rookie of the year >> great player with the titans. ohio state guy and then, oh, this is so appropriate. breanna stewart, money machine's two wwe titles in this week of women's basketball, who better than breanna stewart to get the first pick >> "closing bell" begins now ♪ welcome to "closing bell." i'm mike santoli in for scott wapner this make-or-break hour begins with tech on the ropes while the rest of the market works to get up off the mat a day of violent rotation to finish out a pretty punishing week at the s&p 500 struggles to avoid a rare six-day losing streak here's your scorecard with 60 minutes to go in regulation. mentioned the s&p 500 is down, has been down as much as about 1% now down 0.6%. below that 5,000 mark. the dow hanging in there the equal-weighted s&p is up on the day, so you do see a lot of

tech down, and everything else managing to try to take up the slack. take a look at the nasdaq as well, kind of the center of all the selling pressure, down 2.2%. nasdaq composite, back down below its old november 2021 highs again, so breaking down a little bit technically, and then we'll take a look at treasurys here big bid in treasurys overnight on those israel-iran headlines that mostly unwound. around 4.6% on the ten-year yield. really flattish on a week to date basis, a little bit off those multi-month highs. semiconductors, really the drag on the nasdaq today. super micro getting taken apart. nvidia, down 9% and cracking well below its 50-day average. netflix, after reporting a strong quarter, but deciding to maybe not give as much information out about subs, stock down 9%. maybe it's giving investors

hesitation about response to big tech earnings next week. that does take us to our talk of the tape has the market's pullback been enough to price in a more patient fed, higher bond yields, and to reset expectations into the thick of earnings season let's bring in laurie, victoria, and kevin. great to see you guys. laurie, market -- look, we could go through march and many of us did, and you did, and said, it's not going to be this easy forever. we had no 2% pullbacks so, we were kind of due for a setback. but what, specifically, do you think the market's contending with obviously, we got the geopolitical headlines t higher for longer story, and maybe a question about whether this economy can handle what yields are giving it. >> it's a really strange time in the market right now we've been overdue for this pullback i've been worried since january. i think you have a combination of derisking

i think you have the begrudging acceptance of a hot economy continuing to build. we're seeing secular growth themes getting sold pretty hard. you don't need secular growth as much when cyclical growth is picking up and you know, i think i saw today the consensus gdp forecast is up to 2.4%. that's pretty darn close to average. >> for the full year >> for the full year, and in a hot economy, you typically see value and small cap outperform it's the cool economy where those themes tend to dominate. >> we have things like banks up today, energy up today, so part of that cyclical value trade, perhaps. i guess the question is, if earnings are going to hang in there, in general, do we need any further setback than we have had already? >> so, to me, a garden variety pullback is 5 to 10% that drawdown that we had last fall when interest rates were spiking was about 10% on the nose so, there could be a little bit more to go we've got to watch the sentiment indicators pretty closely, and they have been pretty frothy i think it's going to take a little bit of work to really get

them down. i don't think you have to turn to an uber bear here as long as we've got the economic tailwinds at our back. the reality is if you see a pullback more than 10% and kind of the 15 to 20% range, that's typically associated with a growth scare, and i don't think we're talking about that right now. even if it gets a little bit worse, i wouldn't expect it to go too far below, say, 4,700 or so >> victoria, your take on, you know, whether, in fact, the market is telling you either to be more defensive or if it says, look, let's get used to an economy that's just running at a higher metabolism. >> yeah, i think there's a little bit of both built in there. as laurie mentioned, pulling back that 47, 4,800 level gives us that 10% correction that 200-day moving average for the s&p. it makes sense that would kind of be the place to go in and start adding, but you look at some of the things we're seeing. you've only got less than 30% of the s&p trading above its 50-day moving average, right? put-call ratio moving higher you look at the flows of all these flows into short s&p etfs.

that is increasing i feel there's very much a defensive mood around the markets, and so put some defensive into your portfolio. some of those areas are doing better utilities, which typically don't do well in a rising rate environment, but we're seeing it now. names like telecom, low beta, good cash flow companies, i think, is where you need to park some money right now we do think, as you know, we've been talking all year. we do think we're going to see probably another 4 to 5% pullback here. >> those things that you did mention, though, money flowing into short funds and people hedging more, and essentially showing some concern, are also the makings of a bounce, right >> they are. >> that's what we have to watch for. >> you typically have three different elements, right? when you have a complete turnaround here. you have the initial pullback. then, you have a bounce. and then, the third leg of that stool is you go back lower so, maybe we're getting a little bit of a bounce here i think you watch discretionary versus staples, watch that ratio, see how that's going to do it's consolidating right now

if we see that start to pick up, then maybe that tells you you're in that second phase of the bounce >> kevin, as you look at companies and how they're valued right now and their prospects, do you feel like you're getting more opportunities do you feel like the companies are telling you that the outlook is getting better, or how are you navigating it as s&p is down 5%, the majority of stocks down a lot more >> i think it depends a lot, company by company, which is how we operate we're very bottom-up. but the market's been grappling with this, what are rates going to do, which relates to what's inflation going to do, and what was t, a few months ago, i think consensus was we would have seven rate cuts this year we're down to -- i don't know if it's two now or zero already >> two, maybe. >> but you know, i think the -- you know, i'm not sure we're expecting much in the way of rate cuts this year. probably a higher for longer environment, which makes things like pricing power really important. we tend to gravitate towards

those more stable cash flow-generating companies, whether they're brand names, waste collection name. we've got some, you know, names you might call defensive in there, but also, a lot of cyclical-type names in the industrial area that are benefitting from a lot of the underlying trends that are going on >> on the whole fed equation and how that storyline's gotten scrambled up, i did want to pick up on something rick rieder of blackrock told us about the fed's approach right now and how we might have to contend with it >> i still think the fed would like to get one or two cuts done this year, but we need the data to help us in the interim, you got to let the market do what it's going to do >> got to get the data to help us so, that would obviously mean inflation has to ease back a little bit market's going to do what it has been doing, which is kind of struggle to figure out exactly what the path is, laurie how instrumental is it in terms of whether we get the cuts, and i guess, because if we don't get it, it probably means inflation is running higher than they want >> yeah, and i think it's also

why is inflation running higher? i think there's a recognition that the geopolitics are somewhat out of control at this point in time, right i do think that if the economic backdrop is pretty strong, what i have been hearing from most investors i've talked to over the last week or so, if the fed stays pat, doesn't do anything, the economy's fine, labor market is not breaking down, there's nothing wrong with that if we're trying to keep the inflation genie in the bottle. i think the market has to reprice in that scenario but not necessarily tank our model suggests 4,500 is a fair value and so, we're not too far off from that right now. >> that's without cuts, in other words? >> that's without cuts, no further move from the fed. we really damage the market in our modeling if we bake in additional hikes, which we take inflation above to about 3.5%. we take fed funds up to 6% we take ten-year yields up to 5.5% when we do that math, we can come up with a 4,500 number on the s&p. >> and victoria, i guess, you know, one of the reasons the market gets nervous, because,

yeah, that scenario where the economy's fine, inflation is okay, but not getting better, and just sits around, is okay, but it inherently creates this sense out there that risks are rising of a hard landing that something, the longer we wait, can go wrong is there a yield level you're watching is there some other indicator that you would say, are we at risk of something in that scenario >> you look back in that 5% on the ten-year treasury really triggered a lot of emotion when we saw that not too long ago a lot of that, though, was due to the increased issuance scare that everyone had, and that the refunding announcement and what we were going to see, i don't think we'll get that same information, may 1st, when we get the next refunding announcement the treasury general account is bigger than it was then, so there will be a little more liquidity to deal with i think you have to watch that the longer that the rates stay higher, we know we have those lagged effects that come through, and it just continues to build, and inflation becomes more embedded. so, you have to watch how that's

going to then affect corporate margins, wages, all of that, because then i don't think you get earnings giving the economy what it needs in order to keep the valuations where they are. >> and i mean, what's happening with the bond market is real yields are rising, right real yields are going up that sometimes acts as a restraint either on valuation or the economy, but does it also make it attractive as a buyer of bonds at these levels? >> you're talking to a bond manager that likes these yields that we're seeing, especially when you look in a barbell situation and lock in some on the long end, take advantage opt short end, but when those real yields get close to 2%, that's when you start feeling a lot of squeezing going on in the equity markets, and we're getting really close to that level last time we saw in '23, like in november and march, and then you had to go all the way back to '07 to see that prior to so, definitely watch real yields that's where i think the pressure is really coming in >> kevin, as you look at the way companies are able to navigate

this environment, you see, you know, when yields have gone up, all of a sudden, the market can't broten out anymore, and smaller stocks get hit a little bit more, and it becomes a safety trade, or has been, at least, into big growth defensives and things like that. the kinds of companies you look at, i mean, are you kind of aware of the sensitivity to it and how are they getting through it >> there's always sensitivity. i still think when i look at the market, small to mid caps is probably where i'm overall seeing the most value. i mean, not exclusively. but companies can navigate a lot of different ways. one is their own business performance, and those companies, again, with pricing power tend to be able to navigate this kind of situation better but also, companies who engage in financial engineering we've seen a lot of that over the last few years one example, kellogg spun off its cereal business. it was a tiny stock. nobody wanted it cereal's not growing it's up over 60% this year, so that's just one example where value can be surfaced, so we'd

hunt around and say, who else can do that? campbell's soup bought sovos just last month. they own reo's pasta sauce you probably go to the restaurant >> i've been once. >> but you know, that's a new growth engine for them they've got a snack business and a meals business >> right >> maybe they'll do a similar thing that kellogg did with kellanova. >> we've seen what ge's done >> ge, century was just ipo'ed out of southwest gas and we've seen a lot of this and you know, it's not every time, but that can be very value surfacing, and often, one or both of the pieces might be attractive to acquirers, too >> lori, in terms of net net, in terms of beyond the index level models of what fair value is, what still makes sense at this point? are you kind of, okay, this is the mid-cycle playbook kind of thing? >> i think we're still in the middle of a strange recovery trade, so you know, we're -- we've cooled off on small caps a little bit i mean, i thought that discussion was really interesting on the individual names, because i hear about that

a lot from my small cap pm clients. small caps have not benefitted from the recovery, i think, that we had off recession conditions in 2022. we need more certainty over fed rate cuts, but there's still a tremendous amount of value there. i think sectors like energy and financials, which benefit from the rotation, they're still very cheap. we've got to watch the valuations there, earnings revision trends are starting to improve. i think you just stay focused on things like earnings momentum, valuations, and stop worrying so much about exactly where we are in the cycle, because i think this is a strange one. >> yeah, there's no doubt about it it hasn't followed a lot of the easy rules and i guess something like banks, victoria, i mean, you know, you could talk about where we are cyclically. had a lot of, you know, okay numbers coming through, but it seems like an abandoned group. the action today seems to be, whatever's crowded, which is mega cap and expensive growth, is getting sold in favor of stuff that was underowned. >> yeah, i mean, people are looking for that opportunity to go into something that has pulled back pretty significantly, but where you

have some opportunity to see the growth, and look, low momentum is outperforming high momentum right now. >> over what period? like, since march or so? >> just recently and -- but you look, and momentum has actually been tied very closery ly with quality, ad it's the names you're talking about. you look at the names that have good earnings growth, good cash flow so, you have to kind of separate those out a little bit now, find some areas that haven't had that high momentum that you can go in where valuations have come down, and then, make sure that the balance sheeting makes sense to go along with it, and that can be across sectors. you can do it in finance you can do it in health care you can do it in energy. telecoms, we talked about earlier, and utilities i think you can find some places in the market. >> if you're not sector-neutral about it, then if you go momentum, quality, growth, everything comes up tech or communication services, right? it's a little bit tough to know what you're getting. kevin, the other piece of it, where you talk about financial engineering, the m&a story

hasn't really been that active, i guess, with small or mid caps either you'd expect you had the makings of private equity doing more and things like that >> yeah, it was -- m&a was up in the first quarter for the first time in a while. i mean, it's been kind of steadily decreasing the last couple of years. so, i think we're seeing some bright spots there on the m&a front. before, it was a lot of mega deals. we've seen a lot of biotech deals recently but i think we are seeing more deal-making in the industrial area we've got command, which was a long-time holding of ours, which is in the process of being bought out that whole vendors to the aerospace and defense industry, you know, is one that private equity and strategics have looked at quite a bit. >> yeah. and lori, the one thing that isn't flagging right now is credit conditions. you can talk about, you know, yields are going up, stocks down, dollar up, volatility up those are all tightening financial conditions at one level or another, but the credit piece of it is sort of hanging in there >> no, it is

it's really remarkable and i think that's a testament to all the repair that's been done since the last crisis i think one of the things that's very different about this post-covid era and also causing confusion about how to navigate this environment >> no doubt about it great discussion thanks very much appreciate it. a we are keeping an eye on netflix tumbling after weaker than expected revenue guidance and announcements to stop reporting subscriber numbers alex sherman joins us now with what all this means and how the street is taking it, alex. >> look, i think, from a narrative standpoint, netflix's decision to stop reporting quarterly subscriber numbers in the first quarter of 2025 is the most interesting, because it really marks the end of an era it marks the end of the streaming wars as we know it shorthand, the first metric that investors and consumers alike would talk about in terms of comparing streaming services was how many subscribers do they

have netflix has always been, by far, the dominant player in this world with 270 million-plus subscribers. the fact that they're not going to announce this anymore, at least from a quarter-to-quarter basis, is a suggestion that, a, maybe subscriber growth is going to start slowing in 2025, but b, they want the street to start valuing the company on other metrics like revenue and profit and free cash flow you know, these aren't maybe as handy as number of subscribers, but they are what other businesses are, in fact, judged by, and they do provide a more specific, accurate assessment of the business >> for sure. i always feel like, you know, sometimes, when companies do this, of course, netflix and disney, at some point, stopped giving guidance on sub growth, i guess not that long ago. i can think of other industries where they have basically said, not just, we want investors to focus on something else, but internally, within the company, they want to make sure that everyone is playing toward the

proper benchmark in a way, and don't get too caught up in the short-term on the other hand, you did allude to the fact that maybe sub growth is decelerating or maybe benefits of the password-sharing crackdown, maybe they've seen the extent of it i guess i'm trying to find other explanations for this stock getting knocked down 9%, except for the fact that it's a tough tech market. >> yeah, look, you alluded to the fact that there was weaker revenue guidance, particularly in the second half, a little bit of revenue growth deceleration coming that maybe analysts weren't expecting. that's one reason i think the stock is down. but yeah, look, to your point, we've seen a nice rebound of netflix since 2022 when, really, the floor fell out in the stock, and that's what subscriber growth plateaued after soaring during covid so, this idea now that they're not going to report subscriber adds every quarter is at least a suggestion that this sort of unexpected rebound, which was really driven by the

password-sharing crackdown, globally, you know, may finally be coming to an end, and it's been a great story for netflix, and it has, in fact, coincided, led, whatever the word you want to use, to a nice rebound. the evidence there is that investors are, in fact, trading off subscriber adds. it is an important metric still. so, that, i do think, is a reasonable reason why the stock may take a dip now look, if netflix keeps pouring out great revenue and free cash flow and profit numbers in 2025 and beyond, investors will probably move to that metric and be fine with it. if the business is healthy, the business is healthy, no matter what metric you use. >> no doubt about that, although it's interesting, as the stock has rebounded so strongly and got not too far from its former all-time highs and of course the valuation gets a little bit elevated, a lot of the sell-side in trying to defend the bull case would say, well, what you really care about here is what percentage of global broadband subscribers netflix penetrates it's like 40% now globally

it's like 75% in the u.s., i think, if you include multiple users in a household or something like that. in other words, everybody was sort of fixated on this one goal of getting that number up, and so, i guess it just means you don't have the ability to track it in a fine-tuned way >> look, this company has gone through a series of waves of, you know, what is the right goal to reach here? there was a time where analysts were throwing out a potential t.a.m., total adjustable market, of 800 million global subscribers for netflix. those days are way over now. no one even talks about 500 million as a realistic goal anymore, but on the other side, netflix has 75 million u.s. and canada household subscribers the whole traditional cable bundle only has about 70 million, so that's a real win for netflix. that's a success story >> for sure. well, i remember a time when postage rates were a huge mover

of netflix stock because they would throw dvds in the mail all the time this is a company, we should remember, that has managed to navigate multiple different kind of cycles and innovation waves >> yeah, exactly the dvd days are over. the streaming days are here. and there will probably be a next wave, and netflix will likely have to iterate one more time we're seeing it already with live sports, maybe, that netflix gets in. the nba rights are up fairly soon they inked a deal for wwe. it is possible that in the next two, three years or so, netflix gets into live sports, which is something they have not done in their history. >> yeah. they have not done that in their history. it's interesting because they've kind of broken a couple of rules along the way in terms of thing they said they might not do. of course, advertising being one of them. we'll see how it goes from here. alex, appreciate it. talk to you soon >> thanks, mike. a quick note to viewers, by the way, you may have noticed that the ticker on the bottom of your screen is not updating

properly we are having data issues with the dow, s&p, and nasdaq we are working to resolve them as soon as possible. now, as you can see, the dow is up by 166, about 0.4% the nasdaq really pulling in the other correction, down a full 2% at this point, and i think more than 5% on a week to date basis. we're just getting started up next, going all in on cash with the s&p and nasdaq on pace for their worst losing streaks in more than a year. 3fourteen research's warren pies is back with why he says it's time to ditch the buy the dip playbook you're watching "closing bell" on cnbc.

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the s&p and nasdaq, under pressure, both poised for their sixth straight down day. that would be their longest losing streaks in more than a year my next guest expects even more downside for stocks ahead, downgrading equities to an underweight. let's bring in warren pies of 3fourteen research warren, great to see you great to catch up with you on this call. so, for a while, when you had been bullish from the latter part of last year until very recently, i think you were essentially saying the soft landing looks probable the fed's going to do what it can to make sure it -- to a soft landing, and obviously, the equation has changed here. walk us through it >> thank you for having me we came into the year basically saying, as you said, a soft landing, and we had thrown out a target, which we thought was a little bit crazy of 5,200 by the first fed cut in may, and that was our base case. in order to get that, you need rapid, immaculate disinflation, and really, the center of that is shelter disinflation, and so

we were able to look through a lot of the stale stuff that was in the cpi for the first few months, but we're starting to get important data sets that are coming in, showing that the rental market is reaccelerating, and that's going to -- i don't think the fed is going to have the leeway, ultimately, due to the shelter re-acceleration to cut rates any time this summer so, i just think there's a feedback loop. rates are going to stay a little higher that's going to pressure equities it's going to be a choppy quarter. we've come through two great quarters of 10% gains. only two other in history we've seen that. i expect some chop in q2 >> we do have that chart that you put together, showing how the s&p has traded when yields have been rising it's been basically one of the drivers of pretty much each correction over the last couple years. what i do find interesting about it is, obviously, the yields have not really gone back and retraced to their prior levels

or below that, and so, you know, it's not as if you have to have the entire yield move unwound, but while the rate pressure remains increasing, it seems like stocks have trouble absorbing it fully >> and i think it changes the calculus for buying these dips we downgraded stocks yesterday at the open. it was like almost 4% down from all-time highs when we downgraded stocks. the traditional playbook from post-gfc period, 2009 through 2021, says buy 5% dip, 66% of all 5% dips, you had new highs on the index within a few months that hasn't worked since 2022. 2022 forward, buying 5% dips has been a losing strategy actually, usually go down to a 7, 8, 10% correction before the move is over and that's really, like you said, down to interest rates, because you saw back in the post-gfc era, rates would fall as stocks got that first bit of pressure, and people went into the bond market.

there was no inflation to worry about. now what you see is yields rise into these pullbacks,and they rise after stocks have pulled back 5%. it's just like the chart you showed us. yields are actually transforming into a causative agent of these pullbacks, and so it makes them less -- there's less of a cushion there, less of a fed put, and a bond market put underneath the stock market in these pullbacks. >> i guess what about the notion that, you know, the narratives kind of overshoot in the short term, right? we obviously had this intense recession watch that went nowhere. we had a stagflation scare along approx the way, and then it became, oh, we're going to decelerate into this year and it's going to be a nice soft landing, and now it feels like people are caught in the overheat mode. the economy is humming and nothing can restrain it. i wonder if there's something we have to be aware of out there that says, yields will start to

buy. the consumer is more fatigued than we thought, and all of a sudden we'll be talking about why we're decelerating >> there's a real risk of that i've had conversations with clients around that. we don't see the data to make a call on the economy weakening at this point in time, but i do think that what we've seen is real responsiveness out of the economy from especially long-end rates. we saw the ten-year go from 5% last october down to 3.8% by the end of the year, coming into 2024, and that's really what caused this re-acceleration in the inflation data, in the shelter inflation data we're talking about, so on the other hand, now we're back up at 4.6% on the ten-year. mortgage rates are getting up to 7.5% it does start to slow things down, and the thing you have to worry about -- i don't think it's here right at this moment, but there is a momentum to the economy, and if you break that momentum, that's when you get in real trouble in the labor market, for instance that's when you hear fed

economists, mainly people on the left, saying, we need to cut rates preemptively and worry less about inflation it just highlights the trap the fed has found itself in. they're up against a rock and a hard place >> it is tricky, especially when you try to figure out, well, what would not repeating the last mistake mean? would it mean, be super tough on inflation, because they weren't tough enough or would it be, try to be anticipatory about the turn and start easing proactively obviously, not an easy call. we just don't know how that's going to drop. >> yeah, i don't think -- look, they were already -- a lot of people have heard this conversation today on television, like, we're at 2.8 on the core pce. fed's estimates says we're at 2.6 2.6 by the end of the year i think the feds are at a limit. if you run the numbers with shelter disinflation not really giving you a tailwind, i don't

see how the fed makes that last mile we're all talking about i think we're shutting the door. without another round of rates backing up, going back into the economy, i think we're shutting the door to rate cuts right now, which is really part of why we downgrade stocks >> all right warren, appreciate it. we'll see what pce gives us in a week have a good weekend. coming up, breaking the bank regional banks rallying today, but still underperforming this month as higher rates put pressure on quarterly profits. we'll have a top analyst standing by to size up the sector, including the names he says are still a buy right now we'll be right back. knock, knock. number one broker here for the number one hit maker. -thanks for swinging by, carl. -no problem. so what are all those for? uh, this lets me adjust the base, add more guitar, maybe some drums. -wow. so many choices. -yeah. like schwab. i can get full service wealth management, advice, invest on my own, and trade on thinkorswim. you know carl is the only front man you need. (phone rings) oh, i gotta take this, carl. it's schwab.

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bank stocks rallying today on better than expected quarters, the group managing to shake off broad weakness here to break down the moves and look ahead to earnings next week, david george joins me now. good to have you we're through the bulk of bank earnings season here thematically, what would you draw out of what we've heard, and what are investors reacting to today in tight ending some value in them? >> well, good afternoon, mike, and a couple things. in terms of the results themselves, i would characterize them as stable, which, given the sentiment towards the group going into earnings, we think is a good thing if you take a step back and think about the drivers and fundamentals, deposits have been stable net interest margins are starting to show stabilization

as well and should show a bottom or an inflection over the next quarter of two probably the most important thing, mike, in kind of the initial bank earnings takeaways is that credit quality, for all the concerns about commercial real estate office and the consumer, credit quality continues to be very good, and capital continues to show improvement as well, so given the poor sentiment and positioning going in, we think market participants are very underweight, particularly regional banks that we think that there's a lot of positives from our standpoint, at least looking through the earnings so far. >> you mentioned credit looked fine, i suppose. now, a lot of, i guess, credit card loss rates have been migrating higher, not necessarily to alarming levels, but that's been a trend. on the commercial real estate side, when it comes to a lot of the regionals, have they worked their way past it? in order, they've been able to build book value and earn some money along the way and then take losses as necessary, or are we still waiting for, you know, for the real hit to occur?

>> yeah, so, on the commercial real estate side of things, this is going to be a very long tail. if you're waiting for a clearing event, it's going to take a very long time to do that, and fortunately, that's actually a good thing for banks, and we're of the view that the cre office cycle is going to be problematic. however, it is going to extend over probably a three or four-year period of time as lessers renegotiate their rents. the good news is, mike, that banks have the benefit of preprovision earnings to pay for those losses over time, and several banks have already taken very significant losses and reserves in commercial real estate portfolios. pnc is over 10%. citizens, m&t, both in the double digits as well. banks are very well prepared, in our view, to deal with, obviously, the well publicized issues and concerns that the market has around cre. >> and what are some of your

preferred names at this point, now that we've heard from most >> our favorites right here -- and we've really been focused on the regional banks more broadly, relative to the money centers, and our favorites are comerica, truist, key, huntington, and pnc. we think all of those names trade at fairly good valuations and the risk-reward tradeoffs, and again, a fairly expensive equity market broadly that we think these stocks provide a pretty good margin of safety and reasonable upside over the next 12 to 18 months. >> and what can you say about the sensitivity -- i know it varies by bank, but to the fact that maybe short rates are going to stay here for a while longer than we thought. >> yeah. obviously, market expectations around rates, mike, have really moved a lot over the last 90 to 180 days, and fortunately, on the deposit side, that's really the key. we have not seen the migration or movement of deposits that we were all worried about a year or so ago that's a good thing. banks are, by nature, asset

sensitive, so the higher for longer is not a huge problem it probably will have some knock-on effects as it relates to credit quality, but again, from our standpoint, again, given where the valuations are, the rate backdrop from where we sit, at least, is pretty manageable today >> yeah. obviously, expectations had been chopped down pretty low. we got truist coming on monday david, thanks very much. appreciate the time today. >> thanks, mike. up next, we're tracking the biggest movers as we head into the close. kristina partsinevelos is standing by with those hi >> well, ulta beauty facing fierce competition from sephora, and sony pictures is reportedly looking to buy paramount those stories next

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looking to b 16 minutes until the closing bell s&p down let's get back to kristina for a look at the key stocks to watch. >> paramount leading the s&p 500 after a "new york times" report that says sony's movie studio division and apollo global management are in discussions for a joint bid to acquire paramount. neither company has submitted an official bid as paramount is still in exclusive conversations with skydance. ever since april 2nd, when ulta beauty's ceo said at a jpmorgan conference that demand was down across all categories, shares have dropped over 20%, and today, jeffries analysts are downgrading ulta to hold, citing constraints in its high-end business due to lack of newness and increasing pressure from sephora. shares down 2.5%, mike >> all right

kristina, thank you. still ahead, semis slipping further in today's session as one of the hottest trades of the past few months shows more signs of cooling so, what's driving that move lower and the names hardest hit when "closing bell" returns.

welcome back the latest cpi report showing a sharp spike in the cost of insurance is hitting consumers cnbc pro has a new piece out with a look atsome of the name that could be set to benefit from that recent surge

for details, and that entire story, head to cnbcpro.com/propick or scan the qr code on your screen up next, more on this volatile stretch for stocks with carson group's ryan detrick. why he thinks this may be nearing its end, and the s&p closes in on its worst week of the year that and much more your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

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these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. >> announcer: the market zone is sponsored by e-trade from morgan stanley. trade commission-free today with no account minimums. we are in the "closing bell" market zone. carson group chief market strategist ryan detrick joins me plus, kristina partsinevelos on the selloff in semis with nvidia down 10% on the day. kate rooney on the big earnings beat for american express. ryan, let's start with you you've been bullish, staunchly so, since late 2022. as we see this choppy period in

the market, we have a 5% pullback obvious questions about whether, in fact, it's the start of something more how are you playing it >> mike, thank you for having me back tgif, everybody. after a five-month rally, after a 27% rally to 100 days off that late october low, we've been saying for a month, be open to the idea of some type of indigestion. we're getting it we're getting the first 5% correction we've had all year. most years, on average, have multiple 5% corrections, but this is just something for listeners to think about >> for sure. >> with the number of stocks making a 20-day low, we had a big spike in that. also, if you look at the last five days, we have had internal improvement. i know you wouldn't look at the indexes, but today, you had a guest talk about the banks, right? there are more stocks participating, even though you don't see it the last five days. we think we're trying to flush out a significant low. we don't see a 10% correction, think it will be less than that. we're getting close, we think. >> so, close in terms of time, maybe in price

though, i did think that some of the factors you were leaning on in terms of, you know, seasonal patterns in election years, seasonal patterns after a really strong first quarter suggest that things could stay a little bit dicey for a couple months. >> you're right. dicey is the right word. but i think just consolidate average election year, you tend to have a little bit of weakness, choppiness into memorial day, then, you have a surprise summer rally, most election years put to call ratios are starting to spike the vix is up around 20. little geeky there, but last time we saw that was march of last year. we can go on this doesn't mean the low is here i want to be very clear. it means we're in the neighborhood those are the things you want to see. everybody was a bull this time a month ago. i think this is perfectly normal and a refresh. it's really healthy, we think. >> that's true lot of the things a pullback is supposed to do have therefore been kind of accomplished. how are you thinking about the moves in the bond market at this point?

obviously, it's a pressure point on stocks. do you think that the yields have kind of made whatever increase they're going to for a little while >> we do we have been underweight duration for a while when everyone was saying six of seven cuts, we were saying two or three, because we thought the economy was a lot stronger now we think that pendulum, mike, has shifted a little too far in the portfolios and models we run for our carson advisors and partners, we added treasurys recently for the first time, at least since i've been there, in two years. i'm not saying we're huge bond bulls, but we do think there's a cut or two coming in this talk of no cuts or hikes. we think it's extreme the other way, and yields probably will start to work their way lower, and it's going to take some good inflation data, we get it, but we're stil optimistic we're going to see that. >> if you think the economy is stronger, we're seeing a lot of the big growth names really unwind here to the downside. i mean, do you think that makes sense? is that the kind of rotation you would expect, or are we going to be back to the old leadership soon >> we're not too surprised by that we've been neutral technology for a while.

like a lot of people, this rotation, this idea of all these leaders moving to some other areas, we think it makes a lot of sense, and honestly, i know small caps and mid caps have struggled, we fully get that but again, we think that if you start from right now to the end of the year, we think those are going to be some of the opportunities. we think rotation out of tech into those areas, that's how we're positioning our models >> all right, ryan, good perspective. appreciate the time today. thank you. kristina, rotation seems like a mild word for what's going on in some of the big semis today. what seems to be behind that >> yeah, to your point, the snh is on pace for its fourth weekly decline. we're also seeing it's the worst week since october 2022 because of several factors and what we -- specifically, the decline in tandem, to your point in the question, what are the reasons? you have the rise in the ten-year you just talked about that the cost of capital, clearly a concern across all technology stocks, not just chips more recently, the disappointing

outlooks from asml and taiwan semi have investors spooked. pc and smartphone sales are recovering we'll fix that screen in a second that was just showing amex lastly, the sector as a whole is considered over, but specifically with chips, you're seeing a lot of that derisking, momentum traders getting out that's why even big names like nvidia, down about 10% second weakest s&p performer today followed by amd an micron, also down 4% i got to mention super micro that stock is down -- we'll bring that up in a second. down over 22% right now. the worst performer right now in the s&p 500 is silicon valley-based service assembler did announce its earnings release date today, but didn't preannounce better than expected earnings, and in the last seven out of eight times when super micro gave an earnings date, they said earnings were going to be good. this time around, they said nothing, and that has investors worried, mike. >> amazing that's such a great tell on just

how tightly wound the positioning was, i guess, and what was -- what it was based on in a name like super micro for the stock to be down 20-plus percent on that. lot of folks looking ahead to nvidia's earnings report i don't suppose much has happened in the way of their earnings estimates or things like that, even after taiwan semi came out with its cautious tone >> they've already said there's a backlog for their blackwell, so they're already seeing demand is there for their next generation the big question will be pricing and what that means for margins, but nvidia's still considered the true a.i. play, and then all the others are exposed to non-a.i. segments. pc sales, smartphone sales, analog, auto, you know, still facing a bottom. so, that is weighing on chips. >> for sure. kristina, thank you very much. kate, american express is standing out today >> yeah. amex, the biggest winner on the dow today, up 6% or so, going into the close american express seen higher

quarterly profit that was better than expectations same with revenue, about 11% in the quarter. it was all driven by strong consumer spending, especially for younger card holders gen z and millennials accounting for 60% of new amex customers. i caught up with american express's cfo this morning, and he highlighted that demographic. he said, people under 35 were spending 70% more at restaurants in particular compared to their older counterparts travel was also a green shoot. he told me business class travel, especially strong. he said the bounceback was coming from consulting firms and tech firms that were traveling more in the past so, potential green shoot there. delinquencies did tick up marginally, but still low, around 1.3%, which is under the pre-pandemic levels, and then small business was a bit of a soft spot, mike. >> yeah. very much back to the old normal in those comments, kate. thank you very much. we have 30 seconds into the close. it does appear the s&p 500 will be down for a sixth straight day, but doing it in a very unusual way.

the equal weighted s&p is flat more stocks up than down you have bank stocks and energy stocks up at least 1%. the weakness is almost entirely concentrated in semiconductors and the broader tech space as we do go out with s semiconductors down 9% that does it for "closing bell." sending you to "overtime" with morgan and jon ♪ the nasdaq getting smacked and the s&p 500 finishing in the red for six sessions in a row to close out a rough week for the bulls. that's the scorecard on wall street but winners stay late. welcome to "closing bell: overtime." >> coming up this hour, we're going to break down the prolonged bout of negative sentiment in the market and new signals that we'll get next week on the economy with evercore isi vice chairman krishna guha elevated tensions in the middle east are adding another layer of