yes, we still are >> so that creates a prospect tomorrow, kelly, that the thing that dana says is holding up the market in the face of higher than expected inflation, strong growth could go away and the market will have to reconsider that >> wouldn't you say -- we've been talking about the whole cpi. i wonder if the labor market data is more important right now, because it feels as though payrolls was a bigger factor, it will remain a bigger factor, because it's telling us whether the cycle is rolling over or not. ises the part of not fighting the fed is not fighting the way the fed thinks whether all of this is true is irrelevant to the fact that powell thinks this way so to the extend that powell has

fingered labor as a key to inflation, you're right. labor does not weaken, you cannot expect powell to either stop or cut if he doesn't get the help in the labor market >> dana, headline was hotter than expected. i noticed they said if you strip down sort of the super, super core, then things look stickier. so they're not even convinced we're seeing moderation here so what do you think is the most way to interpret what we saw this morning >> we need to look at it wholistically. so goods have been coming off in terms of inflation we saw a turn around so will that persist on the services side, you still have rents rising, and that's a key here we really need shelter costs to come off to have big gains and slowing inflation. when you look at services,

excluding housing, which is that super core, you still have the usual suspects like restaurants and insurance and also medical care still driving up prices on the services so you need all these pieces to slow and particularly the housing component. >> all right leave it there steve, what's next are we done with fed speak for the day? >> no. i've got john williams come up at 2:05. and retail tomorrow and a bunch more fed speak, i think. >> we'll see you in 55 minutes time for that. steve, thank you very much dana, thank you, as well really appreciate it dow is down 138 points we were down 400 just a little while ago. this is just one of the tensions in the market. my next guest says a couple of ways to play these unresolved tensions matthew mcclinon joins us.

and rick sen ttelli is here, as well this thing could turn a number of different ways. where is the safest place to be if you're in equities right now? >> it's tricky when you look at equities from a top down perspective, markets are pricing a relatively soft landing here we see the same thing in credit markets. so the key thing is, if the yield curve is correct in what it's telling us, and some of these other conference board consumer indicators that you have been discussing, i think there is risk to the complacency in the markets right now i think it means you have to look at companies that have the ability to do okay if the economy continues to chug along here but have some form of resilience, whether it's a step down in the economy. and those companies are

companies that have had some kind of cost pressure in this window that could benefit from a slowing economy. >> you have names globally, i'm going to mention some of them, hca, a health care play, colgate, a staples rick, i think a lot of people would go, i'm not that excited about anything except trying to get on treasury direct and scoop up some 5% t-bills right now >> the motion of investing in t-bills is a good idea the problem with all good ideas is they don't last forever and if inflation comes down, and it will, and we see that servicing the debt keeps getting more expensive and we'll have to make adjustments, and we will, ultimately those t-bill rates are going to come down a bit even if it's in a year or two, then you have to figure out where you're going to be moving your money next.

so that's the issue there. it's hard to argue with over 5%, especially in at least what's considered the most risk-free environment. when it comes to equities, though, i'm sure our guest must have had some good picks that he was long, because really since the first few days of january, outside of those, the equity markets really come to life. and they come to life at a time where inflation to many is too high based on history. who wouldn't agree with that when we look at the headlines, most of the headlines are is that inflation was hotter than expectations i said it on the air live and it's true. but expectations suspect what makes the market go around that was the first 15 minutes of trade. what makes the world go around is, dealing in the realities of the moment the realities of the moment, you have fed fund futures contract making new lows, putting in an extra helping to the fed steve mentioned it this morning,

the markets and the fed are basically on the same page who isn't really on the same page are investors who keep buying the dips. they believe if you see through the fog of the next couple of quarter, you will be rewarded. but if you wait until all the smart people of the world say hey, all clear, hit the bell, there will be little money left on the table i challenge all of our guests who continually bring up the fact that we're probably going to be less than an intinger for first quarter gdp, how can they say that inflation is going to go wild? >> matthew, i'll hand it over to you. in rick's point there is this idea of people looking past a slowdown that might be coming or trying to -- they're still afraid they're going to miss out on gains here. what would you say to that >> there's a little bit of hope in that conjecture if you look back at historical

cycles, the typical post crisis environment has been one where much of the policy has moved from restrike ctive to accommodative. we haven't even seen negative payrolls at this time. so there are a lot of things that can weigh on sentiment negatively, between now and when one would feel comfortable saying the worst is behind us. having said that, i agree with rick that, you know, the ability to time these things with scientific precision, i think our approach is to have a range of different investments that can be resilient in different places in the world and we have some wash, yielding better than it was but we also have a potential hedge in gold. i think one of the things that can happen in the state of the world that rick is talking about

is if treasury yields go lower from these levels, one has to ask of what the equal lib breeium value of the dollar will be it's benefited so much, despite negative current count on the metals and despite a longer term outlook that has question marks attached to it >> so you think it's going lower? >> over the medium turn, there's downside to the dollar i think that's something that investors need to think about when they construct a portfolio. some amount of international diversification may be prudent against that backdrop. >> you have a couple of different names here these aren't just u.s. plays, and a lot of people have been thinking through that, as well we have to leave it there. thank you for your time. great to see you both. coming up, market down 116 popeye's parent company restaurant brands posting a mixed quarter, announcing a

shakeup. plus, from building to renting and powering your home, we have every angle covered. we're waiting results from airbnb as we head to break, the dow has been all over the place today. now we're down 115, and the nasdaq up a quarter percent. back after this. lily! welcome 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.

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♪ ♪ welcome back to "the exchange." the restaurant brands, the parent companies of popeye's are down the company naming the chief operating officer joshua cobs as the new ceo. joining us now to talk about that is patrick doyle. you all know him as the wizard behind the performance of domino's pizza thank you for joining us >> appreciate you having me on >> i went back to look at the stock performance. i don't need to remind you, but domino's went up 23 fold with you at the helm.

if i were rbi i would be feelin good about you right now so do tell, it's a challenged company, it's not hiding that. they're trying to -- make the case for me, how do you get this stock up consistently, especially with the potential consumer slowdown heading our way. >> it's a couple of things the thing that the four brands have in common, i believe all four have the best food in each of their categories. the whopper is amazing the chicken sandwich out of popeye's tim's coffee and firehouse has terrific subs. so you start with great food at all of these, and then what you need to take that to is give it a great experience, getting the pricing right, bringing digital

in, which was a big part of what happened at my old company but then the other thing we announced that was very important today is we're going to start releasing our franchisee so the economics of the units are ultimately what drive growth in your restaurants. so if we have great operators who are committed and we deliver to them and they're confident about the future, from the investments that they're going to make in more restaurants, you're going to generate growth, which is going to generate great returns for investors. >> how do you get the magic back again, popeye's has been very successful, i don't want to down play that. burger king spends a lot on marketing but do you try to go -- are we talking about tiktok influencers, just people have to give it a chance and

they'll see things are changing? where is that investment spending to really get people back in the doors? >> yeah. first of all, tim's, you know, which is canadian based, is an unbelievable business and brand. they may have had a little bit of trouble during the pandemic because as a coffee-based, morning-based brand, which has been expanding into lunch and dinner, losing those commuters hurt but the business is coming back strongly so tim's is in great shape popeye's is in great shape firehouse, still relatively small. the international business has been booming so it comes down to bk in the u.s. and the reclaim the flame program, which combines our investments into more marketing dollars. investments into upgrading technology in the stores, and the reimaging of those stores. also with a real emphasis on

proving the guest experience, which i think our customer satisfaction was up 20 points from the third quarter to the fourth quarter you do all of those things, you're seeing we're starting to generate growth. the advertising that is out right now for the whopper is terrific and really breaking through. it gives me confidence we've got work to do we have some franchisees that have some balance sheets that need to be cleaned up. we'll work through those things. honestly, the rest of the businesses are overall in very good shape >> firehouse i thought was maybe a recent acquisition i'm not as familiar with it. but there is another famous sub chain up for sale right now. would you be open to adding subway to the portfolio, and/or any other target why stop at four >> first of all, we have plenty to work on right now, so i don't think that's in the cards any

time soon. but firehouse is our brand in the subspace we love the food, we love the opportunity there. lots of growth ahead subway is a very, very different situation there. you know, it's a big brand, big business already i'm not sure you have as much growth ahead, just based on the scale of the business today. so we're much happier with firehouse, with the gross trajectory ahead by building out that brarnd in the u.s. and around the world >> all stock, you have to hit 6% to get these rewards i would be so nervous, if we're heading into a consumer downturn, and maybe we're not, but let's just say we are. how do you plan to invest and deal with that uncertainty trying to accomplish this turn

around truly, what happens on the macro front here wouldn't you say that would have the biggest effect of where the shares go? >> first of all, the business has been performing well there's one business that needs some focus but look, i'm in for the long-term. i made my investments. i can't touch it for five years. i'm all in i'm excited. and honestly, the risks around a recession, the slowdown in the economy, the biggest thing to watch from the restaurant perspective is employment. employment is the number one driver of consumption in the restaurant category. the employment levels still, employment overall is still robust it may have slowed down in terms of growth, but you are not yet seeing really any weakness in the employment numbers as long as employment is good, i'm confident about the category overall.

then it becomes, how do we outperform the rest of the category >> final question on that front, that goes back to the technology you're so famous for should we expect any major initiatives on that front to keep labor costs from, you know, becoming an issue, if they still are? >> yeah. digital will be a big part of the story. there's a lot we can do. about 1/3 of our business is already on digital channels around the world a lot of opportunity to grow that that brings with it higher margins because of higher check averages on digital orders, and it drives efficiency in the restaurants, because the customer is effectively taking the order themselves and using their own labor for that there is a lot of advantage as you shift people to digital. we already have a good base, and

we will certainly be doing lots of things to invest there, grow that faster, which is going to help our franchisees >> we'll be glued to see how it goes, patrick. thanks for joining us. again, one of the great stories of the 2010s and it will be fun to follow along this journey >> thanks, kelly still ahead, speaking of brick and mortar, amazon's ceo says they're ready to go big on brick and mortar stores. should it make shareholders nervous? is amazon throwing away good money? the dow is down 142 points with rfavelers one of the worst peormers more on that in just a moment here on "the exchange. ♪ ♪

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welcome back to "the exchange." markets have been all over the board. down 120 points on the dow, even on the s&p and the nasdaq is up a quarter percent, despite the increase we have seen. that's an area to watch here also, keep an eye on shares of ford, moving lower in the past hour after the company paused production and shipments of the electric f-150 electric lightning pickup the automaker says it has a potential battery issue but declined to go into detail we have more on the story at cnbc.com and bowing is leading the dow and it's hitting a new 52-week

high today and that doesn't include this massive order from air india today of nearly 500 aircraft from boeing and airbus the 220 boeing aircraft is a $34 billion offer, making it boeing's third largest sale all time in dollar value let's get to tyler now for a news update. >> thank you very much the white house saying the u.s. intelligence community is considering the possibility the three unknown objects shot down over the u.s. and canada could be balloons tied to commercial or research entities and therefore, totally benign. a spokesperson john kirby says no debris has been found yet, so there's not a lot of information so far to work with. former vice president mike pence will fight the justice department's subpoena requiring him to test about about former president trump's attempts to overturn the 2020 election that's what a source is telling

nbc news his lawyers will argue because he was acting as senate president on january 6th, he is shielded by the constitution's so-called speech and debate clause that protects u.s. representatives and senators from -- who are engaged in legislative activity and former president trump responding now to nikki haley entering the 2024 race for president, saying he wishes her luck in her candidacy. she initially said she would not run for president if trump decided to run again, but she's walked back those statements quite obviously. kelly, over to you >> tyler, thanks coming up, if you build it, they will rent it or power it. a homeowner's edition of earnings and exchange is coming up before we go, here's a look at the major indices and the valentine's day message from our team to ours markets are red, investors are uebut tebl, afr the break, we'll

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welcome back we have made it through the heart of earnings season, bup 3, after shares got cut in half last year.

t welcome, guys. diedra, airbnb is a big one. what are you watching? >> as you said, it's had a huge runup going into this quarter. airbnb has to deliver in terms of the top and bottom line, especially guidance. we have been hearing from the otas that are saying they are normalizing that shift between hotels and home sharing. so people are going back to cities, are they benefits, do they have that hotel supply? supply overall is always an important topic for all of the home sharing companies, because they're battling each other to meet that demand so what they say will be interesting, as well airbnb has seen the average daily rate grow at a much faster clip but it's going to come down to

guidance, because investors want to know if they can justify these huge premium they have over the otas. >> true, showing it as you speak about 44 gina, do you like airbnb here? >> so this one is interesting. diedra is right that supply is an issue but here is what we are looking for in guidance. if you look at prepandemic experience, 60% of airbnb business and demand came from international travelers. with china reopening, they're going to be very exposed to that that could be a plus if you look at expectations going in, they are very high and have been steadily increased over the last several months it's not as though am lists are walking back expectations. so airbnb does have to deliver, and they have to give great guidance that's a tall order to meet, you know, it's not to say they don't have some upside the downside is whether they can

get the supply online. >> you're sort of a hmm on the stock. what would make you feel more conviction one way or the other? >> it would be good to have them have an answer to how they're going to attract that supply and get it online. because if they are exposed to that china reopening and they're benefitting from that 60% international business, getting back to normal, then they really just need to have product up there. >> interesting i would have thought the opposite but you're right, it's the same story with the housing market overall. diedra, thank you. and now to taylor morrison, the home builder, shares rallying 17% this year. diana has the story. what is their niche here >> really, they're in arizona, which has seen a very big demand curve over the last couple of years. it's been a pandemic hot spot. but some of the hottest spots

from the pandemic have dropped the most we are going to be watching at home prices and any talk of potential mortgage rate buydowns the shares have been on a tear, because mortgage rates have pulled back. this is when rates went from over 7% to the low 6% range. so in december, we wanted to see if there was any commentary about buyers coming back into the market, perhaps a surprise to the upside. the ceo has said they've been fairing well and working with their potential buyers with ways to incentivize and bring costs down we always watch cancellation rates to see how many people are pulling out. remember, we did see home builder sentiment pop up in january on reports of much more buyer traffic. so this should be an interesting one to watch >> i don't know. it's almost five times forward for a home builder, that's just

crazy expensive. >> there are a few challenges here they have some tail winds. we are still not where we need to be in terms of the overall supply of houses but interest rates were a huge hurdle that has pulled back, but frankly, how much more are we going to get on the downside of interest rates i would say not that much. we're talking about another rate hike before we settle back down, and nobody is expecting a cutting cycle after the fed is done hiking. and that is going to be the continued head wind, because a lot of the cancellations were partially because mortgage applications fell through. that's a big problem you do have to watch what happens here >> yeah, from a hmm, to a meh. thank you, die ana. we'll turn to generac before the bell tomorrow, up 19% this year

after plummeting 71% in 2022 generac shares peaked around $500 in november of 2021, and are trading around $120 today. we'll have updates on the income technology business. revenue has beaten 18 of the past 20 quarters this is why i love this story. you didn't need crypto, the shares of generac almost look like the dot com smart from 1990s. do you think the hangover will persist here >> well, it depends on how much you need them to get back to a long-term, sustainable pe. they're still a little high, but relative to where they are, they look cheap they were riding a cycle that was hitting a lot of the solar companies, a lot of the charging

companies, electrical infrastructure and they really look that to a whole other level. seeing them come back down to earth is important i think they have a long-term business model, and this could be something that, in the long-term, could be a great buy. is it there yet? better than it used to be, but i think that we're still resetting in terms of what forward rates should be, what pes make sense given a higher interest environment and that's not played out >> i don't understand why there's not more of a long-term tail end here. power outages are getting worse, especially in states like california so the stock got overvalued, but it would seem now that they should have, if anything, maybe more demand over the next couple of years >> well, i think a lot of the value got pulled forward

what does warren buffett say the biggest risk you take is the price you pay. but i agree there is a long-term business model here. hey, i live in los angeles we had a 32-hour outage, and that was terrible. and first thing we looked at was power back up. so i don't think that anybody is going to argue that people don't need this product. they do. it's just a matter of whether or not the investors are going to make some money buying it now. >> fair enough gina, great to see you gina sanchez with our trades today. don't miss our interview with the ceo of generac tomorrow, 2:00 p.m. eastern time still ahead, amazon is back at it. the ceo says they're going big on retail stores but will this time prove 'ldius rhtft t wel scs,ig aerhis. ed to be the . but with upwork... with upwork the hiring process is fast and flexible.

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welcome back to "the exchange." amazon prepared to double down on physical stores the company acquired whole foods five years ago it has more than 40 amazon fresh grocery locationing but hasn't really disrupted the industry.

the ceo saying he wants to go big on brick and mortar. let's bring in our technology reporter andi, i think i'll quote a familiar face who says they're not very good at brick and mortar why is that going to change now? >> yeah. i think you're right to approach this with skepticism on one hand, he's saying we want to go big on retail, but amazon announced they are pausing expense of their fresh stores and even closing some of the supermarkets so it's kind of hard to reckon with what the plan is here >> unless maybe they leverage an existing partner like kohl's whole foods has worked because they basically just took the existing asset and some would say ruined it, others would say no, it's still good.

it's still usable. so that could be a different template, i suppose. >> yeah, it could be they do have these returns and pickup partnership with kohl's department stores. and amazon has its own sort of new line of apparel and accessory stores called the amazon style store they're only in two states right now, california and ohio so it seems like they still have some sort of vision for expanding and physical retail beyond grocery, but it's too early to tell what exactly their plans are. >> if you had told people five, ten years ago when amazon was so sexy that there never be stores again because everything was going online, what does this tell you about the viability of their core business? if they have to go this hard into physical retail, which they were supposed to disrupt, that can't be a good sign, unless you're maybe a landlord. >> yeah. i don't know if it is so much --

or highlights any amount of weakness in their core online retail business as much as it shows the majority of dollars and where they're being spent still is in ofline retail. so they're looking for the room to grow in online retail space, but people are spending most of their money in stores so they feel like they have to be there. >> the real world wins, annie. that is the theme here very reassuring. we appreciate your time and all your information there's more at cnbc.com still to come, we'll tell you what is driving shares 15% higher and one strategist has a warning ahead of software and semi conductor reports still on deck. all that is next don't go anywhere. the backside,

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saving you up to 60% a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities. welcome back look at shares of palantir surging 15% after an earnings and revenue beat today they just reported their first profitable quarter ever. frank holland is here with more on this story.

wow, frank, the timingwise what all led into this? >> kelly, number one, the buzz around a.i. is a big part of it as you mentioned palantir on course for its best day in just about two years after turning that quarterly profit for the first time and also guiding it will be profitable this fiscal year so a lot of excitement this company's best known for its work with the u.s. military using data analytics and artificial intelligence. it saw its commercial customers, that's not military, increase by 79% last quarter ceo alex carp says the recent buzz around a.i. is increasing customer interest in palantir. >> technologies we built that will allow you to do a.i. in private networks, institutions and enterprises have precursor technologies that will take other companies four or five years to build for example, how do you do a.i. in a regulated context >> in that case he was talking about manufacturing, health care, other regulated industries here in the u.s. karp also expects rising rates to have a minimal impact on palantir was the company has almost no debt and $2.6 billion in cash in preparation for any

economic downturn. >> i should have guessed it had something to do with a.i that's really interesting. especially like he said in a regulated environment. frank, thank you sticking with software, chase coleman's tiger global making some moves in the space in the fourth quarter they've just filed that 137f kristina partsinevelos has the details. >> i want to start with the cloud names because many of them are getting the ax tiger cut its exposure to data dog by 83% this is going from q3 to q4. although the stock right now data dog is not really reacting up 3.5% they also cut exposure to snowflake and service now some huge drops in their fintech stakes they cut block by 51%. also sold off shares of e-commerce names like shopify or toast. you can call that fintech. their coinbase exposure which we know a lot of ours vike like is down about 5%. and much like we are seeing from other hedge funds there's been some moves in big cap tech boosting its shares in amazon and netta but decreasing its exposure to alphabet and microsoft. last honorable mention spotify

they initially had about 6,000 shares in the name but they bumped that up to over 500,000 shares, an increase of over 8,000% in spotify. and for all of our viewers keep in mind these holdings are as of december 31st and could have definitely changed in the last six weeks since. kelly? >> all right, kristina, thank you. tiger's cutting exposure to software my next guest might agrie with that move with software and chips set to report in the next week and a half he's warning there could be another shoe to drop chris stennic chief investment strategist at wolf research. what are you worried is around the corner here? >> hi, kelly thanks for having me on. tech is balanced year to date for what we think is non-fundamental reasons. positioning was very negative coming into the year and hopes for soft landing grew as we progressed during january and that led to a bid for tech stocks but what we've witnessed over the last really two weeks since the payrolls report is higher interest rates and higher break even rates on the inflation

front. we think at some point over the near term that's going to catch up with tech stocks, semis and software stocks within tech. >> you think in other words we've seen kind of the head fake here i you hate to hate on the cats with the dead cat bounce language but that's a little bit it sounds like you're warning about. you think this is a bigger macro slowdown or just a valuation story? >> i think it's both the tech piece has rerated higher even in the face of higher break even rates and we found a very strong relationship between tech p/es and break even rates. they're going and diverged in different directions which is not a good sign. and secondly this earnings season tech eps beats have been anemic and revenue surprises have gone negative which is really the first time we've seen that consistently since 2012 the job cuts we've witnessed and seen over the last month too aren't good either so it gives us a lot of caution

on that space overall. i think investors are piling into the space over hopes the economy might do a little bit better we're still in the deep recession camp for this year we haven't changed our view. and today's inflation report actually emboldens our bearish view p >> because you think it will make the fed more hawkish? >> indeed it will. the break even rates and fed rates futures have adjusted to the point the fed's going to have to go higher and hold for longer and that's just not good for high multiple stocks that frankly i think have become more crowded recently look at all the activism in software, right? i wouldn't want to own heavily owned software semi names that have become very crowded again >> fascinating and i want to point out as whl you go through earnings quality you rate nvidia lower than intel and lower than zoom in that regard to be continued chris. we'll definitely bring you back as we start to get more of these results in but appreciate the warning. thanks for your time today >> if you. >> chris senyek with wolfe research meanwhile with just a month

until march madness there may be another sports gaming public going public who does that these days we're going to talk about and the impending fight for nba streaming rights it's one of the last big media deals. that's coming up on "power lunch. there's power forward tyler withisen getting ready i ll join him on the other side of this quick break

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s. good afternoon, everybody and welcome to "power lunch. alongside kelly evans i'm tyler mathisen coming up stocks are falling today on signs that inflation maybe is not slowing as fast as everyone hopes the cpi showing prices rose 6.4% from last year we'll dig into what stubbornly high inflation means for the fed and for the market >> plus we're continuing to cover all things ai. today, in fact, we talk to the head of c-3 ai, the company with ai as its ticker tom sebold was ahead of the game but with google and microsoft and all of their data getting into the game will they crush