i didn't even know that was thing. >> - aj on our team, well, i don' want to say anything anyway, you know what? i'm not going to say anything, but they are beautiful, i've seen them. >> you know that diamond rings as engagements presents were not a thing until, like, the 1930s? it was a dubious advertising campaign >> also, diamonds don't really have value >> diamonds are not -- >> thanks for watching power lunch, everybody >> that's right, closing bel starts right now >> all right - thank so much, welcome t closing bell i'm scott liner. this make-or-break hour begins with a risk, reward for stocks and whether it's gotten better or worse as the second half of the year approaches, jpmorgan's - legos will be here in just a minute with his answer because his new noted wall stree talking today. in the meantime, here's th scorecard with 60 minutes to g in regulation. boeing and ibm are a drag toda on the dow, which was lower fo much of the day, but as we start this final hour, the dow is green, albeit, barely more broadly, stocks trying to

avoid a fourth day of losses i a row. there is the snp, positive now as well. energy, financial, utilities have been lagging. in fact, it is the worst wee still for the s&p since march. nasdaq, higher it's hoping to keep its eigh week winning streak alive, and it's doing pretty good at that right now. there is the nasdaq, 13,613. just shy of 1% it does lead us to our top o the tape the challenge ahead fo investors, given the rally we've already had, and what we think still lies ahead let's bring in joe terranova o -- investment partners. -- it's going to join us in just moment good to have you here. so, you sat down, you said, oh energy is lower. oh, financials are lower i mean, the markets fought back, though, as we begin this final hour so, how do you see things here >> okay, but the market is fighting back, why because there is a mega cap pu underneath the markets the mega caps, once again. so, i initially it was microsoft, it was in video, it was apple, it was meta

well, guess what now amazon is joining th party. amazon is at its highest level since september of 2022. they just announced today -- that they are going all in o that stop you just saw three and a half percent >> which is a catalyst in th early innings in 2023. so, if the balls are going t be depleted and they are i control right now, the bulls are going to be defeated, yo have to tell me, how is it exactly you are going to break the fever that currently exist in mega cap equities because every day, it's saving the tapes. look at s&p -- today. s&p equal weighted i underperforming the s&p by 5 basis points that is something that jus continues to act i continuance. so, the script is in place i have said, i think, cute three could be a flat tonigh of quarter, but on the other side of that, you have the meg cap put that is in place and that's going to leave market to resume the overall positive trend of 23. >> see, the only way the bulls can stay in control, some woul

suggest, is for the ones lagging sectors to continue to do well. how, otherwise, can the ball stay in control? everything else can lag an tech is just going to carry th day? as you continue to see multipl expansions of mega cap equities >> how long can that last? >> i understand. listen, logically, you would say to yourself, not muc longer but how high is high and how low is low that's a question that you never want to ask yourself whe you are training or investing. so, fed is still - whether it's the chair himself bowman, or waller overnight wa obviously hawkish. he can - write? we think it's going to weaken, more evaluations are kind of rich, right? so, are the bulls really abl to stay in control in the face of all of that now, they have been, they have been but for how long >> they are in control because of the predominance of mega ca equity that is why they are i

control. so, you were mentioning with federal reserve, it's not just the federal reserve. the bank of england with a surprise hike. we talked about an economy - >> rise at 50. >> again, the premise that the economy, we are going to have soft landing and the economy i actually resilient, and th economy is accelerating, how can anyone say that? if you look at a two versus ten-year, as a deep inversion, not only here in the unite states, look overseas, look at germany. germany's two versus ten -- easiest inversion since 1992 that's not a sign of growth in the economy. >> but you say none of tha matters, as long as mega cap tech has a bid, because it's - the place you can find growth. >> it's the only place that yo can find, within earnings, the consistency of double digi earnings and revenue growths >> yeah, but what happens, so, we are right on the edge of th second half of the year, okay? now, we've been a lot stronger for a lot longer than i think lot of people thought we would

be, by this point. do you agree with that whether it's a consumer, the economy at large, and for that matter, the market >> correct >> the thought, though, is tha once you turn the page into th second half, the rubber starts to hit the road of all the fed has done that jobless claims today, you know? they remain elevated, that the employment picture is going to get worse, that the consumer finally going to get capped ou at some point. spending, you know, as much as they could possibly bear t keep up with inflation, want t have summer travel, that has kept air fares up, but at some point, that is going to ru out. >> i see the economy continuin to weaken. the price you paid to combat inflation is an economic contraction. i see it through the secon half of the year that we wil have the federal reserve makin the mistake of raising once, probably twice, and then, if they raise prices, they're probably going to, at some point, in the near future, hav to take back those hikes tha does not mean that you was away with an eraser th

positive catalyst that i generative a.i.. so, but in the last couple days, you sounded more cautious, i think, it's fair to say on the market now you don't sound so much. >> no, i'm cautious in terms o valuation, in terms of trading out of what i perceive to be a higher valuation equity name into a lower value equity name broad complicate, and the, tha it's an example. i did that early june. traded out of amd, much higher valuation. it's a - also going to benefit from a i so, i want to use this quarter as a place holder. i want to be invested, but i just want to be respectful o valuations i think valuations in this upcoming quarter, i think it's going to matter. >> you think the market care what the fed does from her forward? because they can keep talkin all they want to >> i think the market will b upset by two pipes, i do think the market will be upset by tw hikes. >> why isn't the market upse now? if they think that's the way they're talking?

>> well, it's upset in the places that are economically sensitive. i think you would agree with that, financials, precious metals, energy, al underperforming. the commodity stories, ver soft right now so, the economically sensitive areas of the market, excluding industrials, - >> what do you mean excludin industrials? that's not a critical part o the technical economy? >> it is a critical part of th physical economy, but that's where you are seeing a large amount of stimulus benefiting sector so, the stimulus that has been introduced over the last several years, they are having a significant positive impac on the industrial sector >> month to date, okay >> yes >> speaking of these economically sensitive areas materials are up seven and a half percent, right? industrials, up 8% financials up 4% so, if there's so much worry about the economy, why is that happening? >> you left out real estate,

you left out energy, and those are important economically sensitive sectors. energy is up two and a third percent. >> okay, and what we have -- >> i know it's been -- >> yeah, but relative to everything else we see, you're isolating a small body of time i get it, i understand that. i think a lot of that has been a result of the resolution o the debt ceiling debate. that is part of it i think it also has to do with the federal reserve skipping a the most recent meeting, but i think when you take the 30,000 foot view of where we are in the economy, i just look a that the other day, i just don't think you can present strong argument, but the economy is actuall accelerating yes, labor is strong -- >> i don't think people ar trying to argue that the economy is accelerating. >> i've heard that >> one bullish argument ha been, it's just no decelerating as rapidly as one

expected therefore, maybe you can actually engineer somethin other than a recession >> okay, but that view i clouded by the labor market an the view is clouded by the labor market, because employer are not going to let go of employees. >> let's bring in -- lagos now, jpmorgan's chie equity macro strategist, joining us once again. it's good to see you, welcom back >> thank you, thank you, goo to see you as well >> so, i mentioned your note today certainly had a stalking and you say that it' unattractive, the risk, reward for equities right now why so >> why so? well, i think you have the policy side of the equation, which remains restricted i think, you know, monetar restrictiveness is going t continue to impact us with the -- i think lives will get only, you know, louder in the second half i think the fiscal side ha been a massive tailwind is diminishing. i'm not saying it's a headwind but i think it's a diminishing tailwind and i think growth, big picture, maybe with the exception of, like, you know, -- are very important and a.i..

i think -- will decelerate and i think th market is now at a point where it's kind of pricing in fairly rosy picture. and so, i just think that th backdrop is quite challenged - second have. >> i want to read you a blur or - from a couple notes you put ou today. quote, some argue the next leg up for the market will b supported by loggers we see that that's a tal order. expect more challenging macr backdrop for stocks. consumers are starting to show signs of weakness. excess savings will likely b exhausted by october so, a lot of this, quote unquote, stimulus that has led to this rally in the first place, you see dissipating and reasonably in short order. >> i would say over the next few months first of all, i think extremel hard to time things in the short term but i think if - six months view, yeah, that is the case and i heard a littl bit of your discussion you are just having now. i think, yes, most of th upside has been proven b

multiple - and by literally a handful o mega cap stocks, which happe to have a very strong valu sheet. i just think it is higher that you are going to start to see broadening of participation an that - are going to start to bounce when they are the most, yo know, interest rate sensitive, very cyclical, and the cycle continues to age it won't get younger and so, i think best-cas scenario you get is you get leadership and concentration - that becomes even more extreme and so, i know we're sort abou the most narrow or most -- since 1970, but you look a 1960s, you look at 1950s things got even more concentrated and i think that' the -- for many and i think this is largely a function of, i mean, yeah, a.i. is definitely helping, but it think it's largely the function tha liquidity is getting sucked ou of the system and mone continues to funnel into the biggest and strongest balanc sheets, that - stand out and hurting continue to happen. as you get closer to a recession, i think - hurting becomes even greater

not lower. so, that's why i don't buy the argument that you're going t see a broadening in leadership >> but what about, i mean, you mentioned this cycle being, yo know, either late or near th end, and you also obviousl mentioned a eye. what if the economic cycle just, i don't know, drank from the a.i. fountain of youth and i is going to be so much mor powerful than we even had an idea of? >> look, it's a view out there i do not share that view you know, my background is als -- machine learning, a.i. i nothing new. the trend has been in place fo the last ten years -- has been adopting it since man years ago. i think it's just basicall brought awareness that's kin of increasing and picking up and you're seeing a bit of a arms race between a lot of the large corporates and so, yes they are investing i infrastructure, ships, deep use, and whatnot, but i don't think that's going to be the big narrative around, this wil revolutionize productivity

this is going to take time and we are not talking about nex year or two, but it takes more than just, i think, a few year to get there and in th meantime, i think the market i pricing a lot. so again, i'm not saying, think it's a very health trend. i think it's a trend that has lot of potential i don't think it is that new and i don't think it's going t revolutionize things that much in the short term. and so, yeah, those stocks can continue to do well, but i'm not sure - basically keep everythin afloat >> i'm kind of surprised t hear you say that, especiall regarding generative a.i.. just what we are already seein and what i guess you could say still -- stages of it from a consumer standpoint and how it's alread kind of revolutionizing search in the way that companies ar investing heavily in it. >> yeah, so i do think that -- pockets will definitely benefi from this. but again, the big picture economy, i don't think it' going to send the benefit an

any significant -- perform in the near term that is what i mean. so, i do think that in certain pockets, yeah, they benefit. the semis, some of these, like mega cap - some of the consumer plays sure but i think big picture, doe not change that much in th short term i think it's really more of medium term story, sort of two three years out. >> even as those groups ar pretty large groups in the market, right? that's the other point we are not talking about, yo know, sectors that are three o 4% waiting out of the snp. we are talking about 25 to 30% of the s&p 500 >> right, but those same companies happen to be the companies with with th strongest balance sheet in a environment where liquidit it's getting sucked out. i think that deserves a premie and to, those are also the companies that have been quite aggressive, in terms of cuttin costs and protecting earnings. and so, i don't think it's jus a eye that is benefiting i think it's multiple factors. >> what about the idea that yo put forward that the consume

starting, as you say, to sho signs of weakness? where do you see that? >> so, i think you're seeing i more and more data points. i think, for instance, if yo just listen to what a lot of the consumer companies hav been talking about recently, whether it's the walmarts, targets, the cause goes of the world, they're talking about a continued rotation fro discretionary towards -- towards private labels you are seeing more and more - consumers shifting towar leverage and credit, has a lot of the - covid stimulus continues to be paid off you have the student debt on relief that is coming to an en later this summer and i thin beginning of september is when people, you know, a lot of these folks are going to hav to start paying debt again we estimate that is 9 to 1 billion dollar headwind pe month and so, i think it's a number of different areas that continue to sort of show signs where not the entire consumer, but the lower income, sort o the bottom two quintiles, th bottom 50% of the consumer b income, that's the area that's

coming under increasin pressure and i think the question is, does that, at som point, start to sort of spil over into the broader economy, into pricing power, and earnest? >> so then, given your view, what's the ideal allocatio look like for one of these investments? >> so, from the beginning of the year, we've been very voca about the fact that portfoli managers in investments should be tilted towards high quality profitable, strong balance sheets, and large sides. we've been very negative o small -- on the flip side of it and i would argue more of the same if you ask me about sectors an one specific sort of - i would say boring stuff lik utilities, investment health care, and then i do think that you know, mega cap stocks, given their balance sheets, would not be selling those areas. i do think that those area will likely not underperform as the cycle ages. so, again, the high qualit areas is where you can continu

to lean into, and anything tha is more sensitive to interes rates, that's the area that would continue to stay awa from so is the quality factor >> i know, but you jus obviously made the case fo mega cap, as you said. so, i mean, if you don't think that those stocks are going to necessarily pull back, why are we [inaudible] why where the market at large, right? if you're making the argumen stay big, stay with quality, and see what good balanc sheets, that just check thre boxes of all the reasons why those talks have done well >> sure and i think more of th same it's just that right now you've seen, you know, these areas perform significantly or today, i'm not saying they continue to go up and -- i'm seeing on a relative basis i think they continue to outperform and i think the rest of th market, everything else -- top 50 continues to melt the private sector, i think, continues to be unde increasing pressure. the economy and i do think tha at some point, that's going to

come and bite everything, it's just that in the meantime, i think you continue to see rotation towards quality the last few weeks, there' been a bit of an awakening we are getting a lot o questions from investors is it time to go back into - back into high data? is it time to go back into small cap? i don't, i don't think it is i think it's just a shor squeeze. >> interesting let's expand the conversatio to rob co- i echo kyoko of wealth enhancement joins us now joe turnover of course is stil with us as well. i, i go to first so, you've heard what -- laid out today this note has certainly a lo of people assessing where we are right now and where we may go over the next few months. what's your view >> i agree, you know i think this is very similar t what we saw back in 2016, in which we had that softness i earnings or the earnings recession, and it was the mega cap tech stocks were the thing that really propelled stocks i 2016 this is not that different

you know, we have a slowdown o an economy that is swelling. so, when growth is scarce, everybody, you know, looks towards finding companies that can grow through that. so, i agree with what -- said >> so, joe, in other words don't pay attention to the snp 50 pay attention to the s&p for 50, is essentially what bravo is saying those stocks are not doing wel in the environment that he see and thus, the market is goin to be kept >> so, i mean, let me first sa -- he and i did not speak before. he come on here because yo basically, i agree wit everything that he's saying, okay i think the important thing, though, that i heard him say the questions that he's gettin our, is it time to go back int cyclical's wait a second. everyone's already i cyclical's so, i think it's a position in question and this is a questio you have asked multiple time

on the show in the last severa weeks. where are we from th perspective of positioning energy, overall, the consensus is still towards energy. so, it's not a matter of going back into energy, it's a matte of now pivoting away fro energy and going back more towards mega caps becaus positioning at the beginning o the year was not there positioning at the beginning o the year did not want growth position at the beginning of the year wanted the -- >> i think part of his point was forget the people who ar already in those sectors you had a considerable amoun of cash on the sidelines you've had a considerabl amount of cash in money markets, you've got a considerabl amount of money in fixed income, treasuries, so, if you do thin that the market has started new goal market and that the lagging sectors, the ones we - are going to catch up, i think that's what he's referring to. should i go into these areas i think the answer is no >> no and i agree with him they are not you have what they are thi

month. scott, you have had a rotation that began in january, a rotation that is very clear. it's not typical in it's nature, it's cyclical in its nature an it will build momentum over th coming months. i gave before for stocks for stocks in which positionin in the fourth quarter went - apple, microsoft, meta, nvidia okay, now we want in amazon. you are going to be adding, yo are not going to be reducing positions towards mega caps. there's a clear rotation tha is in place. the rotation is not going to buy the wagons the rotation is going to buy the s&p 50 -- >> yes, i broadly agree with that and i do think the on thing that's quite interesting is the ten largest stocks have decoupled quite significantl from sort of the next ten an the next ten stocks, which historically is not typicall the case so, where i would be looking right now is not necessarily the soft and, but sort of stop

number 11 through 50 which are also good balanc sheets, good quality companies pretty robust, should be abl to tolerate the higher interes rate environment better training, i think generally is much less stretch valuation. so, 11 through 50 to be more precise is an area where i would be doing fundamental wor and trying to then - that look attractive >> so, do you think the market will is vulnerable do the - not really have the contro that they think they do? >> i think that is bold -- pricing in a very rosy outcome and that's part of that outcome, many - last several months could -- interest rates are going t come down, the fed is done that is going to roll over, bu if anything, the opposite is happening. and that is, i'm just saying -- when the consensus has moved t

soft landing there's a lot of capitulatio happening in the market. there is recession fatigue people are giving up wit recession and i think at the same time, complacency i building up. so, that's where you get the vulnerability. >> we i will make this the las word as well >> - no, i completely agree in that the economy is slowing i think investors are tired of hearing about a recession. we've been talking about for almost two years now this slowing, it will impact the field. you know, it's kind of lik tiger woods versus the rest of the field. everybody is betting on tige this time. but, you know, we think that there is a chance that the field can win, as we go into the next 12 months we have things slow down in th economy. >> we will leave it there. i, thank you -- thank you we will talk to yo guys soon. >> thank you for being here. let's get our twitter question of the day we want to know, is the risk reward for stocks gettin better or worse? i want to know what you think.

please vote at cnbc closin bell on twitter. the results are coming up little later on in the hour. we are just getting started, though up next, top picks for you portfolio. -- crawford is back with some big opportunities. she is finding in some big tec stocks and some under the rada names to so, join us right here, clos nine after the break we are live in the new yor stock exchange and you are watching closing bell on cnbc.

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its eighth - winning streak, but despit investor concerns over our leadership, our next guest i still finding broadbased opportunity both in and outsid of tech, which bring back -- crawford, executive vice president and portfolio manage at - welcome back >> thanks for having me. >> let me just get your firs view here, as the bears do not want to go away, okay? and they don't think they have to because they think that th bulls have this false hope tha all is good and that the res of the year is going to be jus fine what is your view on that? >> i think, let's put it i perspective, where we starte the year we started the ear with -- accepting the s&p turn one 8 $290 that number is now looking lik 220 and the number is rising as we go through turf earnings it's highly likely that we actually get revisions upwar

to the number, not downward. as we look forward to 2024, we see a growth here. instead of a down year so, we i think we have to at least consider that we are coming through this -- too much damage in the last si months - banking crisis it hasn't really affected th market the consumer - hasn't really affected the market numbers are going up, you know we've seen a brand new scene with this jen a.i. that ca really drive the next few year of earnings. >> you sound bullish you sound like you are able. >> i suppose i am and in part, if you look at the valuation in the market, - >> are they justified? >> well, let's take meta, fo example. meta only trades out of 15 o 17 multiple -- street earnings on next year is that aggressive i don't necessarily think it is >> what if i take your meta an

i show you an apple? and i say, okay, that is 3 times. is that justified? >> yes, so apple is a little bit of a different scene i think the former guess you had on was talking about how given liquidity -- that we are seeing in th market, there's this rush to these mega caps that actuall generate liquidity the do not need to take on the -- i think there's a little bit o that going on, but if you look at the profile for apple, appl numbers have not actually come on that much >> microsoft has been 33 and a half times more. is that justified? >> and microsoft numbers for 2024 may actually end up going off, just like we saw fo nvidia, in part, because we've seen so much - demand for jen a.i. and a.i. that, you know, i think we hav to at least entertain th possibility the numbers ca still go up. >> see that's what the bears seem unwilling to come to grips with, is that maybe thei expectations of earnings falling off a cliff are goin to be wrong. and they still think that al

of this is going to come hom to roost in the second half of the year that earnings expectations are going to disappoint. they just have not yet >> everything you said i right. >> and i would remind you that at the beginning of this year, the bears were playing the sam thing in the first half of thi year so, if it comes to roost, mayb it's in, you know, 2024 and we still have another, you know nine months of earning revisions upward >> what about areas outside of tech so, tech dominates everythin and it's a large part of wha you do, is portfolio manager obviously. but what other areas are the opportunities then - so you thought there were? >> yeah, so i think as we inch closer to 2024, this becomes very much a stock takers marke and in part because he has t suss out, who are th beneficiaries of certain trend and what trends do we want t be part of so, for example, in an industrial world, as we go int 2024, we have the tail winds o

the inflation reduction act, all the re-shoring, the chip act starting to come t fruition the jobs act that was enable in 2021. -- starts to slow in 2024 you know, you have data center -- a.i. is going to, the demand for data centers, the building of data centers, the power related to the data centers. so, you want to actually b part of some of that cyclical, that cyclical bend in th market >> martin marriott of materials, does that fall under one o your picks >> it does and it kind of feed into these same trends it's absolutely not a jen a.i. story. but it is a story of basically their stone quarry they sell cement and stone, an rocks, and it's not really tha sexy but it enables the building of america, the reshoring building of data centers >> we will leave it there. anna, thank you. there is anna crawford joining

us once again at post time up next, forecasting the fed former dallas fed president, richard fischer, he breaks o what he thinks mr. powell' next move might be he flags when he thinks th first rate cut could come. just after this break. closing bell, back after this. just after this break. closing bell, back after this.

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the close. let's get to the top stocks to watch, as we get closer ther to - this year. with that, christina >> let's talk about amazon because it's firmly an positive territory after j morgan reiterated it overweight rating on this top. it's up 4%, citing further growth in amazon prime luke also reiterated its buy rating on the stock and that commentary comes as amazon announces a 100 million dollar investment in its new a.i. focus innovation center fo a.w.s. and so, that is where you ar seeing shows that 100 and -- 81 cents let's talk about over stoc because maybe -- bed bath & beyond is not dead. overstock is higher, after winning the option for bed that, and beyond branding an

intellectual properties. the 21.5 million dollar deal includes bed bass mobile platform, but none of it physical locations overstock is on pace for its best days since march, 2022. stock is up a whopping 18% scott? >> all right, christina, thank you. when we come back, forme dallas fed president, richar fischer, joins us with his own outlook for the fed and his bi great forecasts closing bell we are back after this we're at war. -detonators charged. there's a chance that when we push that button, we destroy the world. we're in a race against the nazis. i have no choice. is it big enough to ead the war?

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wrestling with the potential for more rate hikes ahead of fed chair, head of fed chair powell's second day of capitol hill testimony, further dashin hopes of a longer pause or eve a cut. former dallas fed president, richard fischer, joins me no to share his outlook richard, welcome back. it's nice to see you >> thank you, scottie -- >> how many hikes are we going to get between now and the end of the year what do you have on your scorecard here >> well, i think if you listen to michelle bowen just now, an you listen carefully t chairman powell, if you sa what the bank of england did with 50 basis points, th canadians, the australians there's still a possibility fo one or two more. and a minimum, scott, they are not going to be cutting rates, in my view as far as the eye can see into

2024, my guess is they wil just have to hold it where i is the reason for that is, powell was very firm -- was very firm has the last meeting and in the press conference 2% is sacrosanct they are not going to give u on trying to achieve tha target they are not comfortable yet that we've gotten far enough i the right direction. so, i wouldn't even -- >> but they just paused. i hear everything you ar saying, but then why did the just hike? >> well, i think he was honest about that they were honest about it. what they want to do is get feeling for how this current constraint in the credit sid is driven by the banks -- might affect the system. but already, i think you can tell, just have some very good people on who are quite bullis about the economy. and i don't see any proble with it. i could've argued both sides a the last meeting, but i have n

problem with their havin pause. but i do expect them to do a little bit more. >> would you have voted to pause? >> i could've argued both sides, scott. >> i know, but we don't do bot sides. come on, richard what would you have done >> remember, i was viewed as one of the hawks, right? and part of that is because -- patient family, i don't want t be the pigeon. but i was seen as a hawk, yes. i would've voted to take a look, pause, see what happens. and also, i would've left th door open for at least - >> you cite the economy and think it's probably, i don't know, i don't want to put word in your mouth. is the economy stronger toda than you expected it would b after 500 basis points of hikes? >> i am not surprised that i is as strong as it is and a bi

reason is because th appointment data is stil incredibly strong. and as long as you have people with jobs, taken - consumption drives are up. manufacturing, already in recession. it's only 17% of our economy, say this over, and over, and over again it's driven by consumption, by the service sector as long as we have people that are fully employed - as long as we have more people looking for people who work an people willing to go to work or able to go to work, and w are going to have decent consumption and have positiv economic growth. i'm not surprised by how the economy has reacted. >> let me ask you this, ho would you counter the comments that you hear some making that the fed is just looking at all of this wrong? they are looking behind them rather than what's really in front of them, that maybe th labor market is just different post pandemic, and their

traditional methodology and al the things that they've been groomed to look at for the las 2 to 3 decades of their career just don't work anymore. the economy is different, th labor market is different, the pandemic screwed everything up so let's get with the program. inflation is coming down a lot faster than they wanted to admit. how would you counter that >> i would say that's a people that make that criticism don't understand how the federal reserve works. they don't give enough credi for the capacity for - and participants to interpret what is going o in the economy and i think it's an argument that falls on deaf ears. >> but richard, the fed's ow staff said there is going to b a recession. it's like there's a disconnect even inside the building

>> well, it's up to the -- and its members to interpret what the staff gets them and then they proceed with monetary policy. so, you have to remember, yo are saying, they are sayin they will be a recession i think you are referring to the slowdown that is forecaste or at least thought of in each meeting, when they project themselves as what the chairman had said, he's absolutely right. -- i can tell he's a retired -- it's not a forecasting exercise what it is is how you feel a the moment and that is not an officia forecast so, i haven't heard a federa reserve system has expressed b the -- committee forecasting recession. in fact, if anything, if you listen to it between the lines they are talking about either very soft landing or not havin to bring in negative economi growth >> i want to ask you lastly, i have to make it quick, because

you just made yourself into -- again, which i want to know, what doubt what you have been? would you have been in the three or more heitkamp or th two? at least two more? >> i would've been probably in the two camp maybe only one we will see. >> all right, we will talk t you again sooner i appreciated, as always >> i appreciate you taking the old dog on board this grea show >> all right, richard fischer, former dallas fed presiden joining us we will see you again soon >> all right, take care. >> last chance to weigh in our twteitr question is the risk, reward for stocks getting better or worse? -- closing bell on twitter. we are back after this break closing bell on twitter. we are back after this break

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the risk-reward for stocks, you said it is worse by 60% the market zone is next.

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with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley we are now in the closing bell market zone cnbc senior markets commentator mike santoli to break down the crucial moments of the trading day. julie box on the pockets of opportunity she is finding in the market phil lebeau on the sell-off today in boeing shares michael, you know, down for a bit, but not out. >> the market behavior itself this week is giving you really no reason to be concerned. we had every reason to have a

pretty sharp pullback, have some turbulence, seasonally, technically, arguably with yields going up, but it is rotating instead of really pulling back at the index level, smothering volatility. the vix under 13 right here. that being said, it feels like a much more even trade as i've been saying. no longer that this is a massively hated or disbelieved market i think it is a little more of a 50/50 shot in terms of the immediate term from here so you have to be on the lookout for some of those things to take hold that might have made you anticipate a little bit of a pullback. >> julie fox, risk-reward for stocks the question we asked 55 minutes ago i ask to you now is it better or worse? >> i still think that the risk-reward dynamic in the stock market is not attractive we see better opportunities in high quality bonds rather than stocks we have been talking about this all year, how the market breadth is very narrow and it just has been tech leading the way. only recently have you started to see that rally widening a bit. and so for investors who really

want to put their money to work in stocks, we focus on areas of the markets that have not participated in this year's rally. areas like consumer staples, industrials. and we also think that income generation is a really important component of a portfolio so we also like dividend paying stocks -- sectors as well right now. >> tech is your least favorite sector >> yes tech is our least favorite sector we still remain cautious on technology least preferred sector we see better opportunities in industrials and consumer staples. but we also acknowledge that the long-term use case for ai is very exciting. but you can't ignore the valuations and the valuations in ai space, they run up dramatically, so we want be chasing these companies, and you want to be really selective. i think for investors seeking exposure to the tech sector, you want to look at areas like software and just because there is promising technology out there, like ai, it doesn't mean

that investors should overpay -- to invest in the area. so i think you have to really think about the markets, the right investment opportunities, that right risk-reward lend lenz ri lens right now. >> boeing was a big drag on the dow for much of the day today and has to do the supplier, doesn't it >> spirit aerosystems, scott that's what we're talking about. it supplies the fuselage for the 737 max. it halted production today the union there, the machinists, 79% rejected a current contract offer, strike is expected to potentially start on saturday. the concern here is 737 max production remember, there are 31 a month right now. expected to soon go up to 38 per month. eventually by 2025, go up to 50 per month. if they have an extended strike at spirit, that calls into question whether or not these production plans, at least near term ones, might have to be pushed out a little bit. for the time being, boeing has

enough inventory of maxes they don't have to curtail their production plans this is one, people are watching carefully. you have an extended strike at spirit, you have an extended problem for boeing back to you. >> phil, thank you we'll keep our eyes there, down 3% the two-minute warning is about to happen as we speak. what do we look for now as we come to the end of the week? >> you look at the weakness in the bank stocks. you want to pay attention to whether in fact all you got was a reflex bounce in some of the neglected areas of the market to start off this month that's one thing that i think be mindful of i mentioned the yield story. i think in general we're trying to digest exactly where we are we haven't gotten a reprieve from the idea that the fed is going to remain vigilant or the economy is set up to decelerate further. what we have this is a window where we didn't have to worry as much about that. so i think we're still in a decently comfortable zone. the overall trend in the market

is higher. that's what's changed, i think, which has built up a cushion, which means you can have a pullback, another 4%, 5% and still no big deal and if growth is again going to be considered more scarce in terms of the overall economy, maybe that will just keep a bid in some of the more secular growers it is hard to know what that means for the overall index path at this point. i'm also watching to make sure sentiment doesn't get overexcited. i think on the verge of it, but not really on a wholesale basis. some of the action in terms of options flow in the teslas and nvidias, you know, that went right back to the crazy zone it hasn't broadened out to where people are feeling thoroughly overconfident. >> biggest change, i guess, between now and let's say, you know, six, eight months ago is this is one of the first times we have been able to definitively say as you just did that the trend is higher, the trend change in the market. >> that's at the index level that's inserted itself it gives you a little comfort to say essentially that it is just

not as fragile a etup, even if we front loaded a fair bit of the rewards. >> so the s&p 500 -- dow is going to fight it out until the last -- it is like green for the s&p and the nasdaq we'll see you tomorrow "overtime" with morgan and jon. >> the s&p and nasdaq slapping a three-day losing streak and the dow about as close to flat as you would get. that's the score card on wall st street welcome to "closing bell: overtime." we'll discuss bitcoin's big rally this year and how black rock's bid for a bitcoin etf could impact cryptocurrencies with morgan creek capital ceo mark yusko >> and