has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. all right, welcome to "power lunch," alongside kelly evans i'm robert frank coming up, netflix reporting results tonight following that live streaming debacle over the weekend. but a new problem emerging for netflix and others, a hollywood writers strike how serious is the threat and how can the streamers work around it?

plus, southwest planes are back in the air after yet another computer meltdown. how did it happen again? how could it be prevented from happening in the future? we'll dive into that let's get a check on the markets as stocks are trying to turn positive the s&p up a point, the nasdaq down 14, and the russell is underperforming, down .75% we'll get to the bank earnings with kristina partsinevelos in a moment domchu, let's chick it off with a couple names in the news >> let's start with dow component johnson & johnson, down 2.5% right now. they reported profits and revenues that topped analyst estimates, and it raised its sales forecast as well, butit' the effects of the pending litigation among alleged injuries from baby powder products that is being felt. it took a $6 million charge related to the settlements of the suits around it. it's also, by the way, spinning off the consumer health business into a separate company.

so johnson & johnson down 2.5% nvidia shares are higher to the tune of 3% driven by analysts at hsbc to a buy. they based it on opportunities and artificial intelligence outweighing concerns about a slowdown in data centers and then an end with a check on teledoc after they announced the launch of a new platform to help patients with weight management and diabetes prevention. of course, that weight loss component of health management is considered a very rapid growth part of the market. keep an eye on teledoc let's throw it over to kristina partsinevelos with a look at the big bank earnings. >> thank you bank of america reaping the benefits of higher rates its net interest income, which is the difference between interest earned for lending activities versus the interest it pays depositors it beat on estimates for the quarter and jumped 15% yeear ove year it also helped bond traders.

deposits were only down 1% despite all the concerns about regional banks in mid-march. goldman sachs didn't see the same strength from fixed income trading, missing expectations with investing banking activity also slowing down. that's weighing down the stock, down 1.32% some analysts pointing out that higher eps might be because expenses came in much lower, helping margins. we do have some regional banks coming out with earnings after the close, led by first horizon and western alliance both of those shares are down well over 1% right now, but western alliance, look at that, it's down substantially year to date negative 45% guys >> thanks very much. let's dig deeper into the bank earnings hew sun is the banking reporter for cnbc.com interesting, even with the good, the b of a, as our analyst said last hour, maybe the deposit growth wasn't what they were

expected and then on goldman, what is going on with the business units there fic has been highlighted, the losses, there was a lot to blush about. >> with b of a, you take a step back, bigger is better when it comes to retail banking. that's very clear. all the four big banks have done pretty well. differentiation between that, jpmorgan, their net interest income i think was up 45%. 49%, excuse me citi was up 45%. what was b of a up 25%. so deposits down 1%, which is a little surprising given that jpmorgan said they added $50 billion in deposits thanks to the svb moves. so it's good, not great. relative to jpmorgan and others. goldman sachs is a different story. this is the quarter which they're still experiencing the hangover from their misadventure with markets and their consumer efforts. you saw they took a $470 million hit on the off loading of a bunch of those loans

and at the same time, look, they're selling something called green sky, which they bought about a year and a half ago for $2.2 billion they bought it in '21, i think, so the peak of the fintech valuation bubble and they're going to try to sell it now. you tell me how that's going to go >> i wonder, david solomon has made a big point about wealth management and asset management being their future it was a good quarter, up 24%, but they missed i guess on the top line compared to what analysts were expecting. what do you see for that business are they hitting their targets, getting to where they need to go with that business based on what you saw in the quarter >> wealth management and asset management missed by about $500 million because that's where it flipped, so more orless, if you exit out, they basically hit the other thing is just the difficulty in understanding the ins and outs if you looked at that, the power

graphs dedicated to wealth management and asset management, it's pretty opaque, tough to understand it's not simple like a bunch of places like morgan stanley >> and the equity markets going up in the first quarter. that immediately translates into higher assets, so you wonder what it's going to do if markets are flat >> and what's green sky? >> green sky, if you are a contractor and you want to be able to extend loans to the people who are going to hire you for a gig, they extend credit. so they have got relationships with places like home depot and a bunch of other folks they were super excited about this business because it was then penetrating main street further in a way that seemed to make a lot of sense. had a lot of good things to say about it, yet you can't get away from the idea that there's buyer's remorse. they just bought the thing at a premium and now they're looking for a buyer. >> it will be remorse depending

on what they sell it for that will be the big question. >> or the degree of it, yeah hugh, thanks we sort of put sort of a pin in banks earning season when do we hear from morgan? >> in the morning. regional banks are in a class of institutions that we don't really look at typically in terms of the earnings very closely. we're going to do it this time >> all the more important this time thank you. wall street is looking for any signs of an economic slowdown from earnings americans have adjusted their lifestyles to deal with ongoing inflation by cutting back on spending steve liesman has more from our cnbc all america economic survey steve. >> robert, we have been talking all day about how inflation is weighing down on people's attitudes about the economy. this is more about how they're changing their lifestyles as a result of it 1,000 people around the country, 65%, that's the number one thing, spending less on entertainment, going out traveling less is number two, driving less, number three, and

using savings to pay for things, about half of the public doing that altogether, about 80% of the public is doing at least one of these things, and some 60% doing around two and then three of them as well what's the biggest impact right now? it looks like groceries. people feeling the biggest impact from inflation in the food store compared to before it was gasoline and our january survey but that's still up there. housing a little less. we'll talk about that, and health care, less than that. now, what about the divide we're finding that people are experiencing inflation in different ways depending upon socioeconomic class. for example, take a look here. these are self-described classes where people say yes, i consider myself part of the upper middle class or the working class 72% of the working class saying they're spending less on entertainment compared to 54% of the upper class. and then 18% of the upper class working more or having an additional job to make ends meet, 51% of those in the

working class. housing, i told you we're going to come back to. interesting, 12% of adults say housing is the biggest impact when it comes to inflation black adults, 24%. four-year college degree, 20%. urban counties, 21%. people experiencing inflation in different ways >> travel, and you look at entertainment. we're not seeing evidence of that when you talk to the airlines you talk to the hotels, look at the restaurants. it doesn't seem to be showing up yet. is there a delayed reaction or how do you account for that? >> i just maybe it depends on where you look it depends on, i would suggest it probably is happening in the lower scale of things. for example, lower hotels, lower motels where some of the other places where you get to middle and higher end, those are the ones that are probably having the best time of it right now. >> steve, thank you. speaking of travel, southwest airlines resuming flights after briefly pausing departures today due to technical difficulties

it's only the most recent issue for southwest and the airline industry as outdated systems are causing delays and slowdowns here to discuss is captain michael santoro, vice president of the southwest airlines pilots association. captain santoro, welcome to the show, and what happened here >> thanks for having me. so maintenance on one of the firewalls to the software system, the maintenance patch, failed it went to the b system, and it took a long time for that to switch over, which caused our pilots not getting their proper paperwork and the airline not able to dispatch airplanes >> we have seen this issue, most notably a couple months ago. didn't they try to invest in systems or personnel or what have you to prevent this from happening again? did any apparatus get in place to prevent this or is it going to take a while? >> it's going to take a while.

this system was slated to be updated five years ago and they put off the project while gary was ceo to invest in the shareholders and not in the company, so swift has been put off for years, and despite our warnings that it's a problem and then you're seeing the effects of that now, as patches keep on going in, and the patches are failing. >> i guess when you look at how this issue was described, it's data connection resulting from a firewall failure, it's hard to see how that results in such a safety concern that you actually have to ground flights for a certain period of time why was it so serious that they just had to stop operations? or was it the faa that just said, look, you have to stop >> no, so the system is called swift. it dispatches all airlines it gives the pilots all our paperwork, everything we need to fly from point a to point b. it requires that system. so when it goes down, no

airplanes can move we can't dispatch them and so the airline has to stop operating until it does a reboot, which it had to do a couple times and then the systems fortunately came online. another fortunate thing is it was in the morning when pilots have lots of duty day left in them, so we can kind of absorb the delays and not have to cancel a ton of flights. so you know, timing wasn't perfect for us today, in that, and minimal cancellations, but lots of delays >> what do you think the odds are this happens again, 50/50, lower? >> 50/50 this system gets rebooted every night, and for me, i'm always like, i wonder if it's going to reboot tomorrow. it makes me nervous, that system not a fan of it, and it's old. it's very old. >> right, and remind me one more time what the options are to replace or upgrade or, i mean, do away with it or, what -- is

it a money problem is it just that someone has to rebuild some new infrastructure entirely what's the solution? >> well, fortunately, the company, bob jordan and waterston have taken on this project and they're building it out, but it takes time it's complex lots of tentacles, and it's a work in progress so it is slated to be replaced they're working on the project now as we speak, and it just takes -- the i.t. stuff takes time >> does it ever. captain, thanks for your patience and your time today we wish you the best >> thank you coming up after the break, americans are waiting for prices to drop across the board, especially for housing the market's in a strange spot prices not moving much, nor are buyers at the moment we'll take a day trip to austin and get a better idea of where things stand >> plus, netflix earnings on deck have the new initiatives driven growth or are problems around pricing and live events driving

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the spring housing season is here we're taking you on another day trip to explore the state of real estate markets across the country. today, we're shopping in austin, texas, among the hottest markets in the entire country during the height of the pandemic, but now showing a few signs of cooling off with sales down 14% in march compared to last year. here to take us for a spin

around the town is sumen kim, rerealtor at xr realty we have this standoff between buyers and sellers where they're not really agreeing on the rice right now. what do you see in austin? right now, obviously, it's coming from this historic height of where the hot market was and coming down to where it is today. there's still a little bit of a standoff in the last seven days we have about 1200 new listings in the austin market but there's 1340 price reductions, so you can see that is a metric that really shows that there's time to negotiate, there's opportunity to negotiate, and a little standstill in the fact buyers and sellers are not agreeing on pricing. and as buyers, they realize, look, everything seems to be somewhat on quote/unquote sale, so we're going to ask for a lower price and see if that works. >> that's interesting about the discounts because if we look at the most recent quarter, the

prices were down, median prices were down about 12%. how much room is there still left to go could we see prices at the end of this when things start clearing down 25%, 30% what's the right level, do you think, for that market >> at the end of the day, i always say as a realtor, i'm not a fortune teller we're in a churning market with rates that have gone up from what they were used to or what we experienced in the last year, and the rates have gone up, so there's a little churning, what's happening now, and so what's interesting though is statistics and metrics are one thing, but being on the ground floor of marketing and being in the trenches on a daily basis, we're realizing a lot of the pricing and negotiation and reduction of prices whether it's from a new construction builder or someone trying to sell their home is almost baking in that uncertainty for buyers already so in other words, if i'm a buyer, and if i'm going to pay this for a home, what if the market goes down what happens is serls are

reacting by saying if it goes down, we'll give you that price today. and so i don't know exactly how much more there's going to be room for prices to go down, but that's going to be up to what's happening with rates and we really don't know what's going to happen with the second half of the year the rates remain the same, if rates go up a little bit or down, but ultimately, i feel it's a great time for buyers the prices are corrected themselves from the high of the market to where they are today, and ultimately, prices, once you get a price for a home, but the rates are always going to change there's opportunities for people to refinance and typically, when rates go down, pricing goes up. when rates go up, pricing goes down >> in the northeast, there's almost no inventory. no one wants to move because their current rate is so low who is selling a home in austin? who is this seller why would they sell in a market like this that seems to be a buyer mfs market

where are they going, and why now? why are they selling now >> ultimately, yes, the pricing did come down approximately 13% to 15% since a year ago, but for most people who bought their homes many years ago, they're up on where they are as far as home value. those people that are looking to sell now are seeing all the new construction homes that are being built. they're realizing their home they bought in 2008 or 2005 is becoming severely outdated and there's envy in some of the new homes and the new styles, the new plans, and getting an updated home the people selling their home are looking to perhaps move a little farther from the center of where they are near, let's say austin city limits and looking for newer space and newer homes that are available today that they have probably desired because of the styling >> texas has benefitted from all that wealth migration. just general migration from california you saw that new mansion tax in los angeles, a lot of people wanting to sell their house quickly. brokers told me they had a lot

of peek quickly selling in los angeles, getting under the mansion tax and moving to texas. are you still seeing that wave of californians coming to texas or do you feel like that's largely done on the buyers' side >> it's certainly not done on the buyers' side whether it's california, whether it's washington. the tech industry continues to allow people to be granted remote access work and what's beautiful about austin and what made austin such a central interest is that there's so many tech companies here we have apple, we have tesla, samsung, facebook, tiktok here, so ultimately when you have someone with an engineering specialty, not only do they feel comfortable going to a place where there's a little bit better cost of living than somewhere like california, but ultimately, if they have to change positions or find new work, they feel comfortable that they're in proximity to which their skill set is required and needed so it's really several of my

clients have already switched companies, but given their skill set, the tech industry continues to boom here and therefore, those that are getting remote access work as an engineer in these markets like washington, california, are continuing to look at austin as a central piece of interest. >> as long as remote work continues. we'll see how long that lasts, right? >> right >> thanks so much. we appreciate it >> absolutely. thanks for having me >> sumen kim joining us today. coming up, retail's big box fort ubs says the wholesale space is holding strong we'll tell you why and how to invest around that plus, who will pay the most in taxes this year? we have robert frank he's going to break it down for us "power lunch" will be right back

welcome back to "power lunch," everybody. as the markets try to go positive and stay there this time, the dow is up 11, the s&p up 2, the nasdaq is down 11 points let's get to bob pisani for more at the new york stock exchange >> hello, kelly. the important thing is i know the markets are flat on the indexes but we're in an uptrend in a number of big sectors they're playing the soft landing.

that means cyclical stocks consumer discretionary, industrials, materials stocks. all moving, and even a smattering of growth stocks in the tech area. look at these defensive stocks l l lockheed on the great earnings report l3, northrop grumman they're at a new high. cyclicals are moving again take a look at some of the tech stocks not a lot of new highs not a lot of new highs in general. oracle as a new high, salesforce, new high, and nvidia, a double upgrade today that's been a monster throughout the whole year that's a new high as well. consumer discretionary stocks, small smatterings of auto stocks, auto related stocks as well as home builders hitting new highs. o'reilly auto, auto zone, new high all of the home builders have been notably strong. we have energy stocks, hess has

been strong all throughout the month. generally oil has been in a modest uptrend, so hess is up probably 10% on the month. exxon has been strong in the dow jones industrial average the point here, robert, is we're continuing to see strength in cyclicals which implies faith in the soft landing a lot of people hate the soft landing idea, don't want to believe it's going to happen, but that is the way the market is positioned right now. back to you. >> all right, bob, thank you now to the bond market rick santelli in chicago tracking the action for us rick >> hey, good to hear your voice on the show, robert. you know, if you look at a two-year note yield, going back towards early march or a ten-year note yield going back to mid-march, you see both have taken up some of the slack in the flight to safety trade we know yields are back up that flight to safety trade put two-year note yields down at 3.77 on a closing basis. now we're hovering at just a

whisker under 4.20 for tens. right around 3.30 on a closing basis. now hovering around 3.56, 3.57 because it's an important distinction. it's not the weakening economy i don't believe it's fed guidance or the fact that we're closer to the end. i think the rise in interest rates is almost exclusively dealing with the market at least seeing less anxiety regarding some of the banking issues and if you look at the movement, the volatility gauge, boy, we went from 198, almost 200 in mid-march to 122 now then that doesn't dismiss the notion that the markets are still rather illiquid when it gets really busy and finally the dollar index one would think locking in a quarter point for the may 3rd meeting, it would be more buoyant after last week's touch of a one-year low, but there you can see it, the dollar index kind of rolling slowly down the hill kelly, back to you >> thank you very much, rick

we appreciate it and the flip side of that, oil closing higher pippa stevens, the spoil sport, here with the numbers. >> yes, making back some of yesterday's losses i did want to take a closer look at chinese demand today because that's been such a key driver of this market and we have gotten some conflicting data. first, a couple months ago we showed data from keppler show loadings bound for china were down, so a lot of people thought import numbers were going to be down then it turned out and china said in march, their imports rose to a multi-year high, so i spoke to matt smith at keppler, and he said that was a product of vessels flagging for someplace like singapore and ultimately changing the destination and going to china instead. he said there's not really too much to read into the data there. however, so the strong import data speaks to this demand growth in china but we also look at experts exports were also higher in march after five months of

declines the question is how much is strength in china versus imports being high then turning those into refined products and exporting so not actually on the ground demand growth >> china really the x-factor in the oil market >> yeah, and the gdp number, which was strong, 4.5% last night, and then also manufacturing missed estimates in march >> no more clarity here than any of the other data. >> very hard to parse. >> pippa, thanks let's get to birtha coombs for the cnbc news update >> thanks very much. here's your cnbc update. hires what's happening at this hour opening statements are under way in the fox news dominion trial dominion has submitted over 7,000 exhibits to the courts including emails and text exchanges involving fox employees. the jury will have to consider that and witness testimony to determine whether fox is liable for publishing false claims about dominion's voting machines during the 2020 election

hundreds of high school students in kansas city are marching in support of their class mate, ralph yarl after he was shot last week when he mistakenly went to the wrong house. his mother said he's doing considerably well in his recovery president biden spoke with the teen last night and stressed commitment to fighting gun violence the man who shot yarl has surrendered to police and has been charged with two felony counts and a new study reveals that up to 1 in 4 students misuse drs the study in the journal of the american medical association found that more than a quarter of teens at some schools are taking the drugs without a doctor's prescription or for nonmedical reasons the study's main author says the findings should be a major wake-up call and that just is something that parents really stress over back over to you >> now ahead on "power lunch," if one thing could be said about the entertainment industry, it's

that we have more content than ever, and yet it's still never enough now, a writers strike could close the content spigot for the foreseeable furetu we're going to discuss in today's tech check at adp, we understand business today looks nothing like it did yesterday. while it's more unpredictable, its possibilities are endless. from paying your people from anywhere to supporting your talent everywhere, we use data driven insights to design hr solutions and services to help businesses of all size work smarter today. so, they can have more success tomorrow. ♪ one thing leads to another ♪

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welcome back time for today's tech check. we have two big stories in the media space and two all-star reporters to help break down them deirdre bosa and julia boorstin. we're starting with netflix. the company set to report results after the bell today this as hollywood kicks off a writers strike that has the potential to disrupt the entire industry dee, let's start with you on what to expect from earnings >> it was just a year ago when netflix saw its first subscriber loss in a decade julia has been talking about this as well that's when they put the emphasis on profitability over subscriber growth. that's led netflix to outpace their rivals on that measure more than a billion expected that's going to help them there, but investors are going to be interested about some of the

other stuff as well, an update on the password sharing crackdown, on the progress abroad, its ad-supported tier, and of course, guys, what the heck happened with love is blind over the weekend and what happened with their first live event in ages >> julia, now we say okay, as soon as they can get through a couple of these land mines, oh, the writers strike is this the first big writers strike in the streaming world or no >> it is really the first big writers strike in the streaming world. we don't know for sure if the walk-out is going to happen. they have a couple more weeks to work things out. if they don't, there will be a writers strike on may 1st. the wga and the studios. what's so interesting here and i'm sure we'll hear questions about it on the earnings call is companies with more international exposure, that have more international production may be better insulated against the impact of a writers strike, which is about writers here in the u.s. of course, so much of netflix's business is overseas and so much production is overseas, and we

are seen the success of some of these foreign language series and also series that are shot in other countries and seen the success here in the u.s. where they may benefit from that it's going to be a really interesting quarter, potentially if transition, maybe we'll hear a bit about the success of the ad supported platform and a lot of investors are anxious to get details about when netflix is going to be launching the password sharing program, the crackdown on password sharing here in the u.s. >> a lot to pack into that call later for sure let's switch gears to meta which has reportedly stopped pitching advertisers on the metaverse that's the whole reason it changed its name what are you hearing and what the significance of this >> i'm hearing netflix is still long term as committed to the metaverse as ever. this is something that mark zuckerberg really believes in for his 2030 vision of the company. in the meantime, in the here and now, netflix is focused on how to generate as much value as possible for advertisers on

their platform, and a lot of that actually comes down to ai we talk about ai all the time on your show, kelly and i think there's no doubt that ai is a key buzz word meta is really playing into that, and they're really investing in ai to make their tools more effective for advertisers. i think from a conversational standpoint, they don't want advertisers to think they have their eye off the ball they're continuing to work on it, but they're trying to use ai to unlock more value for brands today. >> when you look at meta's stock price this year, it's been on a tear mark zuckerberg's wealth has gone up $30 billion after losing a ton last year. is it the success of reels that is driving that? what will be the positive surprise that you look forward to in this quarter and future quarters >> so maybe it's the promise of reels. they still have some work to do there, as julia has talked about in terms of monetizing it. it's been the efficiency drive

it's really that cost cutting that has led to thousands and thousands of layoffs of its work force that has caused the stock to jump. more than 80% year to date so i think investors -- mark zuckerberg has done a good job in terms of giving investors what they wanted it's the longer term julia alluded to this, too, how it's putting the emphasis on artificial intelligence over meta, the focus of the core that has been pushing and will push meta higher. it's kind of funny because it used to be so easy for meta to pull in the advertising dollars. it's no longer than easy the story in the information today, it's alluding to the fact it has to try now, it has to have more regular check-ins to make sure they have control of that core while working on the longer term projects >> they have to actually try the companies are maturing deirdre and yulia, thank you both we appreciate it for tech check. >> coming up, ubs says a looming recession should be a boon for

buy in bulk retailers like costco and bj's. we'll speak to the analyze about who wins and who doesn't when "power lunch" returns.

welcome back, everybody. high inflation and a looming recession are sending consumers in search of the best deal when it comes to buying household staples. and a new note from ubs points out warehouse clubs like costco, bj's, and sam's club are still best positioned amid a tough macro environment. let's bring in michael laser, a retail analyst at ubs. so many people are nodding their heads and going yes, of course they are, but costco shares have gone nowhere for a year and a half now what gives >> that's exactly right. the reason why they have gone basically in line with where they have been is because there's been some questions around what's happening with the consumer there's been questions around its premium valuation, along with what it's going to do with its membership fees. we think all of those questions will be answered in the months ahead and that's good news for the stock. the most likely case is that

they're going to raise their fees this summer, which will provide a pool of profits that they can reinvest back into the business and let some of it fall to the bottom line our survey shows the consumer has such a strong affinity for costco that it's willing to accept a higher price because it sees so much value >> i don't know. listen, i'm not just saying this as someone who hopes me fee doesn't go up. there's a reason they didn't raise the price of the hotdogs, of the rotisserie chicken. these are huge things that would turn off the core customer base. they know the core customer base is struggling. why raise the price of the membership fee do they have to? >> you answered the question they haven't raised the price of the hotdogs. they haven't raised the price of other products in fact, they tend to charge really at most 15% mark-up on their goods. you can't find that anywhere else that alluring value is the number one reason why people

shop at costco the low prices and high quality of the merchandise, that's not going to go away even if they charge $10 more per year to shop at the club. >> and we have this bifurcation in retail right now where the very high end, lvmhs of the world, luxury do great, and the bottom, very value conscious consumers are realizing value. but we also have more and more pressure against that low end, for instance, tax refunds, which have been one of the most important one-time windfalls for working class families are $20 billion less this year than last year we heard walmart talk about that during their investor day. do you see that as a potential problem in the first quarter and going into the second quarter? >> we have already started to see that have an impact, robert, in march sales of highly discretionary goods like furniture, consumer electronics were under considerable pressure, down high single digits year over year

and that was most likely a direct result of consumers having less access to this windfall from tax refunds that they get during this time. the important point is that tends to have influence in march and in april, and as the season gets away from that, it becomes less influential so while this might be a near term drag, this is also creating an opportunity given the stock is trading at its typical multiple relative to the s&p 500, and that to us looks very attractive >> michael, what's the difference between costco, bj's, sam's club is this a regional diversification play or concentration play, different type of shopper? you know, how would you kind of separate these out for investors who want to maybe pick one versus the other >> there are some distinctions bj's, that is focused on by my partner mark carden, it's more levered to the eastern portion of the united states

costco is a bit more diversified. it has a lot of exposure to california costco just executes this model. they have 3600 items in store. they take great care and consideration in choosing every one of those individual items. and it's that experience that drives superior performance over time with that being said, sam's is getting better and we're seeing that in its performance. i think that walmart is set up well from here and part of the reason why we think walmart is set up well is because sams is really doing quite well. >> fair enough all right, michael, we'll leave it there thank you for your time today. michael laser joining us from ubs. >> still ahead, catalent is down 35% in a week on news they're abandoning takeover plans. we'll trade it and another big mover in the day in a fresh three-stock lunch coming up after the break.

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guidance setting strength in units and you including pharma pharmaceuticals. h lockheed martin reaffirmed its 2023 outlook and let's bring in david wagner with aptus capital advisers. first up, johnson & johnson. >> so i think that the big question for most investors today is why the heck is this stock down 3%. i know you had the company beat on all three segments. and you had the company raise guidance on both the top and bottom line. and i think the cynical side of me would say that the company beat on the forma side due to the covid vaccine andnobody really cares about that. and all of these factors are known. there is more recent information

that is very positive. just last week thet tal cum powr is less of an issue. and so i think that they see a light at the end of the tunnel but i understand that johnson & johnson's growth is not as great as what it has been, but also the multiple is trading well below his toltorical averages and well below peers and so if you get any up grade or turnaround in the device side, i think that you could see at a multiple closer to 16 types where it is 13 times now so any improvement in sentiment, you can get closer to $200 worth of stock without really anything heroic happening >> the enthusiasm for j&j, i love it. and what about cata

>> it is a good company. but the question is do they have the leadership to do they recently canned their cfo and it appears that there is not a lot of confidence in their newly appointed ceo. and last week there was news that they are having some problems on their production side and at the very important facilities but this is only three of their 53 facilities that are having problems and so investors are really just don't knowing why you fired your cfo. is this an operational issue or other structural execution issues outstanding so i think that investors are trying to figure out using the mosaic theater, is there anything else, any other quality control issues within their site network. so it is the fear of unknown and that is nothing that i want to take a part of, so i'm definitely staying away. >> as are investors. and lockheed martins had a good earnings beat. >> yeah, i'll be frank, i

thought this was a very good report out of lockheed today but if you had to poke holes in this report, i'd say that their book to build ratios was a bit weak but not a really big concern we know how the f-35 works and this is well flagged by the company. but as of rate now, it feels like owning lockheed is more of a macro play than a fundamental play given their well balanced valuation. it is basically a call on the sector for defense you are basically saying that geopolitical tensions are elevated but if you are a bear, you are saying the opposite. but there is going to be muted growth and i get more nervous when the rubber meets the road regarding the debt ceiling any comments on defense spending will definitely have a lot of sensitivity towards the share price. but as you mentioned, technically speaking, this stock

traded above $500 which is about a one year resistance level. so i'd say look out for now, but it should be probably a good hiding spot moving afford especially in industries because i think that there is a lot of other industrial names out there that probably worry me a bit more so i'd continue holding it >> and interesting to watch all the defense stocks thank you for being frank with us >> there you go. and what is three letters long but traded like a four letter word? tax. today is officially tax day and y ts arndhos ho is expected to pauphiye a w inot maybe.

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to unbelievable. visit us at newageproducts.com. is. welcome back it is tax day. and we'll talk about those who pay and those who don't. you look at the numbers and lot of people talk about fair share in washington, d.c and new numbers from the joint committee on taxation, a bipartisan group, they look at the 80% of americans, top 10% that pay 80% of all taxes. and in fact if you go up even higher, the top 0.5% now pay 39% of all taxes and they say, well, it is because they earn a lot, which is true. but that they earn 16% of the income and they are paying 39% of the taxes and people say let's look at the tax rates. and the average tax rate for that 0.5% is 26%

which sounds lower than the official rate of 37% but compared to the middle class, so let's say those earning between $75,000 and $100,000 a year, that is kind of mee median income, effective rate is actually 5%. and so yes you can pick out examples where a billion here, a billionaire there for a certain year paid zero taxes, but on the hole, whole, it is a progressive system that has become even more progressive. >> and so what are the next big changes for taxes? we've seen certain proposals floating around by this party or that but it would seem that the repeal of the 2017 stuff is the next thing that will that barring any action >> and that is almost like the fiscal cliff of taxes. because they have either got to do something or at a minutia not do something either way, we'll see major

changes. so they have to answer take by the end of 2025. >> because if nothing happens, it just goes back to the way that it was? >> yes >> and then that will depend on the composition of the white house and the senate and house so a lot of big questions. >> happy tax day "closing bell" starts right now. and welcome to "closing bell." i'm scott wapner live at the new york stock exchange. this make or break hour begins with a countdown of netflix earnings just about an hour away and the first of the nasdaq reports to hit the tape. the stock off to a pretty good start, so the release all the more important and we'll walk you right up to it we also have a couple famed exclusives bank of america ceo brian moynihan and also mickey drexler will be along. and here is your