esper and what this means for geopolitical risk. >> ask mark esper -- last night "60 minutes" interviewed general milley, who said if we allowed putin to win, defense spending in the u.s. will double at least as a result of that. interesting question. thanks for watching "power lunch." >> "closing bell" starts right now. >> i'm scott wapner at the new york stock exchange. this hour begins with markets on edge as acritical week gets under way. clearly, the events in the middle east have introduced a new level of risk for investors, but markets are strengthening as we move into this final hour. look at your scorecard with 60 minutes to go in regulation. at the highs of the day across the board. that's despite those geopolitical concerns. even the nasdaq, which was the big loser earlier, has turned around. it's good for 0.5%. everything is in the green, that ahead of earnings and important

inflation data still to come later in the week. so, there's a lot ahead of us obviously. also worth noting today, the bond markets closed but importantly bond futures suggested a much-needed rate relief could be on the way tomorrow as yields look as though they'll be decidedly lower. it will be interesting to see how that cycles through the equity market, but perhaps some of it already is. our "talk of the tape," the risk/reward for your money and whether it's about to get better as some are suggesting. let's ask adam parker, founder and ceo of trivariate research. interesting turn in the market. >> yeah. >> you think it is in part because of what the futures are telling us bond yields could do tomorrow and we'll get some relief? >> i think so. you have weird days when the bond market is closed anl the equity market is open and the

value of a lot of the growth stocks, as you alluded to, is correlated or associated with the perception about rates in the future. i think when you get a risk off trade, the 10-year usually goes lower. i also think that frankly a lot of investors believe, the kenls view among institutional investors, is we'll end the year higher, that they're behind on the 12%, 13% in the s&p, behind on the 20% in the nasdaq. they didn't allocate as much to equities. i think people will chase a little bit. it's october 9th. we didn't get any major negative prereleases yet. if things were worrisome on the earnings front, you eat get a mess in the first seven, eight days. that could be okay. maybe we could be off to a bit of a rally based on fundamentals. >> what about this new geopolitical risk that was introduced over the weekend? always in the background, but now we have all-out war.

>> when you have a risk off trade in that sense, typically the businesses that do the worst are ones with poor free cash flow and conversion. by conversion, the earnings, how much of the net income gets turned into free cash flow. we put out over the weekend ideas that you want to short or ideas you want to avoid owning where they have poor precash flow attributes and poor conversion. i think that makes sense. but i'm looking at the market thinking i see a lot of things i want to own and a lot of things that seem oversold. for the first time in months i was looking at truist, thinking that's down to march 2020 levels. does that make sense? >> financials have gotten crushed. the kbw -- >> actually crushed. >> it tells a tough story. >> and 7%, a dividend, they've got a pretty solid geographical foot footprint. unless things go wrong with the fundamental, should stocks be at

the 2020 levels? i'm looking around thinking there are things to own. >> but obviously bank stocks started to do worse as rates shot up, worrying about financial conditions and credit. >> i'm looking forward. we've been underweight banks all year. i'm saying from here, for the first time literally all year, i was looking at stocks earlier today thinking there's a bigger recession and some more negativity embedded in those stocks than there are in other parts of the market. it's more of a relative thing. >> you're one of those i wrote about at the top that said -- >> oh, no, what did i do? >> no, that some people think the risk/reward is better for stocks. you sound like you do. >> i think we're helded by year end. i think earnings will be fine. and i think the general expectation -- i think people want to own stocks and they're trying to find quality names that are down a lot. i'm seeing lots of thins that i can own.

i think you want to avoid indebted companies that have to refinance at higher rates. it's not an all-clear signal. but i'm not negative thinking we're going to end the year way lower. i don't think it's a big risk off sustained trade. i'm not getting at the geopolitical stuff, which is harder for somebody like me. >> it factors into the possibilities of oil. >> right. >> more shocks there. >> right. >> maybe it changes the more near-term calculus on rates. we've been on such a hot boil of rates that you've needed them -- if your thesis is going to work, you can't have rates continue to go up. >> i think the quality growth companies probably don't get affected that much by this environment in terms of their fundamentals. the biggest overweight has been energy, only because we see asymmetry with relative upward earnings revisions. we're very underweight retail. i think we're positioned correctly here, but i still see lots of opportunities. sometimes i don't know what to

buy. but there are five or six things i have conviction on. no machinery or construction equipment, no retail, energy and metals. all of a sudden staples -- i've found it hard to get defensive because the staples were so expensive. now looking at coke, it looked like it was trading just below 20 times forward earnings. i usually can't get a decent quality defensive name below 20. you want to buy coke below earnings? i think history says you do. i know the algorithm. >> hem me understand. >> yep. >> as it relates to the consumer, you're a little more defensive, right. >> staples over everything for sure. >> but you sound positive on the overall picture. >> i think it's going to be fine. i think we have a little bit of a harsh sell-off there. i think you're looking out saying can earnings be above -- look, all i need to know are earnings going to be up next year versus this year, and i

currently think they will be. >> that's not hard to do. >> well, but, you know -- >> i mean, we've been, like, in the garbage can on earnings growth for a while. >> well, earnings -- yeah, that's true, but earnings expectations for 2023 are the same now as they were in february. normally, they come down the whole time. we're using 225 for next year. the street is at 245. if you get something 225 or higher, i think the market has a bias toward heading higher. look, i've had six investor questions last week of what worked this year i should immediately sell in december and buy in january? people were kind of burned by that nvidia, tesla, meta reversal last year. people want to work it through. >> do you think 225 for earnings for next year, that's your number -- >> our base case we said at 2023. >> what multiple are you putting on that? it has to be pretty high. >> yes.

>> i put 18 on that and i get to 4,050. we're almost at -- >> you'll have to pay way more than that. you have to believe you're at the beginning of a multiyear cycle. in 2011, you could say things were bad, but earnings grew through 2019. if you don't think we have steady growth for a while, you get a reset. >> you don't think we're late cycle? >> depends. trucking, industrials, semis, toward the end of the cycle. >> to the end of a semi psychle with ai and all that? >> in terms of inventory cycle. it depends on the business. dram and memory, micron, the cycle peaked 18 months. we don't have the synchronous kind of cyclicality we used to. that's part of the reason i feel excited about some opportunities in the market today. i'm just saying i'm looking at the market, you're asking are we

ending the year higher or not, i think it's 70/30 we do because i think earnings will be fine, i don't think bond yields run away from us, and i think people are not positioned and are behind and are going to chase to catch up on performance. >> emily roland of john hancock investment management joins us. nice to see you. you heard adam's take. do you agree with it or not? >> yeah, i mean, we agree that earnings season is probably going to be okay. we're looking at the last quarter here where negative earnings growth is pen similared in for the s&p 500. i think the challenge is going to be what happens from here. you look out over the next four quarters and analysts are penciling in between 8% and 13% earnings growth per quarter. we're also looking at estimates for a whopping 5.5% revenue growth. i think that's going to be challenging given where we are in the economic backdrop. another thing we're watching is margins.

so, we had just extraordinary margins, 13% in 2021. we're looking at 11% for going into next year. i think there will be a war on margins as the cost of capital goals up and demand slowly slows. for now, we could see some nice beats this quarter. >> you don't sound like you -- you don't sound like you like the setup as much as adam suggested he does. >> well, i agree with him there are opportunities. one thing that we didn't touch on much was the backup in bond yields. we've talked a lot about how we see value in bonds today. i think investors often look at big corrections in equity markets as an opportunity to capitalize and buy things that are trading at a discount and they're finally chaem. we almost never think about bonds like that. we just had the biggest stack-up in rates in the third quarter that we've seen in history. rates went up almost 1%. now we're looking at 6% income

on high-quality bond. we think this is a really good opportunity for investors to lean into fixed income and get paid to wait as we do things that recession does likely unfold into next year. >> do you want to counter that? >> i'm focused mostly on u.s. equities as are my clients. but everybody has liked bonds this year. i think the question is, you know, what makes that work. i think equity is premium, meaning the yield i get, you know, compared to -- i think people found equities unattractive all year. i think that works in years five through ten. it's very hard to compare bond yields to equities and make money in a short-term window. > if there's allocation for tons of people, you have to look at the bond equity thing. my clients are focused on the rest of this year, and they think equities are going higher

and they're trying to beat the market. it's a timing thing. >> is there better value in bonds or some of those cheaper stocks? if you want to play this as an equity conversation, how would you answer that question? because there are a large number, i think, of people who still think that there's better value and better risk/reward in bonds or in cash versus very uneven -- >> what i would tell you is there's been very, very few times in the last 100 years where there was better value in cash than equities over any meaningful period of time. if you told me in your 401(k) option at your company, they allowed you to choose any cash, i might say that's something they shouldn't allow you to do. >> you know what i'm talking about. >> i'm never going to say cash for any sustained period. >> cash is better than losing money in the stock market. >> for sure.

>> made over the last 18 months. >> that's destroyed their net worth as the equity market has ripped through all that. it has to be right. but i'm willing to bet that, i don't know, 73 or 80 three-month periods, this could be one of times, maybe. you know what i mean. >> emily, we're about to kick off earnings season. you suggested it will be good. they'll be okay. do you think they'll be good enough? where is the bar? is it low? >> the bar is low. analysts expecting negative 1% earnings growth for this quarter. so, you know, i think that can be achieved. of course we'll be watching the financial stocks. they're expected to see about 9% growth this quarter, and there are a number of year-over-year tail winds for the banks. you have a doubling in interest rates. you have the markets generally

higher than a year ago. but on the other hand, you have a yield curve that was much steamer in q3 of 2022 and you've got some potential loan write-downs here. i think we'll be looking to see can we get a read on the consumer here and that should come through in some of these bank earnings. consumer is fine. everybody has a job. for now. >> so, you like the financials. >> they're not our favorite sector. we are actually looking for pockets of quality, so we like areas like technology stocks that have great balance sheets, low interest burdens. adam talked about this, superior profitability, better ability to maintain margins. we like areas like health care, which are trading at a discount. they've sort of been left in the dust, are trading at a 10% discount to the market, 20-plus percent return on equity there. we like that part of the market. we also want to find things that are pricing in this contraction we expect. we look to areas like u.s. midcap equities, which are

trading at a significant discount, the biggest since the late 1990s, versus our large-cap counterparts. cheap at 12 times forward earnings. it's really about finding that balance between protecting portfolios from solvency risk at the same time from protecting them from valuation risk. >> would you buy small or midcaps? >> she and i are on the opposite side right now. i think some of it is just timing. i don't think the market can rally and have small caps outperform. the whole broadening thesis. what makes them outperform is a dream their margins will expand more. some of them are more vulnerable to wage increases, rising commodities, you know, and, you know, cost of capital stuff she alluded to. the truth is the biggest 20 or 30 u.s. equities, 40%, 50% of the market, no cost for capital. you think there's a problem for apple on cost for -- so, they are cheap, in a 20-year valuation gap, but the catalyst

has to be that plus the estimates are more achievable. >> what if the catalyst is more soft landing, becomes more clear that -- >> a year ago we were talking about a hard landing, then a soft landing. we're in a goldilocks period where the fed is almost done and earnings haven't collapsed. that will be good for equities. we'll make that change if we somehow get a collapse in earnings the second half of next year. >> you say goldilocks. you're employing a lot of stuff will do well. small caps don't have to be the best performing thing in the market. no one is saying you have to outperform megacaps. if this is goldilocks -- >> i think the small caps will do well, less well than the mega large for the next few months. look at earnings season. which one do you think will have a bad quarter? i don't think microsoft or amazon will have a bad quarter. i don't think google will have a bad quarter. >> i think she's right if you look out 12, 18 months.

>> if the economy bottoms and improves some, small caps are cheap. i think it's a timing issue. you're saying right now, mid-october, what happens between year end, which a lot of equity people are focused on. >> everything is timing for investment. buy it at the right time. >> tons of equity investors are figuring out how to make money between now and year end. when you do what she has, you think one, three, five, ten years out. 90% of the people i talk to don't care about five years from now. >> more than not care about it who are watching us, emily. what's your perspective, then? take megacam, for example. are you expecting earnings to be good enough to carry the market towards a year-end run? >> i agree with adam on this point. we have been overweight u.s. large-cap equities in large portfolios. we have a preference for domestic over international equities. look at the megacap names as being the poster child for

quality, which is our favorite thing to screen for right now. we talk about more durable profitability. i certainly see some more durability there. i want to be clear, we are emphasizing midcap xwequities b we're underweight small cap. we don't want to own that. small caps should be better poised to do well early in the cycle. finally, i've been doing this job for about a decade now. this is actually the first time we've been overweight bonds in portfolios. it takes a lot for us to love bonds. we all know that equities are a much more powerful compounder of wealth over time. so we'll probably go back to an overweight to stocks once we see this downshift in bond yields play out, which we certainly expect as economic contraction on both. >> bond yield are the highest since '07. that makes sense.

i don't disagree. i talked about it in april of 2022, my 2-year-old, i could finally -- i agree totally on u.s. equities versus non-u.s. equities. i've said for 15 years europe is great for vacation but not stocks. >> what about utilities? do you see value there? >> i kind of do. i think these things that really got sold off in q3 because the 10-year yield backed up actually have more achievable estimates than most other businesses. they're just safer. so, if i'm looking at -- if you guys are worried about the potential for a fear of recession growing -- everyone was wrong this year, there wasn't one, but maybe there will be, then all of a sudden i can buy defensive equities at lower multiples than i could at any time in the past several years. the problem is, 2018, you had to pay 30 times for defensive memes. now it's 20. the risk looks better. my view, i'm trying to find a way to get a basket of stocks to

beat the s&p, i think some of those things will finally contract for the first time in a while. i bought coke at 20 times. had to do 30 before. >> emily, adam, thank you. let's get to our "question of the day." do you think the risk/reward for buying stocks is about to get better or worse? we'll have results in the hour. courtney reagan has top stocks to watch. the war in israel is sending oil prices higher with wti and brent up 4%. that has shares up around 6% with a number of big gainers in the energy sector. gains in oil are pressuring the airlines, which have been warning about higher fuel costs in the past few months. delta, american, united, have all suspended service to tel aviv currently. all those stocks are off by about 5%. defense contractors are higher as the conflict potentially leads to high erl demand for weapons and other instruments of

war. names like northrop grumman, others higher. it a is on its pace for its best day in a year. >> courtney reagan. we're just getting started. up next, trading the volatility. our next guest is break do you think where he's seeing pockets of opportunity. ♪ ♪ every day, businesses everywhere are asking: is it possible?

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welcome back to "closing bell." the nasdaq looking to close in green today. our next guest believes tech stocks are a good defense against any market headwinds. doug clinton, managing partner. good to see you. nice reversal for a nasdaq that was low er than almost any megacap tech stock i could find. except nvidia is modestly lower. what's the state of big tech? >> if you're trying to play offense or defense, you can own the mag seven. if you like offense and think rates are going to calm down, i think you can own them and own them for the growth. these are great growth stocks stim. if you want to play defense, they have great fortress balance sheets. i think even in a tough economic environment they have businesses that should be resilient in a recession. so, they'll weather the storm

better than most other companies. >> i think the knock would be, okay, i hear you on all of that, but the valuations are a problem for some based on how they're, you know, looking at where earnings are going to be, where growth has been, where rates are. how do you counter that? >> we try to pick and choose. for us, google and meta are two favorite names amongst the mag seven. both of them we think trade at actually reasonable valuations. they're both around 20 times next year's earnings and both have great catalysts. for google, they have a new ai model they're releasing, gemini. on meta, it's been a year of efficiency for mark zuckerberg, but it's also been a year of accelerated progress. that's been underreckless endangermented. i think meta is innovating at a faster pace than they have over the last five or ten years. >> you wouldn't own amazon or invild ya. then i want to know where apple comes down on your list as well. >> okay. nvidia, we had in one of our

strategi strategies, the deep water frontier strategy. we took that off earlier this year and replaced it with amd. we would rather own amd than nvidia. the reason is amd has a new chip coming out later this year, competes with nvidia's high-end chip. if they get a little bit of traction and gain a little share from nvidia, who has 85%, 90% market share for compute, it's great for amd stock. we owned amazon earlier this year. we sold it because we see better opportunities in google and meta. >> you have an issue with nvidia's valuation? you make the case for not owning it, and then in some respects you kind of make the case for owning it because of their market share. >> i think if you own it and you want to be part of the ai revolution, you're going to be fine. i think there's a better option out there, which is amd from a stock standpoint, which we view as different than maybe a fundamental business standpoint

for the ai revolution. >> now apple. >> it's the greatest company in the world. we were talking about my partner, gene. he loves apple. >> loves it. >> you look at the multiple. he loves apple. >> do you own it? >> we don't own apple right now. >> does geno that? >> i have to tell him. >> why doesn't he? >> again, we go back to what are we trying to do with the mag seven? we don't want to own all of them. we want to pick the one wes think have is most upside in the next 12, 18 months. it's google and meta for us. and better growth aspects than apple for the foreseeable future. >> what's your outlook for earnings in this space in a few weeks? >> we think largely in tech earnings will be fine. i think oom oom this quarter is set up so different than last quarter. last quarter, i think there was a ton of expectations coming into earnings, a lot of optimism. we saw companies reporting pretty decent earnings and stocks were going down. i think it's a different setup here where expectations are more

modest, and i think earnings will be okay in big-cap tech and i think largely the stocks will be the same. >> good to see you. thanks. up next, weighing market risk. jpmorgan asset management's global market strategist, meer pandit is up.

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we're back on "closing bell" following the latest developments out of the middle east as the conflict between israel and hamas enters its third day. eamon javers as the latest. >> hey, scott. i'm at the cyber threat conference, jeannie ahn yule gathering of top, current, and former u.s. intelligence officials. i have to say, scott, the mood here is pretty grim. among the cia veterans i've been talking with today, there is a

sense that the casualty count in israel and gaza is going to increase sharply on the ground, even as both sides struggle to win a parallel information war online. i spoke with norman ruehl, a longtime cia officer who served as the national intelligence manager for iran in the u.s. intelligence community. he said we should steel ourselves for what he called dark days ahead and said the hostages in gaza are in a very difficult situation. he said the intensity of the hamas violence that we've seen is intended, a deliberate tactical choice by that terrorist organization. >> they conducted a series of operations we have not seen since isis activities in syria and iraq. these are horrific stories that are only beginning to emerge, but as they i merge, they're telling of a new modus operandi by terrorists where civilians were not only kid napkidnapped,

murdered, abused, but we're talking children, elderly. >> of course there are parallel questions among this group as to how several of the most highly financed intelligence services in the world including the u.s. and israel missed this terrorist attack as it was being planned. for now, few answers to that question. but he said it's important to understand how hamas did this before they or someone else can do it again. >> eamon, thank you. eamon javers with the update. for what this means for the markets, jpmorgan asset management's global market strategist meera pandit. welcome back. geopolitical risk introduced in a new way or at least a new risk for investors to consider. i just recall two weeks ago, jamie dimon was talking about geopolitical risk as being maybe the biggest risk for markets. how should we think about it going forward? >> we think about the conflict that is unfolding overseas. of course we cannot underscore how vast the implications are from a humanitarian perspective

and from a political perspective. of course it will send jitders thr through markets. but typically the impact in the longer run from geopolitical events tends to be somewhat contained. of course that was the case last year with the russia/ukraine conflict, so let's dissect that a little bit, major commodity exporters and a big shock to energy supply and food supply at a time when the world was vulnerable to an inflation shock. what we're watching now seeing this conflict unfold is does it widen out, do more countries within the middle east get involved, what is the impact to affect potentially things like oil. but at this point, it's day one, it's really early to say. we just advise clients to keep their cool and composure as things unfold. >> most important thing for the market remains rates and the direction of interest rates. is that fair? >> i think that's fair. when we think about where the fed is going, likely headed towards a pause in november, and from there on out, higher for longer.

we've been seeing for the last couple weeks the effect that higher for longer is having on stocks as we realize, okay, we're not going back to lower rates meaningfully for a while. we have to deal with this type of rate environment. i also fold in earnings and growth in terms of how that continues to play out into the end of this year and next year. >> sure. do you think we're too optimistic on earnings projections? how do you feel about that? they prepped up and were pretty optimistic for 2024. >> we've probably seen the worst of earnings for this year, and so what we could see is quite a nice quarter coming up in which we see revenues still holding up as a consumer holds up, margins looking a little bit better because we've seen inflation start to come down and input costs come down, wages starting to come down a little bit. but next year, if we're not going to see 4% growth as we're tracking for this quarter and trend growth or below, that puts pressure on revenues. next year, we could see a little

dip. right now expectations are for 12% growth in profits for 2024. that feel ls s lofty, so we hav prepare that might not be the outcome. >> we talked about rates and earnings. let's talk valuations. a-plus b equals c. is the market too rich or not? >> the good news about the equity market is things have calm douned down a little bit. the s&p is about 8% more expensive than averages. take out the top ten stocks and they're about 30%. we have to modify our allocations in terms of where we're finding relative pricing opportunities. things are better than july in terms of pricing. they're not perfect. we have to keep that in mind. but it's just going to be a tougher environment for invest going forward no matter if you're looking at stocks or bonds given the rate environment. >> what area looks cheap to you in the equity market right now especially? >> let's look outside of megacam tech for sure and look in certain areas within sort of the

value or even more defensive areas. defensive stocks have kind of gotten crushed in the last couple weeks. >> like staples? >> maybe staples or health care thinking about the fundamentals starting to turn and a little. i still think energy, especially with volatility that prices could move higher. within that, health care, energy, again, more value, more defensive than some of the growth names right now. >> what about utility ls? >> had a tough go not too long ago. >> you could see opportunity in that. >> you could start to see that turn around a little bit, but we don't want to get overly defensive yet where we see immediate trouble on the horizon. it's a balance at this point. >> adam parker suggested we could have a pretty good chase into year end. definitely saw the market higher between now and then. you? >> i'm not so sure there's too much to chase. again, if right now we are seeing potential for 4% growth and 12% earnings next year, i do

think those expectations are going to come down throughout the rest of the quarter. maybe people get excited about a rate pause, but then remember that we have higher for longer. so i don't know that there's going to be a huge amount of upside from here. we have to just be selective in where we're deploying money. >> meera pandit, thanks for coming by. >> thank you. up next, tracking the biggest movers as we head into the close. courtney reagan is back with that. >> two stocks moving in opposite directions, one in music, one in cybersecurity. when you're looking for answers, it's good to have help. because the right

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we're 17 minutes away from the closing bell. back to courtney reagan for a look at stocks she is watching. >> shares of spot ify after it was downgraded. it doesn't help its forecast for market expansion plus competition from amazon, which owns audible. barclays is upgrading zscaler, hiking its target. analysts cited a new growth opportunity in a new type of cybersecurity. shares are higher than 3%. last chance to weigh in on our "question of the day."

do you think the risk/reward is about to get better or worse? the results are just after this break.

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activist investor nelson peltz increase his stake in a big way. we break down what's at stake.

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♪ finally we can eat. ♪ you know you make me wanna...♪ and then we looked around and said, wait a minute, this isn't even our stroller! (laughing) you live with your parents, but you own a house in the metaverse? mhm. cool...i don't get it. here's to getting financially ready for anything! and here's to being single and ready to mingle. who's ready to cha-cha?! ♪ yeah, yeah ♪ we're in the "market zone." mike santoli here to break down the crucial moments of the trading day. and julia boorstin, a renewed push for disney board seats. and deirdre bosa. mike, to you first. a lot of green, nice turn. and i guess some relief for a bond market that's closed.

but the futures are giving us a little bit of a tell. >> the repetition from these beneficials pointing to the same factor, maybe the fed has to do less. i think it does free up the market to essentially embrace the fact we have a decent economy right here. it is more of a normalization-type move in rates than a punishing one in that context. that being said, we're up to the month now on the s&p 500, which is a little bit of a surprise. but still with plenty to prove. i think everyone is looking at, you know, get above 44 p,4004,4 back to that level from the third or fourth week in september before you know this is a sustainable bounce. if yields are calm, earnings season coming, you'll have less macro stress. the oil move today, while dramatic, only gets us back to several days ago. it's absorbable. >> cpi needs to play into the fed may be done, rate have done a lot of work. >> it has to feed into it.

>> a lot of fed speakers are saying that. >> it can't contradict it too loudly. the projections for the cpi have been coming in close to the resulting number. i believe phillip jefferson said we're not going to get distracted by any one number. that presumably works in both directions. you can have some comfort that disinflation is the law of the land for now. >> julia boorstin, he's back. what does he want this time? >> nelson phelps trading fund is one of the largest investors with a stake of worth more than $2.5 billion. peltz plans to push for multiple board seats at disney. all of this comes after disney shares just last week hit their lowest level since 2014. it also comes after back in january there was a proxy fight against disney, criticizing its

acquisition in succession plans. peltz dropped the battle after ceo bob iger unveiled a corporate reorganization and meaningful job cuts. "the stock is stuck in the exact same spot, and disney is holding a much weaker hand of cards than it was holding last winter." the stock is down since then, but bob iger has announced a slew of changes. disney had no comment, and we are awaiting official announcement from peltz about the plan. >> julia, thanks. to julia's point, sort of peltz stood down the first time, them watched the stock do nothing even though this plan was enacted and now is i guess thinking enough is enough, time for more action. >> presumably. the cost of get back involved has gone down as the stock has declined. i don't think anyone has the impression there are three orrive five obvious things to be

done to reorient this business that aren't being done by bob iger. more of a say of change the pace of some of the strategic moves on the table. it's been an incredibly tough area of the market. disney hasn't been immune to the bigger pressure. >> deirdre bosa, we're waiting for the analysts to start weighing in following the ipo. about six weeks ago, i guess. >> 25 days to be exact. that's how long the banks who underwrote the ipo had to wait in order to publish research. now that's out. they're rating the stock a buy. all of them were a buy. the consensus is they like arm's gross prospects. right now, arm is the biggest player in smartphones, but they think there's room in cloud infrastructure and of course ai, the big gamble, which they say justifies its valuation, so far

above the chip space. i do want to point out, the first-day pop was about 25%. it has pared gains from there. the consensus for the average price target is about 10 bucks above where it is today. a lot has to happen to fulfill these expectations. but i also think it's interesting to note the softbank in all of this, because remember they are still 90% shoulder. arm is now the new crown jewel for softbank, taking the place of alibaba. >> appreciate it. deirdre bosa. back to mike santoli. haven't talked that much in the last week or so about them, but i sawsome stocks floating around the floor. >> they're ready. we'll see a lot of fair feed around this place on wednesday. i do think when it comes to arm, no surprise you have the parade of investment banks. by the way, it was dozens who were involved in this deal. because the stock is so close to

the actual ipo price. you priced it at 51, trading give or take a couple bucks above that. it's an easy call to say we think it's a core holding and you have to own it at these levels. i still don't know. the response today wasn't necessarily particularly exciting. it's up a little bit. i think the same debate on a known quantity of a company is there in play. what do you pay for a company at this sort of integral spot in chip design know if it's there? broadly ipos will be deal by deal. you have to have something special to be in first wave. >> let's turn to earnings. the banks first. i wonder what you think that's going to mean for sentiment. you'll get a lot of commentary about rates being up. >> yes. >> the likes of jamie dimon talking about -- and talking loudly about the perceived risks. now you add this geopolitical element to that as well.

he's been talking about that for weeks. >> yeah. two things i would look at would be just quantifying on a quarter-end basis, where they stand in terms of impact of rates on the balance sheet, on bond holdings. for bank of america, it matters quite a bit. for others, maybe not quite as much. then what their credit loss or delinquency experience has been so far and what they're projecting, because there's a lot of sensitivity toward credit trend right now. everything looks a little scary on a short-term time frame in terms of credit card delinquencies, especially among lower-income households. but in a longer-term frame, it isn't much of anything except coming off depressed levels of delinquency, so it kind of looks like a return to normal. what is that going to mean on a going-forward basis? i think those are the areas. really, it is macro, even though it's company specific. >> sure. >> it's kind of their window on the macro. they'll probably say on the spending side in terms of account balances things look healthy, jobs are in a good

spot. i think it is much more about the credit performance. >> brian moynihan, bank of america, usually gives a pretty good view into the krendi consu spending psyche. we talked withed a arm parker. some say maybe staples. coca-cola, pem pepsi for cheaper than i could a while ago. >> if you're of the mind to say, okay, they've actually put some relatively defensive things on sale and you can lock it in and have higher dividend yields on things like pepsico in years, fine. i would also look at the cyclical parts of the market that have been cheapened and decide do we believe the economic outlook -- capital one got an upgrade today. that's a good example. this is a dirt-cheap stock. is there a reason? you lookover the value and say it's worth something else. retail as a stock, if you're

brave and opportunistic. >> the events in the middle east. the bell rings. dow shy of 200 points. the nasdaq had a late turn as well. see you tomorrow. welcome to "closing bell overtime." i'm jon fortt back with morgan brennan. this hour, full coverage of the conflict unfolding in the middle east and the impact on global markets. we'll talk to ruchi sharma about how to factor in geopolitical risk. >> and mark esper will talk about the impact on defense countries. and we'll speak. energy expert bill perkins about the pop in