welcome to "power lunch. i'm joe kernen alongside kelly evans. i'm in for tyler today, and an interesting, if you haven't been here, we have no camera. >> welcome aboard. >> do they bring cameras

eventually >> we can only hope, otherwise it's a podcast >> china predicting modest growth for 2023. wasn't the country supposed to come roaring out of the covid lockdowns? plus, a renewed push for a tiktok ban government scrutiny of investments in chuna and we'll talk to a market watching who says the economy is headed for a hard landing i haven't seen this gentleman in a while. it will be good to see you we'll be talking about all these things and much more, whether the fed should keep raising to get it over with so the next bull market can begin. >> first, look at a check on the market and see how they're holding up today there we have the dow up just 26 points nothing like the picture earlier when it was up almost 200. by the way, the russell small caps are down 1.5% a very different feel there, and a ten-year yield which was looking much calmer this morning is now heading back up towards 4% let's get to the naz kk with kristina partsinevelos >> thank you, kelly. shares of apple right now

driving the dow just barely into positive territory apple is up over 2% right now after goldman sachs initiated a buyerating with a price target of $199 on the stock that's at least 30% more than friday's close, and this comes even though apple's sales fell 5% in december that was the first quarterly decline since 2019 the goldman sachs analysts argue investors should focus on apple's user base and reoccurring revenue growth from services, which they say is going to be the main driver for apple's growth over the next five years and i have a tech theme today. let's talk about netflix also higher today after getting a vote of confidence from morgan stanley analysts they say netflix is a top pick ahead of an anticipated market bottom so not necessarily good news but shares are up .3% right now. last but not least, shares of digital media company snap are having their best day since november they're up right now, 10.5%

after the u.s. house foreign affairs committee voted to advance legislation that would give president biden authority to ban tiktok. banning tiktok means firms like snapchat can regain lost market share and you have other app based streaming and social media companies like pins which operates pinterest and meta, which owns instagram they're also trending higher on this news. but still coming off the highs of the day kelly and joe. >> kristina, thank you very much >> china open its national people's conference with the country's economic road map, announcing conservative targets for 2023 with a key focus on chips and defense. eunice yoon is in beijing with the latest >> target growth was set at around 5%, so this is lower than expectations and last year's forecast the premier had indicated that most important is to boost domestic demand. and he also flagged some risks to achieving that such as some of the problems in the real

estate market, and a jobs problem. now, the unployment rate is targeted around 5.5%, so this is allowed to be slightly higher than last year the fiscal deficit to gdp is forecast to reach 3% a bit of an expansion, while the quota for some special local government bonds which are used to fund infrastructure projects is going to be scaled back there is more money that going to be earmarks for defense and technology, especially for chips. this is coming as the government through the premier calling for the whole nation to have a strategy and feel motivated for technology breakthroughs guys >> all right very good. for more eunice yoon, the second time i have seen her today >> for her, it's like the middle of the night right now >> thank you >> i see you a lot >> on your other show. >> michelle is here, but for

more on china's economic projections and what it means here on set is michelle ca caruso caruso-cabrera, and dennis uncavich michelle, i'm going to reference dennis with you. did you read dennis' notes i thought they were very interesting about this is the most powerful leader that china has ever had, even superseding mao zedong and i'm trying to figure that out, dennis. i guess in terms of length and in terms of just absolute power, you would say? >> let's say that china is like a three-legged stool it has three legs. one is the economy, one is the military, and one is the ccp, the chinese communist party. mao only had control of two of those. xi jinping as of yesterday on sunday, became the president, and he now totally controls china. that's why i think he's more

powerful today than mao ever was in the best of his years >> what does that exactly -- is that -- is that good for us or bad for us i can't imagine that that is good for us, especially michelle, with some of the recent privets the country has made i thought it was all about growth now it's about global hegemony >> you know when you walk in a fancy store and say you broke it you bought it. xi jinping owns the chinese economy now. let's see what he does with it so far, he's been very anti-business. he claims he's going be pro private sector, but everything he's done recently appears to be antiprivate sector there's a hope he's going to be pragmatic and because he needs growth he's going to start making decisions that are good for the economy, but i don't get that impression at all there's a report from the "wall street journal" we're going to hear later this week, leaked to several outlets, that imagine if we took the federal reserve and the treasury department, took

them away from the government, and put them all together controlled by one person in a party. that's what's likely to happen under xi jinping that's how much control dennis is talking about it's extraordinary how does it work out when you have so much government control over an economy? you think they're going to grow a lot? i don't think so >> to that point, i mean, the government and the chinese communist party are two separate entities even though we usually lump them together this is really the takeover by the chinese communist party of the entire government. >> it is going to be the takeover of the total government by the ccp, the chinese communist party. there's a great proverb from china i love, the mountains are high and the emperor is far away that's from 800 years ago. the point was the people in the countryside or the local governments could do what they wanted because the emperor is far away xi jinping is now up front, in charge, andhe's saying we, the

chinese communist party, are essentially going to control everything and as michelle just said a few minutes ago, we're going to have to sit back and wait and see what happens this is something that is a real challenge, i think, not just to the united states but to all western democracies. >> we had speaker mccarthy o this morning he is feeling really good, he says, about engendering some bipartisanship it was about a china committee and that's how important this is in fact, you know, because he was on, you know what i'm going to do? >> what are you going to do? >> run a sound bite. gosh dang it here's the speaker from this morning. >> this isn't about defense. this is also about just not our security but our technology and our supply chain what china has done is done these five-year plans to go after certain parts and certain industries, and now we have become dependent upon them this is that we can come out with one voice, republican and democrat, an american position, that we bring those jobs back to

america but we don't have us dictating these businesses how to do it, but we aren't beholden to china and any industry. >> i asked if he was going to taiwan he deferred. >> did you see the reporting on this he is going, not going to taiwan, speaker kevin mccarthy will not meet with taiwanese president in taipei after all. they persuaded him to move the meeting to california instead to avoid upsetting china. this was an ft scoop from a couple hours ago, probably after those comments he wanted to visit and show boldness as pelosi has done, but they shares intelligence with him to get him to reconsider >> he said they're going to spend 7% more, this is to dennis or michelle, 7% more that's a lot, to raise defense spending in decades, but it's up to $250, something we spend $800 every year but they said it was for special -- >> why are they headed to

supersonics? >> they're clearly worried they want to control the navigation and the seas around them they want at some point to be able to take taiwan in some form or fashion the one data point i would point out to you is they spent more on internal security and surveillance than they do on defense. >> which is both scary and also maybe an achilles heel in the long run if they continued to siphon money away. they don't have endless funds here >> when you hear the reporting today about what the vice premier said, he said we have got to deal with local government debt immediately. this country is so indebted, i want you to think of china like a vast swath of puerto ricos and illinoiss. okay, and they are so in debt. there are some areas spending 75% of their revenue servicing their debt why can't they have higher growth because they cannot spend money. they're going to have to fix balance sheets you know what it takes to fix a balance sheet? that means you have some kind of balance sheet recession where

you can't build roads and bridges and hire people. you're just paying down debt >> you meant more than one illinois, because i have heard h anchors on tv calling it illinois dennis, i really thought that xi's most important priority was to raise the standard of living for the average person living in china, i don't know what's gdp now? average gdp, $8,000? >> per person? >> per person, and all of a sudden it seems like he's tacking to where, i guess putin did it, he's not worried about the standard of living in russia does that analogy hold true for what china is doing now? >> a 30-year run where they had great growth and really until the last couple years. i think he has -- xi has enough power to say to the average chinese person, be patient i'll get to this

but there are bigger issues out there. i think we haven't talked about technology leer clearly, western technology has been dominating china for almost the last 30 or 40 years xi now recognizes he has to have his own level of technology or to play nice with the united states it's clear to me he's not really wanting to play nice, so that's something i think, and i think michelle has spoken about this on some other interviews where you have reverse cfius we might say you're simply not going to get our exports and you may well not be getting our money. am i right >> cfius is the committee on foreign investment into the united states. this is made of cabinet members who say no, mostly chinese companies, you cannot buy this company here in the united states what if we did it in reverse and now we have cabinet members saying to american companies, you cannot put your money into china. right now, we have outbound export

nvidia, you can't send that chip what if they say, sukoa, you can't send that money? >> so people go, okay, maybe obviously really sensitive areas they would start to clamp down, but sometimes you think of starbucks, we're talking about mcdonald's the question is would they clamp down or to investment firms, would they start having to look at it piece by piece or would it begin with those that are most sensitive and everything else we look away. >> your question is the scope of it they have been arguing about that for two years the original legislation, it could go through the white house with an executive order or legislation. the first round of legislation was so broad, they said almost every sector is going to be beholden now they're talking about artificial intelligence, anything relating to the pla, the people's liberation army, the military, and anything related to personal data hence the tiktok thing >> you saw mobius. is that different or -- they're

not saying you can't take your money. we want 20 years worth of records for him to get money out of -- and he was a big china bull >> mark mobius is a longtime chinese investor and bull, and he has said recently when trying to expatriate dollars he hasn't been able to get them. there's this new regulation. for years, the law, the regulation, whatever you want to say it was, was that you leaving china could not leave with more than $50,000 and yet, chinese people own vast swaths of san francisco and 57th street, so obviously, they can open the window or not and now they're obviously clamping it down >> we did ask derrick scissors about the same issue, saying is this new or not? he said listen, if it happens it's evidence of a clamp down, whatever has been the official policy, more sensitivity going into this onference. >> dennis, i'm sorry we have three hours in the morning.

it's different i'm going to -- we're going to call you will you answer? >> sure. >> good. michelle, you're already on all the time >> dennis is great >> yeah. >> you're going to steal him from kelly >> i have seen other people poach when they come on "squawk box. >> i do watch sometimes and say we should get that person. >> they're really good >> quid pro quo. >> as we were just discussing, the white house is working on new curbs for u.s. investment in china. let's bring in kayla tausche with new details on what exactly this program could look like >> reporter: the biden administration is requesting at least $10 million in new funding, that's on top of $20 million secured at the end of last year. all to monitor outbound private equity and venture capital money in adversarial countries the agencies didn't mention china by name, but the end goal is to rein in china's military advancement.

they sent two brief nearly identical reports to congress that say work is ongoing to insure clear definitions of scoping as necessary to facilitate swift implementation and achieve the objective of preventing u.s. capital and expertise from being exploited in ways that threaten u.s. national security while not placing an undue burden on investors and businesses behinded the scenes, investors are disagreed on how broad to make this program. funding for semi-conductor and quantum computing investment, but expanding to include artificial intelligence which touches a wide swath of industries that could be much harder to police that's where there's not agreement now. sources say the administration is discussing a one-year pilot program to try to refine some of those issues but there's no word on when it could all go live. earlier today, gina rumondo said no decisions have been made. >> great stuff thank you very much. kayla tausche with fresh details. coming up, markets are

heading higher today or trying to the dow with a small gain for the year, but as people fear a hard landing, my next guest says bring it on. he'll explain his thinking and then later in "tech check," soft bank is going to the cash machine looking to raise money. it's not what they're doing but especially where that makes this so interesting and important we'll explain. dad, we got this. we got this. we got this. we got this. we got this. yay! we got this. we got this! life is for living. we got this! let's partner for all of it. edward jones ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna.

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says bring on the hard landing he thinks it will happen and that the market should go full speed ahead, joining us with his strategy is hugh johnson, chairman and chief economist with hugh johnson economics. i have seen a lot of takes ubhard, soft, no landing this is the first time i have seen somebody say give me the hard landing, bring it on. >> yeah, really simple, kelly. you know, i looked at all of the so-called cycles since 1890. each case, you get, of course, a bear market that's accompanied by really followed by an economic recession and in 23 of the 25 bear markets that have been accompanied by recession since 1890, the bear market has ended and the bull market has begun in or during the recession. not before, not after, but during the recession and of course, the reason for that is pretty simple and pretty straightforward. that is when you get the hard landing, when you get economic numbers that are not very good,

that's when you get a change of public policy. that's when the federal reserve will start to lean towards less restraint, start to maybe not just pause but maybe lower interest rates, and that's when prospects for the economy and earnings importantly start to get better, and that's when stocks turn. bring on the hard landing. i don't think it's going to be a severe hard landing. let's have it, get it over with because it's during that hard landing that you're going to get a turn for the better in both indicators that lead the economy as well as stock prices. >> right, so the -- i guess the other camp, hugh, would say no, it's not that we want to delay the hard landing we want to avoid it altogether, and we think we can avoid it and it's -- i don't know how the rationale is, but do you think there's hope that the hard landing can be avoided altogether >> of course, there's always hope that we're going to be wrong. forecasters are going to be wrong. they have been wrong many times in the past.

we could avoid a hard landing. key could have a soft landing, but kwhwhen you look at the numbers. look at the index of economic indicators declining for ten months it's done that ten times since 1960, and on eight occasions we had a recession. look at the yield curve. a lot of people want to criticize the yield curve. it has a really good record of forecasting recessions, so yes, you're right we could avoid it. we might not have it i don't think that's going to be the case the numbers right now tell me we're headed towards a hard landing, although it's not likely to be very severe based on a lot of factors. >> i mean, what's the playbook, hugh as people then are weighing, and of course, listen, at some point, let's fast forward and get it over with, but what's the playbook for an outlook that says we are going to have a recession. we are going to have a worsening bear market. how should people be positioned until that happens

because if everybody wants the recovery but you have to wait for the bear market to get the recovery, then what do you do in the meantime >> yeah, you take your clue, quite frankly, kelly, where you should always take your clue that's from the financial markets themselves we're getting some fairly interesting numbers coming out of financial markets between the beginning of 2022 and basically october 13th, you saw the markets perform as bear markets perform. since then, you had fairly positive interesting performance. you have seen bull market sectors like materials, industrials, and technology post good relative performance. you have seen small capitalization stocks outperform large capitalization stocks. and the reason it's changed is because investors collectively, and those sectors are at the top now, those sectors are basically investors are really anticipating the outcome that i'm talking about.

they're anticipating the typical hard landing and during the hard landing we get a change in policy the fed will pause, even if we're not at 2% inflation, i think. and the fed will turn policy, when they turn policy, things like the index of leading economic indicators will turn from the positive. that's when stocks will turn so, you know, financial markets recently, very recently, again, i say since october 13th, have performed better in anticipation of an outcome of the sort i'm telling you about. >> they're getting -- it might get worse before it gets better but they're kind of looking past it either way. hugh, good to see you. thanks for your time >> my pleasure further ahead on the show, today's clean start. we'll take a look at one company that removes carbon dioxide from the air and then turns it into diamonds we're ckn o.ba itw d financial advice from my ameriprise advisor. she knows my goals and can help me reach them with confidence.

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>> we have the premarket trading. not an actual session. let's get you caught up on stocks bonds, and the economy how much time are we giving this guy. starting with a gain for the markets to the start of the week did you hear what you have to cover, bob no pressure. >> he's doing the stocks part. >> oh, you're just doing the stocks part. that's easy. do the russell 2,000 for us, all 2,000. >> having a tough time of it today. let me just show you what's going on here. you live by bond yields and die by bond yields we had a great start yields lower, and in the middle of the morning, yields starting creeping up again and the markets lost a lot of the steam. remember, lower bond yields, lower interest rates, the growth people love it so tech has been roaring since thursday communications services, cathie wood's ark fund has been doing great. energy is now up it had a terrible start. nat gas collapsing, a lot of big nat gas stocks were down 4% or

5% they have recovered a little bit. resources, some of these stocks have amazing yields. devin has a 9% yield right now cotara has a 9% yield right now. the prices are down there. metals and mining. some are china stories, fwhut coal stocks have been terrible peabody, console, some of the other names like century aluminum are also weak overall, you have to admit, 120 points in the s&p since the middle of the day on thursday. that's a 3% move in the s&p 500. we come off that here today a bit on the yields moving higher, but it's been quite, quite a run in the last couple days. back to you. >> bob, thank you very much. bob pisani >> over in the bond market, yields went down this morning, now they're back on the rise we have the yield curves inverted to worry about. rick, what's the latest? >> you know, we saw data today, and if you stripped out

transportation in both factory orders and durable goods, the numbers that remains were pretty good that's partially the reason we saw rates reverse from lower to higher as you look at a two-year versus ten-year spread, you'll see right now we're hovering close to the minus 90 basis points we closed at on friday. it's very key because if we start to get just a smidge more inverted, of course, we'll be looking at a fresh four-decade inversion on that spread and we continue to monitor that because of course, it seems to correlate very highly with recessions but something has gone awry, and what really is the three-month to ten-year, the actual recession spread and what has gone wrong is let's look at three months to two years. we see the coupon curve has made up a lot of ground with t-bills. we're looking at two-years higher than three-month bill rates. and that has made the three months to tens a little more

steep or less inverted, at minus 89 basis points. we're going to continually watch twos versus tens to be the harbinger of potential recession news because three months to tens most likely is going to end up a little bit less inverted due to the dynamics of bills and the coupon treasury conserve starting to get closer together. back to you. >> rick, thank you very much the final key here is oil prices, which are back in the green today after trading lower even this morning. the growth projections from china a key driver but the big energy story today, nat gas. falling, the latest check was about 13%. 14%, there you have it coming off a huge week in nat gas did go up 20%. still, way down since january 1. the ceo of baker hughes will join the crew with more on this unique situation let's get to bertha coombs now >> here's what's happening at

this hour. norfolk southern pledging to pay several million dollars to pennsylvania to cover the cost of the response after last month's derailment there pennsylvania's governor shapiro met with norfolk southern's ceo and secured an initial commitment for financial aid, as the cleanup from the february 3rd derailment continues norfolk southern already made a similar pledge to the state of ohio to cover the cost of cleanup from the palestine derailment that toppled 38 rail cars two planes set to leave boston's logan airport this morning made contact that according to transportation officials. the incident took place as a united plane leaving for new jersey made contact with another united plane that was set to ply to denver. no one was injured but this comes less than a week after two planes had a close call at the same airport and notre dame cathedral is set to reopen to visitors at the end of 2024.

the reconstruction itself started last year after the cathedral's iconic spire collapsed in a fiery blaze in 2019 more than two years of work went into making the monument stable and secure enough for artisans to start rebuilding. and kelly, one of the things they're really working on is to make sure they can recapture the sound of the acoustics that's going to be a big challenge. >> wow, and probably make all the difference for the experience that people have. bertha, thank you very much. >> that's great. at least it's saved. >> and pretty quick, honestly. >> i guess when you think about how - >> it took them a couple hundred years the first time around. >> a small amount of time. ahead on "power lunch," soft bank owned chip maker arm holdings reportedly raising at least $8 billion in the u.s. for ow l i "perunch" will be right back

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dead, although maybe they are if you're in london >> the windows still shut, but we're getting signed we talked about it, the first ipo in about a year could be a big one in terms of money raised and market valuation that would be chip maker arm it's looking to raise at least $8 billion in a u.s. listing at a valuation of $32 to $70 billion. it tells us where we are in the ipo landscape. chip stocks have been extremely volatile over the last 12 months exciting in terms of the secular trends of digital transformation, of course, the chatgpt/ai hype. the ipo window has been frozen shut so you might expect banks are vying to get into this deal. that may also account for the wide range here's arm's ceo on "tech check" just a few weeks ago talking about the ip orb >> we're being very careful as we prepare for an ipo. we're fully committed to making

that happen this year in twnt 23 plans are well under way we need to balance that with making sure we're able to capture the long term opportunities which we're most excited about. >> arm itself occupies a very unique strategic position in the chip space, one that soft bank ceo hopes will lead to what he hopes, quote, the biggest debut in the history of the semi industry, that the uk based chip company designs components across the ecosystem m1 and m2 chips changing the game for processing power. we're talking about arm, it's at the center they're also powering amazon's latest cloud computing program, and more broadly, it's lowing more and more tech companies to bring more chip tech inhouse the stakes are very high, and arm ipo would be a major windfall and helping to make up for continued losses in the vision fund portfolio and that selldown in alibaba, and we

know, kelly, and joe, he has taken a step away from the big soft bank overall, he's not doing the earnings calls anymore because he's focusing on this ipo. >> by the way, so total combined market cap of listed companies, number one, new york stock exchange number two, nasdaq shanghai, euro next, shenzhen, mumbai, london that's how far london is is there a brexit, you know, angle here i wonder >> i want to check the math on that range i mean, did you check that math? but then i thought, you know what, looking at tech stock when it's trading, that's not crazy we have seen market caps move that much in a year easily >> yeah. you're referring, kelly, to the idea that arm is sort of this big symbol of uk tech, and it's supposed to be this giant that many were hoping would actually list in the uk, but it is going to list in the u.s and that has come as a

disappointment to many i think the range too is going to be fascinating. $30 to $70 billion nvidia wanted to acquire it for $40 billion. here's an interesting stat arm accounts for a bigger percentage of the company's net asset value, more than alibaba isn't that kind of amazing we associate alibaba with soft bank for so long, but he has been selling down that stake, which really tells you why it is so important he must get as much out of arm as he possibly can. >> $40 trillion combined market cap of the nyse and market cap these things matter. a heartbreak for them that doesn't even sound like it was close. deirdre, thank you so much deirdre bosa with "tech check. >> could diamonds be a planet's best friend? up next, we'll take a look at one start-up that turns harmful carbon emissions into high quality diamonds as we head to break, we're celebrating women's heritage, sharing the stories of women

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we're moving carbon emissions from the air is one of the fastest growing remedies for global warming but what do you do with that captured carbon diana olick explains well, we have seen a lot of creative uses for cabtured carbon from making bubbles in

soda to distilling vodka, and now another brilliant idea lab-grown diamonds are becoming big business, forecast to reach $50 billion globally by 2030 names like wd, clean origin, and a start-up called ed ether >> every ether diamond that has been grown to now is from carbon captured in the swiss alps >> this makes them even greener than the competition and pricier than other lab grown diamondess but less so than mined stones. he describes the process as follows, captured carbon is converted to atmospheric methane. that is then injected into a temical vapor reactor and over the course of about four weeks the diamond grows, atom by atom. >> at the end we're left with something that is unparalleled and its environmental footprint

and meets the strictest requirements for cut, clarity, color, and carat weight for even the world's top luxury brands. >> ether's diamonds are certified by the international gemological institute. the company is currently using carbon purpose from a firm that operates this firm in switzerland but says they're pursuing carbon sources in large steeks like paris and new york, a strategy particularly enticing to investors >> imagine you're proposed to in milan and in the future the ability to take the air out that day and putting it on your ring finger >> in addition to helena, it's backed by trirec, sound wave, and socimpact capital. total funding $18 million. ether's ceo says the company is now expanding beyond diamonds to produce industrial materials like carbon black graphite and grapheen from atmospheric carbon they have also shifted their

diamond business from direct to consumer to b2b. >> does it take a lot of energy to convert the carbon dioxide gas into the diamond >> less so than other lab grown diamonds that's why they say they're greener than other lab types and while they do have to use some obviously to create the diamond, it is much less than you would emit by mining or as we said other lab grown types. >> diana, are they using coal to fire up the grid to use the energy to make the diamonds? >> that's not how it works >> okay. might work that way in india and china, because you have to power the grid somehow right? >> right, but they're saying they're using less energy to produce these diamonds and it's offset by the fact they're using carbon emissions taken from the air. >> i wonder net/net. how much -- is it similar to the cost of a regular -- i don't want to -- >> it's in the middle. it's in the middle

it's more expensive than a lab grown diamond because it takes more to do that carbon capture they're having to buy from companies. it is slightly cheaper than a regular diamond. >> diana, my 25th anniversary is next week. and if you make too many of these damn things, seriously, i'm going to be really upset if you flood the market with these diamonds i'm going to be -- that's all i'm telling you. diamonds are scarce, aren't they we're going to start making them please don't >> well, what if you're saving the planet by doing it, joe? >> isn't that a little worth it? >> i think the planet will be okay, diana. you know how i feel about it maybe humans -- not humans we'll all be dead. but that's life anyway >> i don't think you should get a c 02 time for 25th anniversary. i think you should ether. i think ether should hook you

up that's what i think. >> i actually gave her a gift a while ago. but it was diamonds. >> up next, we'll trade key movers in today's three-stock lunch. i'm just being exposed to this actually, i have seen it every day. l gh i know what we're talking abt. alrit. this is the planning effect. if rayna's thinking about retirement, she'll get some help from fidelity to envision what's possible. fidelity can help her prioritize her goals

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time for today's three stock lunch. welcome back on today's tasting men knew, we have six straight days of gains, tesla lower after announcing more price cuts for the models in the u.s. and eqt the worst performer today as nat gas prices dropped 14% here to trade all three is ari i'm sorry. managing director and head of technical analysis the more you get to know someone the more you make the mistake. anyway, thank you for joining us and start with applied materials. what do you do with the stock? >> kelly, don't call me late for dinner the key message coming from our work here is that measurements credit participation and internal breath are pointing offense over defense for these reasons we expect high beta cyclicals to lead the market higher over the coming months and one of our favorite industries to gain exposure to

cyclicality is semiconductors, given the broadness of the strength in the industry i was on the show in january and we spoke on nvidia and i think applied materials is the tactical setup here, getting above its breakout point from last august's peak the levels to watch, the breakout point support at $111 and we see runway up to $140 resistance over the coming months. >> wow that's a vote of confidence. all right. >> i'm just -- i like the drink things are those martinis >> you know better than me. >> margaritas? >> little bit of everything back there today. >> we digress. ari, i will go with the flow, ari, next up, tesla. >> sure. joe, half my friends call me ari. ask my mom she will say ari.

we'll go with that my take on tesla we like large cap growth as a theme. it's not going to be the same one-way bet that it was for much of the last decade if you were to break it up by sectors, tech growth we like more so than communication services growth, consumer discretionary growth and health care growth. tesla would fall into that consumer discretionary growth where we're seeing more relative weakness which is to say the stock isn't as farther -- far along in the reversal process. tesla has bounced and showing signs of moderating below the bearish slope of its 200 day average which we see as a tactical opportunity to reduce position size in the name, conversely, if you were to see a move above $220, that 200 day average, that would be an incremental positive for the trend of tesla. >> all right so kind of depends on this by the way, don't call your ari ari because i don't think he would take well to it.

you can't let this confuse you it could be career suicide here. >> right and on entourage it's ari. >> exactly. >> based on ari. >> exactly final name eqt, really tough day today, but is the stock one you would own for the longer run >> we would not. we -- this is a relatively weak stock and in a sector that has moderated as well. we downgraded energy about a month ago based on signs of moderation in the sectors relative strength. i think select exposure is warranted, but here, too, is an example where it's not the same broad one-way energy bet it was much of the last two years between 2020 and 2022. specifically we would be selling and avoiding the enp stocks like eqt that have fallen below the 200 day rotating and refining stocks like marathon and valero. >> all right thank you. a pleasure thanks for rolling with us

>> managing director at oppenheimer, ari and you're good on tv. roll with the punches. are you available in the mornings too >> any time. give me a call. >> ari. >> that's two i got. two i got. still to come, some important drug data out today results of phase two trials from merck's cholesterol pill that's next so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create [office sounds] ♪upbeat music♪ ♪♪

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afternoon as the company releases data on its cholesterol drug, another cholesterol drug sell me. joins us with more. >> joe, this is really interesting. it would be the first pill addressing the pcs 9 target, two drugs, merck in a phase two trial saying this pill reduced ldl or bad cholesterol by as much as 61% on the high dose planned to start a phase three in the second half of 2023 it will still be a while until they gets to the market but jpmorgan says could be more than a $4 billion drug for the company. merck also leased data on a drug called sotatesaf for arterial hypertension showing the drug could reduce the risk of clinical worsening by 84% and this is driving the stock higher we talked with merck's chief medical officer about his reaction to the results. >> now with this new drug that's

really thrilling to come back to my roots and see, yet again, we have something that's going to move the needle not only for patients with cardiovascular disease but also with pulmonary hypertension as a cardiologist i am super thrilled. >> and there you have it. >> potentially big move for merck. >> thank you very much meg tirrell with the latest there. >> we're out of time. >> thanks for watching "power lunch. "closing bell" starts right now. >> thank you, joe. thanks so much welcome to "closing bell." i'm scott wapner from post nine at the new york stock exchange this make or break hour begins with stocks trying hard to eek out another gain here's your scorecard of where things stand with 60 minutes to go in regulation the dow up all day weakening, though, throughout the session. interest rates turned around, perhaps getting ahead of the fed chair's testimony on capitol hill tomorrow you can see the s&p still hanging on to positive territory as well. two dow stocks primarily the