welcome to power lunch, everyone. along with deirdre bosa, i'm tyler mathisen. welcome to power lunch. stocks are down a little bit dow down 480 points after cpi came in hotter than expected. the dow is down as i mentioned nearly 5 # 00 points right now. we will go to steve leaseman now with the feds minutes. >> minutes to the federal reserve march meeting show there was general agreement that the fed policy was at the peak and almost all judged it would be appropriate to reduce rates if the economy evolved as expected. hold that thought. they later go on to say that participants did not see it appropriate to reduce the rates if they were not confident that inflation was falling towards the 2% target. a lot of that is in the statement. what we see in the minutes is the beginning of a debate between hawks and doves on how to think about the inflation numbers that have come out above

expectation two months in a row before this meeting. you have a wing of hawks that we have heard publicly saying things like the recent inflation reports have reduced participants' confidence p that inflation was moving towards the 2% target. some saw the inflation increases as broad and were concerned about it and argued they should not be discounted as the market did at the time as well as some members of the feds. they noted geopolitical risks that could increase inflation by hurting the supply chain and also noted financial conditions becoming less restrictive. several said the primary source of inflation was the supply chain and that could moderate over time. there were doves at the meeting that were less inclined to be concerned about the recent inflation numbers. they blamed the residual seasonality, the tendency of some prices to rise at the beginning of the year. they said they expected core nonhousing services inflation,

the number that the fed chaer powell pointed to to decline over time as the labor market moved into balance and wage growth moderated. some were upbeat on productivity. overall, they agreed that the unevenness they were seeing was anticipated and part of what they had expected but there were disagreements on what to do. there was consensus that policy was in a good place to either remain high for a long time or go down as the economy increased. there was no talk of rate hikes that i could see in the minutes here. the risk to the dual mandate moving into better balance. a couple notes on the balance sheet. the staff advised the committee to take a cautious approach to further runoff on the balance sheet. that meant maybe slow it down. the majority of participants thought it was prudent to slow the balance sheet runoff fairly soon and it was talking about having the pace of the runoff which is now $95 billion a month,so cutting that number in

half. tyler? >> it feels like there is a pretty big window in those five words, if economy evolves as expected. that is really the big window there, isn't it? >> you know, tyler, sometimes when things get a little squirrely, it is what you consider to be the parts of a contract. if things don't evolve as we expect, that's where we are right now. if the economy doesn't evolve as expected, it's not. we learned that today because of the march number. and the hawks' caution in the march meeting looks to be the more appropriate approach. i guess there is a question as to whether powell looks to be a little more dovish and a little more inclined to see the two months of inflation as a bump in the road. well, it turned out a couple of extra bumps than you thought

before they started the pavement project. >> the big infrastructure spend. >> exactly. >> a couple more bumps in the road. steve, stick around as we bring lindsay in. my question to you is reacting to the feds' numbers but the overall question, did the fed error in not raising interest rates higher than they are today? did they need to go an extra increment or two to bring inflation down reliably? >> i think that's the big question. is this the appropriate level? with the fed hyperfocused on achieving the soft landing, did they fall short of achieving that restrictive level to control inflation? >> what do you think? >> we were long standing that the fed needed to raise rates up to 6% and perhaps higher if we continued to see inflation

behave in an unruly manner. so i dothink that the fed was so focused on trying to achieve this delicate balance that the fed historically does not have a great track record in achieving that they did stop short and unfortunately, now, what we are left with is inflation, reversing course, still double the 2% target. and the committee now is losing a lot of credibility in the market place by sitting on the sidelines, not reacting to three consecutive months of inflation reversal. >> is there a path you see where the next move could be a hike instead of a cut? >> well, i think if inflation remains at these levels with the core levelling off at about 4%, i think the base case is for the feds still likely to give us one or two rate cuts. this is a committee desperate to provide relief. but without more meaningful

improvement in inflation after one or maybe two rate cuts in the second half of the year, i would expect a prolonged pause. that being said, if inflation does continue to gain momentum, now we are talking about the core pushing above 4%, i think in this scenario, the fed may be willing to reengage with one or two additional rate hikes. but it would have to be a meaningful incrose and on a sustained basis. >> how about that, steve, if i can turn back to you, we are in a higher for longer phase. lindsay is addressing the question of maybe we didn't go high enough? >> i want to address something she said and she's my friend so hopefully this doesn't come on too strong but how can the fed credibility in a market that has no credibleability? they decided that there was six

rates coming from nothing from the federal reserve. the fed stuck to its guns amid the strong pricing the other way by the market and went back down to 3 rate cuts. now they are back down to 2. i don't think the market has combaep particular monopoly on the truth or credibility when it comes to the outlook here. it has been wrong. i think maybe the fed is roit here to kind of wade -- i guess wading is the best way to think about it, mark the way it is. theoretically, they believe it is restricted. even if you believe it is a little higher, they think they are exerting restraint. maybe the problem the fed hadwise not raising high enough but not cutting quick enough. i think the market itself lacks credibility when it comes to judging the federal reserve. >> i would agree but the fed was

fashionably late to the interest rate hike party. >> fair enough. >> and the market was reminded of the adage, don't fight the fed. now we are in a new period where inflation is rising and the fed is sitting on the sidelines hoping for inflation to correct course. now i'm concerned they will lose credibility that they previously established by pushing back against investors hoping for multiple rate cuts in the first quarter. >> they call economics the dismal science and not without reason. to me fed policy is as much art as it is science. >> i think that is right. even for a reporter on the dismal science, i am naively upbeat on a routine basis. it is my sunny disposition. but anyway, they do not know key elements. i was just talking to a georgetown class this morning, a

graduate class where i was lecturing, and saying look, this is not rocket science. it is harder. you can send a rocket to the moon and you know how far the moon is. you know the speed of the rocket. but if you want to know what is the mutual interest rate that is the one that will keep the economy from accelerating at a pace that isnot inflationary, you only know that after you have passed the moon, until you have gotten there. you don't know the speed of the rocket. you don't know how fast it can or should travel. and you don't even know how far the moon is. but rocket science has precise numbers. the fed is feeling its way into this. it needs to be very careful. >> good metaphor. >> whatis interesting is we have a debate between the scientists who think we need to slow the rocket down a little more. and the other folks are saying we are okay, we are on the right

path. >> right. and there is this idea of how will the economy respond? could it overheat. and i wonder, where credibility comes into play here. we have job status, economic strength that some say is proof that higher rates are not as restrictive as many had thought and you don't need to cut. >> absolutely. the economy is accelerating and still consumer spending, still a sight labor market. this further justifies not only the feds holding rates at the current level but potentially underscoring the thought that feds could have raised rates higher. and to the point that it is so qualitative, that justifies the feds erring on the side of caution. the risk is not that the fed raises rates too high in a cycle. they can reverse course quickly. the risk is always that the fed does not raise rates high enough

to get ahead of inflation and restore price stability. i think the latter is where we find ourselves right now. >> tyler, can ijust quickly apologize to rocket scientists, that i did not mean to denigrate their profession or the fabulous work they do. >> certainly not in the week we had a solar eclipse. >> exactly. >> i will ask you to stick around, steve. lindsey, we will excuse you from class. we love you and we will let you get on with your day. we will bring in rick santelli from chicago. i'm told that you wanted to react to a few things you heard. >> the only entities that are not correcting this on what the feds will or will not, whether their track record is too low too long or not raising enough or not understanding the durability of inflation or the

fact that no matter how high they raise interest rates, they will not be able to counteract horrible government policies that fuel inflation, but the feds fund future contract is misunderstood, misquoted by every economist, i don't care how high up they are, what institution they work for. they are not correct. fed funds future is not accurate beyond the next meeting and only when you get close. if i recall, if i lock now, it doesn't have it priced in for june. even though july is down the road, doesn't have it priced in there either. the contract was never designed to be telling you what is going to be happening, meeting, meeting down theroad. this is something that has grown up because the market was slow for so many years and the fed did so lettal for so many years. that is the flaw. markets aren't wrong. that's like saying when the fed kept interest rates too low which was wrong, that you should have gotten more interest.

it was wrong. but you didn't. the markets give you and take away whatever the closing price is. it is never wrong because you can get a check. try getting a check out of the fed. you can't because they are enarrears trillions of dollars. i rest my case. the 10 year auction was incredibly weak. it underscores that there are many traders paying close attention and not listening to some of the economists' interpretation of how they read the tea leaves in a market place. and fed fund futures is never designed to be a crystal ball. >> steve, i guess you want to respond. >> first, i want to say that rick is my favorite rocket scientist when it comes to the bond market and all things that have a yield on it. that's the first thing i say. i would generally be with him but i didn't take my comments about the cuts from just the future contract. look at where the price was previously. over the period of time on a

daily basis, the average of the overnight rate will be x over time. so that is telling you right now that the market sees the fed as more restrictive over time. before when it was down lower, it was telling you it would be lower and there would be cuts cut in as well as forecast of economists. my issue is not whether the market is right or wrong. i don't think it gets it --. >> it's not what you said. you said the market was wrong. >> let me finish the thought. >> in bold letters. >> the market is -- can price it wrong. but my interest is not that that happened. it's how the fed is communicating such that the market prices in that eventiality. that to me --. >> who cares? >> what do you mean? >> the fed is guesswork. it gives fodder for many that don't really understand the market. >> are you out of your mind?

that's crazy talk. >> traders have to live and die by what they trade, by what they trade. >> yes, yes. >> you think those guys know the future any better? >> they don't but they are trading. that is all that matters. >> it has been naked for a decade. >> steve, the florida is yours, rick, hold and we will go back to you. >> the marg t and traders out there trade on every verb, comma, word, spoken by the federal reserve. so my question is --. >> and i know traders who trade on full moon, new moons and where jupiter is in the sky and they are big traders and hedge funds. what does that mean? >> well, i don't know what that means. but my point. >> exactly, i agree. >> if you are arguing that it doesn't matter what the fed said --. >> i didn't say it didn't

matter. i said when the feds talk it doesn't mean they get the market right or that the market will pay attention. here's another thing. qt, embedded in the minutes is another surrender. the fed understands that the treasury is sweating bullets and that the fed doesn't lower rates, doesn't ease the cost of services the debt. now what they are doing is they are going into qt mode. and that should exist and stay. because they should be nervous that if they keep it in the 7 trillion camp the next time we run into a problem which is probably right around the corner. what are we going to do? move it up to $11 trillion? where dowe draw the line? >> my interest is getting policy right for the greatest aggregate good. >> my interest is monetizing the market. >> my question is when the market prices it wrong, how did the fed communicate? >> there is no wrong pricing.

what is wrong? are the next two meetings showing any easy? the next meeting is the only one that is a valid representation. >> they did previously. >> did we learn something new today? if the cubs get better pitching staff or if they getting a new roger maris, does it improve their chance for a world series? >> of course. we have to go but perhaps we will continue it at another time. >> i think we will. >> i think we will, dog gone it and sooner than the next eclipse. thank you. >> do we think that rocket scientists are okay after that? >> they are fine. they came out all right. still ahead, we will watch the markets. the dow is down about 450 points. s & p lower by 50 points.

on the positive side, the s & p, de ver nova, and on the low si, deckers outdoor. that is your power check. we'll be right back. (sirens) [due at target in 5!] copy that. make a hard left down the alley. network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business.

norman, bad news... i never graduated tfrom med school.ed. what? but the good news is... xfinity mobile just got even better! now, you can automatically connect to wifi speeds up to a gig on the go. plus, buy one unlimited line and get one free for a year. i gotta get this deal... that's like $20 a month per unlimited line... i don't want to miss that. that's amazing doc. mobile savings are calling. visit xfinitymobile.com to learn more. doc?

news alert out of washington, emily wilkins is live in d.c. with more action from the hill. >> hey, tyler. a key federal government surveillance program is in danger of not being able to be reauthorized in time. the federal intelligence surveillance act was supposed to be moved through the house this week. there was a key procedural vote today and that vote just failed with about 19 republicans voting against it despite leadership asking to move it forward. this bill that the house teed up had a number of reforms and changes to it for the government surveillance program, something that big tech companies have

been pushing for to give consumers more transparencies but there were debates on whether there should be warrants as part of the bill. overall it went down especially after former president trump tweeted today to kill the program. at this point, they will have to do a simple reauthorizization of the program. there is bipartisan support for the program and the changes but these procedural votes were only going to go on republican votes and this is what happens when you have a narrow majority that you do in thehouse. it is just another sign that speaker mike johnson is in trouble when it comes to his conference and the amount of support he has. as you remember, marjory taylor greene filed a motion to oust him. she has not triggered the motion yet in putting it into play. but greene and johnson did meet today and she emerged from the meeting saying she has every intention of eventually moving to oust johnson. we will have to see what happens here for the federal surveillance program.

the clock is ticking. congress has until april 19th. it needs to get through the house and senate chambers. a lot of work ahead. >> interesting time. you have bipartisan support as you say but if you have a faction that is not part of that bipartisan support in this congress, you can't get much done. emily wilkins, thank you. sticking with d.c., president biden making comments on the economy. megan has the details. >> president biden commented moments ago on today's inflation report saying that it could delay the fed's path to rate cuts but suggesting that his path on the economy is still the right one. >> our prediction is that before the year is out, there will be a rate cut. this may delay it a month or so, we are not sure what the fed will do for certain. but look, we have dramatically reduced inflation from 9% down to close to 3%. we are in a situation where we are better than when we took office where inflation was sky rocketed. we have a plan to deal with it.

>> biden and the japanese prime minister were asked about a potential takeover of u.s. steel. there were government procedures but they were hoping to get a win-win there. president biden said he was standing by his word to the workers, suggesting that the deal would not move forward unless the steel workers were on board. biden also told supporters that he was in communication with china and he would continue communication and he would have personal talks with president xi whenever he wanted to. >> thank you so much. we appreciate it, from the north lawn of the white house. the markets are still in the red after the hotter than expected inflation data. joining me now for more is portfolio manager, michael, thank you for being with us. you saw the heated debate before

the break. investors continue to be caught off guard, talking about the consensus for rate cuts. who is at fault here? is the fed giving mixed signals? is the marketnot pricing this correctly? what is going on? our markets resilient? i had a guest that said they should be way more down today. >> we are surprised that investors are surprised. we have been playing this game for a year and a half of when is the fed going to cut and it keeps getting delayed. people get it wrong because the reference is the last ten years after the financial crisis when interest rates were abnormally low. 4% is not particularly high based on longterm history. what is unusual is where we were in the 2010s. the world has changed a little bit. you had covid rgs many trillions

in stimulus, less trade with china. all of this could lead to a world that is a higher inflation world than we lived in ten years ago. >> so are you saying the 10 year yield is not an appropriate metric to look at? what is? >> no, i think it is the appropriate metric. everyone's question is when will it go down because it is unusual high. we are saying we don't have a crystal ball and we are no better than anyone else but instead of waiting for the next cut, we are trying to embrace the idea that maybe we arein a high interest environment for the next several years. >> we had three areas where inflation is sticky. one is energy, two is rent, and three is services. i guess the question, i will go back to what i asked lindsey in the prior segment, did the rates error in not raising the rates higher to go the extra mile to get inflation out of the system? >> i think the jury is still out. the fed was clearly late to the

game in raising rates. >> but then it raised them aggressively. >> it did. now we are at a level where patience continues to make sense. we are not at 8%. we are at 3 or 4%. i think you can't look at inflation in a vacuum. >> does it surprise you that this last mile on inflation is being as stubborn to navigate as it seems to be? >> i'm not a phdeconomist. >> and neither am i but i opine all the time. >> i think we see what is happening with wages. ups raised wages 40%. the car companies are raising wages. i'm surprised that people think that inflation will drop back when wages. >> wages are outstripping inflation right now. >> absolutely. but that is a double edged sword. that is not good for inflation but it is good for workers. we are seeing a more robust economy.

>> like you said, a more resilient economy. so what matters more for equities if you don't get rate cuts but you have a strong economy? how does that play out? >> i think that is tough for people to make sense of. we are so used to that idea that earnings should continue to grow because the economy is resilient and that is great for stocks. but we have the interest rates. we are trying to take advantage of areas that have had less attention. there were several sectorsalist year where they started to discount higher rates and there are opportunities today. for example, we like consumer staples here. inflation continues to be more sticky than we would like. we focus on companies -- we like dividends. they are critical in high inflation. the only way to keep up with high cost of living is if your cash is growing. so you can find the dividend growing 8% to 10% of years and

that is well ahead of inflation at 3%. so purchasing power grows and that is critical. so dividends have been overlooked for along time. they will be important. you want to focus on companies with the ability to grow dividends. >> we have to leave it there. but sempra is among your choices. >> yes. copper climbing to a 2024 high, start a second bull run this centu, tas xtrydeilne, we'll be right back. rade is now part of schwab. bringing you an elevated experience, tailor-made for trader minds. go deeper with thinkorswim: our award-wining trading platforms. unlock support from the schwab trade desk, our team of passionate traders who live and breathe trading. and sharpen your skills with an immersive online education crafted just for traders.

all so you can trade brilliantly. investment professionals know the importance of keeping their clients on track. sometimes they need help cutting through the noise, to ensure fresh investment ideas keep flowing, and to analyze the market from every angle. at allspring, we deliver the unexpected, by relentlessly exploring where others don't. allspring, follow the insight.

welcome back to power lunch. markets broadly lower. looking at s & p energy, all 11 sectors are lower now. the least bad of that is energy, down only slightly. it has been a hot sector so far, up 15%, almost 17%. pippa stevens looking at the names and b numbers for us. >> and it is the only positive sector across the s & p and today across the entire s & p 500, there were only three new multiyear highs and they were all energy. last night, barclay's initiated

coverage on the emps with a positive rating. and they said these companies have done what investors demanded and more. they said quote, we believe the sector offers a better value proposition than ever before. they pointed to a change in business model from growth to return and now value over volumes. they also said that the sector generates about 7% of cash flow across the s & p but it is only about 3%. we had the other chart showing the return on average capital employed. you see the spike there. they are getting more for every dollar they spend but the waiting is still on historic low. the chevrons can benefit from the business and not just focus on one sector of energy. they also have the size that will help them be more efficient. >> seems like a secondquarter theme emerging, thank you. let's get to julia boor stn

for an update. >> president biden is considering dropping the prosecution of julian assange. his lawyer called it encouraging. australia's parliament called for his return to his native country. the u.s. is trying to extradite him on the leak of military records. tapical police have hired three attorneys to investigate threats to members of congress. they will also assist in prosecuting suspects. "the new york times" first reported this news. capitol police say they have more than 8,000 threat assessment cases last year. officials think the numbers are growing because people think they are anonymous online. a dire warning for the united nations climate chief. humanity only has two years left to save the world by making

dramatic changes to greenhouse gas emissions. he called on voters to raise their voices ahead of crucial elections this year. deirdre rgs back to you. >> that is a dire warning, thank you for that. ahead, we get a view from the top. we will weigh in on cpi d e coum nt. nserex new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. at corient, whose resumes on indeed wealth management begins and ends with you. we believe the more personal the solution, the more powerful the result. we treat your goals as our own.

we never lose focus on the life you want to build. and our experienced advisors design custom built strategies to help you get there. it's time for a wealth management experience as sophisticated as you are. it's time for corient.

her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

welcome back everyone to power lunch. stocks reacting to today's higher than expected inflation rate. the dow and nasdaq off 1% as fears of higher prices and interest rates creep back up. let's turn to someone with a strong pulse on the consumer economy as well as real estate, restauranting, tilla fort wortha, name behind golden nugget casino hotel and the houston rockets, good to have you with us. i have to begin with this. i had your beloved university of houston in my brackets, so sorry they did not win.

>> i'm sorry too because i had them too but when your all-american gets hurt during the tournament, that's what happened. >> he was a heck of player and it was a tough game when he went out. let's talk inflation and how you are feeling it across your business. wages are up, even more than inflation. how are you feeling it and do you think inflation is coming under control? >> inflation is definitely coming under control but not fast enough. if you go back and look at all of the times i have been on here the last couple of years, and always kept saying that if we don't get a hold of this labor inflation, we will continue to have a problem. the problem is there are not enough workers in the work force and we are fighting for workers and it is causing wages to go up. >> are there not enough workers

or not enough legal workers or not enough workers who want to do the jobs that are on offer? >> i think it is all of the above. you have to remember, we let these people in the country but then we tell them they cannot work because they don't have the papers to work. that's where i have the biggest problem with immigration. if you are going to let them in and you are going to turn them loose in a city, why not immediately give them a piece of paper that allows them to work? all of these people running around new york don't have a right to work and we are supporting them, the united states of america and the city of new york which i'm in right now. >> makes a lot of sense to enable people who are here to work perhaps -- i'm no expert on immigration, i stand on thin ice here, to allow them to work, pending whatever judicial proceedings may be against them. >> you are saying it perfectly,

tyler. >> i want to go back to your inflation point. yes, the numbers show us it is coming under control but it is sticky. but there is a discussion that people are not feeling that way. they are still feeling higher gas prices and mortgage rates. what does foot traffic look like in your restaurant businesses? is that at odds with the data? >> everything is not 2021 and 2022. 2023 slowed down a little bit. that is retail and restaurants. the foot traffic is down a little bit. because of inflation and prices, our same store sales were not off very much. the high end is feeling it and it will continue to feel it. you can't charge $75 and $80 for a prime steak but yet because the herds are still small, that's what you are paying. until we get our arms around the beef industry, especially, there are a lot of other proteins that

are starting to come down but beef is the one that still has us totally locked up, especially the higher end beef. >> are you finding -- let's switch to real estate a little bit and interest rates are a factor in the real estate market, maybe a big factor, i don't know how big for you. you made a couple of very large signature acquisitions. the montaj in laguna beach, one of the most beautiful properties i know anywhere as well as river oaks in houston, big purchases there as well. what are you seeing in commercial real estate? why are you buying what you are buying? >> that is really interesting and i'm going to tell you how i was able to buy those. there were two assets that cost over a billion dollars. whether it is hard to go out for a commercial real estate player or even the reach to borrow

money right now and the amount of equity it takes, i did those in the private wealth areas of large financial institutions and therefore, i had the ability to do it because i'm able to borrow the money cheaper than commercial real estate because most people doing deals those size are not individuals. so where my big company is not done that way, i had no problem because they are such huge trophy assets and personally guaranteeing and borrowing the money. >> so you are borrowing on your own recog sns basically. >> just like they may let me out on bail on my own. >> you have a wide sports portfolio. we just had the ncaa finals and the women's viewership blew the men's final out of the water. there is a lot of talk about

women's sports rights gaining. how are they looking to you? are you thinking of that side of the business increasingly? >> i just came from our nba meetings and one of the topics was the growth in women's sports and there could be a lot of growth there in the years to come because they are starting to develop these stars that are becoming huge stars. all sports is still star driven, especially in basketball. women's and men's. even more so than other sports because you see them. you see their personalities, they don't have a helmet or hat on. there are such close-ups on the court. in any sport that you can recognize the player, it is a huge advantage. you are dead on. women's sports, i think you will see huge growth in the years to come. >> would you like to get a wnba

team in houston? there have been reports that you are courting the nhl about a team there. comments? >> i love sports. sports is a religion for all cities. we would leak to work to get an nhl team in houston. i'm working on it. >> okay. >> and i would consider, definitely, i think it is a great topic with the growth of women's sports to talk about a wnba team in houston also.. >> on that note, i have to say go leafs, go. i just have to. >> you put it out there and you got me. >> and you turn it around, the rockets have come a long way from where they were. >> thank you. still ahead, we will get a live report from the site of new york city's office to real estate conversion. could this be a solution to america's housing crisis?

we'll be right back. encore energy, america's clean energy company, now in production in south texas. energizing america with reliable and affordable uranium for nuclear energy fuel from our environmentally friendly extraction process. encore energy.

power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley. with powerful, easy-to-use tools, power e*trade makes complex trading easier. react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity. e*trade from morgan stanley.

welcome back the power lunch. a number of major banks and financial institutions get set to report key line results. chief market strategist. first up, this is how most play the financial space. what you most say about this one? >> financial report at the beginning of the earnings season and you look at it over the next couple of days, jp morgan, wells fargo, blackrock city. it'll give you a good idea of the sector and the broader market and economy. i want to start wide with the xlf which is what most used to get exposure to the sector. there are two key tie frames

drive in the u.s. equity market . the second most critical is off the march 2020 low. when we zoom out and look at the bigger picture you can see we you put a critical low here right around $17. the next thing we focus on his the bulk of trade activity that is taking place since those critical pandemic lows. it takes place right around 33 or 34. most people when they look at a chart there i goes to the low and the high. the most important thing to understand is the square value because how can you by and not know what the fair value is? it is simply where the bulk of the money has been invested in over that time period. these moves tend to be symmetric around fair value. so you are going to see another

17 to the upside and that should get you somewhere around $45-$50. so i still think there is big upset here but the we are looking for a pullback that we want to buy. >> let's go a little narrower you mentioned j.p. morgan and you say that this is arguably the most important name in the second there, why? >> huge financial services company. not just relevant to that second there but also the economy. i think a really good tell in terms of the broader market. again we go back to this critical low march 2020 and we got it around 75 or 80. again we try to find where the fair value of that critical low. where is the book of dollars that has been invested since those march 2020 lows. it is right here. it is around 150.

low 150s, high 140s. you see that's about $73 here and he will put on another 73 and i j.p. morgan ends up going to 20, 225 before it is over. these march 2020 curves are really driving the equity market across the board. there will be a pullback because the october is done and we want to buy that. >> we have enough for just one more probably. wells fargo. what is a chart telling us? >> let me see. okay. wells fargo. same thing. critical low in the 2020 a little bit later in the year around $20. fair value. is right around 45. that is $25 here. we should get 25 to the upside. take you somewhere to around 65 or 70. we are still good upside there. >> we will squeeze one more and

because we are looking at the broader seller. s&p 500? >> to me this is the most important chart for all the people watching the show. this is going to guide you in the bigger picture. low 2200, fair value comes right in here around 4000. the projection is up to 5700. i still think there is big upset across the board. for what it's worth nasdaq and -- >> we got to the most important one. thank you so much bill. we'll be right back.

trading at schwab is now powered by ameritrade, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab.

>> loss is beginning to accelerate. lows were down about 580. we are close there right now. it is going to be a very interesting final hour of trading. the news this morning that came in hotter is expect it. i think we have a couple of the s&p winners and losers so far can we put those up? there are some gainers, i think

that is the energy subsidiary exxon enterprise, nvidia. extra space, invesco and thank you for watching power lunch. >> power lunch starts right now. >> welcome to closing bell. i am scott wapner. this make or break our begins at the selloff after the cpi and whether it is time for investors to rethink the road ahead. we will ask our experts that very question over this final stretch including goldmans, jan hatzius. stocks down yields of, that is immediate reaction today that happened this morning. major averages