>> dow is down $250. we're watching the talks on the debt ceiling you heard the speaker before we got on air doesn't sound like they're close. political posturing, probably. spin from both sides, probably we'll see if they can come to a deal before that june 1st deadline i'll see you on "closing bell. "the exchange" is now. ♪ ♪ thank you, scott and welcome to "the exchange." i'm kelly evans. here's what's ahead. still no deal. like you just heard, house speaker mccarthy says the two sides remain hung up on the central issue of baseline spending the central issue, with only days before we might hit the debt ceiling that update sending stocks to a session low. only two names are positive right now. but our market guest says my debt ceiling risk may be to the upside on the other hand, the worst is yet to come that warning courtesy of investor don peebles

he's back with us live with how much pain he still sees ahead and where he sees opportunity also as a result police, jim cramer sees a genuine bull market underway in one particular area of the market i bet you can't guess it it has nothing to do with ai we're joined today with where there's more upside and the names to watch let's start with the markets, though, and get the full scoop from dom chu >> decidedly down today. but i'm going to show you where i'm seeing a bull market as well so we'll see if what jives with the analysts the markets have been down all day. as kelly mentioned, we drifted towards the session lows after house speaker kevin mccarthy really kind of told us all that the two sides are still pretty far apart on a debt ceiling deal so the dow down about 260 points, a similar percentage loss for the s&p 500 remember, we were in that 4200 points before, just hovering above 4100, down 36 points,

almost one full percent. again, tilting toward the lower end of the trading range today the nasdaq composite off almost 1% 12,438 i mention ed where that bull market was the housing market is where we are seeing positive signs. we're off session highs right now, but toll brothers, after the closing bell yesterday, better than expected profits and revenues, helping to put a rising tide among a lot of the home builders out there. lennar up, dr horton, among some of the green names the ishares is up one quarter of 1%, as well. so maybe some green there in a sea of red and two of the retailers big in focus. we have kohl's and amber com by and fitch. kohl's, we were up 16, 17% at

one point earlier today. better than expected results at that department store retailer meanwhile, flip it around to abercrombie and fitch, teen apparel and retail, up 26%, and that, by the way, is off the best levels of the segsz ssion h now, so it's up a huge amount as they raise their forecast. so a couple different moves. kohl's down over the last year over the last year for amber com -- abercrombie, i will add mitt back in my teenage years i did wear what's old is new again, kelly >> absolutely. dom, thanks. stocks hit session lows after speaker mccarthy's later comments on the debt ceiling, saying talks are still hung up on baseline spending are we close to a deal kayla is at the white house with

all the latest hi, kayla. >> reporter: the answer is no, they're not any closer to a deal negotiators are meeting just across the way from where i am right now. that meeting started at noon despite the fact that negotiators are now on the different end of pennsylvania avenue, they're pretty much stuck in gear. and that is this dispute over what spending levels for the next two years should look like. the white house proposed freezing spending levels, essentially at the last fiscal year and then a slight decrease for the next two years republicans say no the freeze is not good enough. it needs to be cut even further. so that has been the position for the last several days. and even despite speaker mccarthy leaving the white house on monday saying it was the most positive meeting he's had yet, he's still not entirely optimistic about how this is going to go, and when asked what republicans were prepared to offer in the way of concessions at today's meeting, here's how the speaker answered >> i'm willing to make america stronger, to curve inflation,

less depen dan si on china and spend less than we spent the year before. >> reporter: so essentially, that is our plan is the plan last night when other republicans who are part of these negotiations were asked what republicans would cononced they said raising the debt s.e ceiling is what republicans will do the real pain begins when treasury has to make choices about how to prioritize its bills. we will see whether there's anything that results from today's meeting, but some negotiators are not optimistic about what could come. >> the market is starting to reflect that kayla, thank you my next guest says we've seen a lot of pain in real estate, particularly office space. just two days ago, jpmorgan's

ceo jamie dimon warned of more pain ahead here's what he said. >> real estate, it will be certain locations, certain office property and construction loans. it will be every bank. it will be some may have an issue with real estate private credit, if you ask me, there may be someone off sides there. >> my next guest raised the flag about office concerns on our show back in december. he says the rapid rise in interest rates has been nothing short of catastrophic. and the worst is yet to come let's bring back don peebls, chairman and ceo of the peebles corporation. before we dive into all that, don, a comment about the debt ceiling, how are you thinking through this >> i think they'll work it out i think there will be some compromise on both side. spending is out of control, they need to cut spending and they need to prioritize how we spend our money but i think speaker mccarthy and

joe biden will make a deal, and this will hopefully be put to bed for the next three years, because that's what they've been talking about, as well >> do you ignore it, then? whether it's looking at this from an executive or investor or whatever point of view, are you literally keeping your hid down and not paying attention to it >> yeah. i think it's more static, it's more noise the fact of the matter is, the speaker and the president are not going to let the country default. we are not going to get to that point. they will compromise, and they're working diligently to do that i don't think anyone on either side of the aisle would want to see our country paralyzed and us not paying our bills and americans suffering for that >> sure. it will be hard to ignore completely if it's unclear if this will play out over a week, four weeks, eight weeks. what is the most important thing to focus on in the meantime? >> i think they're focusing on what is happening in the economy. interest rates have chilled the economy. i mean, they're having

devastating impacts on commercial real estate as jamie dimon indicated, that will create some significant stress on local and regional banks. not everywhere, but in major markets around the country, there will be significant stress in those sectors, because these banks are making 80% of the development loans in the markets. so as a result of that, they're going to have some serious stress coming. that's not just on the development loans but the acquisitions and repositions loaning, as well but there's a lot of stress in that sector. the worst is yet to come we'll see some other banks in trouble. >> i was struck obviously, we were following the news with pacwest there, doing what they can to off load some assets and a business focused on real estate investment. are banks being proactive enough here >> i think that they're trying to figure this out, because they were making loans at lower leverage in sectors that were performing very well with good, strong fundamentals.

especially on multifamily residentials and because of this rapid rise in interest rates, what was a very strong sector is now in trouble. and i think that they're trying to figure this out with the hope that things will stabilize and some are being more proactive and selling off their assets in places they think are trouble. but the buying is going to be a much lower prices, and next year we're going to see a lot more as these interest rate caps start burning off when these commercial real estate loans, multifamily and office buildings. >> we have jumped from one topic to the other while everyone is aware of the pain in office, the pain could be just starting so do you think that will end up being as big a problem area as office, which has its own pandemic issues. >> there's a continued demand for apartments as the housing market, the for sale market continues to tighten up, there's a greater demand for

rental properties. the problem is the fundamental decisions in the beginning that are going to get people in trouble. apartment buildings were selling at below 4% cap rates. so the expectation of those buyers were that interest rates were going to continue to stay low or they were going to have moderate movements but they didn't. they more than doubled now as a result, these projects are no longer fundamentally sound, and you can't move rents quick enough to offset it. so i think those types of investments are going to have some trouble but mainly in the private lending community, as jamie was mentioning and also, i think you'll see it with the funds that -- pe funds that have made equity investments, i think their equity will get wiped out in those places >> it may be quote unquote private. but when it buckles backto pension funds in terms of losses, there will be an impact. this is the first time we've heard from you since the bank collapses in march

you sound a lot more concerned, i think it's fair to say do you think that fed policy should pause, that the economy is going to be much weaker than is currently appreciated >> yeah. i think the fed was too hyper focused on consumer spending and not must have focused on the overall ripple impact. if you think about the commercial office building sector, and how that was fundamentally changed as a result of covid and remote working, it was already struggling in some of the cities like new york where they're high tax and businesses were leaving. but once covid changed the way americans went to work, that created a great deal of stress and then now to double the interest rates on those assets, they basically are -- they have no way to survive. many of the property owners, some of the strongest companies in the commercial office building sector, stocks have plummeted, and they're defaulting on loans. if you look at sl green, they

are in the epicenter, because they're new york city focused, and they're office building focused. the stock is down significantly, and they're talking about selling assets and giving it back to lendors. that is an example of what's coming but they're not the only office building owners. the entrepreneurial firms and property owners, they're going to start having greater stress and they're not going to be able to hold on so 2024 is going to be a very, very tough year for this sector. throughout 2023, we'll see some problems but 2024, 2025, you'll see significant stress and value loss and value erosion >> quick final question for the individual investor who may be thinking, i don't know if i take this point of view, how do i make it investable you can harvest the yields that -- the high yields still on offer and a lot of different cash-like things what could this kind of investment theme be here, as we

see -- you say the worst is yet to come, and there's still a lot of pain to be felt >> we've always looked at real estate from an opportunistic perspective. we are partnering with two large investment firms to raise a couple billion dollars to go and buy distressed office buildings and convert them into other uses so i think that next year is a time for investors to look at where they buy office buildings, not for office building operators, but for those who are going to convert those office buildings into other uses like residential, hospitality both sectors are going to be pretty strong, and the office sector will have such significant discounts. that could be the first place to look to make investments >> and i was thinking it looks like we're going to have a miami denver miami playoffs. l.a. and boston, it's the decline of some older cities,

the rise of newer ones that you are emphasizing. we'll see if they make it that far. don, thank you for your time today. >> thank you >> don peebles with the peebles corporation. that bleak outlook for commercial real estate is why there is worry about regional banks. but one name was called out with a fortress-like balance sheet with a lone-to-deposit ratio of 41%. and they're saying it's well positioned to take market share in a difficult environment he's talking about frost bank, and that stock is down today, but on pace for a positive week. joining me now is phil green, chairman and ceo phil, great to see you again welcome. >> great to see you, kelly thanks for having me >> so many people have referenced the texas bank failures of the '80s when they talk about what could happen but it seems as though the texas economy and texas lenders look okay am i going to regret saying that >> i hope you don't. i went through the 1980s with frost bank, and this isn't our

first rodeo. this is not the 1980s, and the real estate markets that we're seeing now are really not indicative of that at all. this is definitely not the '80s. i think that one thing about the texas market, admittedly, that's where i operate and where frost bank is doing all of our business, is that 1,000 people a day continue to move into the state. that means that they need housing, they need multifamily and places to work so it's been a good thing for us >> even if the fundamentals are strong, you could still be guilty of being too profitable in 2021, when valuations were much higher, maybe funding some projects because of office changes or real estate supply, multifamily now don't look so great. talk about the discipline you have or if those were areas where you would be active in the last couple of years and where that leads you now >> you know, you make a great point. the fact is, it's not what

you're doing at this point in time, it's what you did three years before and how you underwrote deals and the kind of people that you bank and the structures that you had. you know, we report on our conference calls every quarter how many deals we lose to structure. we lose many more deals to structure, and those deals we lost at that point looked better and better today so it really has to do with banking with great people, not transactions and making sure that your structures are right it all works out if you're doing those things >> that said, do you still face funding pressures for having to pay whatever you pay on your deposits and not earning as great a return, if customers are shying away at 9% rates. >> yeah. you know, i think for the banking industry today, we moved beyond what was happening with silicon valley right after that. what we're hearing, not just ourselves but from our community banks and just for example texas

has about 450 banks, we bank about half of those banks. what we're hearing from them is a lot about the dust-up has settled down what we're trying to do now is figure out what cost will it take to grow deposits and maintain the ones you have that's more of an operating issue. that's a business issue opposed to the kimsd of liquidity issues people were dealing with 60 days ago. i think that, you know, it's something that they're all going to have to look at, and they're going to have to look at their cost structures and what it takes to be successful >> the last question is the biggest hanging over the whole industry right now do we need to change deposit insurance or not do you feel hike you're at a disadvantage because you're not on the same playing field with a jpmorgan with an implicit government guarantee >> you know -- excuse me you know, i don't think we need

to -- i think it's a moral hazard, but we're a 155-year-old bank that's been through a lot of things. i was reading our 1933 annual report and the chairman at that time railed against a program that today we call the fdic. i think it's not something that we need to do, have universal insurance. i think it's important for us to get past this developing stigma around uninsured deposits. the commercial bank model doesn't operate on a fully insured basis. let's take a developer that wants a $50 million project in a community that will create jobs. are we supposed to cobble together all of these $250,000 savings accounts and lend it to them what are those people supposed to do when they want mortgages and credit so it is a situation where we

have a noble profession of bringing together people who have access funds, people who need it. you don't have to be the smartest guy in the world, but it takes probity to do it. and i think we really need to get ahold of that, because that's how we grow community you can't grow a bank or a community on scared money. >> you're reading the 1933 letter to shareholders >> i'll admit that i do. >> phil, thank you so much for your time. really appreciate it >> thanks so much, kelly coming up, are we still in a stock picker's market? my next guest is a fan of broadcom and pal alto. is it time to take profits with both names hovering at record highs and where do you put the cash to work next? nvidia, elf and dollar tree with results

as we head to break, here's a look at the fkt mass, just off session lows dow down 250 the russell small cap, back in the red today. and the ten-year yield at 373. back in a moment

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welcome back to "the exchange." today's hot stock is pal alto, popping 8% on what has already been a good year, after a strong q3 earnings report my next guest has been adding to her position since last fall is it time to take profits she says not so fast joining me is nancy tangler. welcome back, nancy. >> good to be with you >> you've mentioned pal alto a lot. i should havestopped you and said wait a minute, get everybody on board because wow, what a performer this one's been. >> this is a company with a nice secular tailwind behind it that will drive growth into the future now they're introducing the omnipresent ai into the narrative. in fairness, we have had to trim it in some places, but we still own it in a very large commitment and three of our strategies so i think this is a company

that you just wait, you take your time, and may is giving us a lot of volatility, which is a friend to long-term investors. so you look for the opportunity to add to your holdings. >> there's been a great debate all day going on at what point do you take profits? they have been on great runs you have a bunch of candidates that you are looking at to make a move like this are you sticking with it, or should people who are now looking at the story thinking okay, i missed this move or there's still time to get in and chase it >> so kelly, i think i mentioned, i just finished the second edition of the women's guide to successful investing. i use a case study of my clients that 30% of his net worth is in apple. i said he should take some off the table, but he's been right and i've been wrong. portfolio managers do trim because it's a tool that we have we don't want the market to make our allocations, but when you

have a great company with a secular growth narrative, it goes against my instincts, but often times you should hold on and continue to. that's built great wealth for many of the billionaires in our culture, because they started companies and held on to the stock. >> it's so true. it's the buffet thing. so many different followup questions, but because amazon is having a shareholder meeting, we'll talk about that one. people hate the retail business, maybe love the cloud but nervous about growth prospects what do you see there? >> i see a great brand, and i think a good management team i think andy jassy is being tim cooked the market underestimated him and continued to say he's not a great ceo, he's not innovative they were wrong and he was right. so jassy brought the cloud business to amazon i think he needs to be given a

little bit of time the stock is up quite a bit, but it has the potential with the cloud business, with advertising, with retail, there's a lot of levers to pull at this company. sometimes i think some of these companies get underestimated because they have too many good businesses the microsoft problem. but you use this as an opportunity that the volatility to add to holdings, and this is when you want to continue to hold i calculated the returns i can't remember, but it's some ridiculous number. and there's been a lot of ups and downs. >> they're all up there. it's not just tech, and people, lulu, and o'reilly, that one with auto zone looking a little more questionable, maybe not so there are some consumer names, obviously the growthier ones >> yeah, and kelly, really quickly, one of the things that investors can do is sell stocks for all the right reasons, which

we did in starbucks, and we were wrong. si it is a great brand, obviously i had concern over management, labor, and china but we were probably wrong about that so when earnings came in disappointing, we stepped back in if you own companies with excellent management teams, you can own these stocks for a lifetime you don't need me to manage your portfolio for you. you can do it yourself >> i was going to say a good mother's day gift. maybe a good father's day gift, i don't know quick final comment in terms of the market overall do you wait to be opportunistic if we're going to get a downdraft ahead or is it full steam ahead at this point? >> we talked a lot about volatility in may. we'll get it through the summer. this debt circus is driving the volatility one of the things that investors are missing, when you go into a

recession, if we do, not a little gdp, except for two periods, the great financial recession and 2020, nominal gdp has grown 4% to 5%, and that has a correlation to corporate earnings so a lot of this was discounted last year, and we are in the beginning of a new bull market or the continuation of a bull market so i would just continue to add in a very disciplined manner i bought some microsoft personally last year than at higher levels. i bought some on the bottom. that will make money long-term where it sits today, you don't feel too bad even if you paid $250 for the stock so some of these stocks, you're getting paid with a dividend to wait so that, too, is an invennincen. >> there's microsoft at $313 nancy, appreciate it good to see you.

nancy taylor quick programming note, a special edition of "power lunch," the power of ai friday at 2:00 p.m. eastern we'll look at how it affects everything from music to entertainment, restaurants and the labor market that's this friday still ahead, energy is far and away the worst performing sector, down 9%. the s&p is up 7% are some of those stocks too cheap to ignore? the staggering stats we haven't seen since the 'ninths ahead and it's the only sector actually in the green today, real estate and financials are the worst. "the exchange" is back after this

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welcome back to "the exchange." we were down a little more than 300 points at session lows, off that right now but s&p is back to 4112, as it fluctuates the china etf is on its pace of eight straight weeks of losses, the longest since the summer of 2021 news flow out of china is simply not helping kweb ely lily reiterating their buy, at $500 a share. lily has 19 buys, 7 holds and one underperform rating on the street for more on that call, go to cnbc.com/pro and now over to tyler mathsen.

>> there are many people that say that drug may be the biggest for any company. now to the update. 95-year-old australian died today a week after a police officer tased her in her nursing home police say the woman, who had dementia, approached the officer with a walker and steak knife. the officer has been suspended without pay and is facing charges that will be likely upgraded following the woman's death. the federal agency that keeps the nation's nuclear secrets is vulnerable to insider threats. the government accountability office says the energy department failed to act on recommendations from four reviewers, leaving holes in protecting classified information. the gao says failing to act on the report could heed to devastating consequences amanda gorman's poem that won

acclaim has been censored at a florida school a parent at the elementary school in miami-dade county complained about the "hill we climb" claiming it had hate messages and wasn't educational. a review panel responded by moving the poem to the hi b library's middle school. she says she was gutted by the decision >> thank you, tyler. coming up, elf shares have quadrupled is nvidia's valuation justified at 65 times forward earnings and can dollar tree continue dominating discount retail that and more, next. at adp, we understand business today

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welcome back nvidia is the headline, but not the only earnings action today let's get the action, the story, and the trade on that one along with elf, is it elf or e.l.f.? >> your choice, kelly. >> i don't know what it is >> reminds me of the band back in the day then you think about will farrell. >> either day. jeff is here, a cnbc

contributor. let's start with the biggy, nvidia their shares are lower in the print but they have surged 50% since the last report and more than doubled this year they're the best performer in practically the whole market so what do you do with the stock? >> beyond the stock, you have to hold it here we're talking about percentages. yes, up over 110%. in 2022, we were down 50%. so if you look at the price, and price is important, the price right now is $300. that's where we started the year in 2022. so a stock like this, this is a high-flying name but nvidia, the last two letters, kelly, are ai you have to think about the nucleus of ai, and this whole movement every single store we've heard this earnings season is fantastic. look at pal alto, cybersecurity.

what do they need for cybersecurity? chips. at the end of the day, we're back to where we started at this $700 billion market cap. >> a lot of companies were happy to be back where they were in january of '22 >> i would love to see it was overbought going into earnings, but it was up 15% in the last 30 days so yes, there's apprehension, but there's more room to run but ha is key about this earnings cycle, when you talk about, are they going to be absolutely, you know, going into this season, you talk about the chips, are people really hoarding those chips remember the toilet paper they were hoarding during covid if they just allude to the fact that we are going to see more focus on ai, the stock will move higher just on that forward guidance >> interesting you see this next one was an ai stock, but it's elf, which is acting like an ai play, up more than 50% this year, up 300% over

the past year. the beauty category has been strong thoughts on this stock talk about an under the radar high fly >> this is a $5 billion market cap. this is a much smaller player, but if you own the stock, i think you have to be more considerate of risk mitigation so we talk about options i think you can sell the 100 call you're going out 23 days that expiration allows you to bring home some income then you will buy that $75 put so that spread costs you 50 cents to ensure your position. so if you see this 300% appreciation, you lock it down however, you see exaggeration in a stock like this, it's a 50 times forward earning, i would not initiate a position, but protect it utilizing options >> interesting

can i call that a bearish take >> you will kcan call that apprehensive no one has ever gone broke taking profits >> dollar frtree, up 10% this year guidance, recent trends, store expansions and openings, a long-time rival with this with dollar general, which is perceived as maybe a better operator >> it's interesting, dollar tree, they have brought in a new talent you think about what the talent they're bringing in, the distribution they have, over 8,000 stores so i think yes, as it sits in between the 52-week range, there's an opportunity to buy this name, because they're going to continue to reinvent the talent they're bringing in i like that. this is lock in step with the

s&p 500. but there are moments in time where the dollar tree has the ability, and a name like dollar tree should prevail. >> what about the vix above 20 today on what is a little more vociferous of a down move. >> we look at volatility all the time the vix is exaggerated in the fact that a couple days ago we were annoyed with the debt ceiling drama. now we're getting a little bothered so we haven't moved into panic, but if it gets closer to 25 or 30, but we don't know when this debt ceiling drama will stop it will be fascinating to see how that works out i believe, and i think the institutional traders that i talk to, they're not only worried, there's going to be a lot of political punches thrown between now and then >> from annoyed to bothered. that is the change today jeff, thank you so much. thank you for coming in.

coming up, from energy going from first to worst this year, could it make history and turn things around to become the best performing sector for the third year in a row? we'll debate that possibility next dow is down less than 200.

welcome back energy was the top performer in 2021 and 2022, but it's at the bottom of the pack this year that's not stopping goldman from striking a positive tone >> that call came from goldman sachs as the pe ratio relative to the s&p 500 sits at the lowest level in more than two decades. energy just isn't what it once was. since the '70s, it's averaged an 11% weighting in the s&p, but now it's just 4.4% goldman pointed to a few reasons for the weakness this year,

including russian supply, concerns around industrial demand and a rotation in the technology they said value cases and capital returns make the group attractive and the firm pointed to these four as underperformers that have positive catalysts. now, if we look at the sector broadly, halliburton, targa resources and slb have the most buy ratings. and while valero has the cheapest value cases -- valuations valuations are fair and that energy lows aren't yet in. if oil went to $60, it would be a big green light to buy >> we go to $60, the economy is doing terribly maybe if supply has some issues. but i want to talk about some of the rest of the commodities complex and copper has been awful lately zinc at about a 2 1/2 to

three-year low what else? >> with copper specifically, you can really see it on a one-year chart. yuck see how the rally started in the fall and went up and spiked in january with all of these hopes around this recovery and chinese demand that has not materialized. we have weakness from the u.s. and europe and on one day, the difference between copper trading today and copper for three months was the biggest divergence since 2006, which speaks how quickly this narrative deteriorated so it just hasn't happened >> it's interesting, that chart shows copper is above where it was last jowl, though. >> yeah. i think they're longer tomorrow. there is still maybe some optimism that particularly from -- we talk about how clean energy will be a big driver with things like construction are down but it is still higher than last year, despite all the weakness around china >> it's what you said, there's

such a long-term secular tail winds that for it to be down tells you the macro weakness that it's sniffing out the whole bigger picture is constraint supply, electrification of anything, this thing should be going to the moon, not this struggle it's had. pippa, thank you still ahead, shares of this medical device company up 12%. and jim cramer sees a bull market emerging in this sector and celebrating stories of aapi. here's founder and ceo of an apothecary >> what makes me proud of being an asian american founder is my parents. they came here in the '80s with nothing. they were farmers, and here i am today, raised over 13 million in venture capital on my second company, filmed for "shark tank"

and i'm just getting started

welcome back

medtronic was our mystery chart slightly higher ahead of earnings reports tomorrow and up about 12% year to date jim cramer is saying if we learned anything this season it is that medical devices are in an emerging bull market, benefiting from the recovery and nonemergency surgeries put on hold during the pandemic joining me now the senior medical analyst. has it ever been this exciting i can't contain myself. >> thanks for having me on it certainly is a resurgence in the med tech space particularly u.s. med tech stocks and you mentioned some of our top picks there, medtronic certainly ge had a good run after the spin that was a separation officially in the beginning of january of this year and that name was up 55% year to date you mentioned medtronic up 5% year to date part of what we're seeing is the

comeback of surgical procedures. hospital companies are talking about this quite a bit hcas of the world first quarter. we certainly did see easy comps so that was at play in the first quarter of 2023 but, indeed, also some head winds that are moderating and easing. one of the things we've heard about quite a bit through 2022 was the fact that there was staffing shortages in key areas in the hospital. radiology, cardiology, orthopedics. some of those head winds have alleviated we're seeing that, certainly that is not only a u.s. phenomenon that is also ous so that has helped some of the volume picture here 1 q. we think for the most part in the u.s. that will continue into 2 q. >> tell me about the valuation for these names, which in many cases are still below where they were a year ago in trading what would be the catalyst is it the next earnings season other than cramer's bullishness, what would make people kind of

wake up and maybe it is the healthcare trade if the market turns more defensive and people want to be positioned both defensively but maybe with a little growth in the sector? >> i think you are hitting the high points. one is recession, right? healthcare is countercyclical. medical device within healthcare is countercyclical i think that draws capital within to these names. that is a theme we're looking at and monitoring i would say secondly, some new end markets are really accelerating here. one that medtronic in is the aortic valves. those surge vice have bounced back in the -- those surgeries have bounced back the first quarter. our data tells us they are gaining share in that market category some idiosyncratic categories but also resurgence in procedures if we think about the dreaded "r" word into the second half

this is a space certainly where you can provide some cover. >> jim was also excited about ge healthcare skaig they have scanners essential for alzheimer's, a really hot area right now. what happens with all the excitement over the weight loss drugs could it mitigate the need for these medical device procedures in the future >> certainly i think everyone in the medtech space, certainly the folks that run these companies would certainly love to see that a lot of these conditions are chronic. they're progressive. certainly weight loss drugs can help but for instance we mentioned ge healthcare. one of the drivers we think we'll see with some of the weight loss drugs, ozempic and others, is the need for mri brain scans. you need to monitor for brain swelling when you are on one of these medications and so we think that is actually a driver for mri demand we're seeing that in numbers now. ges ceo spoke about that on the

first q earnings call. we think that cycle is just starting to get going. some of the other names we are recommending here, lantias imaging in the diagnostics space that had a great run up about 80% year to date we still think that is double from here. on the small cap end we're recommending adma biologixx as well as establishment lab and we think there are certain cycles and countercyclical benefits to these companies as well. >> anthony, thanks for your time and for diving into this with us today. >> thank you so much >> happy birthday. >> thank you very much great to be on cnbc for the birthday. >> there you go. i won't sing but we appreciate it and hope you enjoy. anthony petrone. that's it for us we have to end a little early

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pnc bank. welcome to "power lunch" everybody. we are seconds away from getting the minutes from the latest fed meeting. >> stocks have been under pressure all day long. dow is down 205. let's get to steve liesman for the minutes. >> minutes to the federal reserve's may meeting show fed officials agreed the next move after that may rate hike was less certain due to uncertainty about the impact of the lag affects, tightening and better bank policies that could be coming many fed officials said, quote, the fed needed to retain optionality after the may hike some saw the need for additional hikes due to slow, inflation progress coming