anyways. that is a consistent flaw that has not been remedied yet and why so many say we are heading back to something that looks like cable except it will be in streaming form. >> and here we are. enjoy the ride from one point to two. hope everyone enjoyed the ride. from 1.0 to 2.0. >> thank you for watching "power lunch." >> "closing bell" starts right now. thank you so much. welcome to "closing bell." i'm scott wapner at the new york stock exchange. we begin with a market upset, hotter than expected jobs report surging. 60 go in regulation. as you can see, red all over the place and it was like that right from the jump today, happened as bond yields hit the highest level in more than a year. we'll ask the wharton school's jeremy siegel where stocks are likely to head in the weeks ahead.

the russell leading the declines, financials getting hit as well. there is the russell down more than 2% today. tech not far behind either. several megacap stocks are seeing see ing big losses today. cold water, more of it, on the iphone upgrade cycle. that's the talk of the tape. for that stock, hit with a big downgrade this week, now these appreciate concerns. let's bring in our tech reporter steve kovach who is here with more. when this particular analyst speaks, you listen. >> i always listen. and this is, scott, this is a dreary note from that analyst. he's over at tf international securities, what i consider the best analyst out there covering apple. he often predicts what apple is going to do months or years before apple does it. here's what he's saying about iphone. iphone shipments, he says, are expected to decline 6% for the first half of this year, even with the expected launch of the new entry level iphone se, the cheaper iphone that apple puts out every few years or so.

iphone shipments, it gets worse, though, in china, down 10% to 12% year over year for even -- for the december month of december that is, even though overall smartphone shipments were flat. that means apple is a losing market share in china. here is the kicker here, he says, quote, no evidence of apple intelligence driving hardware upgrades or service revenue. apple's reporting earnings in just 20 days, scott, on january 30th, and this is the biggest question everyone is going to have for tim cook and his team is apple intelligence driving sales, they seem to think it is not paying off right now. >> at what point do we say, we have enough evidence to suggest this is just not going to happen, like maybe we thought it would? >> i think we're going to get a good sign in 20 days here about what that actually looks like, what the quarter looked like. because keep in mind, this is the first full quarter that december quarter that apple is about to report, first full quarter of iphone 16 sales, not to mention the launch of apple intelligence, there are two main

updates to apple intelligence, chatgpt is there now, a lot of what apple has promised is on the phone. we're waiting for the other update. so if you're holding on hope that maybe apple intelligence will drive more sales, there is the significant update we're expecting in march that upgrade siri, lets third party apps happen to the system and like that, maybe that's the key, but right now we're just not seeing the evidence behind that bull case. >> stock down 3% this week. most of that happening today. steve, thank you. steve kovach with a bit of a reality check on what's taking place around this name. there is fallout in other stocks and for that we send it to kristina partsinevelos now for the other names being dragged down today and you flagged some for us. >> yeah, there is quite a few actually. we have to point out, apple's massive $3.5 trillion market cap isn't just what happens in coupe tino, it is just built on this complex web of suppliers worldwide. so when apple gets a negative report, faces headwinds, these suppliers feel the chill. start with sky works, they're

behind the analog and mixed signal chips in your iphones. apple is their biggest customer, which explains why their stock is down about 1.5%, really dropped after 12:00 p.m. when that report came out. then there is qualcomm, even though apple is planning to roll out its own modem chips this spring, they rely heavily on qualcomm's components and according to bernstein, apple makes roughly around 20% of qualcomm's revenue. shares also down about 1.2% at the moment. and you have two other key players that were already churning down with greater markets, still worth watching, broadcom, which just inked a multibillion dollar deal with apple to develop 5g radio frequency components and corning, which makes glass for iphone, ipad and apple watch. both trending in the red right now. scott? >> just ask you one more question unrelated to apple, but since we have taken stock of this all week, nvidia is going to close the week looks to be about 6% down. they had the big keynote at ces. what is your big takeaway this

week for that stock? ? the transition from hopper, which was the current gpu iteration to blackwell is not as smooth as what a lot of analysts were anticipating. i say that because the ceo and cfo both said they're not going to up the guidance. they said blackwell is shipping beyond their expectations. but if they're not upping the guidance and one product is doing better than expected, the other product is not. so we have to think that going forward in a lot of every single year we have this moment of transition from one product to the next, especially nvidia creates this annual cadence. that's something important for investors to keep in mind, that customers are going to hold back and wait for the next iteration of the gpu. that's number one. number two, overall, we got a lot of robotics and gaming, but that's not near term catalyst. so that's probably why you saw more of a negative react ion right now. >> kristina, thanks. kristina partsinevelos, appreciate you on that.

let's bring in malcolm etheridge of capital area planning coat. you hold apple, what do you make of these reports and the question that i asked steve kovach, at what point do you say, as an investor, you know what, maybe this is going to be different than i thought? >> yeah, scott, i've been making the case to you for a while that apple has to do something to justify this run-up that has happened, all the questions about is it overvalued, when will they finally deliver? i think realistically the quarter report that is coming isn't going to do anything to help apple out in those regard. we'll see a sell-off in the shares leading up to, because nothing shows that apple intelligence will be the game changer we're hoping it is going to. i'll also say it is very important in the first half of this year that apple does actually come out and show us how meaningfully important apple intelligence is to the ecosystem, simply because we need that as a read on how much

demand there is from the consumer side for these a.i. tools that these companies have invested so heavily in because up to this point, all of the developments have been on the enterprise side. >> shan, rough week for the nasdaq to say the least. made worse by the rise in rates. what do you make of that? >> well, i think it is two parts, scott. i think coming off of really kind of a run to the -- run to the finish, if you will, for some of the stocks and so, you know, i think there has been some risk mitigation going on. i think there is some pairing of positions, if you think about taxable investors, there has some concentration in the names even in and outside of what they might own through a s&p 500 conduit. the other thing is we're in a scenario where we are, you know, we are getting fearful about rising rates and there is a number -- it is a multifaceted rational for why rates have risen the way they have. it is on the foundation of economic growth and so if you're anticipating that there will be continued economic growth, if

you're looking at an environment where you're higher for longer and looking at the lofty valuations for some names, there is some of that vulnerability and, again, it is not just that we're concerned about kind of relative to other stocks in the s&p 500 earnings are still going to likely be stronger. but there is that deceleration and so then you start to hit that inflection point why you look at your portfolio, want to trim the names and you're a little bit concerned that earnings growth is not as robust to adjust the valuations with the headwind of higher rates into the middle of the year. >> why doesn't good news just rule the day. at the end of the day, you hit it on the head. the fact that you -- if you have a stronger economy, earnings are likely to be better, there still is the narrative doesn't seem to have changed really over the optimism about an incoming administration that is going to have tax cuts and deregulation and just an overall better feeling about where maybe things can go from here. sure, it is a momentary upset it feels like because of the direction of interest rates and what it might mean for the fed

and what it won't do. >> well, you know, equity investors, they're always looking for everything to be a tailwind, right? they're looking for the tailwind of economic growth and deregulation, m&a activity pickup and lower rates and lower inflation. so, i think for us when we look at the year, we're really constructive on equity still. and but we acknowledge that this first quarter in particular might be choppy. so taking advantage of, you know, perhaps some of this fear of the uncertainty post inauguration and some of the executive orders that might be put into place, i think, again, you hit the nail on the head. good news can be good news. but right now in looking at the valuations, and looking at kind of repositioning of portfolios coming off of two really strong market years, i think that's why you're seeing a bit of this skittishness starting the year. >> you're not changing your overall view of the market here, are you, as a result of the move in yields? >> not changing my overall view of the market, but i am changing my overall view of what will probably be the leading sector

by the end of this year. big tech has done very well by me and everyone else in the markets the last couple of years like shannon said. realistically, investors expecting to rinse and repeat the same playbook just buy the same five to ten megacap tech names that have done well before, i think folks following that same playbook this year are setting themselves up for disappointment. there are a number of headwinds as you mentioned that investors are focused on, but the biggest one for tech investors is simply that the comparables for the last year and frankly the last two years that any expectation of earnings will be based on are just way too hard to hit at this point. at the same time that tech investors' expectations have been out of control and they continue to grow out of control while we're seeing valuations reach these questionable points. so, i just don't think that it bodes well for anybody who is looking to simply put the money back where it came from at any sell-off. i think that realistically we have to look for opportunities

within tech specifically, but then also look at which other sectors will do more favorably under the incoming administration. >> you're thinking about that, and being actionable as a result. at least as it relates to financials. i know you added that recently for your clients. >> yes, so we added the xlf to many of our client portfolios. i wholeheartedly expect for the number of tailwinds at the back of financials, specifically the larger g-sibs, talk about potential tax cuts at the corporate level, talk about decreasing interest rates throughout 2025, two cuts or three, if we think about additional deal flow coming in the form of ipos and other m&a activity, that all spells heads they win, tails they wind kind of scenario for the financial names. we added that as the sector that we anticipate will do meaningfully well regardless of what direction the rest of the market decides to go. >> shan, you still believe in this broadening story you've been telling us about, even in the face of higher rates?

that seems to be a legitimate problem. >> it is a legitimate concern. i wouldn't say it is a problem that can't be overcome. i think that's because, again, in addition to our broadening out in terms of this earnings deceleration for the names that have done really well, we're also looking at the potential for above trend economic growth this year, which is part of the foundation of our story. we also expect there to be growth in real disposable income and we expect small businesses to be able to have an environment in which they can focus on growth and so it is not just in the public space, it is in the private space, this broadening out we think there is a foundation. higher rates were certainly one of the tailwinds -- lower rates were one of the tailwinds we would have liked to see. and we will see lower rates. maybe not as low as we thought. but we think that they will be offset by this economic momentum that we're talking about and, again, that is really at the foundation of our thesis for the broadening out in '25.

>> thanks. great weekend to you both. for now, let's bring in wharton school professor and senior economist jeremy siegel. welcome back. nice to see you in this new year. >> good afternoon, scott. >> what do you make of the markets' reaction today to that better than expected jobs report and the move in rates? >> the price in stocks is always a battle between the numerator and the denominator. the numerator is earnings. and the strong, you know, it is a strong report, and that's good for earnings. but also strong report also means higher interest rates. that's the denominator. today the denominator beat the numerator. and i think -- i think really the market is saying maybe no rate cuts in 2025. and that the ten-year could very easily break well above 5%.

one has to realize, i've done the historical research, over the last half century, the long rate has been on average between 1% and 1.5% above the fed funds rate. we have a fed funds rate now at 4.3%. so do the math. you're talking about 5, 5.5, 5.75 potentially on the ten-year. that's a normal term structure. that's not anything that is unusual. and i think more -- we got so used to this inverted curve, you know, the short and the long, we thought the long would stay low, but that is not normal through history. so, now i think what investors have to say is, oh, my goodness, all right, if the ten-year goes into the 5s, earnings are going to be good but i have to take that into account. >> are you thinking that the fed might not cut anymore? you said the market might be

thinking that. does that match with your own view and do you really think that the ten-year could get substantially over 5%? >> i think it could. i think no one really, you know, anything could happen, you know, when we talk about 3, 6, 9, 12 months out. clearly if things start flipping, the fed will lower. but given the growth that we see right now under that, and if you look at the futures and adjust them for risk premiums as i do, i really see that virtually every cut has really been wiped out. and looking at history, i was saying that that is actually a formula for higher long-term rates. and as you know, you know, before you're in, i said this could be the year of a correction. i don't think it is going to be a big collapse. look at the vix, i think across 20 today, it is a little bit lower now.

that's a lot of hedging in the market. there is a lot of people that say, my goodness, you know, this could be a little bit of a dip. when you get vix at 20, i don't a big fall. i think the thought that i have to deal with maybe a 5 to 5.5% long bond, how do i allocate in that case, that -- especially for all types of stocks, small stocks are hurt because of if the fed doesn't cut their interest costs remain high. the tech stocks don't borrow at those interest rates. but they have to worry about discounting and since they're, you know, such high pe ratios, a small change in discounting sends them lower. so, both those have for different reasons been depressed by the strong economic growth. by the way, no one mentioned today that wages came in at or actually below expectations. so, you know, it wasn't a wage

pressure situation over here. it was really, wow, this economy moves ahead at this interest rate, is that our star or what we call that natural rate, it is really we're very, very close to that now, maybe just a tiny bit restrictive if at all. >> you did have expectations rise which maybe added a little bit of fuel to all this. let me you this, let me ask you this, what weighs more on the proverbial scale, if you will. tax cuts and deregulation and good feeling about the new administration and what it means for the economy, or higher rates thus fewer cuts? can the market overcome the latter? >> well, as we mentioned before, most -- remember, the big tax cuts were done in the last trump administration. the ones that are talked about now are much smaller.

even if you can get 15, and he's talked about 15% for domestically produced, compare that from going down from 35 for everyone, down to 21. so, i mean, people are saying it is a repeat, but it isn't. it is on a much smaller scale. also, he got a lot of deregulation done. now unfortunately biden put some of it back, but a lot of it was done, i don't think -- are we going to get the increment again that we got in his first term. so, in my opinion, those boosts and they are positive, i don't think, oh, can overwhelm what might happen to interest rates to keep this market much flatter than we have seen it for two years. >> you mentioned the possibility of a correction. would you be a buyer of it? >> yeah. i mean, if we get down 10%, i say on the s&p, which would probably mean 15 to 20 on -- i

would put idle cash to work, definitely, on that. i do not -- i do not see a bear market, which is over 20%, although certainly there is a technical traders can bring it there. but i think you would be rewarded by buying below the 10% mark. >> what would you do with the russell? the pullback, looking on my screen right now, the russell over a month is down 8%. it is obviously the first place you look. i know people want to look at growth stocks, et cetera, but when rates rise, the russell has been in trouble. >> the russell is totally a story about wiping out those fed rate cuts. because those small stocks do borrow at the fed rate. overwhelmingly. and which, of course, large stocks really don't. so, i mean, all their borrowing costs which were factored in is going down 20%, 30%, 40% in terms of that, that just might not happen. so that's going to hurt their

bottom line and that's the problem with the russell 2000. so, once it gets used to the fact, hey, maybe we won't have any rate cuts, you take a look at their valuations, say, hey, i can sit on them at this particular level because valuations at 12, 13, 14, 15 times earnings historically have been rewarding to investors. >> i mean, i know we're talking about the russell and sometimes we use it as a proxy for the so-called broadening trade. but the broadening trade does have a problem if rates remain where they are if not back up even further, correct? >> yeah, absolutely. don't forget, i mean, you know, there is two things, there is the value growth and then there is the small stock, most of the small stocks, though we divide them in growth, many of them are more of those value stocks. so, both of the value story and even among the big stocks, which

have dividend yields which are challenged by the interest rates and the small stocks, which have interest costs, which are challenged by the lack of interest rates, they -- they both suffer and they have both suffered. and the a.i. arrative, now, you talked about apple and what might happen there, the a.i. narrative is still in tact. and there is no real trend break of the growth stocks relative to the value stocks, or the mag 7. there is really not yet any sort of major trend break. so, that's one of the longest established trends and that train is still going at this point. >> all right, we'll leave it there. good weekend to you, professor. we'll see you soon. we have some news developing from hpe. steve kovach has that for us. what do we know? >> yeah, shares are going green here, just defying the rest of the market. this is off a bloomberg report

saying hpe last year landed a billion dollar deal with x, elon musk's social media company, for a.i. servers. we reached out to the company for response here, they didn't comment to us yet or to bloomberg. but you can see what this is doing to the shares, like the professor is saying, the a.i. narrative is still there. by the way, it is a little unclear here, scott, if this is going for x by itself, or if xai, musk's separate artificial intelligence company that shares a lot of resources with x, if that's going to be playing in here too. we know elon musk, xai has built that huge super computer, using server racks from dell and super micro names we talk about all the time. but hpe getting a billion dollar deal out of elon musk's a.i. empire here. shares up a percent and a half. >> appreciate that update, steve, thank you. steve kovach. we're all over today's market volatility. up next, rick hitsman is back.

he'll react to today's big drop in big tech, what could be at stake for that sector coming up. he'll join me at post nine after the break. ♪♪ well would you look at that? jerry, you've got to see this. i've seen it. trust me, after 15 walks, it gets a little old. ugh. i really should be retired by now. wish i'd invested when i had the chance... to the moon! unbelievable.

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introducing powerboost, only from xfinity mobile. now that's big. rising yields s weighing o the tech trade today with the sector having the worst week in some two months. let's bring in rick heitzmann of firstmark capital here with us as you see on set. how are you thinking about this space right now? coming into the year, i felt like there was a lot of optimism and today has that waned at all or no? >> not at all. i think this is a short-term issue. in the long-term, people are feeling really good about the year. they feel the new administration, especially with the ftc, is going to be much looser. we're seeing the m&a market really heat up. we had a couple of companies sold tocompanies, even so far this year and it is

the first week of january. there is a huge m&a pipeline either from large companies trying to acquire smaller companies in areas like vertical sass or folks trying to play in the a.i. game. >> when are we going to see, i ask every venture capitalist who comes on, because there has been all this pent-up demand, when are we going to see more ipos? wait longer than we thought? >> i don't think so. i don't think so. we talked about earlier this year, hey, we got to get through the audit season. this is always a dead time for ipos. you have to get your audit done, update numbers and be ready to go out. we're 60 days away from seeing that machine turn on, a lot of companies filed confidentially, even some companies with great financial metrics and even some a.i. pixy dust like core weave, a great company this year. some of the companies like stripe and data bricks might be second half of the year. you're going to start seeing a pickup as soon as march. >> let's talk about valuations. there is an arc. you had a tremendous run-up in

valuations of private companies, you know, over the last handful of years. and then there was a big comeuppance as the fed changed course, had to raise rates, valuations really plummeted. >> yes. >> where are we now? >> we're back to a normal stage. we started to get normal about last year, this time last year, where people realized that it was a myth, the valuations of 21 and 22 were not real, even the public markets or the private markets. and now we're seeing, hey, what are companies really worth, and, you know, you're seeing more venture capitalists and more private market boards willing to take real market valuations. so you're seeing a lot of these m&a deals getting done maybe at a premium to that, maybe to a discount of the 21 valuation. people are willing to take a step down, they know it is a real market price. i think of the ipos, more than a handful done in a discount to the last private round. >> talking about valuation and had the anthropic raise at 60

billion, how do you think about that? do you separate, if you think that valuations overall are more at a normal level, are they normal for these a.i. companies or are they starting to get to the point where you're, like, i don't know that this is sustainable? >> so, there is valuations and there is a.i. valuations. a.i. valuations detached from reality about two years ago. and then within that a.i., there is companies like anthropic, openai, which are completely separate and that detached from the reality of even a.i. valuations. so you can't look to them as market bellwethers or comparable company of any type. you have to look at what is the financial performance, really look at operating metrics, really looking at how the company is performing, so when you see the headline of an anthropic, data bricks, any of these a.i. companies, you can't look at them as a measure of the market. >> no, but do you look at them and say, bubble or anything of the like, even as, you know,

they differentiate themselves as you say from traditional even a.i. companies. do you look at it with any sort of pause or no? >> a lot of pause. very concerning. and -- >> concerning? >> concerning because everybody else says openai is valued at this level, anthropic is valued at this level, so should i. that's really not relevant to 99.9% of companies. that's only relevant to the two or three really premium a.i. companies. and maybe not even relevant to them. >> okay. >> so, you know, if -- >> we're back to that game, back to that game. >> always a bubble somewhere. and so, you know, these companies have detached from reality. they're momentum stocks and now a couple more of the known companies where folks are piling in. now the private markets have become more accessible to the retail investor. so you're seeing a little bit of a bump there as you're seeing increasing demand for those shares and very limited supply,

so that's artificially increasing the price of those -- >> how are you advising your portfolio company's ceos or ones that come to you and ask you for advice, do you need to tell them to take a step back, like, look, your company's great, but you're not anthropic and you're not xai and you're not openai yet? >> yes. and maybe never. if you think about that, it is like winning the lottery. you get into this artificial valuation bubble and probably if you get into that bubble, you're not going to get out at that same price. so you have to take a step back and say, what can i do with the game on the field right now, what do i have agency over, and how can i build a sustainable business without looking over across the field at those types of companies. >> we'll leave it there. always help us understand this better, rick, thank you. that's rick heitzmann of firstmark capital. up next, avery sheffield is back with us.

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♪ who knows ♪ all right, welcome back. all s&p 500 sectors are lower today. it is a broad sell-off sparked by the rising yields. our next guest sees opportunity in two corners of the market, even with higher rates. joining me now, avery sheffield, welcome back. good to see you. >> great to be here.

>> rising rates aren't going to wreck the whole story. >> they won't wreck the whole story, no. there is a reason why rates are rising. rates are rising because the economy is fine. we saw with the payroll numbers, we saw with wage growth still at 3.9% year over year. we saw the small business opt index recently. data points are coming out and suggesting the economy can withstand higher rates. >> why are we reacting this way? >> valuations are very high in many areas of the economy. and, of course, higher rates over time, high enough rates, will slow the economy. but the question is, which companies actually can do well in a higher rate environment? and have reasonable enough valuations that there is real still asymmetric opportunity to the upside. >> so, you're not naive to the fact that rates are rising. not like you think everything is going to work. there are going to be winners and losers. >> absolutely. >> where are the winners? >> yes, i think that two areas

that are most interesting -- two areas most interesting to us are airlines, we have seen from the results this week. >> delta. >> yes. >> record high, right? >> yes, yes. and also banks. i can speak a little bit more about airlines. i think they're controversial. you look at the stocks, like, wow, these look like they're poised for a bruising. higher rates, higher oil prices, aren't these going to be terrible for them over time? so, look, first, i'll say the number one bear case that i think people should pay attention to is higher oil prices because they're very sensitive with fuel as a meaningful part of the cost structure. what is interesting is on the call this morning, the company said that this is the highest pass through of higher oil prices into rates they have ever seen. because the industry dynamics in the airlines have changed. i think for an extended period of time, because the low cost carriers have gotten to a place where the cost structures,

because of -- are such a burden, that they have had to shrink capacity and raise prices. what that means is the legacy airlines are in a much better place. everyone is going to be in a much better place because of capacity growth continues to be lower than gdp growth. they'll all get pricing. and with better pricing they'll get better earnings. companies are still trading in the single digits. >> ed bastian was talking about 2025 being the best year ever. >> it should be the best year ever. >> brent hits 80 bucks today and wti in the high 70s, they have a little more leverage because they have a refiner. >> yes. yes. but all of the airlines should benefit if the industry structure remains this strong. >> structure is up a lot. does that matter? united was a double last year. >> it was at four times earnings in august. so, like, okay, so, like, you start off at four times earnings and earnings increase, you're still in the midsingle digit multiple. we have seen what has happened

to companies that start off at a reasonable valuation and have an earnings fluctuation. these companies are some of the cheapest companies in the market. so, you know, i'm not about to speak about individual names, but there was a trader going bankrupt ten years ago and is up ten times. i think if you think that the industry structure is not sustainable, then you want to be bearish. if you see capacity creeping back in a way that is great -- risking being greater than gdp growth, then you run for the hills. i think the management teams all understand they need to keep capacity growth constraint and the most aggressive players historically have been those at the low end of the market that have disrupted the apple cart and we don't expect that. >> worst sector today, financials. you want to talk about the banks, they're going to start reporting next week. some say higher rates. why isn't that -- isn't that supposed to be good for the banks? >> i think this is going to be a false move today.

i think they're going to do better next week. the airlines, we're selling off into the prints this week and are doing quite well and recovering. look, i think that the nice thing about higher rates in this type of environment is we're at higher rates because the economy is strong. credit still remains benign. the fed really wants to cut rates, right? the economy is so strong, they can't. if higher rates started to create an issue, they'll be very quick on the trigger to lower them. so you're getting the steepening yield curve and you're going to see the yield curve because the economy can withstand it. that's a very good environment for nim. you have m&a activity really picking up and then as i mentioned the benign credit trends. and still reasonable valuations, not dirt cheap, more expensive than the airlines, but i think this is an environment where the large money center banks can do well. add to that decreased regulation, potential pullback of basil 3, reduced capital requirements, they could chug along this year quite nicely. >> what about tech? let's leave it with this sector

which, you know, had been asleep and then woke up and now looks wobbly because rates continue to go up. >> as you know, we're always very wall situation sensitive. technology as a whole is very expensive. not every tech company is crazy expensive and you do still have some really nice secular trends. a lot of technology. so, where we're very cautious is in technology companies that are very expensive with growth estimates that can't really go much higher because they're already so inflated. and/or lack of innovation leading to market share losses. we're constructive on technology companies that continue to gain market share at low 20s multiples dominating their sectors. >> i'm thinking of, you said you can't talk about individual names, i'll do that. but we're talking about 40 plus forward pe, 60 plus forward pes, but you can throw up the stocks, for example, today that were

selling off like palantir is having its worst year ever, not to pin you on those couple of stocks, but you get the point. those types of names are the ones selling off because their valuations are bigger so they're more sensitive to higher rates. >> exactly. i expect that to continue unless they're able to post dramatically outsized earnings growth. with many companies, the earnings, they got to this point, because the earnings expectations got to be so high that people were able to try to justify the valuations. now the earnings growth expectations independent of the valuations are so high it is going to be hard for them to beat those. so we would be very cautious. we're always looking for asymmetry. you have perfection already priced in, it doesn't seem as asymmetric to the upside as other opportunities in the market. >> we'll leave it there. good to see you as always, thank you. avery sheffield joining us at post nine. we're tracking the biggest movers into this friday close. kristina partsinevelos is standing by with that. what do you see? >> from worst to first.

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walgreens investors getting some relief today after facing the s&p 500's worst performer last year. shares jumping 29% or 28% now on better than expected earnings while the drugstore chain posted losses, they liked hearing about cost cutting efforts and improved medical reimbursement models. hold my drink, what many fans seem to be saying lately. and modelo missed estimates and cut outlook with trouble brewing on multiple fronts, u.s. tariffs on mexican imports like beer, budget conscious consumers and changing habits as more people turn to weight loss drugs and cannabis. that's it. >> leaving it there. >> i have a zillion puns. it is friday. why not today? >> i had a feeling you were up to something there. i was going to lay off that.

we'll see you soon. >> sli?ming >> kristina partsinevelos. all right. more on the financials coming up, that sector seeing some serious weakness amid the broader decline. we're back with the bell after the break. 100,000 delta airlines employees, powers tractor supply's stores nationwide with reliable 5g business internet, and partners with pga of america on game changing innovation. this is how business goes further with t-mobile for business. that moment you walk in the office and people are wearing the same gear, you feel a sense of connectedness and belonging right away. and our shirts from custom ink help bring us together. we make it easy to wow all your groups with high quality custom apparel and promo products, all backed by our guarantee at customink.com.

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we're now in the "closing bell" market zone. energy the only positive sector today, pippa stevens on why that is. and leslie picker on the sell-off in the financials today. we mentioned it is, they are the worst performers today. there are many bad performers today and we got good news. >> the rate move obviously unnerving banks which actually among the cyclical sectors had come into it a little bit of a better position. it definitely is this sort of low conviction moment in the market where you actually want the economy to hang in there pretty well, but it is hard to have faith that what we actually have is a 250,000 job monthly

pace from here on out. therefore, are yields going to impinge that much more. i still think we're mostly in the same process we have been in, which is trying to wash out elevated expectations from late last year. everybody thought the upside was a lock into 2025. and now we keep testing and testing and testing the election day range. i'll say it again, i don't know if it means we're softening up the floor, but this 28 -- 5800 area for the s&p 500 has been, you know, most days over the past month we have been in there. >> we gave up all of the s&p 500 election day gains. >> the day of election day, no, no, that's right. the day of election day, you close like 5700 and change and so that's -- that's the buffer right there. i don't think that's the be all and end all, you can continue to chop around. i think that the big fear is that this is a little bit of a head fake in the data or overstating the strength and therefore it is going to get

revised down and we're setting the scene for another growth scare down the road. and that's why it has been tough for the market to make its peace with it, certainly small caps, certainly banks, but i don't think it is game over for the overall story. >> pippa, is this as simple as oil is up today, so thus the sector is going to be green? >> brent topping $80 per barrel for the first time since october with wti approaching 77 after sanctions on russia's oil industry. since the invasion there have been multiple rounds of sanctions and price gaps, but russian barrels have still made their way to the market. but now jpmorgan says the sanctions might finally be starting to work, noting that in recent weeks chinese and indian refiners have sought alternatives to iranian and russian crudes. the cold temperature is adding to the momentum with wti pushing

through major resistance from the october highs. scott? >> pippa, thank you. pippa stevens. leslie, tell us more about the financials. >> yeah, the financials taking a hit today. the best way to think about the bank story right now, scott, is to look at the spider bank etf, which is trading near the same levels as it did on november 4th, the day before the election. the etf has come full circle as the broader market has as well in the two months since for much of the month of november. there was this mindset that president-elect trump would employ an onslaught of deregulatory measures and rethink the hindrances that have hampered one name that banks say they really face. but the tone has shifted really ever since thanksgiving where the prospect of more inflation from some of trump's policies really took center stage. now the idea that the economy will remain restrictive with fewer rates expected this year could create some challenges for banks and their loan making

profitability. we get a new snapshot, the big six banks report fourth quarter earnings starting wednesday and thursday of next week, scott. >> leslie, thank you. that's leslie. mike, back to you, we have a minute to go here to leslie's point, earnings next week, the rubber meets the road next week, earnings and inflation data. >> the cpi is again more important, you could have looked within the jobs report and said that there actually were dovish elements in there, wage growth wasn't running away, doesn't seem as if the job market even at 4.1% unemployment is a real driver of upside inflation. that's a good thing. and then earnings, if we're anywhere in the zone of the expected double digit growth pace year over year, even though it is not equally distributed among all companies, it is tough to see the market really falling apart if you have that confirmation that the estimates are somewhere in the ballpark. i think that's where people are trying to anchor to right now. again, i think it is much more about, you know, yields, not just as competition for stocks,

but yields as pressure on parts of the economy, goods producing, home building, that is susceptible to a little bit of more downside as opposed to services of a.i. infrastructure which seems like nothing stops it. >> more competition for we are decidedly so. have a great weekend, everybody. >> that now marks the end of regulation for the week. new york stock exchange. mind- body doing the honors at the nasdaq and the jobs number, surging inflation expect haitians, sending yields higher. stocks tumbling to end the week. back to scorecard on wall street. i am john fort with morgan bennett. >> we have a great lineup to help you navigate the selloff and the impacts on your money, including mohammed l rian from alianza and david service from jeffries, bob elliott from