♪ good afternoon, everybody. welcome to "power lunch." busy day alongside deirdre bosa, i'm tyler mathison. glad you could be with us. the dow on pace now for its ninth losing session in the past ten. >> jp morgan after the results of citi group and wells fargo, also following their own reports. we'll have more on those banks congress up. is the market still fed-obsessed or is it now becoming earnings ob obsessed? is that all the session back, nvidia helping to drive yesterday's gain. what's the real driver here? we have the dcla joining us for the full hour. let's begin though with mike santoli at the new york stock exc exc exchange. >> it intensified for a bit. we did get a little bit of a bounce, and whether it's just technical or a little bit cute, the s&p 500 bounced off its

average. it's the first time it had been there in months, and so i think you had a little bit of pentup selling and i mean that in the form of the market that had gone straight up without a 2% decline for five months into late last week. things have loosened up. i think if you came into this week certain of a few things, about the macro backdrop whether it was fed expectations, where bond yields could go to, whether gold or oil was something to worry about or embrace, i think it got more complicated as the week went on, sticky inflation as we repriced the fed path and it caused you to re-wait the probabilities as to whether the fed's going to make a mistake. all that thrown into the mix. again, a market that had been up a lot since the october low going into earnings season. i think it will be welcome if the macro and geopolitical concerns fade a little bit going into next week, and then it can just be about the to-and-fro of earning expectation. >> how, if any, do the rumors out of the middle east about a possible iranian attack on israel figure into this?

if at all? >> i think the morning action was very much animated by that or at least exacerbated by it. mostly i'm looking at things like, you know, the moves -- the concerted moves higher in oil, gold, the volatility index, and to a lesser degree, the u.s. dollar. now all of them have kind of moderated those moves in the last little while. so whether that just means the momentum has tired out in the short-term or not, i do think, you know, all those things do suggest that we're kind of, you know, clenched up in this what if way about what might happen and what could be the implications for it. so, you know, sometimes you don't want anything obviously bad to happen, but the other side of it is that usually those things don't end up being real market turning points in a decisive way, but they can exacerbate fears that are already under way. >> all right, mike. thanks very much. mike santoli. for more on the markets and this year's biggest selloff so far, let's bring in a managing partner at dcla, and a cnbc

contributor. he'll be with us for the entire hour. what do you make of what's been going on the past couple of weeks? >> i think we have had such a quick run this year. nobody expected the market to be up 10%, but what they didexpect with that was that you would see some fat cuts. you've got a strong economy and you've got inflation. where do we go forward from here, and at what point do you get cuts? you've got multiple expansions and s&p 21. it's up to earnings. it's up to companies that provide good earnings and good expectations. >> we're going to talk a little bit more about that. >> they weren't really that bad. >> they weren't that bad? that's what i'm reading. >> look at jpmorgan, right? year to date, it's up 7% after selloff. a year ago, it's up 43%. the s&p is up 25%. so a lot of it was built in on the expectations. now what happens is you get the selloff. you had people who probably crowded into the trade and the banks. jpmorgan is a phenomenal bank. it's one of our top holdings. you've got a great management team, very diversified business when you look at acid management and you look at capital markets

and international, great balance sheet and great dividend ands this going to happen. a 5% sellout for jpmorgan is pretty normal. there must have been a lot of people hiding out in there and didn't see the expectations of -- and they're pretty conservative. if you look at kind of the way they've always said they're going to do is hey. i know that's not going to increase that much, but with rates the way they are, and the economy as strong as it is, the bank is going to make a lot of money. the question is, does the economy start slowing, and we don't get the rate cuts, right? that's not just for the banks. that's the overall stock market. >> what leads to that? i think you're pointing to the fundamentals, remaining pretty strong, and markets have been very resilient so far. i wonder if we can pull up a chart of the vicks over the last year. it's up 25% today, the volatility index, approaching 20. what's changing here? what's the character doing? >> i think the change is, hey. if we're going to not get rate cuts and the economy slows down, do we get a fear? i'm just -- the word that nobody wants to hear is stagflation,

right? does the economy then start slowing down? the fed cannot cut rates just because inflation by itself is staying up, and tyler, to your point, you were asking about geopolitical concerns. if that puts up commodity prices, right? we have seen oil prices almost close to $90. that's not good for any inputs for basic materials, for anything in that sense, and i think that's where the fear is, and if china is starting to come back and you see global tensions, you're not going to get that -- that foot off the brake for inflation that everybody was expecting at least for the first couple of quarters dw d . >> so you mentioned one of your biggest holdings, chase. let's talk about your biggest holding, nvidia. >> it is. >> what's happening there? what are you doing with it? what is your strategy? >> and a very good question. nvidia became our largest holding because it grew so much. it's up 60% year to date. we have been cutting back. i have been cutting back almost $400. so for, you know, new money coming in, i'm still not ready to put new money in for a new client, but i think at $850,

it's pretty fully valued, and the question is, where does it go from here? and right now, you know, it's an easy stock for profit day. if you've made money, you can just take some of it as we all have, right? portfolio diversification is key. this stock is down. >> it can do that. >> it can do, that and it's very volatile. again, it's a crowded trade. a lot of the momentum stocks, momentum investors and hedge funds have it b , but it's a fabulous company. >> we'll get to the microscalers. microsoft, and amazon will be reporting over the next couple of weeks. what do you expect to hear from them in terms of caps? i wonder if some of these computation issues who go -- all of them developing their own. >> you've got to watch for a couple of things. the stock ran when meta said, we are going to be buying all the chips from nvidia, et cetera. what we're probably going to hear from all of them is they're going to say, we're going to produce our own chips only because they don't want to be paying the prices that nvidia is

charging. there's nobody else to buy these chips from right now, and intel is starting to see -- it's a game of catchup, but by that time, nvidia will be one or two steps ahead. so it's just pricing and how much of this will really come to gr fruition, and really how much does a.i. play out? everybody's expectations if a.i., but nvidia places in other things as well. they're if gaming and data center and crypto. it's 75% earnings, so it's not cheap, but it's not ridiculously expensive. >> that's the question, kind of where does nvidia go? they have to keep that ip out that the others are catching up to do. >> i had a guest last hour who said it was all priced in. it was an interesting point of view. let's turn to banks. you talked a little bit about it. they're reporting quarterly earnings this morning. jpmorgan chase is down more than 5% after its outlook for interest for income payments came below interest income. also disappointed at wells fwaro

down 8% on funding costs. citi fell 27% in year of year, and credit costs, all three banks did beat the street's elements though as we have been talking about the fundamentals, we're still pretty good. let me ask you then, dive into sort of one area of them, and that is deposits, right? we see rates higher for longer, you're already seeing customers kind of shift out of these very low yielding checking and savings account, put them into cds, which sort of hits the margins for the banks. is there room for the big banks to raise those savings or checkings, apys? i've wondered this sitting in san francisco and seeing what the big tech is doing. >> people are smart now. they're figuring, i can look at the treasuries for six months, as yields stay locnger. the key to that bank is not just the income. it's the activity and what they do with their balance sheets and how they're helping their customers. the stronger economy, the i.p.o.

market has picked up. that's where they're going to make their assets. this is, i think, more short-term, and if and when rates do come down, they will make a lot more because they will not be moving their money out. >> let's get another perspective. we have the head of research and securities. what do you think, abraham? you have been listening to our discussion. the fundamentals still strong, or did you see any even yellow flags in them? >> thanks. first of all, thanks for having me, and i have been listening to the conversation and i would say the fundamentals are really strong. i think we can talk about why some of these names are in the red today, but i think what we heard from jp, bell, citi group, it's on relatively solid footing, how it looks for all three banks, and it was fairly constructive evenrelative to three or six months ago. now bad things can happen. as you mentioned, higher for longer, leading to a stagflation scenario, which could lead to some downside on credit or on

the economy 6, 12 months from now, but today, i was very encouraged by what we heard from all three management tea parties -- teams in terms of the ma macroeconomic area. >> it's not reacting as though all three of them beat estimates, which all three of them did. >> i think this was mentioned earlier. if you look at what they all three, i think citi was up about 20% year to date. both have had significant moves. what you are seeing is particularly a name like jpmorgan, it's been higher for longer, and a phenomenal last 12 months or couple of years, and positioning was pretty tight, and i think it was crowded going into the print. i think the street came in expecting maybe another division hire to their neck and revenues, which didn't happen, and you're seeing that on the back of that. >> abraham, looking out during the financial services sector,

you see insurers backing the front here. different proposition here for them with higher for longer rates, right? >> that's correct. my colleague covers the insurance sector, but i think they have elongated liabilities and higher rates for longer and it allows them better terms over time. >> any thought for you or questions? >> i guess my question is what is your read-through on companies like bank of america on this? are you going to see this similar selloff or do you see any of these banks separating themselves? they're all kind of being pushed in again. you're all here in one basket and we want to use that etf to sell off. >> sure. good question. obviously i can't really comment on bank of america because of the name you see behind my name, but i think what i would say is these were extremely positive, and i think what's important here is over the last few months, the moneys that the banks have generally broken away, and at least all that jp,

wells, citi, when you contrast that with even the largest regional banks, the pncs, u.s. bank corp, you're still concerned around the macroeconomy, and discounts relative to where they have been in the past. i think the messaging we received here was very constructive. again, unless we get a macro shock or you spike higher. i think we could come out of next week. we have about 20 banks supporting, where you start feeling better about maybe even the main street outlook, or some of the income that's beginning to stabilize for the banks, while credit as i said, is holding up. including commercial real estate. >> you follow about 30 banks. do you have three that are favorites? >> absolutely. so i think wells fargo, it's a name that we like. we continue to like that both in terms of its idiosyncratic drivers on capital. you saw them buy back $6 billion

in buybacks in the first quarter. they still have significant runway there. i think in terms of growth opportunity, that's a bank that has a significant runway. you're discussing capital markets and the ceo talked about that. wells is a name we've liked. we like them in terms of the macrotrends. citi group is another group. i appreciate the stocks have had a strong move, but we do believe actions taken by those turning this around reversing mismanagement, it's finally beginning to take shape, and the other one i would call out would be the efc, the largest financial, they've gone through marginal things. they had three to four years of stumbles and they're beginning to get thuings back on stack. plenty of capital and liquidity at its disposal.

>> thank you very much. appreciate your time today. coming up, yesterday's tech rally fueling apple to its best day since last may. can it keep up that momentum? on a down day, the stock is a little bit higher. we'll discuss that and more when "power lunch" returns. 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

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their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for. hi, i'm kevin, and i've lost 152 pounds on golo. (uplifting music) my biggest concern when i started golo was food. i'm a big guy and, shockingly, i like to eat. i was worried it was gonna be like other diets that were bland and restrictive. but with golo, my meals are great, and i'm no longer hungry like i was before. i'm so pleased i gave golo a shot. don't wait, go to golo.com. have a listen to what larry fink said about the

transformation we're seeing. >> a.i. cannot truly happen unless there's an investment in infrastructure. the amount of energy that is required for a.i. for -- is eno enormous, and in a power generation, we will run out of electricity if we are going to fully adapt a full a.i. world, and so the need to build onto -- this is all going to stimulate our economy by the way to build onto more a.i. which is building more electricity, and power. >> we've got steve covac here. what larry fink was talking about was this a.i. halo that is supposed to touch many other industries. energy is certainly one of them. software would be sort of an obvious next place to go, but i want to show you a chart of the software etf versus the estimates chip etf, and the discrepancy between the both. we haven't seen this a.i. halo expand beyond the chips or

megacaps or would you agree with that? >> i totally agree because we haven't seen it implemented yet, right? companies have not really come out yet and said, oh. our productivity is increasing because of a.i. so, you know, you've got microsoft and copilot and all these other companies, but to your point, it's the megacaps and it's the chip companies right now, but until we see it being used, we have to kind of make sure, and if we don't have the infrastructure there, i'm not sure we're going to get it to be used because the power needed for that, we don't have that. >> why does a.i. require all that power? >> it's the chips. let's just talk about those nvidia chips. they require enormous amounts of power. they're not the most efficient chips in the world, unlike the one that runs in your iphone. they need to run in these big data centers that take up a lot of power and, you know, intel had that announcement earlier this week. they were talking about the power efficiency for their chip, their a.i. chip that they'll start selling soon, just saying it's more power-efficient than the nvidia stuff so you save money not just on the chip

itself, they're saying, but also on the power. >> here's a stat that broke it down to me. i hope i'm getting it right, but the chatgpt query takes i think ten times more compute power than a simple google query. >> wow. why is that? i don't get it. >> because it has to run through those circuits. >> all different algorithms that it's running through so it's trying to, in fact, incorporate everything else there. what you are really going to need is much more energy. you're going to need utilities to get more power, need more gas and more data centers. >> this is what we hear sam altman talking about a lot. in the middle east this week, they were talking about this very problem. >> who builds the data centers? >> it can be many people. the company -- the companies themselves do it. >> amazon. >> exactly. exactly. >> companies like digital realty and real estate, and you have got all these companies and you need the power behind it. it's one of the utilities in california, and the addisons and the e.s.s of the world. >> it's not enough.

>> they have to come together. >> it's an interesting article on the street today saying that you can use a.i. to make the grid more efficient and household consumption more efficient. maybe this will all work together. >> let's talk about apple bucking that downtrend today as we mentioned a moment or so ago. yesterday, its best day since may, up 3% for the week. steve, why the move in apple? is it too about a.i.? >> a little bit. i know serat has other things on this, but let's talk about this angle for a second. yesterday, bloomberg had a report that kicame out that sai them as a.i. chips and unleash some new a.i. capabilities on devices later this year, but of course, none of that really matters unless they have some really great user facing features that we're expecting to see on june 10th at their annual developers conference. what that looks like, we have no idea, but that's part of it, and i know you have some thoughts on this as well. >> look. an apple is one of these stocks that become like a treasury

build in the technology world, right? it's come down. it's down 7% for the year, but it's -- the amount of cash there, people are safe in it right now. that doesn't say anything about the growth of apple. you haven't really seen earns growth. >> there is no growth. >> or revenue growth. it'll be a question and everybody's talked about it. why has it lagged behind meta and microsoft? because we haven't said what they're using a.i. for. let's see the execution. >> what is the speculation? they make a great point. you can have all the chip power you want in a laptop or mac or they're going to read fashion, the entire mac line which means i'll end up buying another one, but if you don't have the apps and the tools to run off those things, what's the benefit? you've got to show me something that i -- >> also, you're right, but -- >> -- can do. >> it might not matter. it might be marketing. >> yes. calling it a mac. sure. >> i'll give you an example of that.

apple released its first 5g phone. basically saying, you know, it's going to unleash all this potential and so forth. i don't know about you. i don't notice much of a difference using a 5g phone versus my 4g phones. it doesn't matter. because it was one more g, it got people to buy. >> i'm going to take the other side. i think it's crazy to think -- and many people in silicon would say it's crazy to think apple isn't working. >> oh, they are, but almost does it matter even if it is unde underwhelming? as long as they mark it as a.i. >> it's incremental, right? it's not a huge revolution. so what is apple going to do that some of these other companies -- >> could edge computing be its advantage? >> it could. >> do you think that's incremental? >> i don't see apple being the leader in edge computing. >> okay. >> they're in a consumer-facing business. how will they be selling more services and at the same time, we could talk to apple for years, but you're basically getting all this competition and you're getting regulation on apple too. so where can they really play

that the government's going to say, hey, now you are just, you know, taking somebody out of the business? >> so for you, is apple a hold? >> apple is a hold. >> apple is a hold. >> china is in terrible shape right now. sales were down 13% in the december quarter. doesn't look like it's improving. tim cook got back from china so we could hear more color in that in two weeks, 2 1/2 weeks. >> thanks for being with us. keep an eye on crew prices while theorizing on those reports. israel is bracing for a direct attack from iran as soon as this weekend. we will get serat's trade on the oil and energy market ahead in the hour and a quick check on the broader averages. the dow lower for the ninth session of ten. we'll be right back.

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welcome back. most of the tech sector is getting dragged down on interest rate sensitivity. the nasdaq composite is seeing the brunt of the selling down 1.7%. kate mooney joins us with more. it's one of those profitable

names. >> this is an extreme example with tech's weakness today. it's a reflection of growth with bond yields. spike higher rates, not great, so these names tend to be highly valued based on future earnings so when rates go up, discount rates that investors use to value the name. that squeezes valuations and it's what you you are seeing right now with with robin hood. it's down 4% today. we've also got sofi, coin base, but with fintech, etf, bellwether for this space, and then you've got bitcoin. lower and trading with the nasdaq hitting the crypto proxy names even harder. micro strategy, the largest corporate holder and the mining names which trade like levered bitcoin plays so they tend to see these outsized moods, and the same direction as bitcoin, but they tend to be more severe and so-called mining names as well are getting hid the hardest. one caveat, some of these names

have benefitted from higher rates. they've held deposits and it's interesting when rates go up. it's a double-edged sword when this goes lower, and more of a kneejerk reaction. poster child of growth lately though, i don't know if you've heard of this, discover tech 100 fund. it's a closed end fund that holds spacex, stripe, other private companies down double digits today, but up 300%, and sort of been trading like a main stock in time. >> thank you very much, kate rooney. let's go to a quick cnbc update. seema. >> tyler, a suspect isin custody following a crash into a texas department of public services building earlier this afternoon. texas dps officials say multiple people were seriously injured in the crash at one of its offices about 70 miles left of houston -- houston, video from

the scene appears to show a tractor trailer aimed at the building. investigators are now investigating the digit. the russian city of orrinburg is facing massive evacuations. the city of more than half a million people is being threatened by rising waters and swiftly melting mountain snow. tens of thousands of people have been evacuated in siberia and kazakhstan. and robert mcneill, the creator and first anchor of pbs news hour has died. macneil got his start at nbc news before joining the ranks at pbs. he first started as one of the half macneil/lair report before expanding the news hour. his family says he died today in manhattan. he was 93 years old. tyler? >> he was always a very comforting presence on air on pbs. >> seema, thank you very much. be sure to join us for the first ever cnbc change makers

event. it's in new york city on april 18th, and you'll hear from some of this year's honorees who are reshaping business and redefining leadership including the actress and talk show host, drew barrymore and the secretary of commerce, gina ramondo. scan that on your screen, our go to cnbc.com/changemakers. we'll leave that up there for just a second. i'll draw it up here so you can take it. there's a lot more "power lunch" after this quick break.

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welcome back to "power lunch." the down industrial is still down more than 500 points in the nasdaq composite. still down 1.7%. the s&p down 1.5%. bond yields are following, the ten-year yields solidly higher

for the week. how much are rate fearsi impacting decliners? >> i think it's one piece of what's going on. i think the fed speak is probably, you know, a rock thrown into an otherwise wavy body of water here. the first thing that looks like it's going on here is a bit of a flight to safety. when if you look at all the movements in the market and try to figure out what's the best explanation for all of these movements, well, you've got oil up, the dollar up, yields down, stocks down, that's a typical lineup for a flight to safety, but then you want to put some context in that was where you started, deirdre, which was we had a bunch of hawkish fed speak. people like susan collins from boston coming in, and in that context, the yields want to be higher, but they're exploring where the top of that range is. they're seeing the bottom of it, and down below right around 4%,

but you have banks down the on day. it's a big day when jpmorgan falls as much as that, and then you have the bond markets figuring out, so i think you have a lot of different cross currents going on. it looks more like yields and flight safety with the geopolitical concerns out there. >> when you look at what bonds have done, and the fact that people seem to be bidding up the yields on bonds, what does that tell you about sentiment? >> when you look at sentiment, first of all, overall, when the fed says higher for longer and the market starts to embrace that, and you can see over the long-term there that the two-year note has been up near 4.90% and you look at the ten-year and it's aup 4.5%, and that presents a challenge to the stock market, and the higher rate will be higher over time. that's going to be an issue, but then you have this kind of explo exploration, and it's a nice

start if you go back and look for example, back to december or so. as i speak so wonderful, you see -- you see the lower end of the range and then what we're looking for is the top end of the range and maybe 4.5% which could be sort of good news in this context. at some point, you were the days when they were worried the market fed would be too long and bring on a recession. that caused ten-year yields to go down and be lower. that could be able to buy the concern as the fed talks were more hawkish and the ten-year comes down. i think if mike santoli were here, but the stock market has come a long way very quickly. so what we're seeing here, were it still not that far off the high, so it's in a big a move. it's one where you might want to pay attention for short. >> it's been a cool couple of weeks not just in the weather, but in the markets. steve liesman, thank you very much. let's turn back to you, serat.

you expect the fed to be on hold for a little while, but you have been really a strong exponent of materials. >> i have, and the main reason for that is if you look at the lack of supply, copper -- there hasn't been a copper mill in ten years, and if you look at the demand for copper whether it's coming from china now, but we were talking about before, data centers, right? evs and hybrids, all the power that's going into building all these chips, that's all copper-related. all the new construction takes copper. so those are things that we think, you know, you can play it through tech resources, right? you can even steel companies like cleveland cliffs, i think the demand for these products and they have been so out of favor like people haven't looked at it for ten years, and if you go back to the early 2000s, that's where a lot of the money was made. the other part was the dollar. as the dollar gets stronger, people buy more of these, and that puts the price up as well. i think that's a very important part of a diverse portfolio, and

it has been ignored for most investors. >> those industrial uses have been real economic uses. gold really doesn't. what do you think of gold? >> i like gold again as a diversification hatch. it's a 1% position. it's important to have in your portfolio given global uncertainty, given kind of wherever you're going to go with the dollar. i think it's something to have in your portfolio, but not pharma. >> you mentioned earlier nvidia, and that you're taking some profits there. you have been taking profits. extend the analysis out to the other magnificent seven. is this -- what do you do with the -- we've got amazon at an all-time high yesterday. >> so when you look at kind of the market weighted s&p versus the equal weighted s&p, that's where you really need to make the comparison. >> they are so big a portion. >> they are so big, and look. if you look back historically, whenever a sector becomes north of 15%, it's not, you know, if. it's when. when does that come down? we don't know what the factor

is. again, i'm not saying they'll get rid of these companies. i'm saying you can have them in your portfolio, but meta doesn't need to be 6% of your portfolio. it can be 2%, the same for apple and google and the others as well. >> this isn't what we typically think of as tech stocks. we think about apple which isn't even there, and they have so much cash on their balance sheets. they're industry leaders. that makes them different. does that make them defensive in higher environments? >> they become defensive in consumer state companies in that sense. >> that's the product. >> however, the difference is that when competition comes in like we saw in the late 1999 area, look. if you are nestle, you're going to be selling chocolate three years from now. you don't necessarily know what's going to happen to instagram in three or four years, right? it's not a recurring revenue as much. so you're getting that multiple of 20 to 24 times. again, i'm not saying sell out of these companies. just don't bet the farm because there are other opportunities

out there as well, and look. if theeconomy slows down and advertising comes back or regulation is coming after every one of these big seven companies. >> i was at a dinner last week with a few tech ceos, and they brought up an interesting point that our megacaps are different. they found ways to innovate out of their, like, innovators' dilemma. you would think it would be dominant for so long, and they were able to do so because they have the capital to do so. even disney, streaming might threaten its traditional business. they might be able to shift. does that still apply? regulators is one risk to that thesis, but they vice president been -- haven't been able to get it together. >> you're starting to see that on the regulation side, but remember, most of these companies got to where they were because of acquisitions. >> yeah. >> google bought youtube. >> meta bought instagram and whatsapp. >> so if you think about what they've all bought, and now maybe you break them up. maybe it's some of the parts is greater than the pieces and you

see, which one do i want to own versus whom? but i think it's important, and look. we can always say it's different this time, but we also know that if you don't have the ability to go out and buy new companies, you have to kind of stick with what you have, and then look. who would have thought tiktok would have come in four years ago? all right. so you do get -- it's very fast-changing in that orld, and they're very good companies, but i'm also saying there are other opportunities out there, and doesn't mean you have to have 40% of your portfolio, and they could do very well for the next ten but they have the opportunities in the market. >> you see the broadening out from the rally. >> yep. >> shares lower after a double downgrade saying the idea that it could be an a.i. winner is overblown. we'll get to a theme and trade ahead here. ahead here. we're back in two.y managers, 'e different. (other money manager) you can't be that different.

(fisher investments) we are. we have a team of specialists not only in investing, but also also in financial and estate planning and more. (other money manager) your clients rely on you for all that? (fisher investments) yes. and as a fiduciary, we always put their interests first. (other money manager) but you still sell commission -based products, right? (fisher investments) no. we have a simple management fee structured so we do better when our clients do better. (other money manager) huh, we're more different than i thought! (fisher investments) at fisher investments, we're clearly different.

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time for today's three-stock lunch. we are focusing on a couple of big movers, and looking ahead to a key name that is reporting earnings this month. here with our trades is ava ados, coo, and chief investment

strategist at e.r. shares. china saying to phase out chips. that is a blow to names like intel among others. the stock is down as a result more than 5% today. what's your trade today? >> it's a strong sell. today we've got the news china is phasing out foreign chips. 26% of intel's sales are to china, and then that's the top market. so that goes away, then we'll see a big decrease on the revenues. that comes from top of very weak fundamentals. their even margin is 0.1%. that's almost zero compared to 21% for the industry average. the revenue growth is negative, negative 14%, and their even growth is also negative, negative 38%, and that comes also side by side with a relatively high valuation of a p.e. of 94 compared to 26 for the average of the sector. it's a strong sell.

>> where are you on intel? there's china, there's foundry. there's competition. >> completely agree because i think the biggest thing about intel also is operating leverage because they own foundries, and because you have that large cap, you have to spread and allocate that cost, and and your revenues are coming down already, and you're with china, and one step behind producing chips, it'll be a couple of other years. there are plenty of other places to put your money, especially in the semiconductors. >> let's move onto arista to a double downgrade from sell to buy over at rosenblatt. their growth in a.i.-driven networks could be thwarted by nvidia. you're a trade on arista. >> i have it as a buy. we own arista and nvidia, and we have been with them since it was a $5 stock. we still believe in both of these companies that they have a great future.

ari arista was actually upgraded and said to downgrade, and this is that nvidia will steal away their internet business and disagree with that. when a company is under pressure, it does not act that way. it has a revenue growth of 34%, when the industry average is only 36%, and most importantly, a net income margin which is 35% compared to 2% for the industry. when a company acts like this, it's definitely not under pressure. it's a buy. >> so if you were taylor swift, you would shake it off, this 8% decline today? >> exactly. i would actually buy. i think it's a very good entry point, and i wish i was taylor swift. >> we can all dream. we can all dream. >> finally, we asked to you pick a stock reporting earnings. you chose chevron.

why do you like this one? >> i like chevron for the short-term. i wouldn't have it as a long-term buy, but just because of the escalation in the middle east, and iran now threatening for further escalation. i think chevron is a good defensive position, and i like it when it comes to oil companies. they're very large in their position in oil fields, and they're geographically well positioned in kazakhstan which can target that region over there. their net margin is 11% compared to 7% for two years. its gross margin is 39% compared to 28%, and even though it's a bureaucratic company so i don't believe in it for the long-term, it's a great defense position for now. it's a buy. >> you were saying you like commodities, energy. >> i do. i like chevron short-term and long-term. the longer oil stays at these levels, the better off it is for these se gintegrated oil compan and the production costs keep getting lower and lower.

when oil is at $80 to $90, they're minting money, and the more efficient they get. you've got a great balance sheet and every year it's one of the dividend aristocrats. you want companies like a chevron and an exxon. >> to you, what portfolio you want a chevron. >> what explains the market funk we've been in? >> we have actually started making changes in our strategy with cpi came 0.3 and 0.4%, and inflation running above the 2% target rate, so that's a concern to us. we've been moving to more profitable companies. we want to see companies widen their margins. we want to see companies with great cash flow. until we see the rate cuts which is pushed way further into the end of the year, we'll have a more conservative position in growth, but way more conservative than we had in the first quarter. >> we were discussing during the break the selloff we're seeing in jpmorgan shares, even after a

decent quarterly report. do you think this is a warning for the rest of earnings season that the bar is going to be set fairly high? >> so i think we have good news and bad news. i'm actually optimistic when it comes to the earnings season. we'll have good earnings. companies have been performing well. companies have been proactive in maintaining their margin as, widening their margins, cutting their costs. i think we're optimistic when it comes to earnings. i'm actually a little pessimistic when it comes to inflation, inflation especially housing, remaining sticky. food away from home is rising. energy costs are rising. that's a concern. i think it will be a healthy boost to see some earnings coming up and it's a stock picker's market. you have to be careful which companies you select. >> right. we'll see if we can change the focus from interest rates to earnings. eva ados, thanks for being with us. let's give you a market check as we round the corner into the final hour of trading.

the cdow is off 1.3% at 37945. nasdaq off a little bit more in percentage terms off almost 2%. 1.79%. 293 points lower and as for the s&p, it, too, kind of splitting the difference between 1.78 and 1.3. the s&p is down 1.67%. we'll be right back. 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.

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stocks when i leave san francisco. that's what happens. >> i'm going back next week so maybe we'll see what happens. banks, of course, we've been watching a close eye on them, dragging on the markets. jpmorgan, costing the dow nearly 75 points following its results. citigroup and wells fargo are lower. energy stocks are lower today and that's despite a gain in oil driven by fears of escalating middle east tensions. israel is reportedly planning for a direct attack fromman. threats, those geopolitical fears adding to a long list to the markets where we started the show. >> it's similar to when you had the ukraine war going on initially on the weekends, risk off. so get your hedges up, sell what you need to, before you go into the weekend. see what next week brings with earnings. people surprised at the jpmorgan reaction. go into the weekend, park your money in treasury yields and see hey, let's reassess monday. >> with interest rates being where they are and presumably

staying where they are maybe a little longer does this raise the premium be on how important earnings will be? >> absolutely. remember tina. well we have other things now. there are other alternatives and you can be in cash equivalent and treasuries. >> you can go into some nice quality corporate bonds at 6%. lock it up fortwo years. >> three to five years. >> nice thing to have. >> nice to have you here. >> thank you. >> we'll see you next week. that does it for "power lunch." >> "closing bell" starts right now. >> and welcome to "closing bell." i'm scott wapner live from post nine on this friday. this make or break hour begins with the rally interrupted as geopolitical concerns, inflation fears and a rate cut reset, all weighing on the markets today. we'll ask our experts over this final stretch what's at stake that includes fundstrat's tom lee. is the story for the bulls changing? it's a kwee key question and we'll get his answer. in the meantime, take a look at the scorecard with 60 minutes to go in regulation, a decidedly risk off day for the market.