morrison ceo sheryl palmer, up 40% on the year. can that rally continue or will rising rates put a lid on the move proceed with caution walmart posting better than expected earnings for last quarter, keyword, last, but also the latest retailer to warn the current quarter is not looking as pretty. dana telsey breaks down the winners and losers straight ahead. deutsche deepak puri's saying why the market doesn't justify a fed pause yet. the s&p is up 0.50% on the back of a rally yesterday. tech is leading today. nasdaq is up almost a full percent. information, technology, consumer discretionary, that's at the top of the market financials, materials and industrials, carl, have joined the rally so far today stocks holding up well in the face of two things that i'm watching in the background, which is rise in treasury

yields we started the week under 350 and now at 650 on the ten-year and rise in the u.s. dollar. both of those can reflect a number of things number one, data not as bad as feared, broadly. jobless claims today, for instance, came down. we don't have to worry as much about that fed speak is hawkish debt ceiling talks look to be going well there's reassuring commentary from house speaker mccarthy and president biden yesterday. here's a lori logan quote. data in the coming weeks could yet show that it is appropriate to skip a meeting. as of today, though, we aren't there yet. if they pause in june, first of all, they may not. second of all, if they do, they're still leaning toward this idea that inflation is too high, the economy hasn't weakened enough to put a damper on it. >> we're looking for broadening leadership yesterday small caps versus large since november as we're getting things like materials playing along a little bit, energy getting some green

arrows we'll see if it continues to be all about nvidia, microsoft, amazon, apple, or if we can get things like a catalyst call on fedex working for some >> cyclical names are moving today higher that's important energy, banks, materials as you mentioned, industrials, because they've been weak. it's been all about the staples on this recessionary view. on one hand, the data is better and it means we push out the recessionary call. on the other, it means higher rates and the fed might have to do more. so far markets looking on the bright side of what it means on the economy. topping the tape is reversal versus rally in a wells fargo note this morning, the argument is the risk of a market reversal seems elevated as credit spreads widen and the balance sheet shranking. jpmorgan argues the pain trade is higher as debt resolution means traders return to macro fundamentals where earnings are holding up, consumers are strong and leverages are near all-time

low. let's bring in mike santoli. it's a confusioning picture when it comes to making a market call right now with the fed and the economy giving mixed signals. >> and i think there's low conviction on both sides of the trade. the market is acting more like the jpmorgan scenario, which is really just about people not being positioned for less than bad news and, therefore, feeling maybe you have to participate. and to your point, sara, if you were loaded up with a bear case and you say not only is the economy falling away quickly, but we might basically have to have the fed cut, emergency measures, credit seizing up. it hasn't all really come together if the debt ceiling was part of that, you had them removed from the case over the course of the last few days. it might just be an excuse to get people nice and loaded up and fully exposed to stocks once we get to the top end of this range. carl, you mentioned nvidia, microsoft, all those names that have loaded on the market cap.

most of them have rebuilt valuations but not quite back to where he they were before the big fall, the peak in early last year, except for nvidia. it's got earnings estimates going up for next fiscal year. on top of that, it's kind of had the multiple increase. aside from that, i think it's mean reversion we find these stocks defensive and small caps have kind of languished but haven't fully broken down. now they bounce over a couple of days you might be able to kind of pull it away from the brink a little bit if you can have some broadening out. >> the jpmorgan thesis, which is bullish, at least on the desk, is that earnings were not as bad as feared. margins are up quarter on quarter. consumer leverage is low relative to history. and so is corporate. and they argue you could see 15% of high yield go to investment grade by the end of the year i wonder if that was too optimistic. >> if you look at the various

metrics of valuation and corporate health, corporate health in terms of interest coverage is very high right now. of course, it's because rates are really low and people locked in low yields. the point is, there is some slack where you could relever a little bit or, as you say, if you're a high-yield issuier you tighten your built and you can get upgraded b of a had huge matrix everything looks expensive on a 35-year view except for price to free cash flow fully average going back to 1986 what we have is companies, the index is different the kinds of companies are different. the economics of those businesses are different margins seem to be a little more resilient and that's why the market cap is there. that's why most earnings are free cash flow as opposed to not being cash generating. who knows. those are counterpoints to the general sense of leading indicators say what they say >> for 13 months.

>> and it's a matter of when not if. >> it's the when not if. i think the most important chart and discussion there is the level of excess household savings for u.s. consumers, which is still elevated and coming down. deutsche bank had a note out this morning, end of year, federal reserve had a working paper, end of year that's when the consumer's really going to feel it. in the meantime, we're getting signs of weakness, pockets of weakness, but a lot of pandemic-related home depot, walmart show it's not in discretionaries, it's staples. that's the hangover from covid. >> the extra cushion seems like it gets worn down by the end of the year on the other hand, why is the fed still vigilant it's wage growth you're above 4% annualized wage growth you wonder if you can actually have things get bad enough in that period of time in terms of the consumer where if you also look at thinge inaggregate reta

it's above pre-pandemic levels the nominal amount of activity out there, incomes and spending are so much higher than we were used to back then. do you have to squeeze that down to have a more moderate inflation picture. >> or is it old data and it's turning. >> or -- >> it will weaken from there, right. >> mike, thanks. let's turn to the state of housing and the fresh data we're getting this week. we just got existing, falling more than 3% in april while starts rise 2.2% builder sentiment up for a fifth straight month as home builder stocks rally on the year shares of taylor morrison up more than 40% year to date joining us is taylor morrison ceo sheryl palmer. what a day to talk to you. >> glad to be here.

>> when we see these sentiment numbers climbing, are you getting any indication those are false tells or some dynamic that argues otherwise. >> no, they're really not. we just reported a first quarter just a few weeks back and talked about the momentum we saw starting to build really in the fourth quarter but i think you have to go back to first quarter last year, carl, to really understand the story. everyone went to the sidelines with the volatility we saw last year obviously, compounded by just pure appreciation that happened. so, when i look today, we've had much more consistency around over the last few weeks we've seen a little more volatility, but certainly not as the levels we saw last year if you look at just the pure demand numbers and the lack of shelter we have in this country today, carl, over the next ten years, we need something between

15 and 20 million units. i think we have a good road ahead. >> we were just talking about, sheryl, what does the fed do with that? if one of the aims is to -- the major aim is to bring down inflation and shelter is a third of the consumer price index, if there's an inventory problem that's keeping things high and keeping demand strong, what gives there? how do they deal with that >> i think we've been listening for the last few days on the fed's next meeting and i think they'll have a pause right now we look at the curve and the difference in what we're seeing in short and long-term rates, the expansion that we're seeing, but i am still a believer that we continue to see the numbers through next many weeks. i don't know if it's the next meeting, sara, but i think what we really need is some stability for the consumer to understand where we're at

as we -- as the discussion became, we were more likely to see a pause. where we did see the consumer kind much take a deep breath and say -- i'm still a believer by the time we get to the end of the year - >> i would love to get your take on labor goldman had a note this week the impact of higher rates on constructionlooks somewhat underwhelming so far it's still hard to get workers they argue infrastructure act is just now beginning to feed into the economy. are you seeing any relief at all on the labor front >> yeah, not like we thought we would, carl. certainly as we got into the end of next year, when we saw starts slow down, i would say the front end of the schedule did see some relief but the pipelines and the backlogs has continued to put some pressure on the back end. and now we're seeing starts continue to move up.

i think the governor -- in the labor environment. the good news is the supply chain has leveled up quite a bit from what we've seen over the last 24 months now we need the labor to continue to catch up a lot of good work by the builders to help and we'll see what happens with commercial activity because that could actually be a benefit to residential. >> that's true if development on the commercial size slows a bit sheryl, pretty fascinating time we're in as well in housing. thanks for the time. >> thank you good to see you as always. thank you. >> sheryl palmer. up next, beat and raise for walmart. another sign that the consumer is still willing to spend or grocery and food inflation holding up the larger business we'll excuse. deutsche says recent data does not seem to support the view that rate hikes are done. their cio of americas is going jp ts ur tooiushiho

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story of the morning, walmart, reporting a beat for q1, sharp contrast from the likes of home depot, target and tjx. with more radio results on the horizon next week, let's check in on the state of the consumer with dana telsey does it just reflect the fact that walmart is 60% groceries and that's what consumers are spending on now? >> it's that and the fact of the

trade down you look at what consumers are spending on. you look at the value they're offering you look at the convenience of their locations, what they've done with digital. it all wrapped up nicely leading to better than expected guidance. >> can we look at the results over the past few days and really glean anything about the health of the consumer even home depot, i pointed out earlier, the consumer is in good shape, they're just not spending as much on their home because we have this big pandemic shift happening. >> look at what some companies have said. improved traffic consumers are going back to the physical store that's a good thing. you look at what they talked about, they're definitely more discerning in their choices. you look at bath and bodyworks this morning that was able to execute on better promotions that didn't impact their maip margins as much. retailers are learning how to promote and promote more effectively. i think there's more margin clarity than sales clarity you have a tough quarter to come

in the back half of the year that's the question mark, will rising interest rates impact consumers to spend on discretionary. >> we mentioned earlier this morning, food at home has been down a couple of months. i mean, is there a chance that discretionary gets a little -- a second wind in the back half >> well, it could. i think if you look at food and you look at experiences, look at travel, that's what consumers are spending their money on and their time on. look at what we talked about earlier, we haven't seen each other in person for a while. i think people want to see each other in person. >> i'm looking for signs about luxury cracking. that's been a strong part of the market i did note two things today. walmart noted the tradedowns from the high-end consumers coming to walmart and berberbur overseas, citing a weak environment. is luxury moderating >> yes, i think it's moderating

across the board you take a look at what worked for berbury. the lower priced entry items didn't work, the footwear that didn't work as well. we've seen moderation in some of the luxury good spending, too. you need that traveling, international consumer to come back keep in mind, have you checked out the new tiffany store? >> i haven't i heard it's fabulous. >> it is fabulous. >> what about the notion, we keep talking about different refresh cycles we all bought a grill during covid. you won't need one for a new years but you might be in the market for a new laptop if you got a laptop in the pandemic >> i think electronics are tough. people still have the same computer, iphone, and with hybrid work, you work differently with electronics giving what's happening with the zoom meetings that are

continuing hybrid matters. >> you're not that bullish on what electronics are doing >> no, i'm not as excited about electronics. i'm excited about the essentials and value. i thought it was very interesting yesterday that tjx called out the strength of apparel and accessories. why? they're getting better brands at value prices and the consumer's discerning. >> what's the most underappreciated story >> i want to watch what burlington does, what some of the vendors do also. i think pvh and ralph lauren pvh as the international bench ralph lawyeren is modernizing their assortment and that's interesting to me. and the off-pricers with burlington and ross. >> goose didn't gain do you know what happened there? >> keep in mind, it's going to be about the wholesale order every wholesale account is looking to reduce orders and retailers and brands will chase into the trends. >> has the inventory largely, though, been fixed

>> dissipated, but they're not getting new orders all of the wholesale accounts are minimizing their orders in order to chase into any demand they see it's going to be an at once order season >> how is department store, wholesale -- >> mixed dillard's said it slipped. not exciting >> we had running brand shoe on, and they are seeing growth. >> we could see that for deckers. >> foot locker. >> and what mary is doing. partnerships. >> beauty, quick, after what target said about beauty comps >> isn't that good for ulta? >> that's a read across ulta you look attribute and wellness, everyone is calling out the strength you know why because people are going out, seeing people in person. >> how long does that last >> there's more product innovation coming. lipstick is doing well, skin care did well during the

pandemic years and now it's about makeup >> right dana, thank you. we have mary dillon on tomorrow, foot locker ceo. dana telsey, thanks. coming up after the break, companies like ge and j&j have turned to spinoffs to drive returns. we'll look at data that suggest retail investors might want to do the same. cisco well off session lows after the company said product orders fell 23% in the third quarter. supply chain constraints a concern there but it was overall a beat stock up one-third of 1%

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some sad news to share with you. billionaire investor sam zell has passed away at the age of 81 he was a titan in real estate, specifically in reits. he was self-made entrepreneur, grew hundreds of companies during his 60-year-plus career he called himself the grave dancer because he bet on distressed assets. he was also an active

philanthropist with a focus on enentrepreneurial education. he started several programs at university of michigan, where he went be, university of pennsylvania he was a regular guest with us on cnbc. he was just on with me on "closing bell" three months ago in february and in a very sam zell way said the fed had screwed up he will be missed. our thoughts are with his family we'll be right back. go. go brain. no, not that one. go this one. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem is the brain for smarter, safer and more sustainable performance. go plant go. go boldly. emerson.

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european markets closing right now. mostly higher with autos and tech leading the gains the german dax hitting a new 52-week high up 1.4%. the big mover, british telecom, bt, saying it will cut between 40,000 and 45,000 jobs by 2030 in asia, japan's nikkei continues to be on fire. hitting multiyear with the etf on straight for third straight positive week. it's being led by two semiconductor names. both up double digits since monday global chipmakers like taiwan semi, micron, intel, they're turning to japan for major

manufacturing investment and production, carl this is the definition of friend shoring. we're trying to make the u.s. a hub for manufacturing semis and japan as well. micron is building a plant samsung is looking to build a plant as well. they're trying to diversify away from taiwan, obviously, and counter china. it's an important step it's also just continuing to make japan a darling for foreign investors. >> not bad timing given the g7 this week. it's not just japan. some news about amazon and maybe tesla investing billions in cloud infrastructure in india and in the auto business so, yeah, the -- >> india and japan seem to be -- >> moving away from a china-only supply chain is huge. >> mexico, india, japan, those are the themes, anti-china trades in investment. >> meantime, back home, turning to a recent trend on the street,

companies turning to spinoff to boost returns. our seema mody joins us at post 9 to talk about numbers. >> following years of mergers and acquisitions we're seeing companies mainly in industrial and health care space increasingly looking to spinoffs many have been successful. look at j&j which spun off, kenvu, and ge health care, which has been a standout, up about 40% since going public, outperforming ge and the benchmark. in fact, analysis from morgan stanley shows that spinoffs outperform the market on average by 10.2% two years after a listing while the parent companies see their stock prices drop on average by 8.1%. we continue to see new deals so far this year 73 global carveouts compared to the 78 we were at this time last year. that data according to iq. david governor telling us, we should expect more deals as

tighter credit conditions reduce interest from private equity >> the slowdown in the ipo market coupled with a slowdown in more broadly the private equity landscape has led to strategic thinking about the art of the possible as they evaluate the mhs board, and increasingly corporate separations, so-called spinoffs into mergers are becoming a key part of the tool kit. >> also adds spinoffs are helping ceos simplify their message to wall street as investors look for more pure play opportunities upcoming deals we know of, there's 3m in the process of spinning off health care later this year, ge's power business will go public in 2024, and there's kellogg with that spinoff expected end of 2023 so, a lot -- >> three companies >> alibaba, too, gave an update. >> with plans to push forward of the spinoff of their cloud

business, $12 billion spinoff. and ceo daniel zhang said the goal is to really simplify the structure. one of my favorite stats is, if you look across the s&p 500, two-thirds of companies have three or more segments that are making $500 million or more. they're just all this unrealized value a lot of people would say is really driving this spinoff trend. >> it's going to be interesting to see what's the larger dynamic, consolidation in certain areas, like media, or like this. >> it depends on what sector we're looking at some businesses consolidation makes more sense when you look at the industrials and pharma and broader health care where we've seen years of m&a and growing out their inorganic pipeline, at some point do they shrink to grow, do they find those opportunities to spinoff? does that create an opportunity for investors at home, especially with data showing spinoffs on average perform better than the parent co.

>> we talked about the conglomerate discount, people want pure plays. don't give me a basket, give me a pure play. >> look at the explosion of pure play traded funds. give me wind, renewable, solar, tangible ways to play those specific assets and subsectors. >> thanks. turning to a note this morning getting our attention, that is truist, downgrading proctor to hold saying the company is operating at its liest level in the last 20 years. what's driving the call? on cording to our next guest, it's been so strong there hasn't been catalysts bill schapelle the note got a ton of interest this morning you're not sure investors are paying enough attention to what may be happening to the consumer after several quarters of price hikes. >> yeah, thanks for having me. exactly. you look over the last six-plus

quarters for p&g and they beat every quarter on the top and bottom line, which has been fantastic and they're operating at a high level. but volumes have been down six out of the past seven quarters we expect that to continue and the belief, we've heard from investors, from the press, from whatever, p & g can continue to price the high-end consumer so strong, they can take that price and no problems ahead. but if volumes continue to decline, that's demand destruction. people are using less of the product or trading down to a different product. at some point, you have to address that or the consumers will never trade back up >> what we hear from p&g is consumers aren't trading down, that elasticity remains much better than in previous cycles and they don't really see -- they don't really see signs of weakness from the consumer are you saying that they're underplaying it? >> i'm saying it's too early to make that call

i view this last quarter with p&g and many consumer companies had great quarters and continue to raise prices as a lagging indicator. that was similar to what we saw in '22 not necessarily a leading indicator of what we'll see for the remainder of the year. you're seeing commentary from target, home depot to others that you're seeing some cracks understand, this is not a call of we're going into recession. this is a call of people who are buying crest with softening and whitening and sensitivity for 5 bucks, maybe they'll take a couple things out and buy one for 4 bucks. at some point, it's -- at some point after 12, 18 months you're tired of paying 5 bucks for toothpaste and you will trade down. >> i don't know that you need sensitivity and whinting in one toothpaste i get your point the other bullish point i hear is this is a very different company than it was in previous cycles it's a much more focused company, as you know we were talking about shrinking

to grow. they got rid of a lot of the brands, got super focused, they had nelson peltz on the board and totally transformed the way they are going into this cycle, they're in a lot stronger shape. >> absolutely. i wouldn't doubt that at all it's remarkable what they've done in the last five years. this was the least loved consumer staple company five years ago. mark taylor came in and now john muller came in and got them around, they got out of 100 brands they focused on cost-cutting and superior products. it's running at the highest level or best level in the 20 years i've covered the name. but at 27 times earnings, which is four to five multiple points higher than five-year, ten-year, 15 or 20-year average. at what point is that fully reflected in the stock price. >> i guess the question is, what do you prefer? do you graduate to a k&b or are

there other less obvious examples >> no. i mean, i think it's the coke, it's the beverages you don't have to worry about tradedown or a weakening consumer for beverages they didn't take as much on pricing over the past two years as hbc names did and so that's where i'd more lean you bring up another point the other thing that's interesting right now on p&g, it's gotten a lift clearly because of the banking crisis and the flight to safety in past cycles, p&g had a 4% dividend yield and treasuries were 0.50% it's a different flight to safety and that's also the concern that this doesn't hold up as long. >> on the flip side, aren't all the input costs going down - >> and 4x. >> and 4x is working in their favor a little more? >> absolutely. we expect, and i think everyone is modeling for gross margin expansion in the back half part of it, there's no surprise factor they've beaten six straight quarters people are already modeling

hundreds of basis points of improvement next year. and so -- and the key thing to understand with p&g, they don't hedge anything they don't hedge currency, they don't head commodity the only large cap staple name i know that does that. you're also banking that nothing goes wrong in the next nine months if you do, it will immediately affect those margins in that forecast i'm not hoping for something to go wrong, but something goes wrong once a year every year. >> well, after the run from the october lows, we've been waiting for a call like this you're the first that i've seen, bill we'll keep our eye on it thanks >> thanks for having me. >> thanks, bill. after the break, could the debt ceiling debate drag on through september? deutsche bank arguing that their cio of the americas joins us next. take-two surging after they said the release of grand theft auto 6 is a little more than a year away. cnbc celebrating asian american and pacific islander

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wall street is excited about the ad tiers and conversation yesterday. lori logan suggesting there's no need to end rate hikes and our next guest agrees adding last month over month cpi. joining us, deepak puri. >> you could argue either way, sara i think what fed governor logan is saying that there's still enough, very off the comfort zone of the fed. 2% inflation is something that we can aspire to this year or next, and the labor market is being so tight, so why give the markets this, you know, pause signal, why not stay a little bit on the hawkish side and then see how the markets react. on the other hand, you have governor jefferson saying the monetary policy should be forward-looking. it needs to take into account what's already baked in.

you look at the regional banking crisis, the credit tightening, you're already seeing a good argument could be made it's time for a pause. so i think right now it's a difficult balancing act for the fed to go through whether they go and hike because that's what just one data inflation is warranting, but when you look at the overall broader picture, it could be easily said it's time for a pause. >> i totally agree we argue both sides every morning. for the equity market, though, isn't the bottom line that nobody's talking about cuts. in fact, we're still talking about whether they should keep hiking so, is that a big risk for stocks >> it is to an extent. i think almost all of ours have completely underestimated the wealth effect, the income effect that the pandemic era created. i mean, you're looking at demand number that is still pretty strong i mean, who would have thought that even after 5% of rate

tightening we're looking at 3.4% unemployment rate and retail number the way it is and a whole host of other data points that still suggest there's pent-up demand, still decent reason. and on the equity side, sara, the one thing i will say, i think there's also been a reality check on the corporate america side in a way that companies have also figured out that the rate regime is going to be very different for the next few years than it has been for the next decade and a half they need to clean up their act or get cleaned out, in a way they are much more efficient using better technology, supply chains are getting simpler, business models are getting simpler and i think that's helping the cause for equities. >> i wonder, sometimes we talk about australia's central bank where they signaled a pause, came back for a little more. is that seen as a mistake or is that something the fed could try to replicate in their framework? >> well, they could try but i think australia's economy is a

little different they were the first one to embark on ycc, you have control along with japan a bit different dynamic, but on the other hand i think the fed, as jay powell has said, it needs to be meeting by meeting, state, course corrected my concern is if it's truly data dependent and the data comes strong, would the fed increase rates, to our initial point? would the fed have the ability to bypass what therates market is suggesting, which is rate cuts by the end of this year >> so, you're also kind of cautious on the debt ceiling you expect this to play out into the fall, right? i guess i'm trying to read what your view is on stocks given some of these big risks. >> yeah. i think you cannot be overly pessimistic and bearish at this point in the cycle you know, last 15 months this is the time where inflation has started to come down

agree it's still compared to where it should be, but the fed is most of the time it's on a pause. it's not increasing rates. it hasn't signaled there's going to be more rate increases. inflation coming down, fed on a pause, let's say, labor market still very strong, consumption reasonably high. it's difficult to be overly pessimistic -- >> buy cyclical stocks >> if you're looking really for the next couple of months, then your blueprint is 2011, 2013 when tech stocks did the best during that time frame so, that's why large cap tech names does well, defensive, utilities, consumer staples are doing well again, this is the debt ceiling related time frame overseas markets, one could look at european equities, japanese equities for the first time in a long time and on the rate side have a barbell approach,

short-term view, and if you're really concerned about recession, we haven't talked about it, then you should look into long data treasuries because you are going to see, you know, a bid there at some point. >> do you think the market is efficiently trying to price in the effect on net margin or profits from ai? some of the numbers we're looking at are crazy >> absolutely, carl. there's no doubt in my mind this earning season, one of the key takeaways for me is this ai talk human psychology, it's very easy to have all the negatives very clearly lined up, but we always miss what's positive, what can be really a game-changer for the risk for spreads to come back. i think that's where ai can play a major role. >> do you buy this 400 basis points to margin >> it's a little too early it's a bit premature one could argue. you need to see more commercial viability on some of these things that look very solid on paper. but at least it's a trend.

it's something i don't think is going to go away some time soon. >> a lot of talk about the product growth and margin expansion. thank you. still to come, the breakup of baba. we look at the future for the company's cloud and ai unit next plus, meta is definitely on the top of mind this morning 11 years to the day since the company then called facebook went public. there's a look at mark zuckerberg on that day a return of more than 530% since 2012 the stock has doubled this year alone. stay with us

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watching alibaba as its oun company and that's the focus of today's "tech check" with deirdre bosa hi, dee. alibaba's spinoff plans have been well telegraphed. maybe the most surprising is the stock has gone nowhere since it was announced. at the end of march when alibaba said it would be splitting into six different units, investors celebrated the, quote, unquote, unlocking of value it was 14% higher on that day. since then, however, it has been a laggard underperforming the broader markets and completely sitting out of the big tech rally. now keep in mind baba is a nearly $225 million market cap

company, it has its pulse on the chinese consumer, with the reopening of the second largest economy and its cloud unit, the third largest by market share ahead of even google so you might think that the spinoff of that business could further allow it to grow unfettered and gain share, but shares are down some 5% almost last time i looked 3.7. ali cloud was a weak spot contracting 2% and is facing competition from players that are, guess what, better connected to beijing it's often the story here, thanks to government contracts so that may not bode well for the other spinoffs including alibaba's logistics and grocery units. remember there's going to be six total and, guys, it could be a cautionary tale to our own regulators on breaking up big tech, something that isn't likely to happen but is often talked about we hear it could unlock value, but it could shine a light on slowing or challenging

businesses we talk about amazon and its cloud business, which is often cited. that business is slowing as well you break it up and that could amplify the slowdown in the business that is a profit engine >> it's interesting. the macro there is not turning out to be as bright as we thought, dee and "the journal" has a spot about china having a spymaster on a corporate crackdown, another headline that makes investors nervous. >> global investors were able to sort of look past the regulatory uncertainty, the idea they could meddle whatever it wanted to, because this is a growth story n. a word, that's turned out to be underwhelming the economic data hasn't been that good. alibaba, one of the barometers of economic and consumer and business enterprise activity in china and it's underwhelming investors are looking elsewhere for growth as we always talk about, china can be a trade, if you think there's something to do here even that as a trade when you

think about splitting up companies like alibaba and jd.com, it's turning out not to be as exciting as investors thought it would be. >> maybe that was the whole regulatory goal, deirdre, to begin with >> yeah, you think about it, it really disperses data and that monopoly power that beijing had accused alibaba and others of having so maybe that is the point, and it gives a leg up to other companies. there are names that have grown bigger and bigger and had less pressure because they didn't start from such a large point. speaking of china, wl al street buzzing about a tiktok ban. that story coming up after the break.

wall street is buzzing about montana this morning after the governor signed a bill yesterday banning the app tiktok from operating inside the state, a bill that will certainly face several challenges legally and logistically the way the legislation plans to enforce it, carl, tiktok, apple and google, the app stores, get

fined if it operates in the state, not individual users, for instance, but american civil liberties is raising a fit saying it's an infringement on the first amendment. it's interesting if a state can ban an app, an app as popular as tiktok the good thing is it's the eighth smallest population in terms of states in the u.s so not quite the uproar like in california >> we've seen it in government agencies, in the u.s. and abroad we turn to a series of stocks that might respond like meta, like snap, even apple and google by the way, as for meta, anniversary of the ipo, as we mentioned earlier. and citi does make it a top pick, visibility across the internet space is getting better and advertising is normalizing we know the tail winds reels has had. we'll see if it catches steam. we're also watching the rally today, and it's building at least in terms of momentum,

and it's not just big tech we're seeing highs in some other names as well. >> ge, mastercard, and then oracle, microsoft, nvidia. i think i saw darden in there as well, take two a pretty nice rounded group of 52-week highs. we'll talk soon maybe about whether 4200 is a ceiling again for the bulls. can they manage to crack that? >> pain trade seems to be higher with the bearish sentiment and positioning. we'll get more reads on the consumer all weeklong. we had walmart today which was good tomorrow footlocker will be out. we'll speak to ceo mary dillon on this show on earnings that stock is up 11% this year, considered a turnaround under her watch. she used to lead you will at that ulta and had a very good run. >> we didn't really mention the schwab debt raise from last night. the three best days for the kre i think since 2021, so how

quickly, and can we keep that out of the conversation? >> that stability certainly bodes well for the economy and the overall system and not so much for the fed if you think the fed is leading to pausing and cutting rates this year. >> plus balance sheet this afternoon, we'll watch for that. >> always. always juicy we never used to care about it otherwise. >> let's get to the judge and "the half. carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center this hour, bubble or bonanza? what is the real story with ai stocks whether it's time to buy into the hype or not, we'll discuss and debate with the investment committee this hour. joining me today josh brown, jenny harrington, jim lebenthal. let's check the markets. carl and sara were just talking about it nasdaq is the leader today, up better than 1% it's not just tech but is led by tech so we're 134 to the plus side on nasdaq the s&p 500 is up half of a percent. the dow is down. not a surprise that the