them shows that individual retirement accounts, i.r.a.s and 4013bs are showing similar type of trends. >> it was a wake-up call around january 1 to look and see where the balances were compared with a year ago great to have you here. >> thank you for watching "power lunch," everybody. >> "closing bell" starts right now. thanks so much welcome to "closing bell." i'm scott wapner this make or break hour begins with stocks still searching for some stability and all eyes as usual on interest rates. nvidia shining bright in today's ma market does the company's solid outlook mean the tech trade has more room to run? we'll ask a top money manager that critical question today we begin with our talk of the tape why jamie dimon is not breaking out his recession playbook just yet even though he does say there is some, quote, scary stuff out there. so what that mean for where your money is headed for the trading

days ahead? i want to start with dimon, economy is good now, a lot of uncertainty, he did talk about inflation taking a while to come down and he was asked by jim whether that meant higher for longer he said, yeah, still said chance for a soft landing what do you make of what he said >> i think this reflects what we're seeing within the data today, we're not falling off a cliff, we're not seeing this imminent slowdown, imminent recession meaning that a recession in the first half does seem off the table but that scary stuff in the future may mean that we could look to late '23 or even into '24 to see an actual slowdown. >> what about this idea of higher for longer because you make the case that the market hasn't priced that in, and it is a scenario that he talked about last week or a couple of weeks ago and brought it up again today. >> i think it is really important. the bond market is starting to price in this higher for longer, you've seen the rate cuts that were priced into the back half of next year get priced out or

start to get priced out. but the reality is that the equity market is still trading at valuations as if the fed is going to step in and save the day. >> you still think the stock market hasn't faced reality to where we are >> no, it is not exhconsistent t where interest rates are it is above the prepandemic peak and 44% above where we were trading the last time real yields were this high. we don't think we have to get rid of all of that valuation premium. but this is still a very rich market, very full valuations, based on the fed guidance. >> what does that mean then for where we go from here? there are some people who say, well, we may revisit the october lows, we have seen far from that, though, like 15% from those levels what do you think? >> i think the first step is to acknowledge that we found a valuation floor last year at 15.5 times that may be where we see of an ultimate floor for valuations, meaning we don't have to go into those dire 10, 12 earnings scenarios. and then as the question of what

do earnings do and if growth comes in better, maybe that saves us, that gives us a little bit of boost, where we're not seeing earnings fall off a cliff. there is still a lot of risk around the margin line not as much about revenues it is about the risk of margin compression. >> what happens if earnings don't become as bad as people think because of, as jamie dimon still says, the economy is good. like a tale of two economies or two, you know, narratives that are out there the economy is good, the job market is strong, consumers are spending that seems to be the reality of where we are right now. >> and here's the push/pull tug of war if earnings are better, that means growth is better and inflation is better, which means the fed is staying tight, the fed is not cutting you can't get that big multiple upside so we could be in a scenario where we have multiple compression, some of that is offset by better earnings and that's where we get into this tug of war scenario where we're in this sideways chop. >> why can't we have growth being good, and strong, and inflation coming down. you paint it as it has to be

both if growth is good, that automatically means inflation is going to be stronger than we think and the fed is going to have to do more or at the very least not cut. >> i think that's the trillion dollar question, which is how much of the inflation episode that we have was caused by stronger demand versus just supply chain issues within the economy related to the pandemic. our view is that you already saw all the disinflation from the durable goods side of the economy related to the pandemic. the inflation we're seeing today is a function of strong demand, tight labor market, and a lot of liquidity, which would say strong growth means inflation stays higher and thus fed tighter. >> how many hikes do you see from here forward? three, two what's your number >> our base case is we expect a hike in march. i think 50/50 chance now on whether it is 25 or 50 basis points that's dependent really on that february cpi data that we get on march 14th and then we think hike in june is very likely if we continue to see data not

fall off a cliff. >> fed funds is pretty much there, though. bullard, you saw the market's reaction yesterday to bullard who said, 5375 makes sense to him. that implies more basis point hikes. the market didn't fall out of bed on that. >> no. i think that we are seeing the bond market come to this reality. but we haven't seen the correction within equity valuations does it have to happen maybe not. what it does is it creates a really high bar if you don't get good news on the inflation front if you don't get good news on the earnings front, when you trade at high valuations, there is not a lot of margin for error. >> what do you make of what nvidia delivered and what it says about the tech trade even though you mentioned a few moments ago the valuation or the multiple that the nasdaq is currently trading at >> yeah, i think that what we're seeing is this very big divergence between tech names that pulled forward a lot of earnings during the pandemic, seeing a very rapid deceleration in their earnings, versus tech

names that are starting to see a reacceleration in some of this exposure to improving economy or specific kinds of is of niche g stories. >> would you fade the tech move from the beginning of the year is that a sell the rally move for you? >> well, we think we do have that very high valuation that is a key head wind. and if the fed stays higher and tighter for longer, in bulk, yes, we would want to fade the tech move. remaining neutral tech we didn't chase the rally higher, we might take a little bit of money off the table in the event we do see valuations too high. >> let's bring in stephanie link of high tower advisers, eric johnson, stephanie is a cnbc contributor. good to see both of you. erica, to you first, you're still super negative and i'm wondering what still prevents you from being positive even in incrementally. you seem to be doubling down every time you come on >> there is not a lot to be positive about we would disagree with this new

found view that the chances of a soft landing, no landing, or the chances of recession going down, we would disagree with that view completely i think if you look at all of the coincident indicators, payroll is one of them and the current strength of the consumer, they're doing great. labor market remains somewhat tight. but that's not a forward looking indicator. if you look at the forward looking indicators and you look at things like the fact that we're at 3.4%, unemployment rate, which is by definition the top of the cycle, delayed reaction to fed hikes to some degree whether six months or two years, leading economic indicators for ten months in a row, consumer excess savings they still have, going down by the day, likely zero by the middle of the year, credit usage is surging, all of that -- all of the leading indicators suggest that the economy is going to decline throughout this year, and will likely go into

some sort of recession, but for sure will be in decline. if you look at prior to all prior recessions, people were calling for soft landing and payrolls were very strong. and we see that changing and what makes our conviction so high is that valuations, this was touched on, you know, earlier, valuations now are excessive. the equity risk premium is 1.5%. to put that in perspective, the average of the last 10, 20 years is 3.25% if we go to 3.2%, that's 3100 in the s&p 500. valuations are excessive and earnings estimates are still too high >> steph, you can debate with the best of them so have at it. eric's view is so different from yours, it is striking. >> well, yeah. so i agree that payrolls are a lagging indicator, but initial claims are leading indicator and now again another week of sub 200,000 in initial claims.

and you're down the four-week moving average about of 6% year over year. so, labor markets still very tight. wages are still strong even though they're coming down a little bit, still strong so real incomes are are actually going up for the consumer, and i would just simply point out that the consumer is not all gloom and doom i went back and i looked at walmart, kroger, and dollar general on a three-year stack basis for comps. that is an indication of demand. and walmart saw 24% increase on three-year stack basis to comps, kroger at 22%, and dollar general up 17% this is just an indication of what companies are telling us that they're seeing and so the consumer remains strong, resilient is the word i would use and then also i would look at the ism services and composite numbers, chicago federal national activity index came out the first positive number that came out in four months.

so there is underlying momentum, and, yeah, this is also leading to stubborn sticky inflation and it is not going to change the fed's path, but i kind of think the economy is so much more momentum than it is getting credit for and i think that's going to translate into better earnings, not great earnings, scott. you know that, but not a collapse by any means because i do think overall everyone is talking about the expensive market, but i think the e is wrong. i think the e is going to be better than people suggest. >> in other words, you're too negative you're not focusing on any of the positive, you just assume the fed has done a lot and it is ultimately going to have a toll on the economy, and the consumer who is going to run out of money, and delinquencies will pick up even more than they already have on credit cards and this whole thing is going to come eventually to an end. >> so what's great about our view is that even if earnings don't go down at all, the market

is still overvalued at this price, if we have this great perfect landing, perfect landing, growth, inflation comes down, fed stops hiking, stocks are still too expensive, and will likely move lower, now, here's what i would tell you around earnings. on october 1st, okay, of last year, the estimate for the next 12 months was $235 we have now had 2.5% gdp in the fourth quarter, we're looking like 2%, 2.5% in the first quarter and the earnings estimates from 235 to 220. that's in a 2.5% gdp growth environment. and the reason why it is happening is for what we have been saying. which is that margins are too high, relative to history, companies were overearning post covid. and that earnings overall are well above trend so even if you have -- >> going back to the lows. what is your ultimate call on -- if you say stocks are too expensive and need to trade

lower, how much lower do they need to go >> to the low 3,000s the timing of that is tricky but i do think -- i feel high conviction it is going to happen in '23 that we are going to go into the low 3,000s. and i think as the economy deteriorates over the course of the year, stocks will not only get hit on valuation, but also get hit on this declining economy and declining earnings estimates. and the key thing is that if i'm wrong about the economy, and somehow from the 3.4% unemployment rate, 5.5% interest rates, somehow we just -- we just skate right through and all is wonderful, i think there is very little upside if at all in this market. and that's why we feel so good about it. >> is eric's perspective too bleak? low 3,000, as much as you suggest the market is overvalued, overpriced, does that make sense? >> it depends what valuation multiple you want to put on the

ultimate earnings. i think -- >> a much lower one. >> a much lower one. we talked about that trough last year being 15.5 times. maybe in a moment of fear you go below that he raises an important point, what is the earnings base we grow into for 2024 right now the market has $246 a share for 2024 that's about 11% growth. that's really a lot of growth. mostly if the recession gets pushed out, and we see some recessionary scenario next year, which means that maybe it is 230 for 2024 and that means that our valuations today are still unattractive >> steph, you get the last word. >> ex-technology earnings are actually running up. right now they're running down 2% i think the struggle points of this market have been technology nvidia's reaction is feh tellinu a lot. it wasn't a great quarter.

it was fine. it was less than feared. guidance was actually encouraging on ai and data center but look what the reaction is telling you. that's what -- that's very, very important. and i was initially concerned that the nvidia quarter kind of didn't propel the market higher, we couldn't sustain higher this morning we rolled over, but now look we're actually rallying, looking at the market now. i think that's because the bond market is telling us we're making progress in inflation, still really high, but we're making progress and expectations got carried away to the downside for earnings overall so it is a stock picker's market but i think that the gloom and doom scenario is -- i just don't see it at this point, not giving all the data points we're seeing >> yeah, maybe nvidia is simply telling us that there is so much hype around ai and that's why the stock has the lift that it does. even after being up more than 40% year to date we shall see everybody, thank you so much stephanie, thank you

eric, we'll talk to you soon i'm certain of that. cameron dawson, thank you for being here. we're just getting started here on "closing bell. nv nvidia's major move. ankur crawford is here why she thinks there is more room to run. and that brings us to our twitter question of the day. we want to know would you buy nvidia, even with today's big gain please vote. we'll share the results later on in the hour. at morgan stanley, old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪ ♪ choosing miracle-ear was a great decision. miracle-ear made it easy. i just booked an appointment,

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40 minutes to go in regulation of the trading day. before we get to "overtime." we're picking up some steam too. dow is good now. more than a third of a percent, s&p back above 4,000 we'll keep watching that with the nasdaq because of nvidia let's get a check on the other stocks to watch as we head into the close. seema mody has more. >> two good reads on the consumer etsy delivering a fourth quarter revenue beat, cfo sharing the online marketplace is now nearly three times the size it was prepandemic. he also offered a cautious outlook on the rest of the year related to the macro environment. but that did not stop bank of america from raising their price target on the stock. up about 3% on the day wayfair, though, plunging after a wider than expected loss and nearly 20% drop in active customers as americans spend less on furniture and more on food and travel. you'll see the stock is tracking for its worst day since march of 2022 still holding on to a gain for the year scott?

>> all right, seema mody, thank you very much. nvidia having the best day of the year after giving strong guidance and our next guest says the ai fueled bull case is nowhere near over. let's bring in ankur crawford, portfolio manager of alger, joins me here post nine. welcome back looking at the stock now, 14%. i hear people all day say, well, the earnings weren't that good you own it what is your take? >> i think let's take a step back from the earnings today and nvidia is going to be the dominant compute engine over the next decade. driving cloud, accelerated compute and cloud, driving, you know, regenerative ai, and so how can you not own this at some point? so i think that's what you're seeing as a reaction of the market people were hoping they would guide down, they didn't, they guided up, and they have inflected growth in all the markets. >> as bullish as you obviously are, okay, about the stock, still 20% away from its high, it

is a double off of its low so even at these levels, with the earnings that they had, this is justified, do you think, this move we have seen? >> i think an interesting thing about enablers of markets and businesses that are demand creators is when you have exponential growth, in the end markets, oftentimes a long-term is underestimated. and that very well may be what is happening with nvidia today the potential is so unique and large that over time the estimates are just too low. >> i'm glad you used the word, tam, total addressable market. you know what happens with tech? we get around buzzwords. is there too much hype >> no. there is absolutely not too much hype in ai ai is something that is revolutionizing the way people work, the way we will compute, the way we will interact with

our society. it is not too much hype. i think it feels like a lot of hype on the consumer side because chatgpt was just revealed but people have been working on ai for three decades and the promise of ai has always been what we're seeing in chatgpt, and then some >> on that note, how do you think about microsoft versus alphabet, for example? microsoft has seemingly all the hype about it. and now we're wondering, oh, well, this dominant place that alphabet had in search, is that now going to be at least lessened to some degree. >> yeah, so, what i think is really interesting about kind of this innovation engine we're seeing, that is actually not linear anymore, it is exponential change and what we're seeing and in part it is because software is starting to write software we're no longer limited by a developer writing code it is going to disrupt markets

that we thought were impenetrable google three months ago, i never would have thought the google search engine was at risk. and their margin structure was at risk. >> and you think it is today >> i do. i do i think -- you know, hats off to the management team of microsoft that they had the foresight to really take the investment and chatgpt and propagate it throughout their entire platform that they were able to recognize what is about to come. >> do you own alphabet >> not sure what we're allowed to say, but we do own it and we're underrated >> are you -- you're underrated. but you're rethinking, even as in the megacap universe the kinds of stocks you're now going to own for a large degree because of ai. >> absolutely. and it was even before ai. i think this is a reshuffling of the decks in technology. i think there are business models that are about to be created that we didn't even expect it is a little bit like, you

know, when the iphone came out, would you imagine there was a company like uber that came and kind of, you know, took down the taxi medallion companies and so, i think we're at that cusp right now where ten years from now there will be businesses that are created at this moment that will disrupt even those businesses that have disrupted over the last two decades. >> so interesting to look at right now as you're talking, we look at the tech stocks that we showed on our screen, you know, most have moved into the green except for alphabet and there seems to be a lot of debate about that i want to ask you about the market, when you sat down, you described what you have been witnessing and i think we have all been feeling, in your words, ping-pong market, right? because we're just -- things seem so as jamie dimon said, there is still so much uncertainty and one day is different from the next potentially. >> yeah, i think there is a tug of war right now about soft landing, hard landing, you know,

fed funds rate, you know, x versus y, and they all have very different outcomes and the reality is nobody really knows and until then we ping-pong between 3800 and 4200 and you won't break out, neither will you break lower. until we have the data and, again, like the consumer has been incredibly resilient. the low end consumer will likely remain employed through this recession. what are the impoliticplication that it will be different than any other recession we have seen. >> i appreciate you being here coming up, we're breaking down the bear case our next guest forecasting a rough road ahead for stocks. lots of arguments as you tell already from our program today on both sides of the argument. we're going to highlight some pockets of safety for your portfolio when the "closing bell" comes right back

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now is not the time to be a hero that's the advice from our next guest as the s&p 500 tries to avoid its longest daily losing streak since december. let's bring in sebastian page. welcome back it is good to see you. it is obviously so easy to be bearish. all you have to do is tune into any program and most people who come on lay out the negative case because it is easy to make. but why are you? >> the bearish narrative is easy it make. i'll start by saying i'm not an uber bear, but i do think that it makes sense right now to be underweight stocks i mean, just think of the bearish narrative. you had a guest go through it. yield curve is inverted 80 basis points pmis are dropping like a rock. manufacturing down 16 points services down 20 points, even though they have jumped back up. inflation is sticky. you had a guest talk about the

equity risk premium. it is as compressed as it has been since the great financial crisis earnings expectations look high at 3.5%. our models predict that housing could go down 7% to 10% this year and on and on, the leading indicators are flashing red. we have had a few good prints. retail sales and employment and so on. but really the bearish truck is coming, scott. >> i know, but there is no indication that the bearish truck is going to, you know, smack into the wall. if you -- look, jamie dimon has been, you know, notable for being out there with some pretty bleak calls. when he talked about there being a hurricane, i know that you know exactly what i'm kef referencing. he could have doubled down on that and he did not. he still maintains there is a chance for a soft landing. bullard, a economy stronger than we thought markets overpriced to recession in 2023. have we gotten too uber negative

given how strong the economy at least at this moment still appears to be? >> i think so, scott and i heard jamie dimon and he was more nuanced today and one of the reasons why this uber bearish set of data has to be interpreted a little bi differently is that we still have about 2 trillion of accumulated savings. the bears will all say, i'm one of them, i'm just a more nuanced bear, they're all saying, well, we're drawing down on these savings, but 2 trillion of accumulated savings going into a recession is a very unusual, never seen before situation. and you had stephanie earlier talk about the consumer and the strength of the consumer, 3%, you know, retail sales in january. that's pretty good the employment market is just really strong. and, yes, everybody will say the bears will say, look, it is just

a lag effect i agree with it. you have to wait it out. you had 475 basis points of hikes, let's see -- let's let time pass to see how this is going to unfold. there is a lag effect. and, you know, employment is a lagging indicator. but, still, i mean, we just created 517,000 jobs and the claims are coming in low, 192,000 so, after 475 basis points of hikes over a year, we have a 50-year low in unemployment. there is something about the response function of the labor market to the fed tightening that makes it look quite resilient. >> at least at the current time. now, you say you are playing, quote, unquote aggressive defense. what does that mean? >> we talk about the market being expensive at 18 price earnings ratio there are areas in financial markets that asset allocators are getting pretty interested in

because there are actually cheap. i talk a lot about quality small caps, the s&p 500, the price earnings ratio there is back to -- it is so depressed to 2 008 financial crisis level it is hovering around there. so to me those quality small caps are pricing in a very hard landing. so i'm comfortable it is nuanced. i'm comfortable waiting to get back in, but at the same time being long small caps. this is actually right now an opportunity to be contrarian and add some juice to the portfolio for the next 12 months i happen to think the high yield bonds at over 9% yield are attractive as well from an asset allocation perspective you have low default rates, and 9% yield on high yield bonds to me is a more attractive risk return trade-off than just straight stocks exposure

>> speaking of being contrarian, the move in technology to start the year has caught a lot of people by surprise it doesn't sound like you could possibly be a believer in the move that we have seen and that area of the market to start the year >> the thing with technology is you have to separate between the nonearners and more speculative and crypto space, and then the companies that can grow cash flow some like the growth at a reasonable price types of companies. i'm not a stock picker from an asset allocation perspective, we're tilting towards value. so this says something about from the top down how we think about technology, but i do think the speculative part of technology that has done really well year to date, mainly driven by this super depressed positioning and the one thing i would say, scott, is we talk about the equity risk premium, a lot of investors are waiting for

tech price earnings ratio to go back to where they were when rates were at 2% on the ten-year but really now with rates at 4% or around 4% on the ten-year, that might actually not happen you have to be selective. >> all right we'll leave it there sebastian, appreciate your time very much. see you soon sebastian page up next, we're tracking the biggest movers as we head into the close. seema mody is standing by with that >> we are seeing the growing trend this earnings season, wth guidance for the rest of the year falling short we're going to bring you with names following that trend after this short break

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about 20 minutes to go until the close of regular trading and we're trying to make a little move here. dow is up by 137, 140. microsoft and chevron and boeing among the leaders interest s&p on pace now to close back above 4,000. so we'll have to watch that closely. and then the nasdaq, of course, getting that nice lift today from nvidia, up 14%, having its best day in a long time. back to seema mody for a look at the key stocks to watch as we approach the end of regulation >> i like that, scott. two long time holdings of cathie wood under pressure today, starting with unity software

down over 10%, 14% after very weak first quarter that's due in part to weakness in the advertising market which they do not expect to recover in 2023 and turning to teledoc, which also issued weaker than expected guidance, that stock has fallen 90% from its february 2021 all time high. but at least one analyst says the worst is over, with svp securities upgrading the stock to outperform. stock currently trading at 27 a share. tune in next hour, we'll hear from unity software ceo first on cnbc, that's coming up scott, back to you. >> good stuff. 90% down for teledoc from the high that's crazy thank you. last chance to weigh in on our twitter question we want to know would you buy nvidia with today's big gain we're going to bring you results after this quick break

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the results of our twitter question we asked would you buy nvidia even with today's big gain you said no. 69% said no. stock is up 14% after a huge run, doubled off the bottom. i can understand that. up next, top technician mark newton is flagging a must-watch signal for a potential market rally. that and much more when we take you inside the market zo ne ♪♪ we all have a purpose in life - a “why.”

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and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity it is that time. we are in the closing bell market zone. mike san tealtoli here to break down scott crohnert and mark newton here as well with a chart he says you must watch. mike santoli, looking s&p, looks like we're going to close above 4,000, barring some crazy finish here important or not >> i wouldn't say of paramount importance but the traction is interesting that we found this afternoon sometimes the short-term moves

are pretty inscrutable, sometimes the mechanics are out there in the open. two hours ago, ten-year yield starts backing off, cracks through 390, goes lower, s&p takes off right away to me that's right now the seesaw that we're on that doesn't have to be the case longer term. i think it is happening in the context as we spoke about a couple of days ago of what could just be a 5% shakeout. the trend looks better than it did the last time we rolled over from a rally high. you are starting to see about half of the latest move, but no more than that so, so far, the economy is not getting worse fast enough for those economy bearers to be right. and then it is really the yield stuff to be afraid of and that's why we got some relief this afternoon. >> scott crohnert, you don't expect much more upside from here but how much downside do you expect if any? >> we're viewing the s&p fairly valued around the 4,000 level. so we're kind of playing more of a trading range right now. where we were a week or two

back, the s&p approached 4200, probably the higher end of that range. we went into this year thinking 3700 was a appropriate downside target, at which point we want to get more aggressive in terms of buying stocks we haven't backed off of that. what i would point out is that it is interesting with today's action, you're closing ten-year where we started the year. this year has been in our view a matter of falling rates up and down with the influence on that megacap growth cohort of the s&p. >> so we're prisoner to rates. that's the way it is going to be for the foreseeable future rates tick up, stocks are going to tick down, mike was talking too about what the ten-year had done and the way the stocks reacted as we head to the last few minutes here. >> right that's the way we see it for now. it is important in terms of teasing out where this is being felt we have been making this analogy that the s&p can't go materially higher without the nasdaq essentially leading it and that's where that rate sensitivity comes in

it is more specific to that large cap growth part of the market that last year proved to be so sensitive to rates and the multiple compression side, that's where your release valve is up and down as we follow the shorter term rate direction. >> so, mike, okay, 4,000 is where the level that scott sees. you heard eric johnson, low 3,000s how you to react to that >> it is plausible i would say that to me, the october low looked pretty good. had a lot of the kind of characteristics of something where it should actually be relatively durable that was sort of the stagflation narrative that was driving us there. if you're talking right now about economy is better than expected, maybe the fed has to go an extra quarter point or so, that's not fatal to where we are right now. didn't mean you retrace all the way lower. would the market be more attractively values down there, bet forward returns, absolutely. that's the trade-off

want the pain now and set up a much better rebound or do you want to sort of hold these levels and then maybe have it be more of a grind from here. >> when you hear people like eric johnson make a call like that, can you get your arms around how we could go down to the low 3,000s in his thinking >> we feel pretty good with where we are with our s&p earnings outlook, around the 216 level. i think to talk about an s&p level that is closer to that 3,000 level, i mean, you need to have a much more dire circumstance unfolding in terms of recessionary influence on the earnings outlook we don't see that in the cards as -- certainly for first half and most likely to the second half so, again, my emphasis would be that earnings stability here probably limits some of your downside which makes us more susceptible to the interest rate movements as a key driver of this. >> i appreciate you being here, scott, thank you mark, you are the level guy.

you're the one who looks at all this stuff 3,000 or 4,000 what makes more sense to you >> well, i'm a bull, scott i don't think we have seen sufficient deterioration to think this bull market rally has run its course we pull back exactly to where we need to hold the uptrend from october to 50% exact retracement of price and time from the move up to late december. this whole narrative shift over the last couple of weeks with the stronger economic data caused sentiment to get worse and worse and worse. and so now we're approaching pretty bearish near term sentiment levels and look what just happened in the last 24 hours. now we see treasury yields rolling over and that is specifically what investors need to be watching to think that this market likely can extend, the market meaning both the bond market and also the stock market in my view. >> you think rates may have topped for the near term again >> certainly enough evidence, you look at the trend over the last few weeks and getting down 387 today, we break earlier 384, that will jump start a pretty

big treasury rally over the next couple of months i think equities get up to 4200 4325 or so i think we have weekly momentum clearly in place, now we're combining that with skepticism, with pessimism, everybody thinks the central bank is so hawkish and we have to continue to hike. rates might not do exactly what they're -- we're seeing evidence that they can peek out here and roll over. markets, equity markets will rally. >> you want to take a stab at this you look at the internals, it looked good to you like it does to mark? >> in general it looked good that's built up this base of benefit of the doubt that you might be able to give the market at these levels. valuation is not compelling, but also not going to be fatal to upside keep pointing out that outside of the very larger stocks, valuations not that challenging. and i also don't think that it is the level of rates that

corresponds to a particular index level. i keep pointing this out, we were at 4,000 on the s&p, in may of last year, at 3% on the ten-year so, it is the speed of the move. it is what it means about whether we're chasing inflation or not real rates are now actually pretty generous at this point. arguably bonds become a good buy, maybe that means yields can hover or come in a little bit. >> you mentioned this sentiment shift, with the way that you characterized what we have seen over the last couple of weeks. it has been justified, hasn't it you got that really strong employment report, and that made everybody sort of stand up and say, you know what that means, more hikes and higher for longer. >> that's the entire point, scott. when everybody leans in a certain direction you don't want to be there for very long. you saw the equity put the call ratio, hit the highest levels at .80 ai sentiment back to bullish cftc data with large stacks are

negative actually see cftc data being quite negative for treasuries also but lowest levels we have seen, the most highest levels we have seen in shorts for almost four years. so that's interesting to me. it means that people clearly are all betting rates will go higher and stocks should go lower i like to take the other side of that so in the words of tom marshall, everything is right, so just hold tight i think we move higher and in general weekly momentum supports my view. i think we'll be fine. and really any further pullback that causes sentiment to get even more bearish, that will create a really good opportunity. i don't think s&p gets below 3900 today's move looks important it is 40/60 we need to get above. above that, we can start to accelerate higher. i like technology. moving semis today is continues to be very, very good. majority of your poll suggested people don't want to buy nvidia. the stock is showing tremendous strength the best part of technology. people need to be in

semiconductors and increasingly they'll want to be in color trend pullbacks for groups like energy and also healthcare they'll start to look a lot better in the months to come. >> a lot of negativity on the program today. from many people but, mark, i appreciate you bringing that different perspective to us. i think we'll be fine, technology, like, semis, good, nvidia does nvidia's strength speak for all the semis? >> it doesn't speak to the strength of all the semis, but it does -- it is feeding off a reset in attitudes about the group. i was saying earlier, the consensus price target is where the stock is right now 236. everyone was too bullish when it was way higher a year ago. they cut their estimates expectations came down that process i think can support things for a while also seeing some data about outflows from s&p etfs and qqq rolling like last two or three months, it reached extremes. to the point you say people are not -- there was a big grab for

risk at the beginning of this year you talk about the short recovery and the chase, people thought they found the old magic in some of these old stocks again. but if it faded quickly. when the markets started going up, the names rolled a little bit and gave back some of the gains you had people back away from those bullish bets. >> if newton is going to be right with his call, which is certainly more bullish than many, does he need technology to perform well to get him to where he thinks we need to go. >> you need the big growth stocks to work to get there. without it, a lot more has to go right in terms of other sectors. i still keep pointing to more traditional cyclical areas that have kept afloat home builders, maybe they shouldn't, but they have been outperforming. >> industrials, if you're worried about the economy, how many days have we talked about industrials hitting new 52 week highs or all time highs. >> trumpers, industrials and

industrial medals. things like steel. that market, those could be head fakes, but they can't all be false moves. >> well, important or not, closing above 4,000 on the s&p is going to be viewed as very important. we'll see, we look like we're going to do that i'll see you tomorrow. that does it for us here on "closing bell. we got the score card on wall street. but winners stay late. welcome to "closing bell: overtime." i'm jon fortt with morgan brennan. the earnings are going to be coming fast and furious this hour we got reports from carvana, block, booking holdings, intuit, warner bros., discovery, autodesk and more. >> that's right. we're going to bring you all those headlines as they cross. we'll talk to the ceo of unity software, which is falli ing sharply today. >> let's get straight to our market panel, joining us are adam