>> in the cases that have gone to trial, the talc cases was johnson & johnson winning or losing >> they were doing both. >> individual cases, they were going through thousands of them and you can see the risks there. thank you for explaining it to us and thank you for watching "power lunch". >> "closing bell" starts now i'm scott wapner from post 9 at the new york stock exchange this make or break hour begins with the fed and the economy going head to head more data showing growth, the slowing and another central banker says rates must still go higher and stay there for longer stocks and your money, well, they're caught right in the middle and there's your scorecard with 60 minutes to go in regulation and the dow carried most of the day by health care names in more defensive areas while the broader market sees selling in technology and more economically sensitive sectors like industrials and autos. bond yields, they are falling as

well on those those recession fears and it brings us to the talk of the tape, what is the right call right now be bullish or be bearish after an early-year rally caught many by surprise, but now might be showing some signs of wear. let's ask adam parker the founder and ceo of tribarrian research welcome. >> thanks for having me. >> this market is still poised to go up what do you think? bullish or bearish right now >> i mean, the market's up and the fundamentals are worse than they did, so i have to like it less than i did previously if i'm just using data, i think there are some signs that things are going to slow. a lot of my incoming is about what was in the commercial real estate market, lower growth from the regional banks, so i don't think the news is directionally positive i guess if you take a step back we were just talking off air that maybe a little surprise that we didn't get a big negative pre-release and maybe

that's a positive that we're kind of most of the way through prerelease week from the negative >> maybe things are n as bad as they want to make it seem. >> could be. you guys are just too negivativ and the fed's almost done and maybe the fed's going to cut and if that happens you don't want to be on the wrong side of that, do you >> i don't think you want to be on the wrong side of that, but i don't think that's going to happen, what the fed told you is the nasdaq pivoted isn't that because the fed pivoted already. it's about what's in the price i worry a little bit that expectations for earnings look a little too optimistic still. >> particularly the 24 numbers which have a v shape they're not there yet and maybe the market can rally through that and maybe the comparison looks okay, but i kind of take a step back and say within the

equity market parts of it are discounting a recession like energy and metals and parts of it aren't like semiconductors and something is wrong here and i actually think it makes more sense than most of the other days. >> why is that >> i think industrials should have pulled back a little bit. >> well, because of the data that came out like the adp and pmi services >> generally, if you can't get a construction loan from a regional bank than the uri is worth a little bit less. >> if the data is negative and it's been reminded that the economy continues to slow, why are people like mester coming out and being as hawkish as they sound in the face of weakening data and do you take it for anything more than, well, what do you expect she's going to say? >> my -- look, i don't know. you have a lot better fed watchers on your program than me, so i'm flattered that you're asking me that question. >> it relates to how the market will perform

>> totally relates to the multiple. they care about full employment and stable pricing which one of those makes you dovish to me the tweet of the week was wm, waste management, wm saying i cannot find somebody to drive a garbage truck am in houston for $90,000, and that's telling you something about the state of the economy, and i'm not sure that unemployment will come up, and those are the two things they care about and why the heck are they going to be dovish? what's the reality is probably less dovish and that's the reason to be negative. >> we're asking in our twitter question today, how many more times is the fed going to hike one, two or three. if you had to answer that question here and now, what would you say? >> more than the consensus for sure they're not going to be as dovish as what's in the price. >> even if the economy is

weakening? >> they care about full employment and stable pricing and the unemployment rate and cpi are not what they want so if they get dovish now i would be surprised >> but it showed at least in the direction that the fed has been looking for. >> we were talking about the jolts off the air. >> at the end of the day they look at the lagging indicators and we'll get a data point soon. >> friday. >> yeah, friday. but i just think that at the end of the day the price-to-earnings ratio for u.s. e quites is very correlated and statistically significant to fed fund futures and the perception is that they'll get dovish and that's in the price with huge moves with tech stocks off lows and so the risk reward are those skewed to the negative which to me is negative and it takes air out of what's in the price. as you know, my price guess is the price to earnings and times to earnings and the only conversation about the fed is the price to earnings, but if the earnings matters, too, and

if that's silicon valley is being told, then i think you probably want to downwardly revise the earnings outlook today for a month or two. >> unless silicon valley bank was so idiosyncratic that we look to make too much of it and suggest that happened, so this is bound to happen. >> silicon valley pull the market maturity bet that was idiosyncratic and the comment that the ceo made that 14% annualized decline in our deposit base in february, that's tech venture and other businesses showing some slowdowns in the fundamentals that were surprising and that's what catalyzed the bank and i don't know that that's isolated just for them with the perception they have some exposure, too. i don't think it affects microsoft's earnings and the economy is slowing and so if you're a market today versus a month ago, the stock market's

up so if you're being intellectually honest you have to like the market than a month ago. >> the tech run, and you think that's directly related to hopes for a pause? at least one component of the reason why its gone up. >> it's been multiple expansion has been more than 100% of the cause of it. >> what happens now, though? >> i think you get a pullback and unless companies can put up pretty good earnings results and we'll know in two weeks. >> do you think the bar is high in tech versus the environment we've been i feel you can make the case either way >> that's a good question. i don't know i think we'll have to see what you're always looking for a company that misses and the stock doesn't go down. you saw a bit with micron kind of a bad number in absolute term, but the market had discounted it and the stock didn't really go down. they put up that same number six months ago and the stock annihilated and let's see if in

the first week of earnings or if we get pre-releases now that i suggested it or maybe at 401, and see if the market can ignore pre-releases with the stock market not going down. >> morgan brennan is on alert in overtime. >> get a coffee. you're forewarned. >> get a coffee. >> that happens, let's add kristen bitterly of citi global weight nice to see you and welcome. >> thank you good to see you. >> let's start where we left off with with a.p. and just on tech, how do you view the run that we've seen to start the year it stalled a little bit in the last few days. what do you think from here? >> so i don't really buy this argument that tech is this defensive play and it's a flight to quality and when you look at thingsier to date it's very strong and when you look at a 12-month basis it's the sell-off last year. i think the other thing is when you look at the flows coming into tech it's concentrated in a

couple of names. really 20 names are driving the majority of the equity rally and this is not broad based and it's concentrated and favoring large over small for sure and we have to be careful to paint it with a broad brush when we say tech is rallying and it's an idiosyncratic examples >> would you agree they're viewed more defensively than other parts of tech especially mega-caps? >> think that's fair within any sector when you start to break it down and say who has strong flow generation who is resilient in terms of contractionary environments there will be examples of that within the tech industry that have cleaned up their balance sheet and took advantage of the historically low interest rate environment that obviously is not the case right now so they're well prepared for the environment. >> if you had to put yourself in a camp, correct to be bullish,

more bullish, or correct >> i have to be on the defensive side there's more down side and we're talking about the equity market, but when we started the year at city global wealth saying not to fight the fed and that the impact of this global tightening would not have the corporations and corporate earnings and we believe we'll see a contraction of earnings upward of 10%. when you have this environment of rising rates and quantitative tightening, that means tighter credit conditions and the idea that there will only be a few isolated examples of companies under stress or actually with compressed earnings is a far shot so i think we have downside to equities from here >> so you're looking more like $200. >> slightly less, in that ballpark absolutely >> you see bitterly, parker, they're so negative. everybody is so negative, and i

got that back at me, and that's the reason why i can't be negative everybody's negative. >> what i would say is if i walk in the room every person thinks i'm ugly that doesn't make me handsome honestly, it's not just i'm going to romanticize and i'm always a contrarian all of the time and sometimes the reality and the data suggests you should be more cautious directionally. >> this is one -- >> i think this is one of those times. they have to beat the market no matter what and we have to give them ideas of how to beat it yes. i think maybe you can take a shot at small-cap software where there's a profit and looking at public equities and i can say biotech and less economically sensitive than technology and i totally agree with kristen that there are economic businesses like tech that are likely to slow and there may not be a self landing for equities and biotech, and i forget what the number was in 2008 like botox

was down 9% and there are drugs that are less economically sensitive and it's better than health care in tech than the economically sensitive term. you have to find your way through the investment ideas and i don't think anybody can say prices are up, therefore earnings are better. >> i think you also have to look at the fact that when we say we're defensive and that we do see some downside in terms of equities, it does not mean wooe not fully invested we're participating in some of this activity, but you really have to pick your spots and i go back to adam said this a little bit earlier and i go back to the concept that the fed and what the fed is looking at are lagging indicators and their benchmark are inflation and those are lagging and when you look at the leading indicators and the data that we received this week, whether it was manufacturing, services, jolts, even what opec did in terms of that you can make an argument that that's trying to forecast demand destruction, you have to

pay attention to some of those signs and the ones that are telling you where the economy is going. >> what if i said i agree with all of that which is more reason that the fed is going to cut and that's positive. >> i think there's a moment in time when bad news is bad news, right? all of a sudden it is pivoting and what is the fed going to do at the next meeting. we have a lot of data and we have tomorrow, not tomorrow. i'm jumping a day, friday. friday and then we have cpi and we have that data and q1 earnings which is very important and that and in terms of where the fed ends up in may will be data dependent, but if the fed is cutting that's different than a pause. if the fed pivots and cuts it means we've seen a deterioration in employment and weave seen a deterioration in economic activity which has to have a downward pressure on earnings and equity markets >> it's lake they're cutting for a reason. >> exactly >> kristen, you're overweight picked

picked fixed income and equities when does that turn? >> the same exact thing that you're going to want to see and what are you paying attention to you're paying attention to unemployment insurance claims. once that employment backdrop, that is one of the areas where all of a sudden they pay less attention to inflation and more attention to employment and that would be something even ahead of that sign that they come out and say that they pivoted. >> how pivotal is friday's jobs number the market's not going to even be open to react to it, but if it is well below the estimate or certainly at the bare minimum not a blowout like we had a couple of reports ago. what does the market do in light of the weaker economic reports that have led into that? >> you know, look, if i was trading on a three-day horizon i would say the bad news would be good for equity, right >> i thought kristen said bad news -- >> it's a three-day -- on monday morning we'll open higher if the

people think the fed is more dovish, but if i'm looking at any investable timeframe with any investors looking out six, 12, 18 months it's a sign that the economy's slowing and probably not good for earnings and so far the trade has only cared about price to earnings and don't care about the actual earnings. >> i have one more for you you say we would look to paratrade banks, what does that mean >> when you get volatility and it's a good opportunity to be long some and short some meaning not all banks have problems with the whole maturity portion of their, you know, balance sheet so there are some banks where they have the tangible book that's lower than the state intangible and others that's not a big deal. >> like big versus little like paratrade. >> no, like i want to long some and short others i think the economy is slowing and not all banks are the same

and i don't like the characterization that this is a regional bank issue and they don't have the miss match lookiblity thing and others have a problem. >> quick last word. >> where we like financials and it's in the preferred market and if you see the dislocations where you see the price gap an interesting data point is on the trailing 12-month basis and preferreds have outperformed treasurys and when you have high single yields from interest rate standpoint, texas instruments is attractive here. >> you guys are great together thanks >> i love having you both. >> have a good holiday weekend. >> yes, you as well. kristen bitterly and adam parker at post 9. as we mentioned, our twitter question, head to cnbc closing bell to vote how many times will the fed hike rates? one, two or three and let's head to top stocks to watch and

kristina partsinevelos is here >> shares of regional bank alliance are down 12%, but off the earlier lows when we saw it down 10% the company gave it an update last night and failed to provide details about the total number of deposit outflows and that had investors wondering what were they hiding? this afternoon post-12:00 p.m. you can see the stock upticked because the bank provided a new notice, i should say, saying quarter to quarter deposit growth increased by an additional 1.2 billion as of april 4th, yesterday, and outflows returned to normalized labels and that's a form of assurance given what happened to silicon valley bank and shares are down 12% it's not every day you see utilities leading the nasdaq 100 and here we are with american electric power leading 12% after another hiring report showed a slowdown in private sector job growth and thz investors worried about the market that may be cooling scott? >> kristina, thank you

we'll see you in just a bit. we're just getting started up, in, trouble in the charts? top technician jonathan krinsky is tracking big market headwinds and he'll be live from the new york stock exchange and you're watching "closing bell" on cnbc. ♪ ♪ ♪ power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity

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xfinity rewards creates experiences big and small, and once-in-a-lifetime. welcome back the rotation back into mega-caps and leadership from tech has the s&p 500 sitting on a 6% gain to start the year our next guest, though, believes there is more uncertainty under the surface. joining us now btig's jonathan

krinsky. welcome back good to see you. i've technicians tell me this week alone that we're still in an uptrend do you beg to differ with that >> yeah. the market really is -- is in the eye of the beholder right now and you mentioned the s&p is up about 6%. if you look at the equal weight s&p it's about flat on the year and then you go down the cap scale and the small caps are much weaker and microcaps are churning on 52-week lows right now. so the question is which one do you believe? and we continue to see more and more evidence that suggests the market continues to thin out and ultimately that's a tale that we see over and over throughout history in the market whether it's major peaks or the end of bear mark rally where the breadth continues to thin out and once the fewer names succumb to the down side that's what leads to the weakness on the cap-weighted index level, and if we're talking about the nasdaq specifically itself, while the nasdaq composite got back to its february highs more or less,

internally it's a much different picture. the february highs, you have about 57% of the nasdaq above the 200-day moving average on the recent move up this week we only got about 37%, and then you look at the credit side of things you can look at cds on the tech sector and that's actually a wider than it's been even at what we saw last fall and credit and market internals are given a much different picture than the cap-weighted nasdaq itself is showing. >> i feel like you have to be careful, perhaps, if you look at let's just say market breadth and say well, 20 stocks have carried the whole thing for the s&p 500. without them we wouldn't be up in fact, we'd be lower i mean, we've been here before, and it didn't really matter. the mega-caps had carried us at times over the past few years, and it managed to actually carry us pretty far, no? >> yeah. i mean, look

that's been a play we actually think the reason the nasdaq has been so strong it's been a beneficiary of the selling and the banks and others in the market. i mean, if you're long the money manager with a cashman mandated you saw the other banks and the cyclical areas of the market you will probable put that money into tech and staples with utilities and what's concerning is the persistent weakness in the banks and small caps and biotech continues to remain weak and the biggest development is probably in the industrials which had been kind of the holdout in the cyclical trade and we're seeing the machinery stocks and truckers starting to break down and that's not giving a great message and you have those other backdrop and when you put everything together, interest rates continue to fall and we're seeing that correlation shift. last year it was all about

stocks and bonds being highly correlated as the market was concerned about inflation and we're starting to see this year stocks fall with interest rates which tells you the market's starting to become more concerned about the economy and we're seeing a steepening in the yield curve where the curves are steepening as rates are falling and another sign of economic stress >> no, i mean, that's obvious. i agree with you on that because it's undeniable and i was talking about that earlier at one point the spread between the two-year and the ten-year today hit 29 basis points whereas when it was over a hundred a month ago. so what does this mean i plug all of these things into my market prognostication machine, and it tells me that we are in danger of dropping to where? >> yeah, so we've been in a sloppy trading range for the s&p 500, call it 3800 on the down side and 4200 on the upside and outside of a few weeks in the fall that's pretty much been the trading range, but to us there's

more and more evidence that suggests that we'll fall back at least to the lower end of the trading range and likely break 3100 on the down side. it's just a matter of timing we're now 15 months into this bear market. it's weighing on everybody and we're kind of waiting for resolution, but again, if you look below the surface, to us, it would be a much better picture, i think, if you had cyclicals and small caps kind of outperforming and it's not just that they're not participating upside they're actually moving to the down side, rate? that's the key issue and it's not so much that, you know, the banks and small caps are lagging and they're continuing to show absolute weakness and it's just a matter of time before ultimately mega-cap tech plays to the down side >> i have to run and i want you to be quick if you can october lows, are we going to be back talking about that? >> i think so. we will be in the next few

months. >> well, all right, which means we'll tack a lot jonathan krinsky btig. shares of fedex going higher today and how that could affect the rest of the transportation sector ahead "closing bell" just ahead. hunde) how do we make our clients feel secure and- ugh... not lions. (lion rumbles) we do it with our people. people who've been looking after people for over 170 years. you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq,

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30 minutes to go until the closing bell th thera a look at where we stand right now. the dow holding on to a gain today, s&p 500, nasdaq, russell 2000 all in the red. fedex announcing fresh cost-cutting plans and frank holland is here to discuss that. >> not only cost-cutting plans and major plans for the company. fedex is announcing that after the major transformation for a brief moment i got to speak with with the founder fred smith and they both described this as an evolution this is a big swing.

in june 2024 fedex will transform into just one company. it currently operates as express, ground and freight for trucking executive compensation will now be tied to return on investment capital and we're seeing to restructuring at the top, and raj subramanian will be the ceo, and john smith will become the ceo of ground operations and richard smith becomes ceo of air operations and subramanian becomes after june of this year which brings it closer to rival ups. ups ties executive compensation to return on investment capital. i spoke to a few analysts that were here today, scott a lot of them said these are positive changes and the investment capital piece is an accountability measure and the dividend returning value to shareholders and it's pushed

fedex on >> why is this happening to this magnitude that it is is it activists with the push trying to be more like ups stock performance last year trailed ups? this year it's beating >> it's beating by a wide margin bans of this transformation idea. >> i spoke to raj and he told me it was time. it's time for this company to range change you and i were talking about this earlier on halftime this started as a term paper idea from fred smith when he was in college 50 or odd years ago and he said it's time for it to change with the return on investing capital and the dividend just giving back more money to shareholders. it's time for this company to change not only to compete with ups and to compete with other companies out there vying for investor dollars that are focused on return of shareholder value.

>> you mentioned and you reiterated it here that fred smith was said to be -- >> said to be. >> said to be pleased adding that it was time for this transformation to happen and at the same time it does take this company away from fedex under fred smith, the legend. >> i called it a big swing to be neutral. some people are saying it's a full departure away from fred smith's vision and that was a decade ago and a completely different time when we look at the logistics market 90% of the growth is expected to be e-commerce and most of it on the ground and it's a different business than the air delivery model that fedex was founded on >> we talked about this, too the idea of the ups ceo, there aren't other ceos of different divisions. >> absolutely not. >> carol tomay runs the same thing. ups is ground focused and fedex is more air delivery focused and carol tomay runs the whole shebang.

>> why doesn't one person run the whole shebang here >> it will be raj subramanian running the whole show >> that's a long time. >> by the way, they upped their guidance, too. >> the eps guidance. >> here's the eps that fedex had in the first three quarters and they did not exceed eps of $3.44 and last quarter they guided for full-year eps of 1460 to $15.20 and i'll have to use a calculator. >> haven't use one since back in high school. ups would have to be 5.57 to 5.17 and that's a big jump from when we've seen in the other quarters and that will give us a really great sense of how this cost-cutting plan is really working. i talked to one analyst that said cost-cutting is great and wer cutting this amount of billion and that amount of billion and so far it's cut $2.4 billion, and this year it's

to cut $3.7 billion. someone asked, when will we see it in the bottom line? q4, june 20th, we'll find out. >> the trajectory of the economy, that was a year ago >> september last year, very dire forecast with the recession coming fedex's volumes did decline dramatically, and we haven't seen that recession and we've always seen the spector of the recession and the inverted yield curve and we've seen this bank come out with a forecast for a recession, and we see our own survey and the recession in the second half of this year, but when it comes to a full-blown recession, we have seen a slowdown in the freight market and fedex is other freight carriers retain a lot of pricing power. i appreciate you sticking around that's frank holland, post 9 we're tracking the biggest movers as we head into the close and later, our most valuable pick is back

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kristina partsinevelos now for a look at the battle brewing over the best a.i. chips, kristina? >> who dominates a.i. with the 82% run-up year to date, investors were betting on nvidia's chips, but today google published detail that its artificial intelligence chips tenserve are faster and more power, fisht than nvidia's a100 or ai chips if wow don't know the lingo with power chatgpt with nvidia's latest ai chip, the h-100. google argues it was made after, and it's not comparable. without directly calling out google, nvidia just published 20 minutes ago a blog that its chips are still and i'm paraphrasing, king of the ai world. why? because a newly published ai

chip test that was out today as well suggests nvidia's latest chip is four times faster than its previous chip, the one that google was comparing itself to earlier this morning >> all right kristina, thank you. >> kristina partsinevelos. >> last chance, weigh in on our twitter question which asked how many more times will the fed hike rates, one, two or three? the results right after this break. ♪ ♪ ♪

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let's get the results now of our twitter question we asked how many more times will the fed hike rates? 43% of you said one. two hikes coming in in second place. up next, bank of america's jill kari hall is back and she's shifting her view on small caps in a very big y.wa that and much more when we take you inside "the market zone. and you can't buy moments that matter. but you can invest in them. at t. rowe price we believe your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price, invest with confidence. what do you see on the horizon? uncertainty? or opportunity. whatever you see,

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cnbc senior market comment art mark santoli, b of a's jill kari hall, and john ransom on raymond james on two health insurance stocks and mike, i begin with you in what feels like a textbook slow economy trade. >> there's no doubt about it i think the notable way is how it's staying contained in the index level and the flip side of having been a very narrow rally with only stocks driving the upside momentum last week and not just this week is that there's only a handful of stocks that were overheated and had to pull back and cool off, so that's under way, but yeah, there's no denying the fact that anything cyclical is giving up a lot. the small caps are off the march and december lows giving any benefit of the doubt that they might have earned and of course, the regional banks are in a similar position, so i do feel like the market has some weights

on its ankles at this point and from the cyclical trade and it's managing to rotate away from the worst-hit areas at this point. healthcare, it's not going to go up 2% every day, but right now it's doing enough and lower yields also keeping things like homebuilders in the game because we've seen the sensitivity of housing demand to every downtick in mortgage rates. >> jonathan krinsky, btig earlier, economic sensitive sectors is weak. breadth is weak and 3800 is the door he's looking at and it's a trap door because you can go back to the october lows >> it could, certainly 3800 people there march 10th, so the monday after svb went down the low in the s&p was 3808. that's not very long ago and you wouldn't want to necessarily revisit it this quickly if you're looking for a mark that's trying to get clear of the lower end of the range, but i think what that reflects is that this really is an eye of the beholder market when we go sideways for ten months you're going to be able to make the case either way,

you'll be able to trade the range and it's a very tactical market, and i agree that it's whatever you earned in january from the force of the rally and the breadth of it has mostly, but not entirely been given up >> jill kari hall, you're changing your view a bit on the small caps and i can only imagine it has everything to do with how mike and i started this conversation because the economy looks like it is slowing even further. >> well, i think the small caps, what hasn't change side the small caps have been more adequately pricing in, you know, the risk of a mild recession more than milder stocks have, but we did turn cautious on small caps in mid-march given everything that happened with several of the regional banks. small caps, obviously, have a lot more exposure to regional caps than large caps do and the indicators that are more correlated with the small cap relative performance have since been moving the wrong way. tightening credit conditions and wider credit spreads and the ism

has continued to deteriorate which is one of the more correlated macro indicators with small caps so i think near-term it makes sense to be tactically cautious on small caps, but i think for a lot of the longer term positives for small caps are still there, so depending on your time horizon, i think a lot of the things like peak globalization and the fact that small caps are very historically cheap versus large suggests upside for longer term investors >> you still prefer msmall caps over larger caps even in the environment that we're in now, but may progress into in the weeks, it not months ahead >> well, i think near-term, we want to see more signs of stabilization. the tightening credit back drop that we're seeing, there could be more to go there. so i think that's a risk i think if interest rates were

to, you know, to continue to demonstrably rise the way that small caps have 40% of the debt and that's short term or floating rate is another risk for the size segment and some sectors have more risk than others so i think, you know, a lot of those indicators that were looking at are suggestive of an environment where small caps could continue to underperform near-term. i think it depends on your time horizon moving out if a lot of this, you know, stress in the market, you know, we see a more benignen varnment and if our call is right that we have a very mild, u.s. recession, i do think that the mild recession backdrop is something that small caps have been pricing in more adequately and once the market bottoms which usually tends to happen six months before a recession ends, that recovery period tends to be the most positive fees for small, versus large-cap stocks near-term, we would stay cautious, but if you have a long

enough time horizon it's definitely a compelling opportunity for small versus large, and i think focusing on particular areas within small caps as within the overall market is important, being selective and being active rather than passive and it's actually been a good several years for active managers and particularly small-cap managers, and i think the fact that, you know, there are so many crosscurrents within the market right now, these environments tend to be ones where selecting stocks tends to, you know, work better than just buying an index. >> jill carey, thank you very much for joining us. small caps first in, first out kind of an idea? >> i think that's ableably for sure, and the valuation divergence has been very stark you look at the small-cap 600 it's been back to, like, 12 times earnings under 11 times at the lows, i think. that goes back to the low in 2018 so, yeah, i do think it's been largely discounted

it's hard to know what gets them going unless you have a clearing event and when the banks return earnings and there aren't smoldering craters in the books that we didn't know about before and when the stocks got cheap enough we're not going have a massive credit crunch and it's still mostly a scyclical appetit day. >> john, your kind of day. why is now the time for a strong buy? >> good afternoon. good question. we downgraded united and cigna and a couple of other stocks in early december we were concerned about the overhang of some complicated regulatory actions that i won't bore you with. suffice to say that these were cleared up in early april when cms released what's called the advanced notice and we also got an audit rule and the simple

story is the stocks traded down into the fear of the regulations and the regulations were not as bad as feared and just with the new quarter and i agree with you, maybe the time is good for a more defensive tone and it's off 27% from its peak multiple and united was off 15% and the relative multiples look very good and we have a clearing event with regulatory stuff clearing up and we thought the time was good. >> how about cigna >> you mentioned it and united health gets all of the play today, maybe for obvious reasons and cigna goes to strong buy, too. how is this story different, if at all >> well, a fun fact for your viewers is we have almost the exact same earnings per share number in 2025 for both companies. one's 3150 and one is 3165 for the same amount you're buying cigna for a high ing

issel-digit multiple and i believe it was nine times the 24 number and united health was 17.6 times so you get cigna for roughly half the valuation so cigna is a very kind of boring mid-single digit operating income grower and a low double-digit earnings grower their share count was 380 million in 2018 and we've got it going to 275 million by 2025 the company's taken out 100 million shares and you're using the strong cash flow i think the thing on cigna they are 50% at pbm, and a pharmacy benefit manager and wash worrell will take shots, and that's one of the reasons the stock traded more than 1% in march. if you added up all of the things we cared about versus what actually happens, the fire are grower than it actually happened and investors went through the noise and thought the business models are very

resilient at the time. >> that's john ransom and you heard him talking about it, as well >> cigna, back to mike santoli as we approach the two-minute warning and it's the second best sector of the down day and outtimo utilities are leading and a bit defensive and it is healthcare leading the charge, 1.75%. >> and pharma, in particular, and terms of the upside contributor on the net basis to the s&p 500. j&j, is moving on news of the legal settlement and drafting in the wake are the other pharma stocks and that is, you know, classic and undemanding valuations and money finding its way there. so y rotation toward very traditional safety it's really the playbook that you would employ if you basically said the two-year note yield is crashing and essentially economic numbers have gone from one of the strongest economic supply trends to a steady bit of disappointment and that's the

way it works and those things are oscillated and go up and down because people revise their forecast so we did get weekly claims tomorrow and we'll see if that either changes the story or confirms the way people are leaning right now which is harder-type landing risk has been increased and we need to trade forward accordingly and it's been really tricky for this entire cycle to figure out what's getting priced in when and how much we're overanticipating weakness and it can be done a couple of times and how much of it is a recognition and we had the atlanta fed obviously cracked down toward the percent and a half and down from almost 3% for the first quarter a few weeks ago. >> the jobs report is always consequential. i feel like this friday yet again it's raised in terms of how important it's going to be after the jolts report so job openings are going in the direction that the fed wants them to go and you've got the economic reports suggesting more slowing.

is hiring finally going to crack? >> that's right. so weekly claims are a big part of that. those usually trend higher when things are weakening and we will immediately say that if the job market is all coming up, the fed can shift its focus on jobs away from inflation at least over the next two weeks. >> the bell's ringing. the dow will go out with a win [ closing bell ringing ] a mixed end for the major averages this wednesday, and decidedly risk trading session and the action's just getting started. welcome to "closing bell overtime" i'm morgan brennan bob iger is meeting with lawmakers over concerns about china. venture capitalist josh wolfe weighs in on what that could mean for the market, plus find out where he is seeing opportunities in the defense sector let's get right to the marke