huge for the washington fan base because mitchell and steven rails are local or the danaher group, might have a big community impact. >> interesting in those five franchises that you showed, three of them were bought by let's call them private equity wall street guys thanks for watching "power lunch,". "closing bell" starts right now. thanks so much welcome to "closing bell," i'm scott wapner live from post 9 at the new york stock exchange. this make or break hour begins with a big rally on wall street, another inflation read coming in cooler than expected, and here is your score card with 60 minutes to go now in regulation time tech surging today as the year's best performing sector looks to take its next leg higher, discretionary and communication services leading the broader market higher today. a pretty strong day across the board as well, helped in part by the fact that interest rates

have been mostly lower, though, as you can see here in the last 30 minutes or so have started to creep up just a bit. it leads us to our talk of the tape and a note that grabbed our attention this week. wells far wego's chris harvey urging investors to sell before may and go away, calling for a meaningful correction in stocks. that was, of course, before a couple of good back-to-back reads on inflation mr. harvey is here with us on set to explain welcome. >> thank you, scott. >> i'm glad we finally corralled you. when i saw this note, we were like let's get harvey. this is i'm quoting from your note, okay, we're within spitting distance of our 4,200 s&p target now shifting direction. expect a 10% correction in the next three to six months, a front end inversion, and a banking crisis that will likely take an economic toll triggered our reversal and here we are, the market still looks like it wants to go higher dow is up 400 points what say you

>> what i say is the same thing i said before. we're going to have a correction we're at 4,200 our price target's 4,200 that's 20 times a 210 number that is -- those are both really, really healthy numbers i can't get a bear case from this level, and what we expect is we expect a pullback over the next three to six months, whether it's related to banks, whether it's related to the fed, or whether it's related to multiples compressing. at the end of the day, the risk reward just does not look that attractive. >> what do you think this rally is about is it on a belief that the so-called bad news that we've gotten on the economic front, some of the fed speak, they're just going to continue to do what they do they're going to eventually put us into a recession, they're going to have to cut rates >> yeah, scott, typically when we have a -- you get a pretty big rally, a 3% rally in one month. you can get upwards of 8% in three months, i think that's what's going on, if we're going to have the fed cutting, something bad had to happen. we're in this sweet spot right now, but we're not going to stay there for very long. >> what if the worst that was

going to happen happened what if somehow we actually have a soft landing and it's not off the table. >> so the bull case is, right, that rates go down, the fed stops. we don't have a big recession, and, oh, by the way, you don't have to pay back your student loan that's possible but is that probably i don't think that's probable. what kind of growth are we going to see in 2024 it's not going to be very uch. >> do you think the fed cuts this year? >> we do think the fed cut this is year. >> how many times? >> gosh, i don't know. what i can tell you is i think the fed will have to cut more than they expect because what we know is interest rates and the economy is not as interest rate sensitive as we thought and regulation is coming down the pipe for banks. >> if we have the pullback that you expect, how do you think we finish the year? when they start to cut, do they rally back and we still have a decent years >> i think so. we're not lowering our price target what we're expecting is a bible pullback we think it's around 10% we think you get to 3,700.

if the fed does start cutting rates, that's generally a good thing for a short period of time, and we can end up back at 4,200. >> so you think 4,200, is that still your end of your target? >> end of year target, yeah. >> earnings hot and heavy tomorrow starting in the morning, united health and then obviously the banks. the market you don't think is priced in softer session, i'm assuming at the level that we're at now for earnings, which are still around 220 >> 220, so what i think is happening is we're going to get multiple compression the market's going to start to say wait a minute. we didn't think about this, and then we might have a little bit of -- what we're having right here right now is euphoria around the fed the fed's ending, rates are going lower. it's all good. we're going to have a soft landing, but we really have to deal with the reality. the reality is we're at the end of the cycle we're going to get a blip because of svb we had a banking crisis that never leads to more credit availability. >> it was so idiosyncratic, you

could make the argument that it doesn't necessarily have to be that next big cataclysmic event. >> so here's the thing, we think tales you lose, heads you lose because if banks don't make financial conditions tighter, then the fed will, so it doesn't matter what happens because if the fed says, hey, the banking situation's fine, they're going to tighten even more. >> what do you think the banks have to say tomorrow is that sort of the first sort of thing that you think breaks this move? >> i think the banks, the large cap banks will actually do okay here, and i think what it is, it's the regional banks are going to have more problems, and then we're starting to see some of the industrials like fastenol came out today and said march not as great as we expected. what you're going to see is people -- if you roll the clock back to fourth quarter 2014, what the ceo said, hey, we're reading the papers, we're looking at the stock market, but our consumer's still strong, business hasn't stopped. we're reading the papers, we're looking at the stock market and so is our consumer >> do you think the consumer is going to roll over

>> i don't think they're requestigoing to roll over, but they have to pause. i think they're leaning way too much on credit at this point in time. >> i mean if the consumer doesn't roll over, we're still in overwhelmingly consumption based economy. that is what a soft landing idea is based on, you know, that the consumer holds in enough. >> yeah, that's fair enough, but if we look at real -- if we look at retail sales, real retail sales, three of the last four months we had negative numbers that's not great, right? and so the consumer is starting to re -- the consumer is being affected by price, and the consumer is slowing down >> the idea of technology, you mentioned it today nasdaq's up better than 2% as we speak. what do you make of this trade >> we've liked -- >> that was a big sigh is it confounding you that it's going up so much >> it's not confounding. we thought the long duration trade would work we thought media and

entertainment was the best place to be. it's up 25, 26%. we still like it, but that's a heck of a move in a very short period of time we want to see a pull back we expect to see a pullback. if i'm wrong, let's make believe the market goes higher, you should see tech pull back and more of your value cyclicals start to work. that's the opportunity to get a little more aggressive. >> why do you think tech is working to the degree that it is, there are a number of different theories, i want to hear from you what you think. >> i think you hit on one of them it's ai. it's rates coming down we have a 4,200 price target is, we thought rates would come down the economy would slow we were talking about an economic malaise that's better for growth and growth stocks. s&p is a growth index, and that's exactly what's happening with growth. it's nothing really too sophisticated. rates come down, economy's slowing down you have a positive with ai and people get very excited. >> you have better balance sheets, you have what, you know, we're going to discuss in a little bit, this idea of you take your medicine first in

terms of right sizing your business. >> yep >> this so-called year of efficiency >> yeah. >> you come out of it first, right? >> and what i would say is we said this earlier. i kind of forgot about this, a lot of tech companies took a page out of the energy companies. what they did is they said we're going to forget about growth at any price, we're going to look at profitability, and the companies that started to do that, they reacted very aggressively when you saw numbers being cut, when you saw heads being cut, when you saw them looking at balance sheets and profitability, they move very aggressively. >> let me ask you a question before i bring in the others what makes your call wrong what has to happen where do you get surprise and you're like i just didn't see that >> what makes our call wrong is the supreme court says you don't have to pay back your student loan you don't have to pay back your student loan that's a big, big stimulus that's going to come down the pipe if that's happening and the fed has eased, you can get stocks a bit higher than where we are that's how we were wrong. >> what if earnings just don't deteriorate to the degree that

some think i mean, i don't hear anybody talking about the supreme court case on student debt >> well, that's why we're talking about it because others are not talking about it and as far as numbers, it's hard for us to get numbers higher than where we are. we're beginning to see multiples compr compress, and they will continue to compress. hard to see numbers go higher on that. >> joe terranova joining us today along with lauren good win of new york life investment management lauren, you first. you heard what harvey says what do you think? >> i am very sympathetic to chris's arguments and sort of the arch of the year that he's putting forward, and specifically with the point that we have seen the impact of interest rates on multiples. we have not yet seen the impact of interest rates on the economy on earnings. investors tend to think of the markets as forward-looking, and markets do tend to lead the economy out of recession, which is one of the reasons why i'm sympathetic with an ago gregate

end of year call that looks okay, but in the meantime, earnings do not reflect recession until the data gets there, and we have not seen that element of the bear market yet it's one of the most common questions i'm getting from investors is isn't recession already priced in, and the answer is no. >> clearly, joe, it can't be priced in at these levels where earnings are still projected to be that's what pisani and i were talking about over the last 24 hours. you know, you're still at 220, maybe you've got to go to 200 o earnings if you have a recession. what's your view on what harvey says, sell before may and you're going to have a pretty good correction coming up. >> the first thing i think about is portfolio management. if you're utilizing the strategy of sell in may and go away, you're really a passive investor and you're just buying the index itself you go over the last ten years, it hasn't worked well. i talked with hundreds of advisers they ask me the question all the time, should we sell in may and

go away? okay the question really comes down to, i, by the way believe that q3 will be the weakest quarter from a performance standpoint in 2022 the problem that i have with it is what am i selling and what am i moving into, and then i'm giving up on active management, which, in fact, i actually think is the right strategy in this environment, so if you go back one year, the market is basically flat, but there's been areas of the market where you've been able to outperform, and i think that is the more productive conversation. i think that you could look at technology and understand there's a disinflationary effect that right now is causing money managers to rebuild positions. so i'm not so sure i agree with you that you want to step away from that because ultimately, scott, at the end of the day, the question comes in are you that good to assume the reinvestment risk and go back into the market because chris said to himself, he thinks the market at some point will recover. >> sure, you can also agree with

that and say that, look, technology has had just too big of a move. you're suggesting that maybe it's not time to lighten up on tech. >> scott, what's happening now with technology is the fundamentals are finally coming back into play to support the rebuilding of positioning, and that's -- as you said, that's ai, that's apple, which is, you know, seeing services revenue potentially increase as we see strength in the mobile app but ultimately, it's back to that disinflationary effect. just look at the composition of what the market's doing today. what is gold telling you gold stelis telling you we havei disinflation nar shock at a far greater ve locity than we ever expected the market is realizing this is an economic climate in which we're going to have to search for growth sorry one last point, the premise that bad news is bad for the economy, i disagree with bad news is actually good for the market right now because,

guess what, it signals peak yields and the fed, you're wrong. >> okay. all right. so the floor is yours. >> the floor is mine a couple of things one, we're at 7.5, maybe 8% you're annualizing a 30%return year-to-date that's pretty healthy. two, if you want to weigh on active management, that's fine, but these are really healthy numbers. if you take some money off the table, you put it into bonds, you're getting a pretty healthy yield at the front of the curve. three, everyone tells me, oh, my goodness, you can't be bearish because everyone else is bearish. and that's the bull case at this point in time. signed, sealed, and delivered, that's the big pushback i get. hey, everyone else is bearish. you can't be bearish at this point in time. that's not a great one when the market's up 7, 8%. >> what about to joe's point, if you say sell before may and go away, what do you want people to sell before may? >> what i want them to sell is

risk they should be selling risk. they should be selling value and cyclicality. because that -- three years ago, risk was priced you could have bought it with two hands now risk is not priced properly. you're in tnot getting a good r of return at this time cyclicality, we still are haven't seen numbers come down so numbers are going to come down on the cyclical side. value and cyclicality, it goes hand in hand value had a great year last year you're having rates come down, we're going into a recession that's what you should be selling. >> what do you think i mean, you like, you know, fixed income plays still you don't disagree on the idea of risk reward in the market not necessarily being on your side right now, right >> yeah, it was a good yes and thinking about where we are today versus a year ago, for the last year stock bond correlation has not worked diversification hasn't worked, and yields have come up a fair bit, so now stock bond

correlation is working better. yields are higher. that is a story in favor of reallocation for many investors, and if you think about the drift that portfolios have engaged in over the last 15 years, a lot of investors are still stock heavy. now, there's nothing wrong with that per se, but the risk reward of that, you know, 80/20 portfolio when you have yields where we have them maybe doesn't make the same kind of sense anymore, especially when, and look, i, you know, whether you think the fed's right or wrong, the bar for cutting interest rates this year is pretty high and especially by july, which is what the market is pricing right now. that different sort of economic environment where inflation's, you know, moderate, rates are moderate for the next two, three years, that's one where, again, focusing a little bit more on the bond side of a portfolio, taking advantage of income where price appreciation has been the story for so long i think makes sense. >> what about are you unmoved by the inflation reads of this

week >> no, i think it's great. >> because again, your note was before the reads from cpi and ppi both cooler than expected. you're unmoved by that if you had to write the note today, would you use the same language >> i would use the exact same language, there's no difference. we're still at 4,200 we wanted to get out there and say, okay, we're above 41. we're getting to 42. the risk reward doesn't look great, and we see some bad stuff. we see a lot of risks on the horizon. as far as the economic numbers, the inflation numbers, they were coming down. we expected inflation to come down we think the fed has stopped or likely it has stopped. that doesn't change anything the market's going to be positive on this inflation news, and that's fine. it gives you an opportunity to reposition the portfolio to take risk out. >> so you'd use the pop like for example, what we're seeing today to lighten up. >> that's right. >> we'd use it to lighten up, to reposition, to take risk out of the portfolio. take cyclicality out of the portfolio. if you can find garp, garp is

where you want to be, right, and you do want -- somebody said it before, you want better balance at this point in time. you don't want to rely on the credit markets credit's going to be more difficult to source. >> aren't you making the case for the very tech stocks i mean, is it just me? some of those are, you know, the bigger ones growth at a reasonable price, and the balance sheets that you're talking about to look out for. >> and this is why we're in media and entertainment, there's a lot of tech stocks there we do like software over hardware, so we're not anti-tech, but when you're up 25, 26% in the first couple weeks, first couple months of the year, maybe you need a little bit of pullback to get longer term. >> you got she a shellacked lasr in those stocks. >> we want to be more opportunistic, we want to tactfully move into these names, and if i'm wrong and the market goes above 4,200, these names are going to pull back, and that's your opportunity. >> last thought from both of

you, joe first. >> 4,200 is a number that aif been talking about on the network. i think it's a trap above 42 for the bulls. i agree with you on that point i'm surprised you didn't mention the debt ceiling that is going to be a challenge in q3 and maybe in selling treasuries the last point on the premise of your note, maybe it's not so much sell in may and go away, maybe it's rotate in may and go away. >> i think that's fair, right? >> says the guy who was asked to look at his own etf, and may have some surprises for us as he looks to potentially rotate to get back into position where he was off sides. my own bit of commentary lauren >> i think one thing that's interesting that none of us have talked about much in this conversation is cash we're all making positions that are some degree of fully invested or close to it, and in an environment where, yes, inflation's moving lower but it's still high, the hurdle rate that investors have to hit to keep -- to maintain their wealth, to build wealth over time is higher as well, and so

that rotate away and go -- rotate in may and go away, i like that a lot. >> you guys are great, i loved it thank you so much for being here that's chris harvey, lauren, thank you, joey thanks to you as well. our twitter question of the day, should you sell before may and go away? head to @cnbc closing bell we're just getting started when we return, tech's year of efficiency, we just mentioned that, the sector rallying so far this year a lot. it's up again big time today amid widespread cost cutting measures what amazon's ceo andy jassy had to say about that on this network today, and what it could mean for the big tech stock in the long run we are live from the new york stock exchange, and you're watching "closing bell" on cnbc.

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about 40 minutes to go in the trading day, let's get a check on some of the top stocks to watch as we head into the close. chris kristina partsinevelos is here with that. >> western digital hitting a session low as hackers are demanding a hefty payment in exchange for not publishing the data, and this comes after western digital disclosed a security incident just back on april 30rd, and we talked about it on the show saying it was still working to understand the scope of the breach. we've reached out to western digital, haven't heard back. the company declined to comment when tech crunch asked them about the hackers claims the stock down about 3% and 2% month to date. let's move on to movements in

the c suite, harley-davidson, the cfo will step down to join toy maker hasbro with david vinny serving as interim ceo the company getting a price target cut from $55 to $65, and other analysts are concerned about a drop in q on retail sales. ubs protecting a 20% fall in retail sales sales have fallen 30% from its february 52-week high. >> kristina, thank you kristina partsinevelos. amazon shares up 20% this year as tech has rallied the most of any sector ceo andy jassy addressing the company's major cost cutting moves during an exclusive interview today on cnbc. it's part of what's been a so-called year of efficiency for big tech overall our frank holland joining us with more on that story. frank. >> reporter: scott, amazon certainly among those mega cap tech companies outperforming this year following layoffs and

cost cuts. meta, they actually kind that year of efficiency up more than 80% year-to-date, so following the release of his annual shareholder letter, amazon ceo andy jassy, he discussed amazon's own focus on efficiency in that letter, jassy really emphasizing a kneneed to maintaa lean culture and a cost cutting culture. he also said this, i'm optimistic that we'll emerge from this challenging macroeconomic time in a stronger position than when we entered it take a listen to his comments on amazon's refocus around costs. zblp . >> i think it's a pretty significant streamline of costs. we went through a process in every one of our businesses where we looked at where we had our resources allocated and k which things we really had d conviction, we're going to have good returns for customers and the businesses we made reprioritization decisions which led to those productions. i think it's a pretty good balance. >> so megacap tech outperforming even with rate hikes as they're

strong cash positions insulate them from the rising cost of capital, but more speculative tech beating the s&p including the ark innovation etf where top holdings, tesla, zoom, roku and block. >> there's been some calls this week almost every day either reiterating buy ratings on mega caps, price targets going up, notes from analysts like dan ives who say, yeah, you'll get, you know, cautious comments probably, but at least the earnings will likely be steady, and i wonder if part of this is the belief that because they were first in in terms of laying off and right sizing their businesses they emerged healthier and leaner and even meaner than they were before >> yeah, you know, absolutely. i think salesforce is another great example of that. they made some cuts that appeased some of those activist investors that were in on the stock. they resolved a lot of that, and you're seeing other companies making similar moves, getting big rewards for cutting jobs, cutting costs. you're seeing stocks pop

another one of the etfs was the wdlc etf, a lot of questions about the quality of that outperformance, when you look at the top holdings, a company like c3.ai, 29% short interest. a lot of people believe that stock is being held up by short cover. >> you got to focus on many more stocks than just the megacaps. that plays right into your beat as you cover cloud frank, thank you that's frank holland, here is where we stand right now a little more than 30 minutes to go we're basically at the highs of the day. dow is just off of a 400 point gain, good for about 388 there's the s&p 500. 4147 1 1/3 percent, technology just talking about that with frank, the big outperformer this year, the big outperformer today, good for 2% is the nasdaq and the russell 2000, those small caps doing quite well as well up next, making the case, i guess another case for a correction, morgan stanley's chris toomey is back, he's a top

ranked financial adviser he's also breaking for big market risks on the horizon. how he's advising his clients in these volatile times we'll discuss next on "closing bell." ing for schwab. i love to help people understand the world through their lens and invest accordingly. you can call us christmas eve at four o'clock in the morning. we're gonna always make sure that you have all of the financial tools and support to secure your financial future. that means a lot for my community and for every community.

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stocks may be rallying today, but they could face a fairly dramatic selloff in the coming months. that is the call today from our next guest who does run one of the highest rated private wealth teams in the country his name is chris toomey he's back with us at post 9 you and chris harvey have obviously been hanging out do you think it's time tosell also, sell before skma may and o away >> i think we've been fairly defensively positioned for a while, we've been pretty open about that tomorrow starts the earnings season in earnest for q1 if you look at last quarter down earnings, this quarter expected to be down about 9%. that's with top line revenue

growth being at 2% second quarter down again, so you're talking 3/4 of negative earnings this san eis an earnings ecessi. >> it is. >> if you look at what the street is calling for, 220 on the s&p 500, 18 times multiple, that's pretty expensive for us, and in our mind, we think earnings in reality are going to be closer to 195, and i think that's where the rubber is going to meet the road. >> so the bears or those who are more cautious, they -- no disrespect in any way, they all tell the same story because the story is easy to tell in the same manner. it's like, you know, the economic news is showing deterioration. earnings are still too rich, and those estimates are going to come down. stocks are too richly priced at these valuations based on what earnings should really be, right? i've kind of laid it out it's kind of easy to do. that's the point what if all you guys are wrong >> if we're wrong, i think we're

in for an even worse outcome i think the further market goes up the more those fundamentals get worse, and the more downside we're going stee >> why so? >> i think look, look at a situation like financials, right? it's the second most important part to earnings this year everyone was concerned about deposits right now i don't think it's a solvency issue i really think it's a return issue. if you look at the basic business of financials, you know, you're lending through deposits a tht one rate, and thn you're along out to earn money that's averted. >> the net interest margin is what you're talking about. >> he talked about peak net interest margins that's going to be a critical problem within the financials, which the fed spoke about in their minutes. you know, they were ready to go 50 basis points and halted because of their concern about what's going on in the financial markets. i think that's only the first problem. i think the second problem is if you look at a report that morgan stanley put out last week, focusing in on the debt wall that we're going to be seeing over the next two years, it's

$5.3 trillion. a big portion of that is commercial real estate. >> so you're one of those who are, you know, getting more worried about the commercial real estate effect as well. >> absolutely. you're in a situation where rates are significantly higher than when these loans were priced they have to reprice, and valuations have to come down 20 to 40% on a lot of these properties that's going to be a really troubling situation, and don't forget, the banks don't just lend in these situations they also invest through cnbs, so if the banks are impaired, that's going to be an even bigger problem for the economy. >> the bank's going to really say something tomorrow we don't know are they going to surprise us? what could they possibly say >> i think that guidance is going to be a lot lower. especially if the fact this banks actually are so in touch with regards to what's going on in the consumer, and i think the consumer is the heart of this issue. consumers have been pushing this economy through this they're two-thirds of the economy, and a lot of it had to do with that savings glut that they had as well as the fact that employment is very, very strong, right? we're at a situation where the

savings rate is at almost an all-time low and credit card debt is at an all-time high and credit card rates are also at an all-time high. something has to give there. when the consumer has to start trading down as the amazon ceo said in that previous interview, you're going to start to see that come down, the economy come down, and at some point prices have to come down. >> why are discretionary stocks doing so well? i mean, they're obviously doing well today, but as a group, i mean, they're up 14%. >> look, i think the story is at the beginning of the year, everyone was expecting a soft landing, right so you had equal weight do very well, cyclicals were going to do exceptionally well all of a sudden the numbers aren't looking good, let's go hide in tech, right? and that's where everybody moved. tech has done exceptionally well. >> surprise add a lot of peopleh were off sides. >> if you say quality, we want

to be in quality, we want to have great balance sheets, we want to have great cash flow that's typically when you think about big cap tech the problem is they're not immune from the consumer, and if the consumer really has a problem, it's going to affect top line, and don't forget, you know, tech was the fist first to start laying off people. they were the ones who were the most aggressive with regard to hiring >> they could also be the first one on the other side to come out. >> they might have already been, right? >> if you say the consumer's going to weaken, that's going to hurt tech. i'm thinking, okay, who's selling hardware product, the apple? you see what's lvmh is doing, right? the high end consumer isn't slowing down at all. would you consider apple a high end consumer-based technology company? >> yes, i would. i would say some of this also has to do with china reopening as well as the biuying in those global brands that were also relatively cheap. >> thank you, apple. they get 20% of their revenue

from china. >> exactly the fact of the matter is at some point that has to slow down, which we think is starting to happen. at some point the consumer can no longer drain on its credit card the sentiment has gone down. consumer sentiment is down by over 60% in that type of situation, you looking ahead along with the fed's base case is a recession, right? like when was the last time -- >> that's the fed staff. i mean, if the -- if the fed membership actually agreed with that they wouldn't perhaps be talking about and even raising rates again in may >> not necessarily >> unless they were that concerned about inflation, right? if they were that concerned that going from 7 or 8% to 5% was the easy part and if they really had a mind of getting to 2%, that that might be real painful >> i ask you the same thing i ask chris harvey what makes you wrong the bad story is easy to tell. it goes on and on and on we've all heard it we know it what makes you wrong

>> i think what makes us wrong is probably something geopolitical some sort of solution with regard to uk and russia. otherwise you're in a situation where economy earnings are decelerating the economy is decelerating, the fed is still raising rates at no point has earnings troughed before a recession, they always trough in a recession. we're in a situation where the risk premium is at 200, and it should probably be closer to 4 or 500 in that type of environment you're talking about earnings at 195 and probably not a 15 multiple, maybe a 13 or 14 multiple, which is going to be really painful. >> so october lows revisited if not breached i mean, i'm asking you >> that's my concern that's my concern, and that's what we're positioned for. in the meantime, you know, we're sitting in treasuries, we're collecting 4 to 5% we've got some equity exposure that we're hedged out on you know, in our minds, if we're generating with very little risk

a 5 to 6% return, and the market sells off and we've got some cash, that's a good place to be. i think i heard somebody say, you know, we get paid to be risk takers we do not get paid to be risk takers we get paid to be risk managers, at this point in the cycle, you're not getting paid for the risk you don't want to necessarily play you wait until valuations get in line, and you get paid for that risk. >> that's a perfect way to end it it's good having you back. that's chris toomey. kristina partsinevelos is back standing by kristina. >> an almost rejection by the fda is enough to lower shares of one biotech name i'll suppexplain all of that an much more just after this short break.

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that's what u.s. bank is for. and you're growing in california? -yup, socal, norcal... -monterey? -all day. -a branch in ventura? that's for sure-ah. atms in fresno? fres-yes. encinitas? yes, indeed-us. anaheim? big time. more guacamole? i'm on a roll-ay. how about you? i'm just visiting. u.s. bank. ranked #1 in customer satisfaction with retail banking in california by j.d. power. more than 15 minutes to go before the closing bell, i'm going to get back to kristina partsinevelos for a look at the key stocks to watch. >> shares of fintech firm affirm are about 3% higher, although still off the highs of the day the company is expanding to my mother land, canada, and it's getting a little help from payments processing firm stripe. stripe has been available in canada for a decade, so affirm can now capitalize on that and it's helping shares climb 3.5% higher now, let's turn to biotech,

which is mostly having a strong day. the biotech etf and, vi is heading for its best day since november leaders including crispr and relay therapeutics, but there's an outlier in the group. that's sarepta therapeutics. that stock is lower as stat news reports that some staff at the fda were leaning towards rejecting the company's muscular dystrophy gene therapy until a top official intervened. because of that uncertainty it's weighing on the stock, which is down almost 9.5% right now scott. >> kristina, thank you very much. it is the last chance to weigh in on our twitter question, do you agree with chris harvey should zyou sell before may and go away? @cnbcclosingbell on twitter, it's yes or no the results after this break

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let's get the results now of our twitter question we asked do you agree with chris harvey, should you sell before may and go away? the majority of you say no, no, we should not. 54.5%, the winner. up next we're counting down to united health earnings, we have a shareholder standing by with the key themes he'll be watching we've got the banks to talk about. this nice rally we have into the

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good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.

we're now in the "closing bell" market zone, jack manly from jpmorgan asset management is here to share his market outlook. joe terranova back with us to make the case for united health care ahead of its earnings report tomorrow morning, bob pisani back with us to break down the crucial moments of the trading day as we head into the close. jack, i feel like we're on a one-way train to no way here it's like harvey at the top, toomey in the middle, and now at the bottom of the show you want

us to get defensive and cautious too? >> i think there's a really good chance this market is ahead of its skis we look at multiples that keep going up, fundamentals that keep getting worse. i have a really hard time imagining that we don't see some sort of stumble at some point in the next couple of weeks, couple of months. long-term, scott, i'm still a big bull when it comes to this equity market. we're still a long ways off from where we were in january of last year i think it haser everything to with your time horizon a little longer term, i wouldn't mind putting money. >> why are we rallying on what has been aside from two cooler than expected inflation reports still not, you know, fabulous, why are we rallying? >> i think it is a lot to do with that inflation report i think people are misreading it entirely ppi numbers this morning were solid. that's encouraging every day is one step closer to that fed meeting in may, which hopefully signals that conditional pause. i think we're just grasping at anything that looks good.

>> now i think you're making a bullish case, inflation is good, it's coming down >> if you open up the hood on that one, so much of what happened was driven by energy prices they've already rebounded from those lows we had a few weeks back energy is likely going to be a headwind moving forward, not necessarily a tailwind two, three months i'm not very confident, a year, two years, i'm feeling a whole lot better what about technology, which we've heard a lot about. sell it, it's gotten too rich, gotten away ahead of its skis. the argument's made by everybody. >> it's ahead of its skis right now. those earnings, i think, will eventually justify the valuations the question is you got to look for those higher quality namesst names. i'm not looking at anything that's junky, i'm not looking at anything that can sir vurvive >> what about the banks quickly ahead of the earnings tomorrow morning? it's going to set the scene, the stage for us. >> a dicey earnings season for the banks, a lot of headwinds going on there

at the end of the day margins are decent, and the high quality ones will be able to make a lot of money >> joe terranova, united health care, the other one tomorrow >> important, very important >> you own it. >> i do. it's going to be very important. it's going to set the tone for health care. it's been in the etf since inception. it's one of ten names that's been there let's keep in mind prior to the month of april, this was a name that was down five consecutive months and it correlated with a lower dollar, 97% of its revenues come from the u.s it's been a significant contributor to the dow industrial gain in the month of april, nearly 70% of the dow's gain comes are from united health care. it's a company in which you're going to get eps growth, double-digits probably around 10%. you'll see revenue growth somewhere around 12% i'll take that in an environment we're talking about a potential earnings recession lastly you resolved the medicare advantage pricing for 2024, came in higher, 3.4%, relative to what the initial take was in

february at 1.1. that's a fundamental strength. >> don't we get retail sales tomorrow >> very important. >> we're not talking about that enough in terms of the string of economic reports that we've gotten have all been pretty bad. i'm not including the cpi and ppi in that, but you know, the ism, pmi services not great in the last ten days or so. a lot of the leading economic indicators have been soft, so this is holding even more importance now >> it is i've said that all week. it's really a read on what the consumer's doing are they becoming more cost conscious like costco told us last week, as american airlines told us the other day. i don't think tomorrow in retail sales you're going to get anything that's going to energize the economic growth, cyclical story i think it's going to be disappointing. >> why are you hanging on american airlines, they're going to have a gang busters summer travel season sounds to him. why aren't you focusing on that? >> because i think what we're seeing is that weekly bookings

statistically are coming down, and we're seeing that flyers are searching for lower fares. it's behavior that they haven't had in the last year. >> you don't have eyes in the back of your head, pisani as i was saying delta, why aren't you focusing on that that was pretty good it depends who you listen to, and then you make up your mind on what side of the coin you're on. >> delta moved 6% in an hour this morning as you could see the investors could not figure out how to interpret. they missed and yet the guidance is fantastic basically they said don't worry, we're going to make it up to you, and they sold it right off into it and then buyers came in and moved around that. to me is a sign of cluelessness, i'm not trying to say investors are stupid i'm saying they can't figure out what's the right way to interpret this i think this might be a problem throughout earnings season >> those is tstocks get out of i own way, if you have every flight full at extraordinarily high prices, the stocks still don't seem to react. >> another thing, fastenal this

morning i thought was not a terrible report and they came in right early on and started selling that i think this is going to be a problem for earnings season overall. have you noticed we've got a breakout today if we close over 4146 or 7s that's the highest level since february right now. >> very few people talk about the charts the chart on the nasdaq looks fantastic. moving averages are turning up. >> talking about a bread trust, means a lots more advancing than declining stocks you're right about the nasdaq, you mentioned united health. health care on a tear. any kind of medical devices, hmos, hospitals have been really strong consumer staples have held up well it's a very broad rally overall, tech's holding in there, but you've got outperformance from industrials, materials, consumer staples, health care, that's a pretty broad rally overall

i think the problem that you and i have been talking, the market's priced for this perfect go goldilocks scenario. heaven help us if we get a mild recession. >> everybody is still so negative, though, bob. you heard it on our show today top, middle, bottom, every person comes on has a view of the market and they all tell the same story it all makes perfect sense >> it's fantastic from a contrarian point of view >> unless they're wrong. >> yes, it's fantastic from a contrarian point of view but look what the market is doing here we were just talking about the fact in a typical recession, earnings go down 10 to 20%, the multiple goes down 20% we have not seen this at all the bulls will argue, oh, we were down last year, we were down 25% last year. >> i got 30 seconds left, are the banks going to rain on this little parade we're watching today? >> i think the banks are going to try to punt i think the banks are going to

say most of our depositors stayed with us, and we can weather this storm you're going to definitely see higher deposit costs that's going to weigh on the net interest -- >> what do they say when they really don't know -- we're going to find out in the morning, we'll obviously talk about it right here again tomorrow. for now, that's wrapping it up on a big day for stocks. morgan and john pick it up in "ot. stocks rallying today with the nasdaq leading the way, best day in almost a month for that average. that's the score card on wall street, but the action is just getting started. welcome to "closing bell" overtime i'm morgan brennan with jon fortt. we are awaiting breaking news when we get the latest release of the fed balance sheet we are going to bring you that as soon as it's out. manufacturing in the cloud, we've got an exclusive interview with frank slootman on today's launch of a new cloud product for manufacturers. let's get straight to thy