it's been with a broadening amount of stocks and the right amount of stocks too for all those reasons, i think it is strength that should continue over the coming months. >> ari, thank you very much. it's actually really almost 3:00 not 10 of 3:00 as the clock says. >> unless he's on a delay or some other time zone. >> thanks for watching "power lunch." >> "closing bell" starts right now. stocks are pulling back. in fact, sitting at session lows as we kick off mega cap earnings and the fed decision this is the make or break hour for your money i'm mike an toely in for sara eisen. the s&p sitting on a 1% decline up 2.5% last week, up 6% year to date, which is month to date, coming into this week, the dow slightly outperforming defensive groups, doing better than some of the leaders of the past month which include technology

the nasdaq up 11% before today, now down almost 2% 10-year note yield slightly higher the nasdaq 100 components moving to the downside. a lot of ev stocks that have had great runs this is a lot of sharp pullbacks from strong moves to the upside for the most part. coming up, we'll talk to long-time tech investor dan miles about his expectations for earnings from the likes of meta, apple and more he'll tell us why he bought shares of intel last week after the company gave a disastrous outlook. to the s&p 500, and really where today's action and this month's action places it from the -- all the way from the january 2021 highs. we got the 27% maximum draw down we're up 16% off the october lows as of this morning. one of the significant things, everybody has been pointing out and i have as well, off chance to sustainably get above the

downtrend but we have the cat lists coming up. what's significant a routine pullback of 2 to 3% leaves you right there above the lows for the month. that's the job of one of these broad rallies to build in a cushion. bigger picture, you've actually diverge the with this rally from some of the more die as truss paths and trajectories that had people's imaginations running wild, especially late last year. this is since the peak last january, compared to the bear market declines of 2007 to 2009 and 2000 to 2002 the one from 2008 looked really scary for a while. that's the dissent into the lows and you've diverged here off of that nothing says it's going to go one way or the other from here, but we're no longer at the same rhythm the 2000 to 2002 decline still kind of in play here, but just more important than figuring it's going to follow one or the other, is to say nothing is really determined but this is a rhythm, including rallies to

bear markets as the pictures show let's talk about this huge week ahead for investors, how that might play into the trend. highlighted, of course, by the fed meeting which kicks off tomorrow, followed by the rates decision on wednesday and we will also get january jobs on friday the monthly jobs report. joining us is 314 research co-founder warren pies it's great to catch up with you again here one way to i guess read the market action so far this month as we rush up to the top of the multimonth high is, investors saying that you have to raise the probability, i guess, of a potential soft economic landing if you're looking at the odds throughout do you buy into that or feel as if this is a fade? >> well, i buy into the idea that that's the narrative driving this market rally right now. you can trace it back to the fed governor waller's speech on january 20th he gave an explicit guide to a soft landing and laid out a lot of hope there and the markets grabbed hold of that

personally and in our firm, we're fading that. we think that a soft landing is still possible, but we put about a 20 to 25% probability on it, and last week we wrote a big report on this and really we wanted to step back and challenge our assumptions and say we're looking for a second half recession what would it take for us to change our view and get a soft landing? so that's how we approached the question really, in our mind, there are two big factors for a soft landing. we need what we're calling immaculate disinflation, heading lower without a recession and a hyper reactive fed we think we're going to get number one i think inflation is coming down it's been a call of ours for a wild while we will get rapid disinflation this year. i do not believe the fed is going to be as reactive as it needs to be to get this soft landing just right so then to spin that forward, we really started to zero in on the housing market, ground zero if

you're looking for a soft landing or recession call because housing is at the center of both of those things. >> yeah. why do you think that the fed has to be acutely reactive by that you mean would have to get easier in terms of policy in response to inflation going down a lot. why can't the fed kind of keep rates around where they are, whatever the level is they get to and just see how the economy handles it from there? >> well, a couple things number one, if you look at the fed's -- this gets academic. i won't go too far down this path the fed estimates that our star, which is the neutral rate of interest where you would be balancing inflation and growth in the economy is like 2%. the real fed funds rate as we get the disinflation is poised to shoot higher above our star number, the big takeaway when that happens policy gets really restricted really fast the fed generally does not ease or does not ease without a recession. so you need a recession to prompt the fed to cut rates

enough to get that soft landing. the other big reason is housing affordability. so we've seen a lot of hope that housing has kind of bottomed here, and it just doesn't wash with the data. i'm not a housing doomer there's a lot of housing doomers. i think there is an under supply in the economy and good demographic tailwind but when i look at it the average real house payment is 2,800 per month. we always have topped out around 2,200 to 2,400 at the very top in the housing market. we need to have housing affordability come down without a crash in house prices if we wants a soft landing that requires the fed to be reactive i think. >> yeah. obviously, mortgage rates on 30 year down 1 percentage point from the highs we need to probably keep in that direction to make a dent in the affordability picture. where does it take you in terms of sort of tactically in the stock market or other markets like bonds >> yeah.

i'm basically stepping away from the stock market at this point we outlined with you last week and to our clients the rough range we're watching 3,600 to 4,000 the s&p 500 i think if you go back and check what i said we need to break above that range to suck most people in i saw a technician on the show and things were looking like a buy. to me classically this is going to suck people in the top. you need an excuse to buy and get long short-term debt you're being compensated to sit this market out and wait to see what happens. because we think we're going to get a hard recession the second half of the year, that's how we're playing it fixed income over stocks and i want to be shorter term in that fixed income picture i mean, if you think about it, you can get almost 5% in a money market fund or short-term debt, where at 4,100 before the sell-off today with the s&p 500, you need to get, you know, at least double that, you have to be guaranteed double that with

the volatility in the stock market to justify long position. you're basically betting on getting close to all-time highs here if you're getting long. no, i don't like the risk/reward of the equities. >> yeah. certainly a different hurdle with yields up where they are versus past several years. warren, great to talk to you thanks very much for your time today. >> thanks for having me. >> all right mega cap tech earnings kick into high gear this week with meta, amazon, alphabet and apple set to report in the coming days up next, veteran investor dan niles will tell us his picks ahead of those results an why he's betting on intel after last week's earnings disaster you're watching "closing bell" you're watching "closing bell" on cnbc. ♪ ♪

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the major averages are on pace for solid gains with the tech driven nasdaq leading the pack up more than 9% even with today's pullback february will kick off with a bang with a slew of tech earnings on the way. wednesday meta and thursday, apple, amazon and alphabet joining us is fund founder dan niles. good to see you. let's just quickly go back last year you were defensive and stayed out of the way of the market decline for the most part, specifically in growth areas of the market. have things changed this year? do you think that there's a different risk/reward setup? how are you playing it >> yeah. i don't think things have changed too much the stocks are down from where any peaked but last year it was really about inflation and the

fed, and so for the first six months the market went down, despite earnings forecast going up you sort of got to mid-year and earnings forecast then finally started to come down, and i think what you're going to deal with in 2023 is the aftermath of all of those rate hikes you saw in 2022, starting to play through to earnings, and you've already kind of seen it with some of the bigger tech companies like microsoft that have reported. now, obviously, the stocks have gone up and you can call it the january effect or, you know, whatever you want, but it's typical that the market tends to drive up the stocks that were oversold in the prior year in january, at least to start the year, and, you know, that's what you've seen, right communication services, information technology, consumer discretionary, those are the three best sectors this year up 8 to 13%, and the best sectors from last year, health care, utility, staples, are down for

the year i don't view this anything more than a bear market rally like we saw last year. we saw seven of them 9% each on the s&p 500 and you still finished the year down 19%. >> that is true. which would imply, i guess, you would be certainly not chasing things like the big caps or the nasdaq, although if you look at alphabet or amazon, the earnings forecast for this year are down a lot since the middle of last year for those companies, right? they're down 15, 20, 25% you think there's still more shoes to drop on that front? >> absolutely. i expect every single big cap tech company to report and to have the estimates go down for the march quarter and some cases they could go down substantially. you could look at this and say intel had one of the worst guidances ever and the stock is up 6% for the month. microsoft's guidance on azure was horrific and up 1% for the month. you don't want to confuse stock

prices with fundamentalments and right now you're seeing big cap tech start to take numbers down in the very large way, and the problem ifz, valuations don't really discount that because you still got a trailing p/e of the s&p of 18 times, whenever cpi has been above 3% over the last 07 years, that multiple has been 15 times, you're not getting paid to take the risk whereas you can buy a three-month t-bill one of our top picks and get a return of 4.6% that's pretty darn good. so i think you need to balance risk versus reward versus just looking at you know these are down a ton and icombined everything is up in january. it doesn't really matter. >> we did mention and you mentioned last week that you did think intel was, perhaps, getting interesting after just being taken apart on that bad earnings guide and everything else what do you see there? is it strictly just about, you know, valuation and low expectations >> well, those are certainly

helpful. i mean intel is trading at 1.2 times book value which is pretty low compared to a commodity d-ram manufacturer at micron at 1.4 times and you get an idea of how compelling the valuation is. you're getting paid to take the risk you never want to buy something based on valuation it's incredibly stupid i'm looking at the fact that intel has been losing share since 2018, and in the back half of 2022, they actually started to gain a little bit of share in desktop and mobile, and the first thing that pat gelsinger did, the new ceo about two years ago, go look, we screwed up by not moving to euv, which is an efficient but expensive way to make chips and we're all-in now. that technology gap that happened with regards to the tsmc, that's going to start to narrow and you're going to see that pay dividends going forward. the final piece of it is, pc

demand, we've been saying this for, you know, 12 months, we looked at and said that's a pandemic beneficiary like smartphones, just like e-commerce, just like zoom, that's going to continue to collapse that was down 30% year over year for the industry in the fourth quarter. intel's forecasting their own revenue down 40% in march. i think that's the bottom. and don't forget, intel has a huge presence in china china has been locked down for three years. once that starts to open up, that should help them a little bit as the cloud vendors in china start to order again and the regulatory pressures come off. for us, intel is like our facebook call if you remember after they gave that guidance after their september quarter, you were sort of getting paid to take the risk, and right now with intel, with their customers are giving them more share after losing share since 2018, it tells you something is different. >> right and, of course, meta, you know, just this month has had some

upside momentum. you've got some rebuild of that valuation. the one that really does stand out is apple in terms of both the valuation has not really come in that much, it's still, you know, above prepandemic levels, but also, kind of growth rates are plus or minus not much it's not as if there's been some huge downgrade what they're going to earn. how would you approach it at this point going into the numbers? >> yeah. i wouldn't touch apple because you brought up all the same issues i have, and don't forget the final one. it's trading at a 24 times p/e this company was not growing revenues in 2019, and the pandemic in, you know, multiple portions of their business don't forget, smartphone unit sales for the entire industry was down 4 years in a row. the pandemic hit, and then we all went and upgraded, like in pcs. you're going to see a digestion phase this year. you can walk in any store and pick up any iphone you want.

demand is so strong you're not stocked out. my evaluation, the opposite of intel, much higher of s&p p/e of 18 times, the market wasn't growing before the pandemic, and people still like it because, let's face it, most of us are carrying an iphone in our pocket and some sense of comfort, but you don't want to confuse a product with a stock and that's a big mistake, especially at the multiples this high. >> yeah. i mean, obviously, loyalty to the brand, to warren buffet and the stuff around it and maybe not just the financials. what about outside of tech, you emphasized more value sectors at times. anything look interesting on the long side? >> sure. i mean, we were on cnbc on january 3rd and gave you our top five picks for the year. they're up 10% year to date on average. there's i think if you look outside the u.s. markets it's actually incredibly interesting, and a simple way to think about it is the following -- money supplying the u.s., m 2, down 1%

year over year in 30 years worth of data that we have, it's never been negative you look at china, on the other hand, which has been locked up for three years, and their m 2 is up 12% year over year money supply drives stocks we saw that during the global pandemic if you look at japan, it's one of the areas we likely own mitsubishi financial there our thesis yield curve control has been going on since 2016 that's finally ending. yuck make positive yields on a two-year japanese treasury for the first time since 2015. we saw this with the u.s. banks, two years ago, where they were up 33% because they could finally make money lending we like that we like uranium, energy security, ura. we talked about that we like the health care sector, xlv. and our final pick was facebook. >> yeah. >> you look at facebook, up a lot off the lows it's at 13 times the s&p is at 18 times and is so

google if -- and we said this, you know, three months ago, if it's doing well, revenues have gone 1 billion to 3 billion, competes with tiktok, that's the fundamental, that's the thing. >> dan, appreciate you running through all of it with us. thank you very much. >> thank you, mike. >> take care all right. let's check on the markets we are hitting new lows for the day. the dow down 232 points. the s&p 500 off 1.2% the nasdaq leading on the downside russell 2000 down 1.1% after the break china takes on chatgpt. wall street is buzzing about a competitor to the a.i. bot. as we head to break, some of today's top search tickers you have tesla getting the most interest followed by the 10-year treasury yield, lucid, apple and amazon amazon we'll be right back.

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what's wall street buzzing about? the global a.i. arms race. the latest company to jump in is baidu working on its own version of chatgpt, the open a.i. product that has captured the public's attention since launching late last year reports say baidu is planning to ingrate the chat bot into its search engine since march. microsoft and google are working to commercialize the technology into their products. baidu would be the first chinese company to bring thetechnology to consumers in china over the government censors the internet and chatgpt is blocked baidu's stock is flat in a down market and having a strong market to 2023, up 24% deirdre bosa and steve covac are with us now to discuss all this. steve, bigger picture, it seems to me that these a.i. programs are essentially, you go out and train them, right, going out and

consume a lot of data and consume a lot of language and try to predict the next thing. presumably there's going to be a lot of iterations of this, it will be a feature as opposed to just a product, is that right? >> yeah. that's right but it goes beyond chatgpt, mike it goes into things that let's talk in the context of microsoft which is the real company that's doing stuff here what they see they're doing, satya nadella talked about this extensively last earnings call and saying we're going to incorporate this technology across our technology stack. so today, it's running on azure. that's a good part of the azure business even if people want to have their own versions of chatgpt, that maybe don't use open a.i., they see it as an opportunity to run the systems on azure he bee yond that they're selling some of this technology and we're anticipating them to put it finally into consumer products, something else that nadella talked about that means in fact office 365, more extensively in bing search

and into gaming and so forth there's a lot of opportunity there, and nadella talks about this as a platform shift that is something you should pay attention to he got it right with cloud, got it right with their azure business now he sees this as the next step. >> and dave, put niit into contx from the baidu side of things. what's the opportunity and how might it come into consumers' attention there? >> well, the opportunity in china is as big as it is here. a lot of people are excited about this baidu is known in the west as the google of china, but it's become a lot more than that over the last few years growth struggling on the search engine side and made this move into artificial intelligence a long time ago, made strides in autonomous driving and this doesn't come as a big surprise we know it's been working on a deep learning assistant called ernie that is supposed to provide the basis of its own

chatgpt like product, and as you kind of said, mike, it has to be trained, so this is what i find interesting. this chat, this artificial intelligence product is reportedly being trained in both english and chinese. both inside and outside of the chinese firewall so when it comes to censorship, this is an important question for a chinese chatgpt, because what it's allowed to say and not say. even open a.i. is doing that, in terms of trying not to return results that are going to be overly political or tap into hate speech, so it will be interesting to see how this turns out in china, but baidu, i should mention tencent as well v been leading the a.i. arms race in china with most, more patents than the companies here that are working on this. >> i can remember for years, really, people saying that because the raw material of artificial intelligence is data, and that the chinese platforms have essentially a lock on an enormous trove of it over there

and all the activity among chinese citizens, it was a head start. to put a button on it, seems like this isn't necessarily something that's going to be, you know, a new mouse trap that only one company controls and there's going to be necessarily network effect likes a google search where everyone will join in on the same platform, is that right or wrong >> that's right. i don't think we can say that one company is going to dominate this or the other. right now all the attention, of course, is on microsoft because they were early investing in this one specific product, but you got to keep in mind, chatgpt was built on a foundational technology started by google they were use something open source a.i. is an open source in general. this community who develops this technology like sharing stuff. a lot of it has the base level foundation anyone can kind of tap into and create their products with. do i think microsoft and baidu and google are going to be the only players here? absolutely not because of that open source

nature and because these researchers and developers share all the data with each other to begin with. >> all right so bait of a free for all here. >> yeah. >> steve and deirdre, thanks so much we'll talk soon. tesla shares rallying more than 30% so far this year. our next guest, though, explains why he thinks the stock is now overbought and should be sold.

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. stocks now at session lows with less than 30 minutes until the close. the s&p 500 down 1.2%. the nasdaq off nearly 2% joining us now is jeff from renaissance macro research jeff, just to i guess take the temperature of how you're feeling about the start to the year i mean a lot of remarked upon improvement in some of the sort of technical measures of supply and demand where are you in terms of declaring the trend maybe has changed or not >> i'm sort of a b-minus, b player here. i think things are better here some of the really very consistent indications that we look for from thrust and escape velocity and 20 day highs and some of the measures haven't triggered.

that's not to say you can't have bull markets without those because you can, but generally that raises the burden on trend and you have to start, you know, creating the sequence of higher highs and higher lows in trend which we haven't done. we've come close in some instances. you need to get through 4100 on the s&p to do that internally about 66% of the s&p 500 constituents are above their 200 day moving average that's going in the right direction. i think, frankly, the best characteristics of this market are just some of the subsurface leadership characterics. beta has been doing well, cyclicality has been doing well, at the expense of defensives you know, those are the types of things that we want to see develop in a new bull phase, even though we might not hit some of those milestones we look for. i think the characterics are far more favorable than what the bears are willing to accept here. >> yeah. the sub themes have been interesting. it's not a uniform market.

i know you've been focused in on in terms of the cyclical leadership profile, things like steel stocks and i guess machinery and these areas of, you know, sort of old economy that have been doing quite well and maybe don't get the attention? >> yeah. they've really done it at the dismay of so many people and i think with this big debate that we're having right now, particularly on the street of, you know, recession, no recession, hard landing, soft landing, or however you want to characterize it, we look at the tape and say, are we really going into a recession when we have consumer finance names breaking out, when cummings engines and some of the big heavy equipment manufacturers like cat have been doing well for, forget the last month, they've been doing well for six months and outperforming that's exactly what should be happening. so, you know, people are concerned about earnings i get it price tends to see through those earnings concerns and i just think that that's not getting the credit that it deserves

here i think that's a far better, more bullish attribute for this market than people are suggesting. >> and then pretty much at the other end of the spectrum, we alluded to tesla your poster child for your 2020-2021 type leadership obviously, got busted down 70%, now is up by 60 something percent off the lows is there a trade here? >> well, first of all, be careful of reference it will steamroll you in this business we want to take a step back with that. >> true. >> i think the trade is and you hit it po etically, 2022, 2021 in particular, the stock was over owned, over valued and over behind and i think we're seeing the other side of that right here, not to say they don't make great cars and there's really interesting things going on there, but i think it just got caught up in a lot of the excesses that we saw from, you know, the covid and the free

money policies it's a big top in our view the 50 day is below the 200 day moving average, still on a downtrend. a big rally that's not unexpected in bear markets even, you know, 60 plus% is not unheard of at all in individual names. we're right up against this resistant level. our system flagged this this morning about overbought condition in a down trend and we look at those and call those optimal exits where you want to be raising cash, not deploying cash into those positions. so he yeah, i think there's more vulnerability for tesla. i think it's an important point, mike, tesla is part of the discretionary crew, amazon is part of the crew equal weight this year, it looks far better than if you allow some of these big behemoths to dominate that tape it's the breath of discretionary we're seeing we're most

intrigued in not specific highflying names or marquee names these are the names, the home builders and some of the hotel stocks and some of the restaurants, that really suggest that the consumer is not dead and they're not about to hit the wall, that, in fact, it's steady eddie for 2023 as we go. >> it is fascinating that's the way the market is hinting. jeff, great to talk to you thanks very much. >> thanks, mike. >> catch you soon. here's where we stand in the markets. you see the s&p 500, just slightly off the lows of the day, down 1.1% or so the dow has been out performing. the nasdaq composite down 1.7% within the dow, johnson & johnson is one of the biggest drags after a he key court ruling involving lawsuits against its talc unit. those details when "closing llcos ghbabe" merit ck

welcome back check out shares of j&j which came under pressure earlier in the session after a federal appeals court rejected the drugmaker's plan to use bankruptcy court to resolve thousands of talc injury lawsuits meg tirrell has the details. hey, meg. >> hey, mike this is a closely watched decision, and as for background, there were about 38,000 cases filed against j&j around its talc baby powder and similar products claiming these were linked to patients' cancers. now there are more than 38,000 they were sort of litigating these one by one and the legal outcomes have been mixed they were winning some, lost some, and the biggest penalty they paid so far was more than $2 billion to try to put all of these together and head off that piling up, j&j spun the talc

liabilities into a separate entity they then put into bankruptcy protection. this was a maneuver referred to as a texas two step because it takes advantage of texas laws. this appeals court came out and said you can't do that this unit was not actually under financial distress, and it can't take advantage of the bankruptcy system j&j saying it's going to challenge the third circuit's ruling and said, quote, resolving this matter as quickly and efficiently as possible is in the best interest of claimants and all stakeholders and we continue to stand behind the safety of johnson's baby powder, safe, does not contain asbestos and does not cause cancer they will continue the legal battle on this the game isn't over, but it has implication% other companies that may have sought to use this man maneuver for all kinds of product liability claims. >> if the standard from the court is that, you know, the company is not really in dire financial straights, you know, therefore not really qualified to put this into bankruptcy, of

all companies, johnson & johnson is one of only two triple a rated companies in the s&p 500 the idea that if you have to cry poverty this is not the company to do it, i suppose. >> yeah. the court even refers to that, that it has this sort of outstanding credit rating and j&j is a more than $400 billion company and get into the nitty gritty of how the unit was split off, however the payments, whatever they would amount to be, were guaranteed by the bigger companies we'll see if this stretches across other companies using this maneuvering. >> about $15 billion off of j&j's market cap since that news, meg. thank you very much. ford cutting prices of its mustang mach-e in response to tesla reducing the price of its model y. details of this price war straight ahead. plus sofi soaring and chips chopped when we take you inside chopped when we take you inside the market zone.

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power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. . the market zone is sponsored by - the "closing bell," market zone, icapital chief investment strategist am rosa is here to break down the crucial moments of the trading day and phil lebeau on ford and kate rooney on sofi. anastasia, the question here, we are on a roll in the markets coming into this week, and is the fed decision, whether it's the expected 25 basis points or something slightly different, at least in the message, is it a

sell the news event or is the market kind of priced this thing okay >> yeah. hey, mike, i think the markets are right to be nervous coming into this week because we have priced in a lot of positive news and the markets should be nervous about not what the fed does but what they say yes, we think it's 25 think it s points and yes, we think we might be approaching the end of the tightening cycle but there is a risk that the fed says, look, the reason why inflation is coming down for most part is because of the decline in headline inflation and fuel lower and food lower and durable goods lower. but we have not actually made enough substantial progress on the service side and just look at how strong the labor market is so there is a risk that they may sound more hawkish than what the markets are expecting. and you know maybe they try to nudge the market expectations higher because we're not pressing at 5% rates at in point this year. just shy of that so i think there is a risk of that and also the risk of the big tech earnings disappointing

as well. because that is not been a rosie environment for digital spending and even cloud and so forth. and e-commerce and the faang stocks have rallied 20% year-to-date so i think there are risks on both sides of those things. >> they were they were on their backs coming into the year but they have picked up. meanwhile, ford, a big underperformer after slashing the price of the mach e and the move that comes on the heels of tesla price cuts means not all mach e models will be profitable for ford phil lebeau joins us to put this into context. >> this is just the beginning of what we expect to see from other automakers, not just a pure play ev start-ups but also the legacy automakers which is what you're seeing with ford today the significance here is that ford said, look, we're going to ramp up or production and that increased production will allow

us to have the scale in order to bring down the price for the mach-e and hopefully turn a profit at some point down the road but a lot of people are making the note that jim farley drew a line in the sand and said we're not going to sell evs unless we make money on them and now they are not making money on all of the mach-es so what is going to have with the f 150 lightning. they raised the price of the lightning since it was first introduced so what happened here over the next say a couple of months? do they have to bring down the price of the lightning f-150 now you could make an argument, the model y, the tesla price cut has a direct impact on the mustang mach-e because that is the closest competitor to the mach-e and there is not an electric pickup truck from tesla. but people are looking for lower prices when it comes to evs

which raises the questions what happens with the f-150 lightning. >> absolutely. and somewhat unusual the analysts are saying when they still have it ramped up production fully and market taking it somewhat in stride phil, thanks very much. shares of sofi soaring after t the fin tech company issued a better forecast and profit ability by the end of 2023 the ceo joined tech and described what is driving the growth. >> this is really coming together and our national bank charter has put the wind at our back it is giving us the ability to offer high interest rate on checking and savings we're offering 3.75 interest on saving and 2.5% on checking an that is a unique and no fees, free overdraft protection and be able to spay or spend when you want, where you want and that is helping fuel our ability to drive deposits and then we're

using those deposits to fund our loans. >> we have kate rooney here to talk a little bit more about this sofi move an this is a stock that does tend to move on earnings day. >> it does you could see the spike today. going back to anthony's commends, we have talked about fin tech and being one of the worst performing sectors of last year part of the reason is the lack of profitability, investors like to see the strategy here for sofi and the goal of being at least gap profitability by the end of 2023. but the big thing here is their bank strategy. so they went out, they bought a regional bank to become a chartered bank at the time seemed a straightforward strategy, but a lot of fin techs have not gone that route they partner with more community banks and smaller banks. it is helping the unit economics for sofi so they could use customer deputies to fund loans and offer a higher interest

rate, 3.75%. which in a competitive environment is helping them bring on more customers. so they alsosaw a huge jump in overall customer growth, their sort of cross selling there, too. so it is a long-term strategy they've taken and profitability really is becoming sort of a rare thing in fin tech and investors are jumping on that. any sign of profitability, in a sector that is not known for that at all, fin tech has been a money loser for a long time, you look at robinhood and and square, paypal and robinhood and it is about discipline and profitability when a year ago it was about growth and sofi is showing that it could get profitability and because it is a bank which seems boring to a lot of people but the strategy is paying off here >> yeah, it is a proven one, i guess. being a bank and taking deposits and lending money out. how about that we'll see how it goes through the rest of 2023 kate, thank you. chip stocks lower today. but have been red hot so far

this year with the exception of intel post earnings slump last week and nxp is set to kick off a big week after today, kristina joins us with a preview. >> we had a rebound. we just showed the smh up over 15%. semiconductors are outperforming the s&p 500. but the big question is, is that optimism a little bit too just cheery and too soon. especially when the fact that you have amd earnings coming out tomorrow and they are just like intel -- we talked about the brutal intel warning and you have warned from lam and texas instruments and wolf speed and a new article from the korean economic daily that said there could be some capex cuts from samsung. so that kind of is an overhang for the entire sector. but today in less than ten minutes we do have nxp and they're highly exposed to the auto sector and that could be a moment of strength for the company given over 55% of the

revenue came from autos so elsewhere within data centers and smartphones and pc's, mike. >> we'll talk to you once the numbers are out. anastasia, semiconductors, you could frame it either way. they are having a rebound and pricing in a tough cycle how do you come out on those >> i think there are two parts of the semiconductor story there is the cyclical and the secular stock. what you want is something that has the secular growth despite the slowdown in cyclicals. what doesn't have the right combination of growth right now is anything related to memory. so whether it is pc's, whether it is smartphones, whether it is old school servers, that memory space is challenged and there is predicted to be an oversupply of memory chips this year so that type of stock is not going to do well but on the other side of that, you have this secular growth themes like article official intelligence like robotics we were talking about electric

vehicles and economist vehicles, they're going to require more semiconductor content. so that is why i agree that auto part of the story might be the strong suit for semiconductors so, i would very much break apart of the two having said that, mike, semis have run a lot this year the index is up something like 15%. and one of the interesting things that i think investors could do is sell some of the call options, sell upside here and get a premium because volatility is rich and positioned for consolidation here >> yes interesting. on a sector basis. volatility looks like it is juiced up. you mentioned there is the risk that the fed tries to kind of put market back on its heels about the recent rally and then also that maybe big cap tech earnings disappointed. anywhere in the market you feel like actually are ripe for a more upside opportunity at this point? >> i mean, near term, mike, i think we are approaching some stretch levels but there is an

interesting distinction between the nasdaq and tech and the s&p 500. if you look at the extent so which the nasdaq is now over bought relative to the s&p, it is the highest level since november of 2021 so i think maybe there is a rotation opportunity to some of the nontech sectors but i would view that as a near term the last thing i would say is reits, i think that is a space that has more upside to it >> interesting sanaa stacia, it is great to catch up with you. as we go into the final minute of trading, the s&p 500 making new lows here. down 1.33% not to far above that 4,000 mark remember up 2.5% last week take a look at the breath numbers. about three to one declining to advancing new york stock exchange on the day. and yet even with that, if you look at the nasdaq new highs verse you new lows there are more 52-week highs than lows on the day, that just shows how beaten up the space was going back a year and year and a

halfch the vix, up about a point and a half, some of that is monday effect and also naturally starting to anticipate a couple of big catalysts the fed decision in two days and whatever commentary they have not to mention all of the companies specific earnings and a jobs friday a few day as head as well. that is going to do it for "closing bell. now over to "overtime" with scott wapner. >> michael, thank you very much. welcome to "overtime." i'm scott wapner, and you just heard the bells and we're just getting started here at the new york stock exchange. we're going to tee up a debate between two market watchers with completely opposite views on stocks both of whom have stated their cases right on this show ed denny said the lows are air and eric johnston who argues not even close they go head-to-head, straight ahead. and xp earnings are imminent

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