bentley, the brand >> brthank you. >> good fortune as many of your customers have already had that'll do it for "power lunch." they are out of here "closing bell" is coming up right about now. we'll see you tomorrow welcome to "closing bell." i'm scott wapner live from post nine at the new york stock exchange we begin with breaking news. all eyes on the white house right now as the president meets with congressional leaders to try and hammer out a debt ceiling deal our amon javers is in washington, d.c. >> they have left the building so so speak at the other end of pennsylvania avenue. we're going to wait to see of their arrival, and what happens in this high-stakes meeting today at the white house

we have a new note out from goldman sachs in which they expect any headlines that come out of this meeting because it's still relatively meeting before that x date of june 1st or thereabout, anything that comes out might be negative in the sense they don't expect this to be the meeting where a deal gets done speaker mccarthy has had some very negative rhetoric over the past 24 hours, suggesting that he doesn't see enough progress being made here. so we'll see if that is the case we know that there are cameras and microphones just outside where they'll be meeting and if they want to talk to members of the press, they will be able to do that. we have gotten another note from the white house just within the past hour or so, scott they have said that the president has prepared to change his travel itinerary over the next week or so because we might have to be back here in washington to negotiate on the debt ceiling so they are signaling that the president does expect to possibly be in the throes of some negotiations here in coming days we'll watch for that as well all of that starting in just a couple of minutes now at the

white house. >> there is an undeniable sense of urgency we know that thank you. we'll look for any details that come out of that in washington, d.c let's take you to the scorecard. less than 60 minutes to go now in regulation here on wall street stocks have been down for most of the day home depot as you know has been a drag on the dow. the worst sales miss in 20 years. tech has been an outperformer today. you can see the nasdaq is the only of the majors in the green today. for more on where the markets are heading from here, let's bring in anastasia amaroso and em emily caplan i'll start with you, anastasia how are you thinking about this issue impacting the markets with the deadline fast approaching? >> the deadline is approaching, but it's really not fast in terms of policymakers' terms you remember 2011 and how long it took to get a deal, and i have a very -- i have a very big

suspicion that we're going to get to the same deadline to the 11th hour of it, and the market need to be prepared for that volatility i take speaker mccarthy at his word when he says we're far apart because the democrats want a clean raise in the debt ceiling and that is not at all what the republicans want, and you know, look to be party-neutral here, and few look at the congressional budget office, the projections, there are serious issues that need to be tackled budget deficits running at 5% to 7 7% over the next few years that puts us over 200% over the next 20, 30 years. these are serious issues and you're not going to solve that in a single day's worth of meetings. >> emily, how at risk do you think stocks are here? >> stocks are barely yawning amidst this phenomenon that's going on right now or the possibility of the u.s. defaulting on its debt is no longer zero. we're looking at things like the

vix which is below 20, and basis points the s&p 500 trading at 18 times forward earnings and a ten-year treasury continuing to bounce off support between 330 and 340. they're not in our view incorporating the risk of the fall, and it will get resolved at the 11th hour of course, but not without significant vola volatility i agree with anastasia this is the best analog for today, given the political dynamics in d.c., and frankly we saw the ten-year treasury yield drop about 200 basis points over the course of that summer from about 370 to about 170, and i'm not saying this is the exact same playbook. there are other dynamics at play we had the european sovereign debt crisis sort of unfolding o overseas at that time, and other elements here, but if that is the same playbook, we do think that we, you know, this is a good time to embrace bonds it makes us like fixed income even more. >> yeah.

the other issue that the market, anastasia, is dealing with is the fed. you know, i'm not sure that the market fully believes anymore that the fed is necessarily done we have had paul tutor jones this week suggest that the fed's done others have, and it was largely believed that they are yields are up today. two years near the highest it's been all month austin golsby said we're not sure >> you can't blame the market because look at the data we got on retail sales today and it's just fine. it really tells you that the consumer is just fine. the consumer is resilient. the consumer is spending selectively. all of a sudden this narrative for a soft landing is really taking hold once again, and the banking turmoil that was front and center, you know, to emily's point, you can discern any volatility in the equity market. that's why the markets were saying, maybe the fed still has to go 25 basis points, but i

want to mention one thing, scott, about where the markets may actually be positioning for this debt ceiling. if you look at the one-month volatility, and if you look at the call volatility, it is continuing to come down, but if you look at the 90% put for example, it has not come down nearly as much there is demand, and investors are trying to hedge their best one month out whether the fed raises rates or not. i think that's the debt ceiling hedge. >> we have been watching the shortest of short parts of the yield curve. one-month, three-month, six-month, all over 5% one of those is at a 20-year high, but, you know, the idea, emily, that the fed -- we thought was done what if they're not? what's the risk in that? >> yeah, we know that the fed has shifted back to this data-dependent stance, and frankly as of late, the data's come in a lot better than

feared that's our new mantra for the year we're going to get bumper stickers made. better than feared whether it's the earnings coming in, much better than the low bar, some of the economic data you looked this morning. homebuilder sentiment, and reproduction, retail sales all coming in better than feared, and this does kind of open the door for the potential that the fed does go one more time in june it's not our base case we're seeing financial conditions tighten we're seeing loan gross. we're seeing demand as we've seen things from home depot like the demand starting to slow. inflationary things are starting to subside, but we're in the a recession yet. in order to have us be confident that we're going there, you've got to see more cracks in the labor market, and the labor market's been incredibly resilient. really hard to think about a recession happening when consumers are out there spending and doing so because they have jobs so that's what we'll be looking for in order to kind of, you

know, understand what the fed's going to do next maybe one more hike here in june, probably not >> i'll tell you the other thing that's on my mind that i want to get your perspective on. so home depot cuts its forecast. berkshire hathaway sells rh, they made it clear for all intents and purposes have no interest in investing in banks other than the one they already hold or the two they already have they're on a mountain of cash, right? they haven't seen anything apparently attractive enough tto deploy some of the capital they have what's the message in that the world's greatest investor is clearly cautious. >> yeah. >> i guess we're reading into it, but i can say from all of those things, you sell rh, deals with high-end consumers. you firstly want nothing to do with the banks and you haven't found anything good to buy yet. >> look. this is a very narrow leadership market, and, you know, we talked about retail sales if you look within the details, the consumers are not buying furnishings, and they're

spending less on gas stations and gasoline, but guess what they are still spending on online retail and what they're not spending on gasoline, they're spending on food that's a narrow part of the market the message is they're getting paid 5% in cash. you're worried about the recession. get paid while you wait, and i think, you know, what the market is telling you is there's no good catalyst for the upside right now, and there's no cost of missing out if you can get 5% cash you know, we talk about the u.s. consumer, you know, we talk about, you know, that being strong we talk about the fed potentially ending its hiking cycle, but guess what? we all talk about it, and therefore that's priced into the market so i think unfortunately this as emily called it, the yawning market may continue here because we're in this dead man zone where we are below some of the long-term thresholds that would get investors back into the market and we're above the short-term threshold there's not this immense selling pressure it feels a little boring, but

that's why investors are sitting on cash. >> you know what you know where else they're sitting, emily, and it's no secret that many of the biggest investors in the world are sitting in the most mega of mega-cap names the ones that are most directly exp exposed to ai. they continue to come out, and that's where the smartest and biggest money seems to be placing its bets in an otherwise uncertain market you call it defense, you call it good balance sheets and call it on the cutting edge of ai, et cetera that feels like a statement in and of itself. >> yeah, absolutely. ai is going to be just such an important mega-trend going forward from here, and most importantly it's going to help increase productivity which is something that's been lacking from this economy. right now we have too many people not doing enough stuff, and so that needs to improve here so we think ai is important, you know, and of course, it's led to very narrow market leaders in fact, there's been some data that have been produced over the past couple of days suggesting that markets would be down this

year if it were not for some of this mega-cap leadership we siee it as quality as you know, we have been talking about the importance of emphasizing high-quality stocks and portfolios ones with tons of cash, great balance sheets, more durable pr profitability. this makes sense that there's been a rotation in technology, and by the way, we're talking about big mega-cap tech, not unprofitable growth at any price. tech companies that are going to need to issue debt, need to issue equity in order to grow. we really think that that's a place you want to avoid right now. avoid cyclical names and again, focus on these high-quality winners that should be able to produce better earnings as we head through this choppy environment. >> does narrow leadership, anas anastasia, matter to you is it a great myth or does it matter >> well, look. if you look at the evidence, it does tell you that any time the market breadth is this narrow, the next, you know, three months, one month worth of returns is typically negative and you can't expect something

like a 10% correction, but i kind of have to go back to the fundamental reasons for why we have this narrow leadership. you know, the economy's not falling apart, but at the same time rks so many parts of the market are not investable. how many investors want to step into the banks how many want to be buying cyclical stocks? >> some come on this network more than some i mean, plenty of people are into the cyclical trade. they'll tell you that earnings growth over the next couple of years is going to be better in industrial stocks than cost. i had somebody make the case to me on "halftime" >> i probably know what it is, but investors aren't focused on the next one or two years. they're focused in the next one to three months, and it's hard to call for a cyclical rebound in that. now, if i were to say one bullish thing for cyclical trade, i will say start looking at earnings revisions. in revisions breadth, just all being cut down, earnings revisions are starting to come back up, and if you look at the

gdp growth, you know, tracking for the second quarter, guess what we're looking at 2.5% once again. but until we have the full evidence, it's going to go back to the tech trade. >> yeah, and we'll see nasdaq again as we said, not up a lot today, but it is in the green. everything else is in the red. ladies, thank you. we'll see you soon thank you very much. let's get a check on top stocks we're watching now. kristina is with us today. >> let's start with etsy, one of the worst s&p 500 performers today after stanley suggesting that the online marketplace is hitting its limits after surging throughout the pandemic. meaning the company went from a growth stage to now a more mature marketplace which obviously has negative implications for valuation in their view, and that's why shares are down over 5% at the moment, and one of the worst performers meanwhile, shares of amd are moving in the opposite direction after a 13f disclosed hedge

point. they have a $1 million shared stake in the chip maker. it's one of the top performers and it's up 5%, scott. >> all right good stuff, kristina thank you. we will see new just a bit we are just getting started, and up next, we have top tech investors. they are in the house here at the new york stock exchange. we're going to get their takes as lawmakers hold that hearing on capitol hill. it does bring us to our twitter question of the day. are you thinking about increasing your exposure to ai stocks yes or no? head to @cnbcclosingbell on twitter. the results are coming up later in the hour. we are live from the new york stock exchange you're watching "closing bell" on cnbc.

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got some tape from the meeting inside the white house on the debt ceiling. let's watch. >> hello, folks. get a good picture of all of us. we're having a wonderful time. everything's going well. anyway

i don't have any comment to make we're just getting started, and we'll be available at the sticks when this is over. so much better. >> well, if you could decipher any of those shouted questions,

you are better than me, but that's a live look -- not a live look it's a look inside the oval as the president and the vice president, of course, and congressional leaders are meeting as we speak on the debt ceiling markets. obviously nervous about the deadline that's fast approaching, said to be the earliest part of june. the dow's been down all day. it's still down about 250 points we want to turn our attention to another event in washington today that was the hearing on capitol hill where open ai ceo sam altman was testifying, calling on lawmakers to create more regulations and safety standards around ai. with me now is lo toney, and rick heitzmann it's great to have you guys. as we just take a look at the events that are taking place in d.c., and we may have to break back and give you some of those details as they come out, so i beg your pardon for that ai did you see any of altman today?

>> i saw some of the recordings. >> what do you think that regulations are going to look like around ai if, in fact, we get them, and whenever that might be >> i don't think that anyone wants to repeat the mistakes made with social media i think they're going to take this seriously, although i would say we probably are behind the curve again, given how fast the technology is moving i hope they approach this not trying to move a blanket, but really thinking about like a product manager. think about some specific use cases although we can't capture anything >> how long do you think it's going to take before we actually get something substantive? >> boy, i suspect we'll see something hopefully before the election right? because i think that's the big concern right now as we look at what happened with social media, but distribution now, now we can have distribution at scale with content that can be created with ai >> i mean, altman was even talking about that today, you know, one of his greatest concerns in a what appears to be

a sea of concerns, is action around the election. and how quickly we need to have any kind of regulation coming into play. what do you think? >> i think we need to have something, hopefully something this calendar year because you're already seeing models come out you're already seeing data leaking, and you're already seeing applications out there which can do deepfakes, whiching do things, and not only alter the election, but really affect the economy. >> is it too late? in lo's point, we're chasing it and trying to catch up. >> which, you know, often happens in government, but, you know, what you really want to do is figure out what are the use cases you could really lock down as soon as possible? i think deepfakes, i think verification, especially by the big platforms who want to know, you know, is this really scott saying, this is what's going on with the economy is this really lo commenting on technology there's ways to watermark it and there's ways to create some kind of veracity in what's happening in artificially created both audio and video. >> do you think that the

lawmakers who are going to be drawing up these regulations fully understand the power of what they're even drawing up regulations about? >> no. we know that historically we always have the people in place and the government that never really are able to comprehend and understand what the techno tech technologists. we see people like sam altman coming in and having an open conversation and talking, and i think we've seen a lot of outreach i think senator blumenthal might have spoken to 100 people from tech we also see that tech nnologist understand the importance of regulation and being on the front end. so those are all positive signs, but to your point, the lawmakers never fully comprehend it. if they comprehended it, they'll be in silicon valley. >> in fairness, i don't know if any of us really understand what the power of this technology has the capability of doing.

>> we spent a lot of time especially over the last seven years, and over the last decade, and we're still looking at cases figuring out not only what the economic implications, are, but the ethical implications and how can this be used poorly or by someone who's a bad actor? we bring that up with our companies all the time, and oftentimes, the companies don't understand as they open the pandora's box. >> we talk about ai's tremendously being inflated. just put ai next to your name, and someone's going to buy your stock and you're going to be able to go public at, you know, crazy valuation. what do you make of that kind of talk is there validity to that? you must be approached all the time from young companies to invest in our product because we have ai. >> it almost feels like people took their powerpoint presentations, did a search and replace for crypto and ai, right? it almost feels like that sometimes that people are trying to incorporate ai into their pitch even if it's not a pure play ai company, but i do think it's important that we separate,

right, looking at this from a speculative nature of investing and trying to chase the stocks that are publicly available that are going to see a run, versus what's really happening with the technology and the advancements that we're seeing and some of the potential pitfalls. >> how do you adjust the idea of a bubble i'm not sure if we have that at his headquarters or not. this graphic that we made up to show the difference of valuations, there it is. thank you guys very much sort of hot tech then and now. >> yes >> look at what the forward pes were for the so-called hottest stocks in the market back then the qualcomms, and ciscos. is nvidia extended that is for you to say, not me nothing close to what they were in 2000 at the peak of the tech bubble. >> these are also the biggest companies, right cisco was early in their journey.

yahoo was early in their journe in terms of growth yahoo petered out, but whether you see them on the private side or in ipos in 2024, those are the companies which are going to go out at head scratching multiples, some of which will be real and some won't. >> are we rhyming with the hype around ai and what we did in 1999 as we approach the januarys and into the peak of the bubble? >> i think there's a little bit of what rick said, right when we look historically, ai has been around for a decade most of the benefits on that first wave on the public side accrued to the large side into existing technologies. google, search ads, facebook recommendations to the algorithm and the news feed and even netflix on general recommendations around movies. i think what we have this time is we will see large tech because of their massive scale and existing product base using ai, but i think we will see some changing the world companies

that will come out with some big opportunities and some of the more niche verticals where there is some proprietary data to train these models think financial services and think health care. i think those will be int interesting areas to watch. >> talking about taking the next leap, i would like to hear from both of you. the ipo market is what we're waiting for to, you know, thaw out and get back to some normality. when does that happen? >> i think q4. i know we had asked about this all the time whether from our investors or from you. i think it's q4. >> of 2023 >> you're going to see a couple of things pop through, and whether they're fast growth ai companies which are taking advantage of some momentum or whether they're, you know, the best enterprise companies with the blue chip and best of class metrics, but the best we'll see is q4 where it'll be a slow summer into the fall. >> how would you kaddress that >> i agree i think we'll see it extend into next year as well. >> it's great having you guys here in-person

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we're back the dow remains lower as investors turn their attention to the debt ceiling and the congressional leaders and the president. we just showed you at the white house. tech remains a bright spot, and our next guest expects it to stay that way. let's bring in our treasury partner. he's one of barron's top financial advisers we need your advice. welcome back >> thank you >> are you still sitting on a pile of cash >> yes, we are >> why are you still so negative in the market? >> well, we're not exactly on cash all the cash has moved into bonds as we spoke about last september, but if you look at the facts on the ground right now, you have m2 negative for six months. >> money supply. >> all right consumer spending is down.

availability credit is tightening leading economic indicators that prospectively tell what's going on, they're dropping so we expect the economy to slow in the second half for the year. >> i mean, it's been much more resilient than people have thought. i would assume you included. >> mm-hmm. >> the consumer even though retail sales were slowing, they're still pretty good. employment is pretty good. >> mm-hmm. those are the two positive, but home depot, well, the report this morning will clearly refute that. >> yeah, but i mean there were other factors going on in there too, and even if we throw up home depot's shares, they've come up off the mat from where they were, and other extraneous factors there too. >> if you look at the performance, the equal weight is flat it's really been driven by big tech, which is the largest component of the s&p and a cap-weighted basis the tape really isn't trading too well. >> this has become the issue of the moment that top-heavy market, right the mega-caps are pulling the

weight of everybody else so what? so what? why is it such a big deal? >> well, we're overweight, big tech so that plus our other allocated parts of the portfolio okay with that we don't have a problem with big tech pulling the market. >> people cite that as one of the reasons to build the bearish case breadth is terrible, it's so narrow so what? why does that matter so much >> we're building a cautious take not because tech is leading the market, but rather because the fundamentals are deteriorating. we had 15 years of free money, quantitative easing as well as a $5 trillion fiscal push that we're taking -- it's a big lag to burn that off so we're wringing out those excesses the second half of the year is when we'll start see a slowdown. >> you think the fed's done? >> yeah. >> they're not raising anymore >> i don't think so, but keep in

mind there's a lot of conjecture about the resolution of the debt ceiling. the debt ceiling will result in a trifecta of tightening it'll supercharge qt here's how it work yellen's been burning down the treasury general account, the tga in not -- in not issuing treasuries powell's still doing qt. so the offset has been pretty constant if you take away what powell did for the banking crisis drama that is. once the debt ceiling is resolved, which maybe we'll get it, who knows? yellen will have to rebuild her checking account it's estimated that she'll be issuining an extra $600 billion worth of treasuries in theextr half in the year that's a tightening and combine that with qt, and add that to the banking drama that has resulted in bank willingness to lend decreasing. it's going to be some real tightening in the second half of the year. >> your base case then must be

recession. >> slowing can't tell whether you define it as recession or not, but -- >> if it's just slowing, hasn't the market price been slowing? >> no. >> it hasn't priced in slowing >> we did $53 in s&p earnings. so it's full 20. we don't think it's happening. if you put 18 1/2 times earnings right now on 220 that's where the market is right now. if it goes to 200, it's 20 1/2 times. either way, where's the market going in an environment where rates are 500 basis points higher >> from nothing. >> yeah. >> they're 500 basis points from nothing. do you think yields have peaked? >> yeah, they have that's why last fall we spoke about aggressively extending maturities, and that leads to another conclusion a lot of people are buying, you know, two, three, four, five, six-month treasuries thinking they're going to get 5%. it's great well, we would avoid that, and we would extend that much further. the economy slows, they're going

to have huge reinvestment risk on those, you know, beautiful 5.1% three to six-month treasury. >> you like the long end, like, gun lock, like, 30 years >> we have been buying ten-year corporates we have been buying long municipals the fdic right now is auctioning off billions dollars of municipals right now every single week. >> do you think the fed cuts this year? >> no, not at all. >> what happens when they do is that bullish or not >> it will be depending on where things are here's where things are. this is where the market i don't think got the memo if the fed cuts, we're slowing dramatically, or there's a tail risk event neither of which are positive for stocks. >> people say that, and it may not be positive for that moment, but i have other people saying that cuts are always bullish >> they are in the short run, but the reason for the cut is because the economy's slowing.

>> you mean the long run. >> no, in the short run. the fanfare of the markets will be, oh, the fed's cutting. we're going to go up, but let's face the reality of stocks follow earnings. slowing economy will result in lower earnings right? go back ten years. s&p did 100 bucks in earnings, sold it 13 to 14 times right now the estimate is for 220 this year, and we're at 18 1/2 times so we have had multiple expansion in the last ten years and i don't think we're going to get 220, scott. >> does the wine you make taste better than you view the market? >> absolutely. >> all right let's leap it there. thank you. >> thank you. >> let's talk to you soon. up next, we're tracking the biggest movers as we head into the close as well. kristina is standing by with that. >> i hope you get that wine, scott. what does streaming platform hulu and florida governor ron desantis have in common? i'll have that answer and obviously much more after this short break.

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(funky electronic music) (narrator) invest in. believe in. move in. grow in. build in. thrive in. all in north carolina. ranked america's top state for business. we have about 15 minutes to go before the closing bell kristina is back with the stocks she's watching. >> let's start with the parent company of elpmer's glue and sha pi the stock is down over 4%. the dividend yield is above 3% that's higher than the

discretionary xlyetf they see the money towards getting getg getting risk off the blank balance sheet. shares of disney are over 1 1 1.5%, almost 2% lower after comcast said they will likely sell their stake in hulu to disney next year comcast saying the final price will probably be $27.5 billion which is the valuation set back in 2019. sp separately but related to disney, the entertainment giant has asked a florida dcourt to dismiss a lawsuit by ron desantis over federal tax district rules that is the saga, the battle between both continuing. >> kristina, thank you last chance to weigh in on our twitter question we asked, are you thinking about increasing your exposure to ai stocks the results after this break

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more breaking news we're going to get back down to eamon javers. >> the president was considering changing his schedule, and we now know he is changing his schedule this from a source from the president planning his trip. he has decided to return to the united states on sunday immediately following the completion of the g7 to ensure that congress takes action by the deadline to avert default here obviously the president aware that that puts him back in d.c. now for the last week and a half before that june 1st x date

where we think the running room is going to run out for the u.s. government in terms of its finances so the president signaling to republicans and to the world that he's taking this negotiation very seriously and will be here in washington for the conclusion of it that decision just within the past couple of minutes. >> goes towards that sense of urgency we spoke about at the top of the program thank you. let's get the results now of our twitter question we asked if you're thinking about increasing your own exposure to ai stocks. as some of the biggest investors in the world are doing and the majority of you said no. some 61% at that up next, shoppers pullin back at home depot what those results are signaling as investors turn their attention now to target and walmart coming up later this week that and more when we keou si t mkezone y ank, you can find us in big cities and small towns across the us, where our focus is to always support the people who live and work there. because you call these communities home, and we do too. pnc bank.

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we're now in the market zone cnbc markets commentator mike santoli is here to break down the kmcrucial moments of the day day. and we have outlook for target and walmart this week. phillip bowe ahead of tesla, the meeting this afternoon we'll get to everybody in a minute mike mike, we're patient. nasdaq has gone a touch negative what do you make of it >> very heavy. this market for as flat as it's been, it's not been in gear, and so we continue to see that you know, auto's down a couple of percent there's definitely a slowdown

taking hold type of a feel to things today on the other hand, you know, industrial production better than expected auto manufacturing ramping up, and, you know, that's goosing the second gdp number. that's this feeling of we're not really headed quickly to a resolution on the recession, no recession, or in the -- can the market stay this way >> the debt ceiling. >> i was going to say also, the resolution to the debt ceiling is being spun as a negative by folks who have already been bearish because they're looking at the aggregates and saying the fed hasn't issued any debt, and it's keeping liquidity in the system look the aggregate mass says to me that's not a reason to be incrementally bearish if we get a resolution on the debt ceiling. positioning and attitudes continue to be the biggest ins police dn installation. some people's version of

cautious is owning a ton of bank stocks that's not purely defensive, but it's behaving that way so i still think that we're in this just sort of confused and cautious state, and again, you can't tell me that the market's not reacting to slowdown because in the past month, the s&p's been flat. auto's down 10%. energy down 12%, and banks down 7% we're listening to what's going on just as it isn't reflected in the big cap index. >> so greg, i turn to you. home depot certainly, you know, raised some issues about a possible slowdown with the consumer, the ceo, ted decker saying, quote, a newer dynamic now we're really seeing again just this past quarter is a more cautious consumer given the broader macro concerns including credit availability. what's your takeaway from that alone? >> well, from that alone, i think you're seeing the reality of there's still a lot of wood to chop, particularly in those bigger ticket discretionary categories like home improvement

areas where consumers are getting more cautious, and our view from the indicator has been the industry will run negative all year, and it will certainly underperform overall retail sales just because we're coming off such a strong market the last few years, and existing home turnover was down a lot last year, and now home prices are probably going to start to slip. >> is this a warning shot for target, especially >> i think it is for any discretionary retailer that had a strong unit demand through covid and then with the stimulus checks of and so that's why, you know, target's not one of our top five, and we have been in line reading on the stock, and there are earnings tomorrow. >> what about walmart then >> walmart, we actually like that's in our top five, and we upgraded it back in march, and the point there is we're starting to see real traffic momentum in the business one way the consumers can save money is go back to walmart where prices generally are

better than fears and competition, and they have a very good strong assortment across many categories we think discretionary product is still likely to disappoint pretty much across retail, but more certain retailers that have traffic momentum or tradedown benefits like walmart, it could be a decent quarter and back half of the year. >> i appreciate it very much as we look ahead to those key earnings reports phil, looking ahead to that key meeting. tesla and elon musk before his big sitdown request our colleague, david faber. >> yeah, and the annual meeting, scott, is typically one of those events where tesla investors get all excited and we don't get a lot of clarity from elon musk in his comments three things people will be focused on one, what does it say about the profit margin outlook? they can go down to zero as long as it's revenue growth i'm not sure it'll be retail

now making 5,000 vehicles a week where the annual meeting will be holding and taking place, and then there's the next leg of growth as you take a look at shares of tesla over the last year, remember, cybertruck production is scheduled to be over the next year but what does it say about the lower priced model 2? those rare the things that they'll be focused on. if elon musk touches in great detail. >> what do you hope to hear that they were all excited about with david faber? it'll be that cnbc special event at 6:00 eastern time this evening. >> i'm excited it's not just going to be about tesla. he's also going to be talking about twitter, ai, spacex. david's going to touch on a whole range of topics. that's what i'm most excited about with regard to tesla i want to know what they're going to say about price cuts and profit margins i want to see if there's any greater detail that david can get out of elon musk in terms of how low are they willing go? >> he does seem willing, phil,

and maybe more so than he has at arguably any time to sacrifice margins for demand. >> yes yes. they believe that they have the hammer when it comes to volume look, they aren't the brand when it comes to electric vehicles, certainly in north america, and you can make the argument that they are the top couple of brands in china as well as in europe he wants to take advantage of that position. >> all right good stuff, phil thank you. see what comes out of that meeting and of course, from the interview, again, 6:00 eastern on cnbc. mike sonantoli, two-minute warning. i'm looking at industrials week, materials week there's a lot of weakness around there's barely any green on the board. it comes from comp services and tech >> we have a situation where as i said before, the day gets kicked off to re-enforce the concerns about slowdown, the state of the consumer and therefore the cyclicals. on the other hand, yields are up >> yields are up >> so, and that to me was also

because people. >> reporter: m-- were making a big fuss about how the retail sales game was essentially a fact it was inflation i don't think the yield move is that significant, necessarily, and in the grand scheme, but it does show you that we don't have, you know, any kind of signed and sealed assurance that the fed is definitely done we're not talking that way. >> no. >> everything points to, we're caught in between. you know, i could also tell you that homebuilders are up again today, and we had this great homebuilders sentiment survey and there are these pockets of the economy that are not really lined up to have, you know, to drive further downside so i think that's why it's more of a puzzlement man it is people being bearish right here everyone remembers 2011, not really for the details, but how it was a sheer panic on the debt ceiling and the downgrade, and it never felt smart to feed into that panic even though it's hard to resist when it seems like these big kind of cataclysmic system failures might be in

play. >> yeah. the dow's down 6 of 7, and that's the way we're going to notch it today as we're off by more than 300 points as the bell starts to ring here at the new york stock exchange. we'll keep our eyes on the white house. they're looking ahead to the meeting and the interview, and i'll seasnd it to "overtime" to morgan and jon the stocks hitting session-lows into the close today with the dow finishing down 1%. that is the scorecard on wall street, but the action's just getting started. welcome to "closing bell overtime." i'm morgan brennan along with jon fortt who is in las vegas today. we are closely monitoring a pair of big elevents. >> yeah. tesla's annual shareholder meeting is about to kick off, and president biden's meeting with congressional leaders at the white house could wrap this hour we will bring you all the breaking news from tesla and from washington as it happens. >> let's get into today'