mets channel, and that creates more headaches, more negotiations and everything to be resolved to go down this road >> all right >> fascinating. >> yeah, fascinating stuff there, playing our music, joe, thanks very much joe flynn. >> thanks for having me. and thank you all for watching "power lunch" on this opening day for baseball >> that's right, "closing bell" starts right now kelly, thank you very much welcome to "closing bell," i'm scott wapner live from post 9 right here at the new york stock exchange this make or break hour begins with more failure fallout for the banks, for the fed, and of course for your money. here is your score card with 60 minutes to go in regulation, nasdaq leading again there it is, 2/3 of 1%. more broadly stocks up for most of the day the s&p losing some steam as yet another fed pres signals more rate hikes are needed.

and that leads us to our talk of the tape banks under the microscope and new questions over whether they'll soon be under tighter regulations. the biden administration calling for just that late this afternoon, only adding to pressure on that space for more let's welcome in the star banking analyst, mike mayo of wells fargo securities. good to see you. thank you, especially on this day. you just published a note on the back of the white house proposals, no big surprises. you think this is okay what they're proposing? >> let me pull the lens out for a moment here, the banking industry has gone from blinking red light to blinking yellow lights the issues about big bank solvency and liquidity i think are mostly done. so now we can just talk about earnings, which earnings are an issue, but we're getting out of that bank crisis phase to more of one bank recession. the other, you know, important point here is that how fast the regulars have turned this around in less than three weeks you had

the house, the senate, you have the white house with a sketch out of a program, you put in place a liquidity backstop at the fed for banks. you resolve the problem banks and sold them in terms of silicon valley and signature you resolve credit suisse, which was a big systemic risk out there, and you sketched out a plan the third important point is there's no cost to the taxpayer. i hear it all over the place scott, do you pay insurance for auto >> yeah, obviously >> and house >> it's required in the state. >> and house and life >> yes >> but do you pay insurance for bank deposit insurance -- >> supposed to be asking you the questions. but do you pay insurance through the bank insurance fund through the fshs dic >> no, not at all. >> the banks are paying the price for this you have the big bank regulation, like the ten or so largest banks applied to the next dozen or so on down, more scrutiny of qliquidity is and

higher interest rates. the one thing i wasn't expecting is there's a carveout for community banks for those 4,000 plus community banks they don't have to pay for the cost of the recent bank failures that's less than 20% of the industry's insured deposits. really who pays for that would be jpmorgan and bank of america. i'm not sure anyone's shedding a tear for jamie dimon. >> how can you sit there and declare that all the banking issues are over? we don't know if they are. we have fed people coming out today saying we need more rate hikes. isn't that going to cause more problems in the credit system, more of a crunch, and then what comes on the back side of that is i tchanges for the bank. >> short-term the bank crisis issues which had everyone unnerved seems like it's probably over. the bank bond spreads have come in remarkably the last week tw the bond market is saying the

banks are safer. this whole idea can i get my money from the bank. the fed is there to give you your money we go from the bank crisis discount, should be eliminated then we go to the medium term. you're right, there are issues out there. there's commercial real estate and office and how would the credit be for that >> those are big issues. >> there's big issues but they're not overnight issues they were around a month ago there may be some contraction of credit everyone's being a little more careful. they might be lending a little bit less or, you know, better terms for the banks. >> isn't the base case that credit tightens and that they lend less, and that they may even raise the rates on their deposits, all of which are not good for bank earnings >> you know what if we're debating bank earnings relative to bank solvency or bank liquidity, that's a step up from where we were the last couple of weeks. yes, there is pressure on bank earnings funding costs, when first quarter earnings come around, there will be questions about,

you know, what's going to happen to funding pressure, what's going to happen to bank buybacks what's going to happen to loan growth overall so yeah, so there will be some earnings issues. i'd much rather be talking about earnings issues and what could happen in a recession as opposed to bank failures. >> obviously, but they both have an impact, one clearly more dramatic than the other on what the stocks may do, right if you think that the answer to most of your questions is going to be, yeah, there are going to be issues and there are going to be some changes, do you think at all about -- i think you have like outperform ratings on almost all the stocks you cover, certainly from the big group it doesn't make you rethink any of this, at least in the near-term? if we're talking near-term versus long-term >> our big thesis here, i've said it before, goliath is winning. the largest banks have been regulated a lot more than the other banks. guess what, the other bank's regulation, that's going to catch up the delta on regulation for the bigger banks is not going to

change so much, and they've also been the beneficiary of this time, who do you go to you go to the banks that have been regulated the most. they are beneficiaries of the uncertainty. getting rid of credit suisse, that was a big event that was a potential global systemic risk. i thought the markets should have reacted more positively the big banks, my final four, scott, would be pnc, u.s. bank ban corp. >> the proposals from the white house, needing to have more liquidity on hand, more frequent stress tests, living wills, et cetera, et cetera, what's the most onerous, do you think, of all of these proposals and by the way, they're just proposals as we see them now >> look, more capital has been the near-term issue on the minds of investors so many investors tell me we're going to see a capital raise the most important few words i saw in the white house press release, they were in bold they said these banks, the next kind of dozen or so after the

ten largest may need more capital, but, quote, after a considerable transition period, after a considerable transition period, in other words they're not forcing the banks to raise capital today or next week or probably next month. that's the most important point out of that white house report they are cognizant in not disrupting the markets near-term, not creating extra regulatory risk on top of everything else, even while they try to have better oversight over the next several years. >> you say goliath is winning, okay you were here with me last summer, and you told me, quote, we're going to have the best main street banking growth in four decades you had separated at that point the wall street banks and the main street banks. the very banks that we're talking about in the eye of the storm. so have these events changed your perspective on main street banks? >> yes they absolutely have on the one hand you have seen

growth in the main street lending. it's going to be up like 25% over two years so the fundamentals played out, but now we have to think about, okay, if you have the regulatory anchor that some of the largest banks have, then the long-term returns of that main street bank will not be as good as in the past so we shift incredibmentally to winning the largest banks. >> these events of the last few weeks have separated the pack to a degree that you didn't believe existed prior. it separated the field >> i would say the events of the last few weeks have accelerated our goliath is winning theme by at least five years. >> okay. i appreciate you being here. that's mike mayo, wells fargo securities reacting to that news from the white house banks on the mind of the treasury secretary, janet yellen speaking at an event in about 30 minutes time our steve liesman joining us now. she's really zeroing in, steve,

on those regulations that were rolled back a few years ago, isn't the treasury secretary >> yeah, that's right, scott the rules rolled back by the trump administration it's been an area singled out for reform since this silicon valley bank and signature blowups that were out there. both the treasury secretary and the white house pointing to them, though i have to say, scott, it's not entirely clear yet how much they have been at fault. both the fed and the fdic, remember, they're in the middle of reviews about what went w wrong. those reviews don't come out until may 1st. but the biden administration already fingering them with the blame. i want to lay on you this statement from the bank policy institute, which is a banking lobby of the bigger banks. they said it would be unfortunate if the response to bad management and delinquent supervision at silicon valley bank were additional regulation on all banks that would impose meaningful costs on the u.s. economy. going forward, the fed has

barely begun its promised review not taking anything away from mike who obviously is the go-to.

>> one of the things i've been baring into on my reporting is the process that the fed, was the san francisco fed the one at fault, or maybe it was back at the board where the problem lay. so that's a little bit unclear know that's why we're waiting for that may 1st review to come out to see where the decisions were. it's interesting, it is true that banks the size of svb were exempted from the stress test. however, the stress test as we talked about, did not test for rising interest rates. what was the fed thinking in an environment of rising rates that would almost certainly stress banks that it wasn't testing for that >> i don't know how many trillion dollars question at this point, steve. it's like really like testing for -- testing for a falling rate environment when they're the ones who are raising interest rates, which by the by,

the new proposals from the white house would have stress tests that assess rising rates and potential outflows of deposits as well. >> yeah, but let's be a little careful with what the white house is saying. my read of it initially is i don't know how much authority the white house has to make these things happen. a lot of the powers of things they want done are with the fed or with the fdic, so the white house can call for these things to happen. it's not necessarily in their power. >> the other thing is, you know, look, the reason you were principally down there is because the flurry of fed speak that we've had today, and yes, the banks are on the mind of fed president ts too. some banks are likely to be more conservative in their lending. but she goes on to suggest that some additional tightening is needed to lower inflation at the same time. >> so this is -- what we have is a lot of two-handed economists talk when it comes to the rates.

on the one hand inflation is too high it's too soon to say what the fomc should do at the next meeting. on the other hand she's saying some additional policy tightening will be needed. they're also talking about this idea of the conduit of tighter credit standards ending up in the economy, possibly reducing inflation. what's interesting is to me, scott, is to look at the probabilities, and i really think these probabilities right now may reflect the thinking of the federal reserve, which is a slight bias towards perhaps hiking at the next meeting, but by no means overwhelming it's something like 45-55 towards a hike at the next meeting, but again, there's data to come. and the main question is, i really thought the interview with mike mayo was very interesting. is he ready to sound the all clear alarm so we can come out of our cellars that the storms have passed when it comes to the

banking crisis i don't know that that's true. it certainly feels that way today relative to yesterday. there's been some talk, there may be a few other banks out there, but maybe the system did work, scott. maybe indeed the amount of capital at the big banks was enough to buttress them from this storm that came through, and with the addition of the extra fed program, but maybe there's more shoes to drop we just don't know it's interesting to hear mike make that call this early. >> yeah, i mean, he's still here, so let's ask him is it too early to make that kind of a statement? >> i said and i say that it's most likely all over doesn't mean there's some smaller banks. when i look at the largest banks, the solvency and liquidity issues are off the table. once you go past the top 20, there might be some things they shouldn't be systemic sort of issues. it's not the all clear i think we're over the speed bump, and i think it will wind up being a speed bump if

everything goes in its current direction. >> let's see what the fed does here too it all comes back to that one simple question. what will the fed do all right, now you're done, mayo, thank you, steve, thank you very much. we're going to hear from secretary yellen, i think, in about 30 minutes' time, but i appreciate that. let's get to our twitter question of the day right in the soim same area. should there be more regulations for the bank or not. you can head to @cnbc closing bell vote yes or no we're just getting started here. here is a look at where we stand as we head into the close. we've got 45 minutes left. we're still hanging positive across the board, though, that the move lower in regional banks is certainly weighing as you see on the russell 2000. up next, our all star panel on what's ahead for the stocks, forecasting the fed's next move as well. eric jackson is back with us too. why he says we're at the beginning, just the beginning of a rally for tech okay you're watching "closing bell" on cnbc.

let's get a check on some top stocks to watch right now as we head into the close, kristina partsinevelos here with us again today. >> i want to talk about square parent company block, they're firing back at hindenburg arguing claims that -- in block's new report today they said of the 51 million monthly active users, 44 million of those members have been ver fi verified of those 34, 39 million have been linked to unique social security numbers.

one thing missing as i was going through it quickly was the percentage of cash gross profit that was generated from illicit activity you can see shares are up almost 3% today jd.com, shares are soaring higher after the e-commerce firm announced it plans to spin off its property and industrial units and then lists them on the hong kong stock exchange this revamp comes after rival alibaba announced plans yesterday to list six of its units for ipos that's why jd.com someone of the biggest moves on the nasdaq 100. >> kristina partsinevelos thank you very much. stocks losing their early steam as more fed speakers call for additional rate hikes and banks weigh on the major averages amid calls for tighter regulations. for more on where things head now with just one more trading day left in the first quarter, joe terranova is with us, cnbc contributor, and victoria fernandez, cross mark's chief investment strategist. victoria, i go to you first.

we got talks of more rate hikes. we had a good quarter. where do we go now >> yeah, i think this is a very difficult journey that we're on here, scott. we expect a lot of volatility for the rest of the year, and i think we still have a foggy windshield we don't have a clear sign of where we're going. i think you look at what a lot of people are saying, looking at the market over the last few days, and you say, okay, some of the issues around the banking crisis have dissipated we've talked a little bit about that already on the show today you have the fed, people assuming the fed is going to make a pivot, and they already have cuts priced into the market i don't necessarily agree with that, but that's what the market is saying, and you have a consumer and here i think it's true, you have a consumer that is strong and supporting the economy. liquidity has been a keyword, and you look at consumer balance sheet liquidity, liquidity versus their income is at 60-year highs, that ratio. there's strength there i just think you have to be

concerned. you have these fed people talking about hiking rates some more if the banking crisis is dissipating, then why would the fed not go back to where they were a couple of weeks ago, or maybe 75% of where they were a couple of weeks ago and say, wait a minute, we're back to hire for longer. that's going to flow through to earnings that's going to hurt consumers in the labor market, and we're heading back to that recession talk maybe that's why we're getting the market pulling back a little bit today. i just think it's still foggy and uncertain exactly where we're headed i do think we'll get a mild recession regardless >> doesn't seem, joe, the fed's going to go back to where it might have before the banking crisis happened because then they would really be concerned about not only breaking something, but obliterating something. >> listen, we are a in the moment society, so we tend to forget where we were previously. we are still in the midst of the single most intention war against inflation in the last 40 years. and what comes to mind for me is

that at the end of january, the s&p was 4076 the s&p today is 4050. a two-year treasury was 4.1% a two-year treasury today is 4.1% so why did the s&p fall below 3,800? why did the two-year treasury go to 5.08% because two numbers were so important. 517,000, and 311,000, and those were the job reports for january and february, and there was this overwhelming concern about an overheating economy and that a federal reserve was going to have to do more. now what you're introducing is credit tightening. credit tightening is actually an ally for the efforts of the federal reserve with their monetary fight against inflation. and i think the market has kind of lost a little bit of focus and certainly in terms of positioning and sentiment, once again they're off sides for

that that's why we're rallying. >> you said to me the other day, and it might have been off camera, the market shouldn't be here it shouldn't be here >> if you were -- >> i think the implication you were making is like how are we up to the degree we are, and how is what's leading leading in this whole environment >> from a positioning perspective, myself included, completely off sides all year. the commentary throughout this entire week from most people on the network has been fundamentally the market doesn't belong here. the market shouldn't be rallying the market should be understanding we have credit tightening we have a looming potential economic recession we have the potential for the federal reserve to be doing more work that all seems so logical and it seems so easy to say sell the market here. that's why my intuition is saying to me the harder thing to do is to understand that there's something dynamically going on

here in the market that's doing what it's moderating the overwhelming bearish pessimism and overwhelming bearish positioning, and it's returning the s&p, scott, not back towards the high from last year. it's just taking the s&p and it's putting back towards the top end of the range that it's been in since november, which is 3,800 to 4,200 that's all we're doing. >> i thought the most interesting, you know, certainly one of the most interesting views you had, victoria with our producers is to focus on value because value's gotten run over, right? it's been pancaked it's been all about growth >> it has been, but i think with our outlook that we are going to have a mild recession, we said a couple of months ago it's going to be in the fourth quarter. maybe now that's been brought forward a little bit perhaps at that point you're going to start to see things turn around a little wbit. i know that valuations in regard to value stocks has been higher.

i also think you've got a lot of quality names in there and quality stocks, and that's what you need when you think you're going to have a lot of volatility in the market i need to see strong balance sheets i need to see business models that make sense. i need to see management teams that can prove to me they know what they're doing, and they can lead through volatility, and these are a lot of the value names you have i will say, i know joseph you don't want to go completely out of the market, right and you don't, but i think you can be opportunistic here, we've actually been trimming some of the tech names we've seen the run that tech has. we don't think it's quite sustainable. some of the reasons that tech has moved the way it has some of those reasons are probably going to come back over the next month or so so you can trend names there. we've actually gone in and bought jpmorgan because of the hit that they've taken as of late general mills, some of these other names that are more staple, more value names you can have in your portfolio >> i don't know, dr. michael, i

was wrong to say sell, he said on twitter there it is. so we'll just keep following that victoria, thank you, joe t. thank you as well. weighing the tech rally, the xlk seeing serious upside this year you know what teasch h done. are more gains really in the cards though emj emj's eric jackson gives his take we'll do it next right here on "closing bell. are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

nasdaq moving high yet again today an pace to notch its best quarter since december 2020. the question now is there really more room to run joining me now emj capital's eric jackson you think the answer to that question is yes, why >> i do. i'm going to take the other side of what joe and victoria said on the last segment i think it's perfectly rational what the market's done in q1 in january i said we could just be at the beginning of a ten-month rally.

the playbook that i think makes the most sense for what's going on right now in the market is 1981 when inflation finally rolled over, started dropping like a stone, and the nasdaq took off on a ten-month rally that took it up 100% we had a great q1, but this could just be the beginning of what could be a much broader and longer route >> what if the fed isn't kidding, right i mean, we've had more fed speak just today yet again suggesting more rate hikes are coming they don't believe that inflation's dropping like a stone, apparently. >> they have to say that, they have to be guarded they can't seem like they're, you know, they're getting behind some rally they have to talk tough, but the reality is that month by month inflation keeps ticking lower. we all have to be guarded, but we have to make investments too in the meantime. and the fact is that tech has done penance for the last two years. tech investors have been out in

the wilderness, and so they were -- now is the time when we have to look ahead, even if we are going into a recession, and the fact is that these multiples on a lot of tech companies, not just faang but broadened out to the smaller and mid capsize, these are in levels back in, you know, 12 years ago, 13 years ago in some cases. and those are going to get interesting for a lot of investors who are just not -- to those types of names. >> i'm looking at the notes from a preinterview you did with one of our producers where you say i saw the show yesterday where add dam parka was saying this rally was driven by the big faang so far this year. i disagree what do you mean you disagree? it's a fact. it's been driven like the seventh biggest tech stocks in the market have carried the entire market. >> i mean, that's a function of market cap i mean, these names sneeze and the market takes notice.

on the upside as well as on the downside but the reality is some of the names that i was, you know, pounding the table on with you, scott, in january, coinbase up 80 some percent this quarter tesla up i think it's 59% this quarter. shopify, you know, 36%, i believe this quarter those are great years let alone quarters so the gains in tech haven't been limited to just the faang names. certainly those matter most from a market point of view i think what's interesting to watch from here, though, scott, is that if i'm right and this thing broadens out, people have to say, okay, what else looks interesting, and there are some -- there are some other tech names that are flat on the year, maybe some even who are down on the year there's some value naemes that have been left aside i think people are going to say what about those names, and

that's how a broader, longer rally takes place, so i'm particularly interested in some other cokind of lesser known nas who have yet to participate this year in a rally. >> it sounds to me like you are more bullish overall than you've been in quite some time. >> i think we got the off ramp from the ten-month rally with silicon valley bank, obviously, but we're back on the interstate now. i mean, that's in the rearview mirror we're looking ahead. so you know, and i think you really have to be stock spisk spe specific victoria said i only want balance sheets on the last segment. one of my favorite names, a private luxury jet company, that's a value stock if there ever was one got a terrible balance sheet, got too much debt. guess what, they are improving hair debt is getting paid down they are guiding to like doing a billion dollars in precash flow in a couple of years you know, that has the chance to make a major leap in value as

kind of the enterprise value shifts away from the debt over to the equity. there's a tech company i love right now, probably my favorite frayer battery making electric batteries. we don't want to buy electric batteries from china anymore and yet there are very few western companies. inflation reduction act incentivizes these kinds of companies was i like those kind of lesser known names that could still have big gains ahead of them. >> sure, but you declare sort of the -- you know, the issue over around the banks, but you know as well as i do that, you know, earthquakes often come with after shocks, and quite often they're powerful aftershocks are we too quick to just say, hey, the coast is clear. all is good. >> if everyone coming on the network was as bullish as i am, i would be very worried. but the fact that we d -- you know, i think a side effect of

what you're talking about, scott, is that so many people are clutching their pearls right now, worried about what's going to happen next, what's the next shoe to drop that just is sort of fuel to the rally to continue so you know, we have to monitor sentiment, but it's stilt out there. so that to me signals that this thing can continue >> all right eric jackson, we'll talk to you again soon thank you very much. a quick programming note as well as we head to break, as part of women's history month. cnbc is hosting a special pro talks with three successful investors hosted by halftime report's own patty martell you do not want to miss. that it is friday, that's tomorrow, 1:30 p.m. eastern time. up next, we're tracking the biggest movers as we head into the close kristina partsinevelos is standinbyitg wh that. >> investors pouring money into a high growth unprofitable firm

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20 to go until the closing bell kristina partsinevelos is back with the key stocks to watch. >> let's talk about shares of ev charging company, soaring 22% after posting a smaller than expected loss on a revenue beat. their full-year revenue guidance came in between 105,000,150 million which is wider than normal for this firm that's because of uncertainty of when their charging stations will be installed at major highway truck stops. nonetheless, ev go is an early stage high growth firm, unprofitable and investors like the results. that's why the stock is up 23% today, but still down 42% just

over the last year or so roku shares falling as the streaming company is cutting 200 jobs and plans to exit some of its office space the layoffs represent probably about 6% of the platform's total work force the stock is down. look at that about 52% over the last year scott. >> had a rough ride. thank you. >> thanks. last chance to weigh in on our twitter question of the day, we asked should there be more regulations on the banks yes or no? there's still time go to cnbc closing bell on twitter, the results after this break. lily! welcome to our third bark-ery.

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the results of our twitter question, we asked should there be more regulation on the banks? near 73% of you said, yes, there should up next, big opportunity overseas, pimco's erin browne is back, d e anshis flagging a key safety play abroad that and much more when we take you inside the market zone at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

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♪ we're now in the "closing bell" market zone. cnbc's mike santoli here to break down the crucial moments of this trading day, and why china could act as a safe haven, greg melic we've picked up a little bit of steam. >> it's been relatively solid most of the day. 60% of stocks up we're continuing to levitate we've kind of gotten above that pre-svb level. now the thing is you make gnaw high for march and get back to that area the end of january when we had that great first month of the year, that sort of would signify maybe getting free of the lower end of this zone. when you get to the end of the first quarter of the year, you start to build up a little more benefit of the doubt that the october low might be important, right? you have down year followed by an up first quarter. bespoke is talking about how you never actually lost the rest of the year after that setup and

other things like we never went back below december's low. all this stuff starts to build like maybe we're climbing this wall of worry, which we understand why it's in place, but so far the market has had an answer for a lot of those concerns. >> told you the top of the program we were waiting for the treasury secretary janet yellen to make her remarks at the conference down in washington, d.c. we want to show you. she is speaking now. we had the opportunity, of course, to have an advanced look at those comments. heavy on the roll or roll back of those prior regulations may have had on the collapse of svb. this as the white house rolls out its own set of proposals, if you want to call them that on strengthening regulations around the bank, so we'll keep an yay on those comments. mike former fed chair, as more fed speakers are talking about more fed hikes >> yes, they're keeping the two-way flexibility, obviously they can react to any downturn in terms of financial conditions

fetin getting tighter. in terms of the inflation getting hard for the most part they're going to try to stick to the story the big objective here is to seem strategic and to seem deliberate about whatever decision comes next. it's just too long from now to the next fed decision to really be straying and speculating on what's to be obviously they hope -- >> we will, but it's too soon for them to do it. and i really do think that they want to keep betting that what they've done is enough for now the market might test that proposition that it's enough what they've done on back stopping deposits, things like that, but so far it's seeming more localized than a real outbreak. >> erin browne, pimco, let's get a little bit of your playbook as we end the quarter, we head into a new one and why you say china offers a safe haven right now. >> sure, so i city thstill thin in a market environment in the u.s. where i think we're going to grind higher and gap lower. we're still climbing a wall of

uncertainty with respect to the stock market so i think it's okay to stay invested in certain high quality, you know, more defensive oriented stocks in the u.s. but where you're looking to get more of your sort of juice in your portfolio, i think you really want to turn your attention to emerging market stocks, and specifically to chinese equities, which are really -- have really decoupled largely from the global economic cycle and are really operating on a reopening story that is i think going to fuel outperformance chinese equities have under performed, you know, relative tissu -- done poorly in the first quarter of this year i think you're getting in at a much better time today than as we turned the page into 2023 looking at the service oriented stocks that are going to benefit from travel and reopening in china is where you want to place your bets skpshand these stockse still trading at valuations that

i think are compeliling the growth you're starting to see accelerate in china is not yet priced into the share prices of these names >> i want to go back to what you said at the outset, grind higher and then in your words, gap lower. that doesn't sound great when does all this transpire >> we've seen it over the last couple of weeks, right even as we went through the banking crisis, we've been grinding higher since the beginning of the year and then have obviously banking turmoil sort of put everything on its knees, and we saw a gap lower in the equity market. now we're sort of grinding back to, you know, new highs or, you know, new levels but i think that we're not out of this risk period yet for equities because we are heading into a recession, which is likely going to come before the end of the year and in those environments, you typically see more volatility in equities. you start to secret underperforming, which we've seen year-to-date, and we're starting to see a lot of these sort of pieces line up that make

me concerned about, you know, being very risk on in my portfolio right now, particularly as we head closer and closer to a recession. ask we start to see more breaks and cracks in the system. >> are you surprised, though, at how resilient the market has looked and acted since the whole svb thing went down? >> yes, but i think it's really a tale of two markets when you look and decompose the equity market performance you've had russell 2000 companies, small cap companies which have under performed meaningfully year-to-date versus, or at least over the last month, versus large cap equities andsector, which is 20% off its december lows there's been a real bifurcation over the last month where i think the market's actually appropriately discounting the risk in the more vulnerable parts of the equity market, the smaller cap companies, the ones that don't have as much liquidity or access to capital

those are starting to under pr perform, and i would expect those to continue to under perform for the rest of the year those companies that are large cap that are maybe not as reliant upon regional banks in terms of their lending and have more access to different liquidity levers or have meaningfully outperformed like the tech sector, and i would expect that that bifurcation in the market is going to continue to persist as we head closer to a recession. >> all right, erin, we'll talk to you soon, erin browne pimco swr joining us in your note, greg, welcome. you said it's time why? >> it's time because walmart has momentum with traffic. it's been positive for three straight quarters. we think the inventory is cleaned up enough now, and the bottom line is their stores, their own execution, that traffic building, their stores are better positioned. they're in the southeastern states where we're seeing population growth, and we're seeing job growth, and the parts

of the country where frankly population is shrinking, and jobs, california and the northeast, that's not walmart's bread and butter so we like their store positioning. we like the momentum they have, and frankly, that strong balance sheet is the kind of thing you want as the consumer generally slows how much of this is about the consumer deteriorating so to speak? >> well, i think it starts with their own turn around. they've done enough investments in productivity to get that momentum if the consumer continues to decelerate the way we think they will in the back half, we think walmart will start to out comp u.s. retail sales. frankly, which they haven't done over the last three years. you look at the three-year comps, they're actually still trailing overall sales growth. the fact that they're getting it back, they could benefit from that strong value proposition that they've always had and i think start to do better than the rest of retail as we go through the rest of the year. >> you know, it's interesting,

i'm looking at your numbers. the base case you have is 23 times. some would suggest that's way too expensive in the environment we're in >> that's a great question it's sort of in the middle of where it's been the last fooi ye five years we would point out that once you back out sam's club and some of their other assets, walmart traded around 17 times earnings, which in line with target. that's how we got around the more elevated p/e multiple for the whole enterprise. >> do you like walmart better than target? >> we do and the reason is that it's that traffic, three straight quarters of building traffic and the fact that their strong value proposition, we think they can keep that traffic growing at a time that the skr overall u.s. consumption of goods will probably slow

it's well above trend for the last three years >> evercore on his walmart upgrade today as we head towards the two-minute warning, about 20 seconds away from that mike santoli, we head towards the final trading day of what's been a pretty good quarter for stocks certainly megacap tech that's going to be one of the largest questions about the largest of stocks. >> for sure. i really do think that you can say there's no quarter effects going on i was looking at the best performing stocks. all but three are up today yes, people are rotating a little bit into the winters, you probably have to see how we handle things on monday to see if it was all that, but i think most of the things point to the market has stayed away from trouble through rotation as o' opposed to just kind of lick t liquidating. in the middle of last year, june 30th, you know, we were 12 or 15% higher in s&p earnings for this year.

you still had four full percentage points of fed tightening ahead of you, and the s&p was a few percent lower. so i do think that just in general it's found a way so far to hold together without really getting escape velocity. i admit if october was the low, this kind of five, six-month performance after a major low is not that impressive in terms of overall market gains or even in terms of participation, but it's still managing to stay insulated, and i'll still say too, all the conviction lies with the people who are very sure there's a recession coming ask that and that the market is too high. >> you're right to say the outlook is foggy as victoria fernandez who was on with us a while ago said, you know, the windshield's all fogged up part of this rally has to be from those when o'so suggest, yo what, we've cleaned the windshield a little bit. we may not have a clear view but we have a better one than we've

had in the past. >> or we've built up enough cash and we have a little bit of security and a cushion there that you can add or feel like the multiyear returns look like they're going to be okay from here b of a were saying they're not that bullish on this year. but they're saying we're priced for 7% annualized over ten years, not terrible. >> we've got one day to go tomorrow in the quarter, but we're going to go out with a gain across the board today, morgan and john pick that story up in "ot" right now >> that's right, stocks gain again today, that was the score card on wall street. the action is just getting started. welcome to "closing bell," i'm morgan brennan coming up this hour, a battle royal for a possible deal, we are going to talk to the ceo of wwe about all those reports of multiple parties throwing their hat in the ring for a potential acquisition. plus, we'll get breaking news on the fed's latest balance sheet numbers, a closely watched