tasted it and now they don't want to come back. >> you see the traffic and you see the headquarters and people got the glimpse. if you're doing your job for three years, you're kind of like, have i made my point. >> and if technology companies as capable as amazon are mandating it. >> it has to be happening everywhere else. >> hey, everybody, have a great long weekend we'll see you tuesday. thanks for watching power line. >> "closing bell" starts right now. stocks are well off the lows of the session in fact, we're at the highs of the day as investors tried to figure out what are the goalposts are moving on the fed rate hike strategy the nasdaq seeing the sharpest decline into the close this is the make or break hour for your money welcome to "closing bell." i'm sara eisen take a look at where we stand in the market nasdaq is down .6% and the dow is positive and it is up now. as i mentioned at the highs, up 138. it is been most of the day lower. and the s&p under pressure by

about a third of 1%. and the defensive groups like consumer staples and consumer and health care is leading the market and technology and materials and real estate and communication are all down here is the scorecard for the week on the major averages despite the zigging and zagging, the dow is lower and the nasdaq highir for the week and the russell 2000 index on pace for a decent week of gains if you look at the best performing sector, that is consumer discretionary, and names like tesla, and energy down 6 .6%. we'll talk to citi chief u.s. economist. and later spruce point capital ben afler why i thinks the chat

gpt is just a distraction. and let's begin with the broader market following yesterday's drop, mike santoli with today's dashboard how do you add it all up >> it is a choppy and anxious week but looking like a prolonged pause on the charts. yes, we have a shot at closing flat on the week for the s&p 500, 4090 would be the number. we're less than 3% off the early february highs so it seems as if there has been a lot of angst about the newly hawkish edge to the fed speak but not really taking the toll so far on that basis so if you just look at line coming off the october lows, that gets you, as i've been saying, around the 3900 to 4,000 area of the s&p where you would still say it is an up trend and we're pulling back an it is not that big of a deal so far contained pullback. but any time you want to hear people say that the rally is carried on too far, well maybe so but we were higher than that in august. so right now trading range,

chopping around and still decently supported and a monthly expiration for options and that traps the markets around certain index levels take a look at the 60-40 balanced asset allocation. and this is the tracking of the strategy it is a global version of it what i find interesting is this nice pattern you don't necessarily trade a 60-40 portfolio based on technical indicators but we're getting well supported even if you look at five-year annualized returns for the 60-40 strategy, less than 5% return annualized and that is below what you've gotten last year was one of the worst starts ever for it and now you have some stocks and bonds and both backed off their highs so far in the last couple of weeks so clearly some headwinds to it. but it is better situated in a way than stocks alone. >> because bonds have worked better. >> because bonds have worked better and now you have the income from a decent level of

yield that provides a little bit of a cushion on an ongoing basis. >> thank you and we'll talk about the 60-40 portfolio and why one advocate is turning let's turn to the economy because it was a week of inflation and retail sales blowing pastest masts and housing data all over the map. now a changing prediction for the rate path. goldman sachs and bank of america and citi calling for 25 basis point hikes through june they see a peak fed funds rate from 5.25 to 5.5 joining us now is citigroup's alan honderous how long have you had this prediction. >> for sometime. and what we thought what would happen is what transpired with data where we had a little period where core inflation looks cooler and some of the activity data was coming in

softer and now we see the data that has come out over the last few weeks, starting with the job report and retail sales and most importantly core inflation still coming in strong we see it in cpi and ppi. >> so you're not changing the forecast to include a 50 in there, despite some chatter around that. >> there is talk about 50. you could go back to the last meeting in february and say maybe it should have been a 50 but you can't go back and do that they did slid down to 25 basis points i think there is a strong feeling across the committee that they're trying to find where the right terminal rate is and as they're searching, they want to move at a slower pace. to 25 basis point pace i think will stay for now. if we have a big reacceleration in inflation, maybe we could get a 50 basis point hike again but i think that is unlikely march is going to be 25. >> one reason the market has been resilient in the face of rising expectations a june hike

is that it looks likely that the soft landing plays out where, the economy is in better shape at the end of all of this. >> i think we want to be careful and distinguish between a soft landing and a landing that happens later and maybe a little bit harder so what we see in the data now is a u.s. economy that is still overheated, that is still producing inflationary pressure. and the good news nor activity in the short is they're highing a lot of workers and the economy is still growing and services consumption is strong. that is good news. the challenge for the fed, with all of the demand and spending power, inflation stays high and does the inflation need to more aggressively and push harder on the economy. >> and so your risk now is more hikes, not less. >> if activity holds up and core inflation stays around where it has been and maybe it picks up with how tight the labor market

is, you could see the fed hiking beyond the 5% range and start to think about the 6% range i think that is not the most likely case but that is the risk. >> the other thing that economists are doing is pushing out recession forecasts until later. is that something that you have done. >> we've had ours in the second half of 2023 we think we might get there. but to your point over the last couple of weeks, it is not there in the data. so we'll see that could be pushing up. >> but you think it is coming? >> we think it is coming i think if you look at the historical record and the tightening that the feds put in, the historical experience is slowing the economy that is probably a recession and that is probably how we get back to 2%. >> which speaks to the fact that stocks may have been overexcited and you think there is a correction that needs to happen. >> i think there is a little bit of a deferential between the narrative in the fixed income and in the equity markets and i think that soft landing narrative has been quite strong in the equity market

maybe with some of the data that has come in now around inflation being stronger and markets starting to reassess that. >> when do you pencil in a cut. >> so great question you need to see inflation coming down certainly below 4% before they could think about cutting probably more, getting into the 3% range. we think that happens in 2023. maybe early 2023 but remember, -- sorry, 2024 that is premised on a slowdown in 2023 to get that lower inflation in 2024. >> so you don't see cuts this year maybe into next. >> i think cuts this year is unlikely probably next year at the earlier. >> andrew, thank you very much for talking us through all of that. >> thank you. look at shares of c 3 ai they've more than buzzed around chat gpt but they are short the stack and the founder ben axler will join us with a first look at his latest report an the

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artificial intelligence. it is been the talk of wall street this year thanks to chat gpt. the excitement leading to a huge rally in shares of c-3 ai. but a short seller report from spruce point capital management is raising new concerns about the company and the stock price saying that the price movement is not reflecting fundamental reality. they shorted the stock back in

february of last year. it is sharing the latest report with us here first on "closing bell." joining us now is ben axler from spruce point capital management. welcome to the show. good to see you. >> thank you for having me. >> so you shorted it back in february of last year. i think you're up on it. it is down from that point but it was down a whole lot more before this year and the whole hype surrounding the ai. what are you doing now >> well we're revisiting the thesis if you look back at what we said a year ago about the company's aspirations being too high, about concerns with the product and of its adopt ability and the use of capital, everything came true we scored our predictions. only thing we were off on was the magnitude of the stock price. it went down to $10 below our target so we fast forward to today and what has changed and the answer is really nothing. other than a press conference and attachment of the company to the latest ai buzz, which is chat gpt

but there are so many unanswered questions here such as how are they going to make money and what the customer use case here that we see nothing but a billion dollar value based upon speculation and hope and our field research which is talking to former employees knowledgeable about the situation, we have concerns about the promotional timing of this press conference by the company and also about how, again, how will it translate into revenues and upside potential for shareholders >> so the press conference you're talking about is when c3 ai said the product would be launched march of 2023 and we're waiting for that and that got investors excited we asked the company, ben, in anticipation of this interview for a comment. they don't want to provide one but we have talked to tom siegel and we asked him about all of the hype around the equity market and his stock price and here is what he said about that. >> the complexities and vagaries of the equity markets are a little bit beyond me

and you know, it certainly has its mood swings that are -- that are, um, that are a little bit -- again, this is beyond my ability to really deal with. our business, we are billing a rapidly growing, you know, enterprise application software company and our objective is to establish and maintain a market leadership position in enterprise ai. >> are they not doing that, ben? establishing a market leadership position in enterprise ai with all sorts of companies like an alphabet, amazon and microsoft? >> well, i would encourage you to go back to our report a year ago. there is no question they have quote/unquote partnerships with the amazons and the googles and the microsoft. but what does it mean. are they actually paying these partners to distribute their products or are they getting paid it is very unclear and so, you know, again, we have a company here that has high aspirations that hasn't acknowledged product in enterprise ai but what does that

have to do with jenneraive ai. it is just not clear what the revenue and business model is here and why investors should be enthusiastic now let's bear in mind here, the analysts who we generally disagree with have not raised their revenue targets one dollar and also recall the company talked about going cash flow positive and yet market analysts still have it going negative so this company has a credibility problem and the stock is getting well ahead of the fundamentals and how this company will make money. >> the ceo has said numerous times they're going to be profitable in the next few quarters >> he's made a lot of comments that vent come true. he said the stock is undervalued but to the best of our knowledge, the company wasn't buying stock when it was $10 a share. and also the insiders weren't buying up either so if he's always believed it is

undervalued, use that $85 million buy back to buy stock at $11 so there is a lot of evidence of companies saying something and something drastically differently happening and we think the setup is once again here where investors will see this as an aspirational story that frequently disappointed wall street. >> i do wonder, the stock being up 77% in the last three months how much has to do with the fact that the ticker symbol is ai and retail traders have rushed back into the markets and you've seen a lot of the meme stocks getting love again with the whole trend and buzz around ai >> i mean, one could argue they're two best assets are, number one, the cash, which is being depleted and the ticker. i remind everybody that this is a company that pivots its business model to what the best and hottest technology trend is. if you use the way back machine. first it was c-3 energy and then

it was internet of things and then ai during covid and then are they going to change the ticker to gpt. one could only speculation but this is a history of promising things that don't pan out and with the stock getting up and adding over a billion dollars here on speculation, we think investors are just setting themselves up for disappointment and if you don't believe me look at what deutsche bank, and jp morgan have to say as well they're negative on the share price. >> and what are is -- what are the analysts' primary concern there? are they also doubting the status of the partnerships with microsoft or the ability to be profitable >> i think both. i mean, it is very reflective in the price targets. you have analysts sitting at $11, $12 a share and again i point to the fact that the consensus revenue estimates haven't increased one

iota since the announcement of the ai suite and the announcement of another air force contract which we point out by the way is almost recycled news. this is news the company put in a press conference back in december so there is -- again, there is a lot of hype here a lot of unknown but our base case is actually to agree with the sell side analysts here and we have an applied down side of 45% going back to where we initially predicted the stock was. >> so i guess you don't think that it could be a takeover target or an investment target like a chat gpt was for microsoft? >> well, let's critically analyze that statement, okay their company with a ten-year history, to the best of our knowledge they're never disclosed a strategic committee or unsolicited offer or anything related to a takeover. why should it be a takeover now just they're integrating some third party search into their enterprise that is ludicrous to think that. and furthermore, if there was a

strategic interest, why wasn't the company buying back the stock hand over fist when it was $10, $11, $12 a share. that is a no-brainer trade if the management thought there was a takeover offer or some meaningful upside. >> well ben, appreciate you coming on and sharing your new research and your new thesis here first. >> well my pleasure. i enjoy being on cnbc. i hope everyone and yourself have a long and healthy and happy holiday weekend. >> thank you you too. ben axler of spruce point. a lot of hype about ai not a lot of pushback. so an interesting point to talk to him about. let's get a check on the markets. we're up 90 points on the dow. the s&p and the nasdaq both lower. nasdaq down .75% and it is the only one higher of the top three. within the s&p it is staples and utilities and health care and the defenses is leading and technology and energy are struggling today that is why the nasdaq is down small cap having a winning day and week

take a look at door dash, giving up the post earnings pop and more during the session today. we'll tell you what is behind the reversal straight ahead. and as we head to break, search the tickers 10-year yield on top, hovering around 3.8 and tesla higher, 2.3% and the two-year yield, very sensitive. higher today and draft kings up almost 14% and the s&p. we'll be right back. luxury exemplified. innovation electrified. with apple music seamlessly integrated. the all-new, all-electric eqs suv from mercedes-benz. see your dealer for exceptional offers on mercedes-benz electric vehicles.

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welcome back to "closing bell." new details areemerging about former barkley's ceo and former jp morgan executive jeff staley and his ties with jeffrey epstein. we have latest on this developing and crazy story >> yeah. we're getting our first on the record response from jp morgan to what we learned this week in a filing late wednesday, attorneys for the u.s. virgin

islands wrote that the jp morgan banking relationship with epstein was known at the highest levels of the bank they released a 2008 internal email in which one banker said about epstein's account, i can't imagine it will stay pending diamond review now that is an apparent reference to jp morgan chief executive officer jamie dimon and that he would review the accounts in 2008 epstein was a client until 2013. but a spokesperson for jp morgan told me today we have not seen any evidence of such review. that is, that they've gone back and looked to see if jamie dimon reviewed the epstein accounts and they haven't found that. they said the 2008 email that surfaced was sent by a jp morgan banker but that jp morgan doesn't know why the person said this a source familiar has not asked dimon directly if he remembered reviewing epstein's account. and a source noted back in 2008

epstein has been pled guilty and sent to jail and referenced as a sex offender but that is not something they could close the account over and felons are allowed to keep their bank accounts. as for a wire that epstein allegedly sent to a woman after a conversation with jp morgan executive jeff staley, a wire transfer like that isn't something the bank would be looking for under its anti-money laundering protocol, sara. >> and in a filing this month, jp morgan wrote that the usvi lawsuit is what they call a master class in deflection, seeking to hold jp morgan responsible for not sleuthing out epstein's crimes over a decade ago and yet they have access to the same information, allegations an rumors about epstein which it alleges jp morgan should have acted on. sara, back over to you. >> what about the emails that have come to light this week

from epstein and staley about discussing things like snow white and disney princesses. >> we learned that jeff staley at jp morgan at the time had a deep personal relationship, friendship with jeffrey epstein. he was at jeffrey epstein's private island in the caribbean and exchanged emails and pictures back and forth with epstein and the reference about snow white is an intriguing one because he said to epstein, say hello to snow white, that was fun. epstein said back to staley in the email chain that came to light this week, which character would you like next and staley said, beauty and the beast not exactly clear what that is about. sara, it does seem to indicate that depth of their relationship or the tennor of their relationship and the pictures

give us a sense of what the context of the relationship really was >> that is gross thank you. appreciate it. >> you bet. up next, the ceo of alternative asset management case on why investors should rethink the 60/40 portfolio and diversify into alternative investments. you have the dow up 104 points nasdaq is still under pressure but keep in mind, it is higher by almost half a percent to finish the week. "closing bell" will be right back

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welcome back to "closing bell." 28 minutes left of trading the 60/40 portfolio showing signs of life. but our next guest is making the case for a 50/30/20 split which leaves space for alternative investments. joining me now is matt brown and from cais. it is good to see you, matt. >> great to be here, sara. thank you for having me. >> so this would certainly help your business, if 20% of the allocation was for alternative investments. how does it work, what do you, connecting the financial advisers to the alt funds of a carlyle on a blackstone. >> that is exactly right so our mission when we set out was to create a technology

company that connected independent financial advisers, so ria and rbd with a broad menu of alternative investment funds, which is hedge fund strategies, real estate, et cetera and the problem that we were solving was that there was a very unlevel playing field the biggest institutions in the world that invested in private equity and alternatives for decades allocation percentages up to 30% to 50% while advisers had 1, 2, 3%, because there wasn't a sufficient way to access that in a portfolio and that is what we solved. >> so how is the fund been doing lately in the nasdaq was down 30% and people sought private equity how has the performance been >> so, as a platform, we're neutral but we could observe which is great so we've seen a tremendous

amount of volume in what we're calling a very uncertain time. we have political uncertain and economic uncertain interest rates, inflation and et cetera so advisers at a pace that we've never seen are now moving into alternative investments because they see that when added to a portfolio could reduce the volatility but put them in a opportunity that the public market wouldn't offer them so like private equity and private credit have been in a demand and on the liquid side, macro, hedge funds also in demand those that could navigate the global markets so it is very interesting, our position, to be an observer of trend and flow and watching what the advisers are doing. >> what do you say to the critics like a cliff who wonders about the private equity model because it doesn't get mark to market they get these exorbitant fees because they're shielding people

from the public markets when in fact they're not reflecting the true valuation >> i think due diligence on funds in their valuation policy is critical. one of the things that we noticed in the financial adviser community is they lacked resources to do deep dive due diligence and we partnered with mercer who does a thorough investment and review of all funds which includes the mark to market policy. so, we've seen many funds, of course, look at their marks on a quarterly base and make adjustments. so we feel very comfortable that the industry is really institutionalized and quite transparent on that topic. >> so how have the flows looked so far, matt, this year, when things are feeling a lot different. stocks are working, 60/40 is working and bonds are working and your getting say higher yield. is that a competitive head wind for what you are doing >> just the status that we could observe. we have over 100% growth in the

advisers that are now using the platform year-over-year and increasing in the early months of this year volume is the amount of capital that they're putting across the platform is again up high double-digits. very broadly across many different funds and strategies we don't see any slowdown in the allocation i think we have to remember that wealth management north of $40 trillion in assets has very low allocation rates so even going from 1% to 2% or 5% to 10% means that trillions of dollars will come out the eq equity property folios into alt. >> there are all sort of products that you offer. what is the hottest right now? >> well, we, as i said, we could observe a lot of he trends but we're definitely seeing a large amount of flows going towards private equity and private credit those tend to be areas that not

only have the right strategies, but a lot of the firms that offer those strategies, a few you mentioned, others like apollo and others have been thoughtful about creating fund structures that enable wealth management to be able to invest easily in these strategies and then of course scale that across the end client book. this is what we're talking about. it is not about the asset manager or the financial adviser. it is about getting better outcomes to the end client with a more balanced and diversified portfolio. >> and i know paul is an investor of you. what are your plans? plans to go public >> well tbd on that. in this market we're focused on growth and scale we've doubled the number of teammates we have at the firm. huge emphasis on the state of the art spot that we've been in. a lot of automation and

digitization and machine learning have smoothed out the transaction process that was very air ka-- very archaic and t is a modern approach and it seems to be working. >> we'll keep an eye on you. matt brown, thank you very much. >> thank you we're at the session highs for the dow. we're up 130 or so it is a more defensive feel. what is leading is united health care and amgen and the nasdaq is down more than half a percent. up next, wall street is buzzing about how threat of losing some of the most iconic characters to the public domain is already turning into a horror show for disney details straight ahead power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are.

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the mushroom kingdom like never before. what is wall street buzzing about? a dark turn for winnie-the-pooh and what is means for disney a horror movie is getting a wide release in theaters after the kid-friendly characters entering the public domain at 2022. it is hauling in a million dollars in mexico box office which is more than ten times what it actually cost to produce. this marks the first of what could be a rush ever films poaching from disney catalogue the filmmaker is planning horror movies based on peter pan an bambi, yikes and entering the public domain next year or the steamboat willie short

disney will still have a trademark on that version of mickey but not copyright protection which could create quagmire around the character. there is no affiliation with disney and it is a thin line to tread since the brand and the character are synonymous it is more of a nuisance than a real threat and disney will have to pick its battles for reinterpretation of the characters blood and honey is pulling in good numbers at the domestic box office and disney is still the champion of the box office. ant"ant-man and the wasp" ahead the holiday weekend. and speaking of this holiday weekend, i just want to tell you all, that today is my last day of "closing bell." my friend scott wapner will be anchoring this hour after the weekend starting next week and i'll be hosting squawk on the street from 10:00 a.m. to noon along with carl and david faber. i also just want to say i'm so

proud of this show and this "closing bell" team. aaron, and zev, and karina, david and donna and mike and our leader lisa, thank you all i'm beyond excited about moving to the mornings. we're all working to bring you the best interviews with the newsmakers and all of the intel on markets as i always try to do so i will see you tuesday at 10:00 a.m. but first, i've got one more market zone left and we have got a number of stories to cover deere's blow out earning report e w 1 pntrket zone is next with thdoup11ois. no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? for businesses of all sizes, so let us focus on the how. there are a lot of choices when it comes to your internet and technology needs. when you choose comcast business internet, you choose the largest,

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we are now in the closing bell market zone mike santoli here to break down the crucial moments in the trading day and plus seema mody is here on deere and melissa on next week retail earnings. we'll kick it off with the broad market higher on the dow, mike. the defensive names are getting the boost. the s&p is pulling back half a percent. any catalyst as we look to end the week lower on the s&p about by half a percent. >> i think the catalyst is just the context people trying to digest the new edge of hawkishness from the fed this week the little bump higher in yields and i do think one of the takeaways is the market really has been able to churn in place as opposed to really give up much now who knows if that will last. there has been a loss of momentum some of the most aggressive parts of the market out of the

gate have rolled over and you mentioned defensive stocks retracing higher today but for the most part it is data point to data point on the economy to fine-tune the outlook for the fed. so far yields come down today a little bit so i think that is one of the reasons why the market was sort of held in a narrow range i mentioned monthly expiration probably has sort of muted the volatility around this 40, 50, 4100 area of the s&p. >> and let's talk about the top performer. raising full year guidance thanks to strong zee pand and higher prices for the agriculture and construction equipment. seema body joins us with the story and a 7.2% pop for the stock and the question is how much longer this cycle goes for deere? >> that is the question. i'm happy that it made it into this historic market zone. there was an investor angst as to whether farmers could continue to spend millions of dollars updating equipment and

today's report saying those concerns are overblown the order book is full for 2023. but some weakness in the smaller tract or business and the cfo saying that is due to the weakness in the housing sector and higher interest rates. but overall they continue to spend more on research and development. so the question is going to be, prices are expected to moderate at same time their costs are going up because they're making this big bet on technology what does that mean for profitability going into the latter half of the year? and so for that, that is a question sort of april to may looking to the second half of 2023, sara but for now investors loving the company outlook and the stock up over 7%. >> and i love that you called this thank you for that and what about the infrastructure bill. now that it is getting implemented. are they a prime -- i think of a deer or caterpillar, are any of the companies talking about that. >> i'm so glad you brought that up that is what josh, the cfo said, finally you're starting to see

the benefits of the infrastructure bill at the state level and spending increase for construction so that is helping their tractor sales and for drillers and that is a read through passing on through deere. and we didn't hear caterpillar reference that as much ge did but the benefits are kicking through and that played into their results today. >> and mike, how does the stock -- how does the stock look how much is factors in there as far as the factors that are helping deere. and you could put caterpillar and cabco in there as well. in general, these long cycles that are working, some of the companies rare ones where you are seeing upside to earnings forecast and they don't really look expensive because the earnings support has been there. so i do think it is part of a broader theme. it is not just a one-off we don't know if it will last forever or how elongated and

intense the capex cycle will be. but this is been a bit of a sweet spot within industrials. >> thank you appreciate it. let's hit door dash. taking investors on a wild ride today. the foot delivery company rallies after a revenue beat but the fourth quarter loss was wider than expected. several analysts expressing concerns about how a potential slowdown in consumer spending would impact this company. something door dash ceo addressed earlier on tech check. listen. >> the consumer is weaker than they were last year because there has been several quarters of sustained relatively high inflation. and so we're certainly cautious and all of this is built into the guidance >> quite a turnaround, mike. stock is up 7.5% now. >> i do think it reflects a few things one is naturally the stock is up huge off the lows, up 50%. like a lot of the high growth stocks that have been killed last year. i think the company itself and

in the report has control and a good story to tell on things under its control like the subscriber business and overall volumes. but there is a sensitivity to what is going to happen to growth rates given the fact, not just that consumers might soften up but it is an expensive stock. it is all about the cash flow to come in years out, not right now. it is still pretty like 20 times ebidta cash flow right now what i did find interesting is the tone that the company struck and in the shareholder letter telling investors we're going to focus on free cash flow per share as the long-term metric and historically for all companies, that is a very closely tied to shareholder performance and shareholder reward so i think that is a good message. they'll have to buy back a lot of stock to offset stock based compensation and the rest of it. but in the near term, it is the pacing of the consumer they're at 50% of the market domestically so there is sensitivity even when the company does the right thing. >> mike, i just want to point out the move here in consumer

staples and utilities and health care because they're all working today. they all worked last year in terms of outperformance and took a backseat as the market expected the fed to pause, perhaps the economy to go into a recession. two things that we're questioning this year. so far, whether there is good values here if you do think we're in for more turbulence. >> well if you believe that we're in for more turbulence and the economic cycle is on borrowed time and treasury yields will stay tame, then you expect that to provide shelter and i do think that is the day-to-day argument in the market whether that is the playbook for this year, and therefore the under-performance of zedefensiv stocks giving you a way in or if the cyclical leadership is telling a better message right now. so i think on a one-day basis, the pullback if treasury yields from the highs have allowed them to bounce a little bit utilities have been weak coming into today so hard to say that today

changes the overall conclusion you draw from it. >> energy getting hit hard it is down 3.5% as a sector. what you seeing in the market internals. >> on the softer side. we did start lower down close to 1% and more declining volume versus advancing volume. but on that point of somewhat cyclical leadership, look at the russell 2000 small caps on a week to day basis relative to the s&p. it is still opened up a little bit of a lead here also outperforming on a year-to-date basis so there is a risk in the market the and volatility down to just over 20 right now. so up off the lows near 18 that makes sense we're starting to brace for maybe a different fed message and yields are on move but still bumping along the bottom end of the one year range, sara. >> thank you we'll let you get ready for "overtime" which you are hosting today. let's talk about retail, because it is retail's turn in the spotlight. a rush of big earnings out next week the list like walmart, and home

depot and small players like overstock and etsy and melissa repko joins us now what are the expectations? >> the message from sara is that investors expect more cautious tone they expect that retails will set the barlower and that we'll also have a lot of cautious expectations when it comes to capex and things like hiring that they're going to be careful about the way that they plan for the year ahead and they thought that they'll have healthier margins in the year ahead. over the last six months, a lot of them have been hammered by excess inventory and higher freight. so as that proceeds, perhaps even as rates slow, still they'll have healthier margins so that could be the good news for investors. >> is it still, melissa, a case of covid disrupting this retail business like if you're in electronics or apparel or home goods and

furniture, you're hurting right now? versus those that are more tied to the consumer staples, the groceries an the services? >> i think the story is more about inflation and less about covid. so people are thinking differently about how their spending money because the budget is changing and their priorities are changing. because as the world opens back up we're seeing services roaring back and for retailers that may not be good news in january we saw stronger than expected retail sales but it is important to note that that was led by restaurants and bars and the sales seen there so that could come at the expense of some of the retailers that are planning for the year ahead as they sell things and not selling food and drinks and travel >> yeah, walmart in particular, what are the analysts looking for there? >> well for walmart, one of the huge advances is that it sells necessities. it sells groceries it is a power house and that could help it. and progress that walmart is

making with alternate revenue streams like advertising that could help with margins as well. >> walmart shares up 1.5%. melissa, thank you very much great to see you as well just want to show youa deep dive into the marks the s&p 500 down a third of 1% the dow is up a third of 1% and it is outperforming today and that is because you have names like amgen, adding 73 points excuse me. amgen adding 40 and united health care adding 73. mcdonald's and j&j, that is what is working today and what is dragging is home depot and chevron. a third of one percent lower on staples and financials are all higher and into the close you have energy, technology, materials, all of the sectors with a 1% decline. communication services also lower. but on the week as a whole, you are seeing the nasdaq out

perform while the s&p 500 is down a third of 1% there is the nasdaq right now. what is helping is tesla tesla is having a rebound day. amgen is in there and t-mobile but some of the big cap tech players are under pressure today. microsoft, nvidia, apple and amazon what is also getting in the way here could be higher treasury yields, a little bit -- actually a little bit lower and higher treasury prices and a stronger dollar here this afternoon it could be weighing on the trade. wee also got some of the winners of this year a little bit under pressure. potentially taking a breather as mike santoli said. keep in mind, this is a year where we're still higher for the market and a lot of the groups that have been driving it were the hardest hit of last year the tech names and the momentum players and even the arc innovation fund and having a good week and a overall good year and a rebound here. as we head into the bell, tag a

look dow up 127 near the highs of the day. spent most of the day lower. no real economic data but we're still trying to digest all of the hot reports lately hot ppi this week. jobless claims below 200,000 hot retail sales that. will do it for me here on "closing bell. look forward to the new "closing bell" on tuesday with scott wapner and look forward to seeing you all on squawk on the street at 10:00 a.m. on tuesday. but now, "overtime" with mike santoli. >> thank you, sara welcome to "overtime." i'm mike santoli you just heard the bell. and we begin with the talk of the tape a second straight down week. as fed officials talk big and hit a wall is this just a pause for the start of the year. let's ask head of u.s. equity strategy at rbc capital markets as the folks from sap kind of