because now clean energy is more affordable energy. we've been investing in american infrastructure for thirty years... lowering electricity costs today, and protecting from volatile energy prices tomorrow. so walk with us— and let's make cutting energy costs real. all right, everybody, welcome to "power lunch. good to have you with us alongside kelly evans i'm tyler mathisen coming up, stocks and bonds duking it out for your money with yields soaring and stocks kind of stumbling. many people seem to be happy to take 5% on the three-month, six-month t bill including my wife. but will those same people have a serious case of fomo, fear of missing out, if stocks start to

rout >> t bill and chill they're calling it >> i love it >> the impact rising rates are slg on corporate balance sheets. companies are rushing to issue debt before rates go even higher first let's get a check on these markets. yesterday's big sell-off looked like a better tone initially today but we've seen the nasdaq which had been positive turn lower by 15. the s&p below 40-4,000 down a quarter percent. the dow down half a percent np. >> we are going to get to chair powell's day two of testimony in just a minute as well as the breaking news on the beige book, my most favoritely titled book of all time. but before we get to that we're going to go to two people who are neglect but beige. dom chu and kristina partsinevelos. dom. >> blue and it looks like yellow over there anyway, let's talk about shares of brown-forman which are down just about 6% now, 5% off session lows one of the worst performers if not the worst in the s&p 500 today. this is the beverage alcohol company. brands like jack daniel's whiskey, woodford reserve bourbon, finlandi vodka, my

wife's favorite sonoma con trera wines among others brown-forman was helped by premium brands of bourne bonne and tequila. on the other hand hurt by supply chain issues a big down day for brown-forman. campbell soup higher by over a percent. this is the packaged food company behind namesake soup, pepperidge farm sacks and v-8 juices helped along by more demand for its ready to eat meals campbell also by the way raise the its full-year profit and revenue forecast those shares up p 1 1/2% and let's end on a pay raise for american airlines pilots ceo robert isem said the company will match the pay increases that competitor delta will pay its pilots the package at american will include a 40% cumulative increase in pay over four years. remember delta kicked things off last week after it agreed to a four-year deal to up its pay for pilots by 34% alongside other quality of life improvements so american airlines shares up

fractionally helping with that bit of news. let's send it over to kristina partsinevelos from the nasdaq with the check on the tech trade. >> what we're seeing is semiconductor names leading the nasdaq higher tail marvell, amd up over 2%. i want to focus on lamb research for a second one of the top performers of the nasdaq 100 and texas instruments. because both management -- management of both those companies are speaking at a morgan stanley conference today and they're both pretty much saying that lagging edge semi capital expenditures should remain elevated for a while. that is seen as a positive for equipment makers there's a lot of news, though. constituent on semiconductors leading the s&p 500 today. recall that just last week elon musk said tesla aims to use 75% less silica carbide in its next generation evs whenever that happens. and on semi fell dramatically last week in reaction. today it's up 4% there was bank of america note naming this silica carbide producer as i atop auto pick that could jump 25%. the stock is already up 30% just this year alone.

and lastly on ball com it was trading a lot higher this morning and still in the positive territory after announcing a 7% increase in its dividend their annual shareholder meeting just ended i listened there, no new news but nonetheless the stock is higher .8 higher. >> kristina partsinevelos. let's go to the bond market now and rick santelli. rick >> tyler, before 10:00 eastern pretty much the markets were a lot different, especially in long maturities. look at an intraday of ten-year and realize some of the news at that point was pushing rates lower. long dated treasuries like the 10s prior to 10:00 eastern were trading -- let's go to the two-day chart. under yesterday's low yields one of the reasons, bank of canada a pause. a large central bank pausing they paused at 4 1/2%. they want to let it simmer a bit and see what happens that did have an effect here but it quickly diminished because at 10:00 eastern you had powell, you had stronger than expected

jolts, all of this of course hitting and as you look at the two-day chart of two-year affecting them in a much more dramt eck fashion than long dated. hence they were making more of an inversion in the yield curve as investors really started to parse the notion that on the back end of this at some point not too distant future they're going to be successful in controlling prices because they're going to knock out the patient, they're going to put the economy in a slow-mo como -- coma and that's what's affecting the spread slower economic growth ahead and if you look at that chart, that one-week chart of twos vs. tens just yesterday morning it was what, minus 92 it's now minus 108 and fed fund futures for october, and if you notice this is a one-week chart, they're moving lower, which is a hint about beige book to come out, but we continue to see that powell over two days has really raised the percentages of an aggressive fed kelly, back to you >> well said thank you very much, rick.

the fed releasing the beige book moments ago. steve liesman digging through all the red and yellow and green highlights and he joins us with the details. steve? >> the federal reserve's collection of economic anecdotes from the 12 federal reserve districts as economic activity increased slightly over the six-week period. inflationary pressures did remain widespread. though price increases moderated in many districts. so that's good inflation news. leave market conditions, however, did remain solid. six districts indicated activity expanded at a moderate pace. supply chain conditions continued to ease he was another of the big headlines there consumer spending helped steady auto sales were little changed inventory levels did improve inflation continues to reduce consumer income and discretionary spending according to the beige book here concern was expressed about rising credit card debt in self-of the districts. travel and tourism a stalwart of

this economy these days, it did remain strong. manufacturing activity stabilized interesting comment here because there had been a period of contraction housing market remaining subdued. labor availability did improve slightly a little bit less tight maybe -- i don't know if you'd say it's a loose job market firms are beginning to reduce remote work options. we've all heard stories about that wages increased at a modest pace and wage pressures eased somewhat a few more headlines here. the input costs rose further for energy and raw materials there was some price relief, however, for freight and shipping costs we've been reporting about that. firms are finding it more difficult to pass on price increases. that of course is bad for profits but good for inflation and selling prices increased moderately in most districts several districts, however, saw a deceleration in price increases. and tyler, that's as far as i got. >> that's pretty much. that gives us the heart of it, steve. thanks very much and do stick around --

>> not bad for three minutes of work, right? >> that's not bad. you jam it in, my friend let's continue the conversation because one quconsequence of the fed hiking so aggressively, higher rates, now attractive competing for cash in savings accounts, t-bills, cds according to bankrate.com you can get more than 4% on high yield savings and over 5% on some cds or you can log on to treasury direct and get greater than 5% yields on t bills that all mature in a year or less so is cash king again? let's bring in greg mcbride, chief financial analyst at bankrate.com greg, i think the last time this conversation was relevant, you and i were probably in our 20s that's a long time ago for me. less so for you. investors, savers who want to find a good place for cash what's the best place for it right now?

i'm looking apt a yield of 5.3% on a six-month t bill. why not just go on treasury direct and put some cash in there? >> the best yields in 15 years, tyler, by anybody's count. but yes, yields over 5% on short-term treasuries. if you can live without the money for six months, that's certainly very attractive. i think for the majority of individual investors and households that are short on emergency savings keeping that money liquid is better after all, the fed is -- even though those shorter-term securities have minimal interest rate risk you don't want to find yourself in the position of having to liquidate it prior to maturity, you'd rather have that a couple of clicks away. >> and you find that combination of yield and liquidity in money market funds, for example, i guess in some savings accounts you could get that but it's basically money market funds and short-term bond funds. am i correct, greg >> savings accounts, money market funds, great for the brokerage account if you want to be able to move quickly if the

market has a bad day you know, the money fund is great for that those short-term bond funds i think that's a little bit more of an asset allocation decision. but again, with short-term treasury yields over 5% there are some pretty attractive yields there in those short-term treasury funds i don't know that you're necessarily being compensated for the risk with very narrow corporate bond spreads it doesn't make sense to stretch for yield in an environment like that >> steve, let me turn to you we're looking here, if we could take that picture of the wall over there with the six-month bill yielding 5.3, the one-year bill yielding 5.25 is that a reflection of the inverted yield curve, one, steve, or number two, is it a reflection of edginess about what might happen if the debt ceiling is breached, in other words we get into a situation where we're not paying our bills and that could happen within six months, not a year's time?

>> i think all of that is a yes, tyler. i don't know that you gave me the option of all of the above but i think all of that is built into rates the increasing, by the way, outlook for the fed funds rate, i do want to get a current quote here i've got, yeah, 5.69 which is a new high for the funds reat for the october contract is out there. but tyler, i want to make an argument that would cause some viewers at home to throw papers at their television here for the ten-year okay because it's lightning why would you do a ten-year at 5% or at 4% when you can go into these great accounts here that greg is talking about and get 4% and all that liquidity well, the argument -- and i'm not necessarily advocating this. i'm just telling you what the argument is. the argument is if you believe that over the time here, the time horizon we're talking about, ten years, that the fed will get inflation down to 2% over that period of time, then

you get 2% yield every year for ten years and you lock that in over that period of time and for that surety, that certainty you pay the differential between what you would get, say, on the two-year or what you would get in a money market fund. so that's something to think about if you have that kind of time horizon, that you're going to get that and it really depends on your long-term outlook for inflation. if you think inflation's going to go high, stay high, the fed over the decade will not meet its target, then by all means stay away from the ten-year. if you think they're going back down to two, then there's an argument why over ten years you get 2% real. >> also steve there's the argument that okay, why would the ten-year be so much lower? so yeah, you can get -- you get your money back, hopefully, on that 6-month bill and 6 to 12 or 18 months maybe the mac roaf's so bad that you can only get 2 1/2 on the 10-year why would i lock in the 10-year now? maybe if it drops a couple

points you see what they're saying with the forward charts and the 2024. it doesn't look pretty in terms of beg ex of big expected rate cuts. >> exactly and also what's called rollover risks. that means six months, two years from now you've got to make a decision as to what to do again with your money. it's worth pointing out that those accounts greg is talking about, greg, am i right, they can change those rates overnight, right >> the liquid accounts, the savings accounts, yes. and money market funds, those will change with the market. cds on the other hand, they're locked in. >> ngentlemen, it's good to see you. steve liesman, i've seen you more recently but it is also good to see you nonetheless. >> coming up all this talk about rising yields has people turning to bonds taking that 5% but will they have a serious case of mofo

if and when stocks take off? that's next.

fed chair powell reiterates his hawkish tone let's go to bob pisani at the new york stock exchange for more on today's market action bob? >> tyler, good to see you. you notice the dow is underperforming the s&p 500 and

that's because we've had problems in health care and problems in banks the last couple days. let me focus on health care for a minute here. these pharmacy benefit managers, they're all having a tough day united health is the biggest stock in the dow by price. look at those 40 points in the dow being affected by united health care. and of course lilly cut the prices on insulin. that's affecting the potential profitability of the pharmacy benefit managers cvs health has a big pbm that's a new 52-week low cigna also down a bit. lilly's had a tough year all the pharmaceuticals have had a tough year lilly's down 15%, 20%. bristol-myers is right near a new low. pfizer 39. 0 that is a new low i believe. and johnson & johnson's been a horrible performer issues with the talc litigation for a long time. elsewhere the regional banks you've got a triple whammy here. higher deposit costs for them potentially with higher rates. you've got lower economic

activity and you've got very big exposure to commercial real estate. so a lot of the big regional bachkz, pnc 144 that's a new low. signature, m & t, zion, they're within one or two percentage points of a 52-week low. is anything holding up the global industrials are doing very well. ge's been on a tear ever since it spun off the health care division eaton sitting near a new high. rockwell some of the airlines have also been doing well. but that's about it, kelly some of the big global industrials one of the only sectors having any positive momentum back to you. >> that's a great point. bob, thank you meanwhile, the fed being blamed again for the latest sell-off on wall street. investor fears are rising as they weigh the likelihood of rates staying higher for longer. and you just heard what you can get on cd ands bonds those higher rates are sending people into those asset classes but are stocks still the best place to be? joining us to make the case is jerry castleini.

have you been tempted yourself by some of these, treasurydirect.gov and all the rest of it >> i mean, why not for a portfolio that needs consistent returns and doesn't have risk, you bet it's a gift. but let's not forget about the gift you have in stocks right now at the same time and all the negatives that i think by this point there's not going to be any real surprise that we're in a tough economic environment and one that will probably find its way out at some point >> so you are supposed to be here to make the case for people to stay in the market. why should they, jerry why shouldn't they just go you know what, this is so uncertain i will take the certainty of that 5% or what have you, granted depending on the time frame they may have to figure out how to reinvest that in six months' time >> three points. first point is we're overly obsessed with the federal reserve and all the things they've done and they tell people about and we analyze. the reality is the fed's done

their job. long-term inflation is expected somewhere in the 2s. that's their target. we're there. we're worried about where short-term stuff is and they're telling us they're going to stay hawkish, and that's great. they've taken all the excess out of the system. close to 100% of all exist and 70% of all ceos expect a recession. there's no surprise here if one comes. so if there's no surprise then all investors in equities have to be looking at stocks where a recession has been dialed in and i guess my point is why would you have further down side risk when everyone's already expecting the worst? and think of the other side. at some point -- >> i want to come back, jerry, if i might, to something you just said. forgive me for interrupting. i think i heard you say that the fed wants inflation in the 2s, and i think i heard you say we're there. >> we're there on the five-year. >> on the what >> on the five-year inflation -- the threes to five-year

inflation adjusted tips. >> but we're not there now we're not there today. and that's why the fed is going to continue to raise interest rates. i mean, i don't know how you can possibly say that we're there. the market -- the three to five-year market may be betting that we're going to get there but we're not close yet and that's why powell sounds so concerned about a hot economy. >> so that's the point, though that economy, that expectation for a slowdown has been discounted in stocks it's been discounted in the forward ten-year return. and it's been discounted in the far out bond market. you can argue that there's more to come in terms of pain but when you break the economy apart you don't have the classic -- so if you go look at consumer balance sheets, you look at corporate balance sheets, you look at labor markets, all of the things that have historically caused really bad recessions aren't present

today. or nearly all of them. and meanwhile, all you have is the fed with a big stick trying to swing at something. my point is they're going to need to unemploy about a million and a half people to reach these kind of goals of higher unemployment and looser labor markets. and they're not going to need to we're already at the point now where all these indicators have given you enough room as an investor to say maybe there's more up side than down side risk here >> you're sounding like elizabeth warren, jerry. >> i don't think she's an expert in up side down side risk bum i could be wrong the point is if you abandon stocks just because you can get 5% t-bill yields you're asking yourself to act as though you can see beyond something that none of us can see but if you look at mastercard or las vegas sands or exxon or these big companies that are doing just fine whose earnings estimates have already been adjusted lower, why wouldn't you take the chance today that

that's actually going to be a conservative outlook a year from now? and that's the job of an investor right? our job isn't to sit here and angst over what the fed's doing in march of 2023 but we have to look forward at what's going to be the economic environment in 2024 >> if we go to new highs -- so some have said, jerry, to me that they think the market can make a run to new highs this year before we reverse lower is that a situation where you ever at some point say to clients this rebound has come too far, we're moving to the sidelines? >> where is it going to come from i'll use the example, in january the rally came from a lot of the bounce moves in some of the high tech names i would say those will expire, and they already have. but if you ask me the places -- think about this the s&p 500's trading at 14.8 times every name except the top biggest, the faang stocks. that's a very attract

target-rich environment for investing in stocks. even if you have to pay 5% interest rates historically we've been able to value stocks at 20 times with 5% interest rates and now we get them at 15 that gives you a broad universe of names to buy without worrying about what some business with no earnings is going to do. >> mastercard, exxonmobil, las vegas sands he's taking them to the bank jerry, thank you for your time today. we appreciate it >> you bet >> jerry cast teleini. the white house controversial le targeting small businesses to pay as well. we'll have the details plus imbalanced sheets. corporate bankruptcy filings soaring to levels not seen in 12 years. we'll discuss when "power lunch" returns. 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 i'm telling you, coach staley, i could reallyhe's a goat h. the story of my life. no coach, there is a goat here! whaaa! what's this? a thousand dollar hospital bill? but i have good health insurance! gaaaaaap! did you say 'gap'? he's talking about the expenses health insurance doesn't cover. but with aflac, you can get money to help close that gap. aflac, huh? gaaaap! aflac! gaaaaap! get help with expenses health insurance doesn't cover at aflac. official partner of march madness.

♪♪ choosing miracle-ear was a great decision. like when i decided to host family movie nights. miracle-ear made it easy. i just booked an appointment and a certified hearing care professional evaluated my hearing loss and helped me find the right device calibrated to my unique hearing needs. now i enjoy every moment. the quiet ones and the loud ones. make a sound decision. call 1-800 miracle now, and book your free hearing evaluation.

welcome back, everybody. president biden to announce a plan to increase taxes on people making more than $400,000. but one detail is creating some controversy, and robert frank is here to discuss it this all leads back to medicare, doesn't it >> yeah. and there are two parts to this, tyler. one is that they're increasing that current medicare tax from 3.8 to 5% for wage earners who earn more than $400,000 a year

the other part of it is that this would apply to business profits. right now if you're a partner in an s corp., that's llcs, that's lawyers, that's doctors, accountants, celebrities who use pass-throughs, they don't have to pay this medicare tax on business profits this -- under this plan would then have to pay the 5% under business profits add all that together what does it mean? it means a new effective top tax rate of 42% vs. the current 37%. >> or over 50 in some cases. >> yes and there's also an expectation that tomorrow biden will announce a new proposed top tax rate from 37 to 39.6 add all that up, if you're in california, that's the top combined rate of 58% new york it's 59 new jersey it's going to be around 55% so if all that happens >> so there's the medicare part of this and then tomorrow there's the budget announcement, and in that he is going to propose raising the top margin rate from 37 to --

>> 37 to 39.6. there's also an expectation that he's going to reintroduce that plan to tax unrealized capital gains for those with $100 million or more. this is taxa-palooza tomorrow. >> what are the chance naz republican controlled house that any of this goes -- >> less than zero. but it reminds us it's important number one to understand how the tax system works and there are business profits a lot of people are using to avoid this. number two, just how much the top earners are going to have to pay to start to reduce the deficit. you start to realize what's going to need to happen if we do get serious about reducing the deficit by he says $2 trillion we'll see. but it just makes you realize who has to pay and how much in order to start tackling these real problems in d.c., which whoever is in charge at some point we should do >> what is it, 2028 for medicare, they need to start filling the funding gap that is going to be created? >> okay. >> if the money doesn't come from here, then from where >> right

and that's why he says this is the plan at least we have a plan for where the money's going to come from the republicans according to biden haven't laid out that plan >> and we focus on the impact to kind of like the tradition a.m. household but the small business impact is probably a lot greater and i have to imagine they're going to be lobbying in full force. if their rates op this piece are going from is it zero to 5% -- >> exactly and that's the huge change some would argue and have said that the -- 85% of that tax increase will be paid by the top 1%, that the big money earned by small businesses or that business profits is a million dollar plus. but there are a lot of mom and pops who maybe wouldn't pay a large share of the overall pie but for them it would be meaningful if you're a small business -- >> and you earn more than $400,000 or more every dollar above $400,000 would now be be subject to that medicare tax at a 5% rate. >> at a 5% rate compared with what today >> zero. zero if it's business profits. >> if i'm below $400,000, if i'm

a small business that has less than $400,000 in reportable income, what would my rate be then >> you've just got to make sure your business never makes more than $400,000, tyler >> well, that's a cap on incentive. >> exactly >> robert frank, thank you always -- i was going to say good news but not really there no >> let's get to bertha coombs, speaking -- see if she has any good news in the cnbc news update bertha all right, kelly, here's what's happening at this hour. america's intelligence community expects china will deepen its ongoing cooperation with russia to challenge the united states a senate hearing today on a new comprehensive threat assessment. the spy chief says countering china remains their unparalleled priority united nations secretary-general antonio guterres is in kyiv today meeting with ukrainian president zelenskyy about what he calls a matter of critical importance, renewing a deal with russia to allow grain exports from both countries. and in west virginia an

empty csx coal train derailed after hitting a rock slide along the tracks three crew members are being treated for non-life-threatening injuries and you've heard of that movie "cocaine bear," based on true events? well, the cincinnati zoo is treating an exotic serval cat, which is native to africa, after it was found in a tree in a residential neighborhood and then tested positive for cocaine exposure its owner cooperated in the investigation and is not being charged. no one is saying how the cat came into contact with cocaine apparently, the cat is okay now. it's not clear what's going to happen to the cat. >> that's not a house cal. >> no. it's a cervelle cat. and apparently that exotic type of cat is illegal in ohio but it is legal to have one in nearby indiana and next door in kentucky so it's not clear whether the

cat wandered into ohio >> yikes >> a lot of mysteries there. but i don't think i'd want an exotic animal high on cocaine. >> no. >> the cat got out of the bag. >> oh, tyler thank you, bertha. >> thank you, bertha >> ahead on "power lunch" wedbush is standing by apple the firm says demand remains strong we'll trade that name and some other key analyst calls in today's three stock lunch. plus further on, today's tech check. a rare bright spot in dealmaking activity who could be next, we'll discuss. as we head to break a quick programming note the premiere of "last call with brian sullivan" airs tonight at 7:00 p.m. eastern. don't miss it. wel rhtac 'lbeig bk. [office sounds] ♪upbeat music♪ ♪♪ ♪when the day that lies ahead of me♪ ♪♪ ♪seems impossible to face♪ ♪a lovely day (lovely day)♪

♪(lovely day) (lovely day)♪ ♪(lovely day)♪ a bank that knows your business grows your business. bmo. if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more.

welcome back, everybody. time for today's three stock lunch. a little early today so don't get carried away. we're going to take a look at some stocks in the green on another kind of down session we've got apple with a slight gain as the streak gets -- continues to get more bullish. wedbush reiterating an outperform raising their price target crowdstrike holding on to a 2% gain today after a stronger than expected q4 report and campbell's soup also gaining about 2% after an earnings beat and raising their annual profit forecast here to help trade them all

delano saporu, founder and ceo of news street advise jrs let's start with apple >> thanks for having me. this is a buy and hold roughly 17% year to date and the growth story i think is holding up well despite what's going on in the macro level. so if we see global inflation continue to cool for apple i think the fx pressure, foreign exchange pressure will start to dwindle down a little bit. and if i think if you look at other big tech names as you call them, competitors, not obviously in the same industry in all respects but look at amazon, how google's trading for those looking for safety in big tech, apple's kind of been the play here so i still like it going forward. >> delano, let's move on to crowdstrike. ♪ or let's play some guitar music. go ahead, delano >> yep so if you look at i.t. spend i think for a little bit of what

we thought would happen with i.t. spend it's been dubbed a lot better in the security portion. that's where i like it if you look at the last quarter earnings, record annual recurring revenue 222 million. they have a lot of cash on the balance sheet at roughly 2.17 billion. and they have minimal debt so i think those are some of the positives for crowdstrike right now. >> let's remind folks that crowdstrike ceo george kurtz is going to be on "mad money" tonight at 6:00 p.m. please tune in for that. crowdstrike ceo with jim cramer tonight at 6:00. >> and let's turn from tech to campbell's soup. this one came in impressing people i guess, delano would you be a buyer of the stock here >> so this is an interesting one because it had a really, really strong 2022. if what you thought was going to happen in 2023 happened with the recessionary outlook a lot of people had, then this would be a really good pick here. but it's actually doing obviously year to date a little lower than it did in 2022 but if you look at the positives it's

trading well compared to its he competitors. it's around 17 times forward earnings and they're executing well in a tough environment. so i think this is one that you can kind of look at if you're looking for a safe value play. >> safe value -- so are you 3 for 3 today, delano, with these stocks >> i think so. i hope -- you guys are the ones that will judge me on that >> no, i guess it's a good sign. thank you so much for your time today. it's good to see you >> thank you >> delano saporu >> u.s. corporate balance sheets start 2023 on some shaky footing with bankruptcies soaring to more than ten-year highs we'll talk about that next and as we head to break, throughout the month of march we celebrate women's heritage, sharing the stories of women leaders in business and those of our cnbc teammates and contributors here's carol b. tomei, ups's ceo. >> 100 years ago ups hired its first woman into our company that trailblazer's name was jesse bell and she worked as a clerk

stenographer in los angeles. today jesse's legacy is thriving, with women playing a critical role at every level of our workforce. and i'm honored to be the first woman to serve as our ceo. today 1/3 of our c suite is comprised of women and 46% of our board of directors is made up by women. but it doesn't stop there. beyond our walls we've provided resources and training to more than 100,000 women and small business owners, helping them expand their reach and achieve their goals. shattering glass that's a reason to celebrate conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible.

because investing isn't one size fits all. allspring. purposefully divergent.

welcome back to "power lunch. we've talked a lot the past couple days about rising rates and their impact across the economy and on consumers what about on corporate balance sheets kristina partsinevelos is looking into that for us, and i don't know if scary's the right word, kristina, but what did you find >> well, you'd think, kelly, just last november i reported on the low number of bankruptcy filings rounding out 2022.

today i'm talking about literally the opposite january and february registered the highest total number of bankruptcies for any year since 2011 consumer discretionary and industrials were the top sectors. health care was, you know, up there with nine as well. telecom infrastructure firm avaya and sorrento therapeutics were the biggest bankruptcies last month 1 billion in assets. while party city and serta simmons bedding were the more well-known names that you might recognize, primarily driven by high interest rates and contracting corporate earnings the bankruptcies, though, come at a time when other u.s. companies, and these companies have high credit ratings, are rushing to take on more debt to satisfy investors looking for yields and get ahead of any other further interest rate hikes. february was actually a record for corporate borrowing. but one expert i spoke to says don't worry just yet >> what i don't think we see yet are companies that have been doing really well with great business models that have just suddenly run into trouble caused by the current economy we're still looking at a set of names that have been suffering

for a while. and when that changes that's what when you know we've really entered a new economic cycle >> and his comments were echoed in fed chair powell's congressional testimony yesterday, who said, "commercial business debt is moving sideways as a percentage of gdp," and he's not seeing major spikes just yet but is watching business debt carefully. >> so i guess the long-term question, kristina, is what is the impact going to be, then, on stocks >> yeah, excellent, because i know you just spoke about this with steve liesman and the big question is are we -- are people going to be shifting from stocks to bonds? well, i spoke to public.com, which is a retail trading platform, and what they said is that it's not a question of no, it's a question of or. so according to new research from public.com, what they're saying is that the yields -- i'm sorry, i just lost my spot there. but it says the shift from high yields is an and and not an or

there is a 30% increase in high-yield bond etf investors compared to last year. already a massive jump and according to research from ubs, this is another completely different report, the quality of high-yield debt is starting to be a little bit riskier. they say, quote, 18 prs of high-yield debt due just in 2024 and 2025 looks, quote, much worse than one year ago and prior years. the good thing, though, that i need to reflect right now is that that high-yield debt for corporations may be riskier but you may not see it reflected in high yield etfs that investors care about like hyg and jnk. so there's a lot of stats i just threw at you right there but know that yes, people are shifting to more high yield debt they want to get that yield. and according to public.com they're not sacrificing their stocks for it. >> talk to me at a freshman sort of economics level, if you would, about the rollover issue. if i'm a corporate cfo or a corporate treasurer and i have a company that has low rate debt

that is coming due over the next six months to a year, i've got to be concerned that the rate i'm going to have to reissue, at which i'm going to have to reissue that debt is going to be double, maybe triple what it was. >> right which points to just that ubs -- unfortunately i don't have the chart to show you but which points to why it's so risky in the near term for a lot of these corporations because they're trying to refinance but they're refinancing going from a much lower rate to a much higher one in the short term. so we can't discount that. which runs contrary to what powell spoke about yesterday, which is why i find this whole topic extremely confusing given that these corporate debt balance sheets, they're going to get a lot worse very quickly soon, and yet we're not raising the alarms just yet. >> all right kristina, thanks very much kristina partsinevelos on balance sheets up next, more software company deals ahead. we will discuss that itoy'n das edition of tech check. ng”]

[music playing] ♪ imagine something of your very own. ♪ ♪ something you can have and hold. ♪ ♪ i'd build a road in gold just to have some dreaming, ♪ ♪ dreaming is free. ♪ accenture, let there be change. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

time for today's "tech check. let's get to deirdre bosa in san

francisco. hi, di. >> they've made for a trickien vie en viern am, you have avalero all table private deals at $7 billion and up bravo one of the most private equity buyers this year on the opportunity that he sees these multiples or revenues from gone from 17 times on average at the peak to about four now what that does, it's much more important than valuation is what it does is it produces an environment where some of the highest quality, largest software companies are looking to go private. >> so the latest deal could be for digital survey software company. it is fielding a $12.4 billion bid from canada's largest pension fund and it would represent one of the biggest buyouts of the year. the price $18.50 per share that is a 6% premium over last friday's closing price, but it's

a 40% discount from its 52-week high and therein lies the opportunity for private equity buyers what bravo was alluding to they have the 2021 peak and management and boards, they may now be more willing to accept that lower valuation qualtrics represents a risk. s&ps swooped in with an $8 billion acquisition offer, it would give the sap a huge leg up on competition and that didn't happen and qualtrics was spun out and a 71% stake in the company stands to make a 10% return that's fine, but nothing to write home about and it wasn't the game changing deal it was once thought to be silverlake may have more luck. in terms of the next private software target, morgan stanley did a screener a few months back and they look for $5 billion of

enterprise value and the customer base, 75% subscription revenue, and 80% subscription gross margin and 90%+ gross dollar retention rate. when you include the duties, smart sheet, on the private equity side, guys we know that there's a lot of dry gunpowder a lot of money to continue to do these deals aside where more interest rates are and you're seeing all-cash deals happen, as well. >> not just in tech. was it maybe iconic i saw a similar scuttlebutt. deirdre, not a big return for sap here, but pretty terrible position for the rest of the public investors in qualtrics and you're talking about a 5% premium. you can say it's their fault and they went into it with their eyes wide open controlled by sap and that's such a terrible premium to come into when it's

at a low value i guess it speaks to the desperation that some of these investors and companies have right now. >> it's a difficult market moment, right? during 2021 they saw a lot of these software companies run up. for qualtrics it was up $30 and now you're accepting $18 and change and that was better than where it was 12 months ago and this is a constant dilemma at private equity groups and whether they want to take them public you have founders and ceos on the software side saying hold on, our stock was worth 80% more just a year ago. maybe we can get back there. so there's the dislocation and it's starting to come more in line the higher that interest rates go that makes their earnings less valuable and the market volatility that we've seen >> all right anyothk u, deirdre we appreciate it >> coming up on international women's day, we are putting women-led businesses under the microscope what will we find? that's next. and technology needs.

when you choose comcast business internet, you choose the largest, fastest reliable network. you choose advanced security for total peace of mind. and you choose a next generation 10g network that's always improving, getting faster; more reliable; and more intelligent to keep you ready for today and tomorrow. the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™. real zero energy is coming... and yes, that means cutting carbon emissions... but it also means cutting costs. because now clean energy is more affordable energy. we've been investing in american infrastructure for thirty years... lowering electricity costs today, and protecting from volatile energy prices tomorrow. so walk with us— and let's make cutting energy costs real.

a third kid. what if she likes playing golf? it's expensive. we're outlawing golf. wait. can i still play? since we work with emower, we don't have to worry about planning for a third kid. you can still play golf... sometimes. take control of your financial future to empower what's next.

women's day and we're looking at representation in the workforce and the c suite and dom chu is here to help us do that. hi, dom. >> we've come a long way and we're pretty much at parity when it comes to gender representation in the workforce in america when you go to 1980-81 according to the labor department, female

participation in non-farm payroll was closer to 41% overall. if you look at just kind of before the great financial crisis in '08 and '09 we got to 50% of the parity. during the pandemic lows it dropped to 49% here and we are just below the 50% mark right now. interestingly enough, as the economy has gotten better and as covid has gotten to be a n non-factor and they're driving the job growth with regard to the c suite, it's trending in the right direction for right now. according to the data from s&p capital, in the latter part of 2015, there were 21 female ceos in those s&p 500 companies fast forward to today and the folks over at catalyst which tracks the women in the workplace data and statistics note that there's 41 of them so that does represent, by the way, just about 8% of c suite jobs at the s&p 500 that are

occupied by female ceos. there also then becomes as i talk to you guys more about this there tends to be a discussion about whether female-run companies publicly traded ones, tend to outperform those by their male counterparts. there's been some academic research that suggests based upon timeframes that you look at, that certain female-led companies do better than their male counterparts. what's interesting is there's enough of a trend here where, of course, etfs will develop around that kind of a product >> a ceo >> there are certain ones. you mentioned that one, i didn't want to mention it if people want to take that view, there are etfs that do it, i would just caution that some of the etfs that being trois like the ones you just mentioned are very small in size and have very thin trading volume sometimes only a few thousand shares a day so if you're going to go do it, there could be disloocations

depending on coming in or out of the funds, but do your research. still, it is an interesting topic to talk about. >> so there are the etfs where the concept would be invest in female-run companies >> it would be interesting if there was a bigger one out there and it's only 200, $250 million and it's an interesting concept on this international women's day. >> dom, we appreciate. >> thank you for watching "power lunch. "closing bell" with scott wapner starts right now welcome to "closing bell" i'm scott wapner this day begins with the stocks still on the defensive and still reacting to the fed chair's hawkish commentary, higher, faster, longer, three words that continue to reverberate through markets. nowhere is that more clear than in treasurys rates continuing their climb and here's the scorecard with 60 minutes to go in regulation. as you can see, stocks are still lower again as a more hawkish jerome power over the last

cole