you founded your kayak company because you love the ocean- not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire ♪ welcome to "power lunch," along side kelly evans, i'm dominic chu. the latest report showing no slowdown in inflation from the previous months and higher than expectations. so, will that change the fed's plan? and how is the fed's higher for longer approach going to affect the bank stocks, as they start reporting those results tomorrow morning? plus, a top donor lashes out at the university of pennsylvania over perceived anti-semitism on

campus. and this issue could be popping up at other well-known colleges all over the country as well, kelly. >> we'll talk about how they and maybe the employers as well should be navigating it. let's take a look at the markets. the dow down almost 300 points going on a 1% move. same for the s&p. the nasdaq as well, all 11 sectors in the red today. energy and tech were helping us in the green, but they've given that up. a lot of this coming after the poor 30-year bond auction top of the hour today. we had similar after the poor 10-year bond auction yesterday. yields continue to climb. that tells you where the market worry is at the moment. we're watching shares of birkenstock, continuing to drop, which priced at 46, opened at 41, and is going to break below $38 a share. we'll have more on recent ipos struggling.

mizuho cutting the stock to underperform with a $5 price target. the stock is $8 now but was a $230 stock. hotter than expected inflation read out this morning. could this change the fed's plan? steve, in addition to the bond auction that kelly just pointed out, the cpi has been a big driver. what exactly has changed? and what hasn't? >> you know, it's interesting, dom, there's been some increase in the outlook for another federate hike this year. but the market is still betting it doesn't happen. i'll show you those numbers right away. but first, let's look at the numbers that moved up those probabilities. the headline cpi coming in at 04. it's down from the 06 last month, but it had been expected at 0.3. and the year-over-year 3.7, unchanged. there was room for improvement there. the core coming in exactly as expected, up 0.3, same as last month. and the year-over-year making some progress.

that might be keeping people at bay or putting two sides to the train here. gas prices went up a healthy 2.1%. and homeownership costs rose an unexpected 0.6. most forecasters were hoping for progress in that number. they do see it coming down in the months ahead. there were declines in car prices and food inflation. all of that leading to a higher probability of a federate hike, but not overwhelmingly. it was down very low, below 10% probability for november. now it's up to 12. and december's 36, up from 28. when it starts to get here 50, the market really means business. officials have talked a lot in recent days of letting the higher bond market yields do the fed's work for it. and yields are higher. so, the fed, at this point, starts to pivot to hold. but it's going to keep a weary eye on inflation data. as you know, the question now increasingly is how long at these levels, not necessarily how high anymore. >> steve, an interesting dynamic

that's developing right now within the longer end of that bond trade, the yield curve, so to speak. is this notion that with geopolitical unrest, the terrorists attacks happening in israel and the middle east, all of that was propelling the flight to safety trade, bringing down longer-term yields over the last several days. how is that going to resolve itself with the inflationary tif? it appears as those the inflation story is having impact on the bond market than is the middle east crisis. >> i have to talk clinically about this. obviously not taking into account the horrific human toll here. but the general consensus i'm hearing is that there's a limited impact on the u.s. economy, not really that much impact on the inflation outlook per se. so, you're right, dom. what's happened is we had this reprieve in yields from this flight to safety, and that came off a little bit, especially now that people said, wait a second.

i've got to worry about inflation. i've got to worry about these massive issuance things that are out there. those are the main drivers at the moment with the flight to safety kind of waning in the background. it's all the fed talk and the talk yesterday in the minutes that made me think the fed is more likely, dom, on hold here. i was talking to kelly yesterday. i said, the movement we're going to see more and more is when that first cut is priced in. over the past several days, they've move frd june to maybe as soon as may. today they're back to july. so, there's a lot of swing in those three months when you want to see when the market gets nervous about higher for longer, you look at those outcontracts of when the first cut is expected. >> great point. and right now it's a little more out. steve liesman, we appreciate it. let's get the latest on the bond market. after the auction about an hour ago. rick santelli joining us from chicago. it was interesting, not only the immediate yields in stocks but that it continued. >> yeah, and this is much

different actually than yesterday's tenure, which was also a very poor auction. having back-to-back long-dated treasury yields with soft auctions, that's important. and listen, i agree with steve. always following the fed is important. they're a mighty organization, right? but let me see. am i going to worry about maybe a quarter point in december or am i going to worry about almost 20 basis points today in 30-year bonds? the market right now is in control, and that is something that has changed. now, as you look at 2s, 10s, and 30s on one chart week to date, you can see what i'm talking about. boy, they all popped. and 30-year now joins 10-year in the highest yields going back to 2007. yesterday it was 2010 for 30-year. on tuesday it was 2011. and boy, it is zooming. and today at the auction, we had the highest yields at auction since may of 2007. but here's something really important. if you look at the dollar index,

the dollar index has been at very lofty levels. it didn't even respond much to flight to safety trades. but look at the way it popped today. that's a week-to-date chart because the dollar index was open on columbus day monday. so, we're at the highest prices since monday, which isn't that long ago. but to see how it all winds up together and what the equities did is painting a picture. i agree with steve, the human toll in middle east trumps everything. but the flight to safety trade is a knee-jerk reaction. nobody really knows the depths it affects the economy. steve made a very good estimate, most likely not in a huge way. but that doesn't really define some of these flight to safety trades. it's more of emotion, and it already seems to be getting trumped by the aggressive long maturities, paid very close attention to which side of 4.75 we close the week on tomorrow. back to you. >> rick santelli, thank you very much. let's talk more about

stocks, which continue to deteriorate today as the risk of facing the markets pile up. margaret -- is here. great to have you on set. welcome. >> thank you. >> it's interesting because you're in an area that's been so strong growth primarily. even so you've been a little bit underweight tech and so forth. are they going to be able to withstand this rate shock better than other areas? now you have health care. just talk to us about how you're, kind of, thinking these. >> yeah, look, i think many of the large tech companies, one of the reasons they've acted offensively and defensively the last couple of years is because they have great balance sheets. if we do have a selloff, should some of the megacap tech companies hold up well? sure. they have really great balance sheets. when we think about -- if you had asked me two or three years ago where we're spending our time, i would have said internet and tech. now not as much. we think there are other areas of the economy where you can find good value and have defense

in your portfolio. or early cyclicals, where we might be a little early, but coming out the other side of the slowdown, there's opportunity to perform. diversification is key now. >> how much do the rising rates -- we showed the chart on the rising rates on the 30-year side of things, 10-year side of things. there have been obvious drivers with the data coming out. does that put more of the onus on you as the portfolio manager to scrutinize the leverage side of things, to look at whether companies who use a lot of debt to finance their operations may be at risk in the coming months, quarters, or years depending on when the maturities happen and when they have to roll that debt into higher interest rate debt? >> it's certainly of a mid capc cap/small cap because most companies have overcapitalized balance sheets wrchlt you're going to see it is earnings depression. they're going to have to roll over some of their debt at higher rates and we're going to see in less earnings growth.

i can see that happening. but not to the point of financial distress. >> again, you think maybe these are the reports in the storm. so, when is the effect of higher rates really going to bite? for a lot of companies it feels like okay, maybe they turned out some debt in recent years. as you're looking through and trying to figure out what's safe and what's not safe, are you literally getting balance sheet specific? >> we are just to make sure they are overcapitalized, to make sure nobody has financial distress risk. in our technology in internet portfolio holdings, we don't have companies that aren't profitable. that's where you're going to have a problem. any company that's not profitable that maybe was a popular stock in 2020, this is a problem. we have much more capital constraint. >> what about the pipeline? in the last several years, tech, the ipo market, this really delivered this whole new crop into the market -- not up to large cap levels yet. but all of a sudden, that's dried up now. all of a sudden, that early stage, kind of, growth part of the market, small cap growth, if you want to call it that, looks

like one of the weakest. and what are the ramifications of that? >> the ramifications are that when we talk to our portfolio companies, for the first time in several years, they're excited about the opportunity, right? so, if you had asked them two years ago, they would have said, we can't afford it by any of these companies because they can go public and make a higher price than we can pay for them. and now that's coming back to them. >> that's a great point. >> let's put rubber meets the road on this. portfolio manager, stock picker, you've got to put money to work. what's on the shopping list? you made some illusions to things like early cyclicals to early health care. what stocks are we looking at that go on your shopping list? >> we do want to make sure the portfolio has some defense. we are facing a more challenging period over the next couple of months, couple of quarters. so, health care is really interesting. it gives you good value and some defense. we like the fisher scientific.

it's a quality company, good compound, very diversified. and interestingly, the issues that are affecting them right now, slowdown in china, covid destocking, those are not long long-term problems. this is a good company. early cyclical companies is where you want to look next. >> i don't -- i don't -- >> it's so tough right now to go that route. >> inch your way in. inch your way in. there are companies like the railroad. i never thought i would be a growth manager talking to you about railroads, but this is a business where -- they still ship things like grains and lumber, which have some defense. self-help. this is self-help. >> what is it? norfolk southern, union pacific? >> we like union pacific. they have a new leader. the company has not done a very good job of execution over the last couple of years, and i think this new ceo can help improve on time performance, can help improve safety. that drives value. that drives profitability. hopefully that will save us. >> this is the sign of the times, large-cap growth manager

ogoing for railroads and health care. >> margaret, thanks so much. we appreciate it today. thanks for joining us. coming up on the show, the ipo pipeline bursting. when the year started, investors were excited about the names going public. but nearly all of them are falling flat now post-ipo. we'll discuss why coming up. plus the fourth day of our five-star fund week. we're looking at the bond market. "power lunch" will be back after this break. ( ♪ ♪ ) ♪ (when the day that) ♪ ♪ (lies ahead of me) ♪ ♪ ( seems impossible to face) ♪ ♪ (a lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ ♪ (lovely day) ♪ a bank that knows your business grows your business. bmo. i promise - as an independent advisor -

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. welcome back to "power lunch." birkenstock is trading below 38 bucks a share right now. that's well below its offering price of $46. it opened at 41, remember. other recent listing, insta cart, arm holdings have disappointed since the pops after their debuts. joining us now is deirdre bosa for our "tech check" today. i'm not sure what it says about the ipo market or sentiment, deirdre, but it's certainly not all that positive. >> what can we say? i know it's early, abut what can we say so far? it was short, not very sweet, and now it's likely closed as we head into the year. and no one wants to be doing their road shows during the holiday season. so, this early performance, dom, that you just outlined, it suggests they've been a bust at -- let me put this in terms

of ipo debut peaks. insta cart is down 40% from its first day pop. even -- ipo market. that's down nearly 20% from its short lived post debut peak. and this is all before the lock up period has expired, guys, when insiders can sell shares. so, really that raises the question, could it get worse from here. we know thatespecially at a company like instacart, employees have been sitting on options for a very, very long time. it can also tell us startups that may need to tap markets, that perhaps market conditions still aren't all that great. and it may take, at least from what i hear, until the second half of next year until we see the ipo market gain steam again. >> deirdre, birkenstock is different, obviously, but different in terms of the sentiment that went into it for

investors -- more techy focused, and that's what was capturing the imagination of investors out there. is it fair to say that birkenstock is not in the same kind of sentiment category that say instacart or a.r.m. was? should we be looking at that or those two as comps to what's happening with birkenstock? >> you bring up a good point. you can say all four are very, very different and -- may be the most counsel enshl because it's a venture backed startup. and there's many more of those than there are instacarts in terms of where it plays, more than birkenstock in the ipo pipeline. that's why we try to take them all together. the one thing they had in common, they were marquee names. the retail investor knows and could get excited about.

the fact they're down and had disappointed debuts tell us us something about at large about the ipo window. it's not looking all that great for other companies that want to go out. in terms of birkenstock, no it's not a tech company. but the way in which it is a direct to consumer company. remember hims and hers, warby parker. they were, kind of, tech companies because they were direct to consumer. bi birkenstock has that model as well in terms of having the e-commerce direct link to the consumer. and it's doing it in a better way than those companies that claim to be tech companies were doing it. essentially it uses its wholesale platform and direct to consumer platform to create scarcity and a compelling platform for the consumer. >> deirdre, thank you. we appreciate it today. deirdre bosa. meantime, fighting in the hamas/israel war extending to multiple fronts, especially the social one. public sentiment divided over the conflict, especially in the

u.s. colleges like u penn criticized for allowing anti-semitism and social media platforms working overtime to battle misinformation. we'll discuss the battles waging on the social front when "power lunch" returns. ♪ ♪ every day, businesses everywhere are asking: is it possible? with comcast business... it is. is it possible to help keep our online platform safe from cyberthreats? absolutely. can we provide health care virtually anywhere? we can help with that. is it possible to use predictive monitoring to address operations issues? we can help with that, too. with the advanced connectivity and intelligence of global secure networking from comcast business. it's not just possible. it's happening.

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welcome back to -- we're just watching what's happening with the markets. the dow industrials were down 60 points. they are now bouncing off lows 290 points to the day so far. the s&p 500 currently down about one full percent, 43.33. nasdaq over a percent. meanwhile oil prices are also moving lower, not what you would expect to see based on past instances of conflict in the middle east. but this time, the u.s. is in a very different position energy-wise. so, let's bring in pippa stevens

with more on that story and the changing dynamic of the u.s. energy market. >> that's right. so, we haven't seen a big response in oil prices given that neither israel or gaza is a major producer. even if the conflict were to spread into the middle east it's likely we'll see an embargo. and also the world is a little more insulated to any energy supply shocks. if you look at the u.s. specifically, our production, we have a sharp production hovering around 13 million barrels per day, which is a record high. and much of that is of course is thanks to the shale boom. and shale oil is short cycle. you can bring it online in six to nine months. in the 1970s it was deep water wells. you can see our production around 13 million barrels per day. as the production that is increased so have exports. now when you take oil and petroleum products together, we're exporting more than we are

importing. and that was the,er for the first time a couple of years ago, that happened. the u.s. is more insulated. that said, this doesn't tell the whole story. we still imported last week about 6.3 million barrels of oil per day. and that's because of our refiners on the west coast and the bull of coast. they are set up to run sour crude and our shale oil is light crude. so, they've been retrofitted to run so much shale. but there's only so much you can do. bottom line is that we're in a better position, but these markets are global. >> i know we don't have a lot of time, but it still feels like we have to watch what happens in iran. if global authorities get serious about 3 million barrels to 300,000, that feels like it would have a large impact. >> exactly. we've turned a blind eye because we wanted prices to go down, so the u.s. has let that exports rise -- in the last year, a lot of that going to china of

course. and the -- is the big wildcard there. about 20 million barrels pass through. >> pippa stevens, we appreciate it. since hamas attacked israel on saturday, social media platforms have been flooded with content and videos, some real, some not. julia boorstin joins us now with the fight against misinformation. >> let's start off with x. it has drawn broad criticism for misinformation on its platform and the slow response to the fact checking feature, allowing altered images and video game clips attributed as war footage to spread. some debunked claims spread by verified accounts, which can make money on the post. a propaganda network of 67 accounts on x coordinated a campaign with false m inflammatory content related to the war. european regulator terry -- sent letters to mark zuckerberg and

elon musk along with tiktok, flagging the increase in illegal content and the platform's responsibility for monitoring and removing misinformation and illegal content, such as violent and terrorist content, under the digital services act. the exceo responding that x has removed hundreds of hamas affiliated accounts and said, quote, we've redistributed resources and refocused teams who are working around the clock to address this rapidly evolving situation. meta responding, quote, our teams are working around the clock to keep our platforms safe, take actions on content that violates policies or local law, and coordinate with third party fact checkers in the region to limit the spread of misinformation. meta's x alternative threads is seeing increase in downloads, 40th place to 20th place since the war began according to data.ai. and dom, kelly, youtube has

drawn criticism for letting videos calling for violence to stay up for days before they were pulled down. >> julia boorstin with the latest on the state of play with social media. let's get to contessa brewer for a cnbc news update. >> dom, hello. the number of americans killed since hamas attacked israel saturday has risen once again. 27 americans are now confirmed dead, up from the 25 we knew about earlier today. 14 have been unaccounted for. potentially they're among the estimated 100 to 150 hostages taken by hamas over the weekend attack. the white house also announced today the u.s. is planning to arrange charter flights to europe friday for any americans who want to leave israel. israel's parliament approved a plan to provide $6 billion worth of insurance coverage to israeli airlines. that move insures that air operations can continue during the israel/hamas war. the country's national airline

has pledged to continue operating flights, after the country called up 360,000 reservists to fight. and a pro-palestine rally on the campus of unc chapel hill got heated today with a university professor tried to carry an israeli flag into the protest. he had a drink thrown on him during the clash but wasn't hurt, and then police escorted him away. tyler. ahead on power lunch. we want to give you a quick power check. on the positive side of things in the s&p 500, it's -- estimates on strong understands for onside products and industrial supplies. on the negative side you've got hormel foods down 10%. union workers ratifying a new contract with the largest wage increases in that for processed food company's history. we'll be back in a minute.

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. welcome back. the ceo of apollo management is calling for the resignation of the president and the chair of the university of pennsylvania over the school's failure to

condemn hamas' attack on israel. he's a major donor to the school. let's get to robert frank for more on this story. >> this has been a fast moving story today. the university of pennsylvania responding to claims by apollo ceo that the university has ref refused to condemn anti-semitism. rowan called on donors to stop giving money. he told donors to send a $1 check to the university rather than their usual donations just to send a message. >> we already have seen 150 million that would have come to the university move away from the university. we've seen more than 4,000 of our most engaged alumni basically say, the university's heading in the wrong direction. >> the vice chair now saying the university has, quote, publicly commit to unpress depacedented o combat anti-semitism on its campus and condemn the attacks

at hamas. similar tensions are boiling over at harvard -- not condemning a letter from the harvard solidarity groups. he wrote, in nearly 50 years of harvard affiliation, i have never been as disillusioned and alienated as i am today. bill akerman is leading a campaign for companies to refuse to hire any student at harvard who signed that letter, including sweet green and easy health. no formal response, yet, kelly, from har wvard on the hiring boycott. >> thank you very much for that. for more on the donor backlash, the implications for higher ed, what happened at u penn, what university leaders should be doing to address anti-semitism concerns. let's bring in the senior fellow at the american enterprise institute. she previously covered higher education for the walt walt journal and the "new york post."

i guess the first question overall is just how important should these campaigns be for the combatting of anti-semitism at institutions of higher learning? >> sure. thanks for having me. well, money talks, as you're beginning to see finally. my question for a lot of these donors is where have they been for the last 10 or 20 years as anti-semitism has increased on campuses across the united states. i think this is hugely important. i think college presidents do have to care about their bottom line. even at wealthy universities, if you have hedge fund managers who are encouraging people to withhold hundreds of millions of dollars in donations in response to what is just pure cowardice on the part of these administrators, i think that's a great move. i think they'll finally start listening to the concerns of people in the community who have, for decades, felt as if this is a problem that is growing and it is not being addressed by the administrations. >> naomi, there's a very fine line that a lot of folks are

trying to walk right here. it's not about the outrage -- not outrage. there are outrageous things happening around the world. the question then becomes the free speech element. the takes that i've heard are that you don't want to stifle free speech, and it's something that we, as journalists, treasure very much. we're all first amendment p proponents. but you have to say with your free speech that these are despicable views or despicable acts that are happening. how do institutions at higher ed make that balance or toe that line? >> i don't think it's as hard a line to draw as you're suggesting. i would refer people to for instance ben sasse, who is the president of university of florida, gave a very clear statement where he said, we have free speech here, you want to demonstrate, that's fine. the second it descends into any kind of threats or violence or anything like that, we will respond. and also we will protect the security of the jews on campus and also, by the way, we

unconditionally condemn the attack on israeli citizens. to say, you know, we are opposed to the decapitation of babies doesn't really seem to me like it's a very controversial thing to say. but apparently these days on campus it is. i will also point out that i think in terms of free speech, this line had been crossed a long time ago. i mean, there was a report -- there are some interesting reports back in 2011. you had this eruption of anti-semitic statements -- you could call them that -- at uc irvine. you had people chanting death to the jews. you had people vandalizing holocaust memorials. you had people threatening individual jewish students. the idea this is about free speech, i don't buy it. i think that campuses have a duty to protect free speech. but they also have a duty to ensure that it's clear where that line is and that students cannot engage in this kind of threatening tone. and also that those students are

not speaking for the university. i mean, it is incredible to me -- just take penn for instance. they were only too happy to speak out about the death of george floyd. once you go down this road of making political statements as university administration, then it seems to be perfectly reasonable to expect that they're going to say something about the slaughter of over 1,000 jews in israel. >> i think that's exactly the question is whether universities should refrain from this kind of -- i think the stanford example is very interesting, where they say we think it's important that the universities as an institution refrain from taking institutional positions. there's others also saying here that this idea of needing to weigh in on every single thing that's happening, i wonder if that's going to be really where university should look. whether or not they have a problem with anti-semitism being separate and of course being an issue. but in terms of these public proclamations, and even the corporate workplace being dragged into this in recent years as well. >> they have already gone down

this road. once you've decided you're going to make statements about black lives matter, once you've decided you're going to make statements about ukraine, once you've decided you're going to make statements about all these things, then it seems like you're singling out the jewish community for not making a statement about this thing, which is very personal to a lot of students on campus. the statement that penn made upon the death of george floyd was all about how we care so much about the black students on this campus and we feel for them and we are worried about their safety and we want to care for them. where is that statement about all the jews on campus? and the jews who have relatives and friends, close relatives and friends, who are living in israel at this time? is anyone saying anything to them like that? no. so, once you've gone down this road of making these statements, then i feel like you actually have to be pretty consist consit about it. >> for sure. and i think you'll see more universities meeting with boards and donors and being told or deciding that going back to neutrality is going to be a

better approach. there's only going to be more turbulent times. thanks for joining us. we appreciate it today. naomi schaffer riley. let's take a break. cnbc celebrating hispanic heritage, sharing stories of influential business leaders. here is palm olive's chief supply chain officer. >> if an industrial engineer from a factory in brazil can become the chief officer, you can achieve and go beyond your dreams. be proud of your heritage. be proud of your identity. at the end, those are your superpowers. what you bring with you from your country is really what defines you as a professional and as a human being. ever since she was a little ki, all maría wanted to do was bak. i'm maría alvarez, owner of maría's cakes. and i'm axel, proud to be her state farm agent.

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welcome back, everybody. our "five star fund week" continues and today's focus is on fixed income, good timing, with yields pushing to multi-year highs. investors have the opportunities to earn equity with returns with less volatility.

dan iverson is -- $127.05-star morningstar rated fund, down about 2% year to date but is consistently one of the top performing funds in its category. dan, it's great to have you here. welcome. >> thank you, kelly. >> i don't know what the move index is doing today, but these are about the most interesting times we've seen in a long time in bondland. >> yeah, it's true. the last couple of days have been a good reminder that volatility's high and we unfortunately expect volatility to continue. it's both, you know, a concern, a mental concern as well, you know know, given the big moves in rates, but also great opportunity for active management in the fund. >> where are you looking -- so, the, kind of, range dynamic as someone is trying to manage a portfolio in fixed income is that you want high yields. but if they keep going higher, you're left with market to market losses. you're trying to track benchmarks and all this. i really can't imagine. where are you looking for both

tactical opportunity and for people to earn pretty decent longer-term yields? >> sure. so, i think the mindset is one of patience. the good news about fixed income is the starting yield is a great predictor of forward returns. if you're patient, our particular strategy is yielding 7.5%. the prospects look bright over the next few years. with that said, i think today's cpi data is a reminder we've yet to control inflation. the risk of a hard landing is still quite high. what we've been trying to do is keep it simple, remain resilient. in the last several months, we go up in quality. you can do that in liquid areas of the market and generate yields that i just mentioned. so, a lot of government guaranteed risks, things like agency mortgage backed securities, a lot of very, very high quality corporate bonds, some asset-backed season pools

of mortgage securities. and again we're at a very, very high level of credit quality in a historical context. and we think we're quite resilient even if we do get into a recessionary scenario. >> dan, it's dom. good to see you again. one of the things i've had a lot of conversations about on a relative basis is the idea that people are looking more and more at things like bank loans and floating rate adjustable rate debt. they're looking to invest in places like that. we've seen fund flows into floating rate funds and etf products. do you think that's something that has legs? is there a shift in investor sentiment on the credit side where they are looking at these higher rate interest levels that could reset at even higher rates down the line? >> so, there's a lot of temptation to move into the floating rate area of the market simply because you don't have a lot of direct interest rate exposure. those are actually some of the sectors that we like the least. and i think it's important to

remember that loan space, segments of the private credit markets have grown significantly over the last several years, when rates are at or near zero. it's good in theory that you have a floating rate. but the companies that have borrowed in the floating rate markets and are not properly hedged or not hedged at all have to find the money to make the debt payments. given our slightly higher concern that we're headed for a hard landing than what's implied in the market, we think its make sense to be defensive in the markets. those areas of the market tend to be lower rated. we would much rather actively manage duration at a high level and focus on sectors that would be much more resilient if we do get into a harder landing scenario. that's an area of our portfolio where we've brought down the risk and have very, very little exposure to senior secured loans or other higher risk form of debt. >> it's a crucial point, dan.

it's the very calculation everyone in the market is trying to make right now. as you said, you're, kind of, in the hard landing camp. are these yields on cash, what you can get across the treasury complex, are these the buy of a lifetime? >> i'm not quite sure of a lifetime. yields certainly go higher. but as good a value that we see in this market, you know, going all the way back to pre-global financial crisis. with a patient investor -- even looking at equity valuations versus fixed income. it makes sense to shift your equity exposure into the bond market, maintain liquidity and position yourself to take advantage of what we think will be more volatility over the next couple of years. and even under a softer landing scenario, there are going to be problems in the commercial real estate markets.

and by staying liquid, we think you can be well positioned to go on offense. and that's exactly what we're looking and prepared to do with this strategy as well. >> dan iverson, our fourth 5-star fund manager of this week. number 5 is coming up tomorrow. dan, we appreciate it. see you soon. still ahead on the show, we'll trade some of the big movers of the day. target upgraded over bank of america. and -- tapping the brakes on car voir dire na shares. on the other side of this break. keep it right here.

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welcome back, it's time for three stock lunch. we're trading some of the big movers of the day. you've got walgreen's boots alliance, disappointing fourth quarter earnings and soft guidance as the street seems to like its cost cutting measures and plans to use ai, here with our trades is david wagner, portfolio manager over at apt us capital advisories. wall greens is an interesting fundamental story, new ceo coming in. what's the trade there? >> yeah, i kind of agree with

you, dom, on the ceo news. i think the market should take that very well. w wentworth has a history of execution, i mean, everyone knows that the pharmacy side sucks, the retail side also sucks. it appears that all conversations around walgreen's alliance right now is going to be coming from the health care services side of the business. if you really focus on the health care service side of the business, they've lost over $600 million year-to-date off of poor strategy execution. it's like the opposite of the field of dreams. you know, they built these village facilities, but really, no one really came, so i'm really not interested in owning a business that has, you know, struggling on the retail side and on the pharmacy side combined with a third leg of the business really that has had really poor execution on the services side. i'm staying away here. >> all right, let's see what you think about target. they're saying the shares, which we know have been under a lot of pressure now look attractive

while margins could you've in the y-- improve in the year ahead. >> i'm begrudgingly saying investors could dip their toes in this thing. i'm not going to say the all clear sign is out there. the stock's still down 25% year-to-date and down like 20% since july, but you know, i tell my clients that valuations should never be the sole reason to be bullish on some type of name. i tell them that you need some type of catalyst to drive mean reversion in that valuation. and kelly, i think that we're finally in an environment where, yes, valuations vary, but you're the starting to see a few catalysts with overall foot traffic moving forward and margins, especially as they have a lot of anniversaries on a lot of bad data. i'm get ting a little bit more constructive. $3 billion in gross cost savings start to come to fruition. >> and our final name today is

carvana. it's down about 1% on a downgrade at b and p moving to neutral after a monster run for the stock up 600% or so year-to-date, is carvana now a little too rich? >> yeah, you know, the downgrade today should not be a huge surprise really for everyone. as you've said, the stock's up 600% year-to-date off of better than expected ebitda and a debt reinstru restructure that kicked the can down the road. there remains an affordability for consumers, coupled with the fact that car prices are going to increase due to tighter supply and uaw strikes. carvana's losing like low double-digit market share since they started to pull back on their market spend. it's a classic catch 22, a catch 22 here, i apologize. you know, they've done a great job keeping cost controls tight allowing for break even ebitdas. but that's baked in right now. you know, basic for this story to change, they need to persuade investors that they are back

again to being a growth stock and not a turn around story. >> all right, david wagner at aptus with our three stock lunch today, thank you very much, sir. we'll see you soon. wt r toul the other headlines weantounhrgh on the other side of this break. >> announcer: catch the market zone today and every weekday on "closing bell" sponsored by e-trade from morgan stanley. easy-to-use tools and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. e*trade from morgan stanley. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities, while an earnings tool helps you plan your trades and stay on top of the market. e*trade from morgan stanley. ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles.

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we've got news out of the sam bankman fried trial, his former girlfriend has wrapped up testimony after nearly three days on the stand. she is expected to leave the courthouse at any moment. we've got cameras camped out there, and of course our own kate rooney who's been monitoring everything is going to have much more on that story coming up on "closing bell." we'll keep it right here. the social security administration has come out with its announcement for the cola. >> oh, cost of living adjustments. >> it was -- what was it 8 point something? >> it was a record. >> this year 3.2%. it's not nothing. that will be the boost to benefits next year, about $50 extra per month on average, much lower. there is the number, 8.7 was the record increase last year. >> what's interesting, the average social security benefit per month is around $1,900. so it's not an insignificant amount of money on a percentage basis, but it speaks to this idea that you have this cooling environment and whether or not people are going to be able to still liveon that paycheck.

>> it's important to mention today as well where we see interest rates rising because there's concern about the size of deficits, the size of treasury r treasury issuances. >> the stock market is down 225 points. remember earlier in the show we were down north of 300 points, so trying to find some stability there right now. >> thank you for being here, dom. >> thanks very much. thanks for watching "power lunch." >> "closing bell" starts right now. kelly, thanks so much. welcome to c"closing bell," i'm scott wapner, this make or break hour begins with the major averages trying for five straight days of gains. that's clearly shaping up to be a struggle to say the least. rising rates, on that hotter than expected cpi report and a weak treasury auction right around midday. there's your picture. dow, s&p, nasdaq, russell all week. that's your score card with 60 minutes to go in regulation. there is plenty on the board, materials, industrials, staples