that extra -- >> fries with that >> having a preconceived notion of how much you're going to spend on that visit, which is something that's different >> on the other hand, they talked to pepsi. they're defensive but are not seeing a pushback on the higher prices from consumers and recessionary tradedown type behavior it's not a broad brush that's not seeing a lot of guidance being cut >> holding 4100 here let's get to court and "the half." thank you, carl and sara welcome to "the halftime report." i am courtney ragan in for scott wapner investors sift through a big batch of this morning's results and two huge tech titans reporting after the bell our investment committee is standing by. joining me for the hour josh brown, stephanie link and jason snipe. let's get a quick check on markets here just about at session lows the dow jones industrial average down about 0.4%. the nasdaq down more than a percent. the s&p 500 down just about a

percent or so when it comes to sectors, consumer staples leading the way along with utilities, defensive play there and energy is pulling up the rear there so the countdown is on just under four hours before we get those first batch of big tech earnings alphabet and microsoft, both out with results after the close what's at stake for the mark as we await these critical results? josh brown, throws so much to talk about whether it's cost cuts, ai, cloud. you pick where do you want to go? >> oh, wow my choice? >> your choice >> actually, i want to talk -- i want to talk about volatility, courtney -- >> okay. >> i want to talk about something we've been talking with our clients about, because i think it highlights how different the market environment is this year versus what we all lived through last year. we're still trading just about where we were last summer on the s&p, but people seem to feel so much better.

i think part of that we are looking at perhaps the last rate hike if you think about volatility, this is a night and day environment. in 2022 the nasdaq had 46 separate days where it was down 2% or worse. it had 18 days where it was down 3% if you look at what's gone on this year so far, and i know it's only april, but bear with me, we've only had two trading days with the nasdaq down 2% we've had zero days of negative 3%, and even in the s&p, you know, it's a radical difference. so right now you have a vix that's up about 5% let's call it 18 that is still one standard deviation below its mean which is 21. the median vix for 2023 is about 19 and the median vix for 2022 was 25, which is in order of magnitude greater. so even though we're in this

situation where earnings are just so-so, we don't have the volatility to match with all of the opinions and all of the headlines. and i think that's what's been key so far this year to understand and in that environment, there's a certain type of stock that tends to do really well, and it happens to be large cap, growth at a reasonable price, and those are the biggest stocks that affect both the nasdaq and to a greater extent the s&p 500 and that's where we stand right now. >> very interesting take i mean, i hear what you're saying about the market feeling better, but so many others are talking about complacency or even some of the companies we've heard from feeling like they're in a wait-and-see mode when it comes to forecasting the future, we're not sure jason, let's start broader markets before we drill down into the mega cap tech names josh is suggesting may do well in this environment. >> i think what is super

interesting when we think of the market in general, this earnings apocalypse that we haven't experienced. 77% of companies have beat on eps and beat on revenue thus far. looking forward to the tech earnings that we'll see, we'll hear from google and microsoft this afternoon i think we're expecting some deceleration on cloud, which i think for me right sizing what cloud -- what cloud growth has been in a normal economy, and i think we'll see some of that for microsoft in particular, i think pcs is a concern for me. there's been some pc slowdown absolutely i think what's good about this week we're seeing the entire market it's not just financials as we saw earlier in the cycle we're hearing from other companies like pepsi this morning that had really strong earnings, we heard from p&g. i do think i'm relatively optimistic on how earnings have gone this far and we'll see how

the rest of the week goes. >> stephanie, it's a really big week here for earnings after the bell jason brings up the weak pc shipments in sales which we do expect what about what's going on in the cloud? >> oh, i think it's all about what's going on in the cloud >> right >> i think this is a very, very big week we know all of these companies represent such a big part of the overall market 35% of the s&p 500, they'd better do good, but i don't know if they're going to. i know we've talked about cloud decelerating and sales cycles extending 50% from 30% sequentially we're hearing about price discounts. we're hearing from cios who are pulling back on spend. so we're all expecting cloud to decelerate it's just how much does it decelerate then you look at google. not only do they have the cloud problems but they have digital advertising problems, right? there's that i think youtube will be fine, actually i think that will be

the bright spot. microsoft has pc problems. there's a lot to digest. these stocks are up 20% on the year they're not cheap. i think the risk/reward isn't that great i own meta and that risk/reward scares me. it's up 70% on the year, but there are specific things happening at meta that i can actually digest and i can get behind and focus on the fundamentals and getting momentum in reels. i click to message and those things that will help drive better growth the back half of the year >> that's a good point josh, we talk about cost cuts, of course, but you want to see organic growth revenue expected to be up 3% for microsoft. is that a concern for you when you're looking, also at how far the stock has run, microsoft up almost double what the s&p 500 has done >> okay, so i bought more

alphabet the other day, and it was a dramatic average up, which i don't do that often. i felt like -- and this is not specifically a call about tonight's earnings news, but i just felt that google was poised to have a better year than microsoft and i'll lay out the case as to why both stocks are trading above their 50 day and their 200-day moving averages. microsoft about 5% from its 52-week high google is still 14% away and i think has more ground to make up google trading at a 23 p/e microsoft at a 31 p/e. i think alphabet you have a little bit more of a margin of safety both companies have had challenges microsoft has seen five straight quarters of slowing revenue growth the reason the stock has held up so well gross margins are holding up 67% to 68% going back to the fourth quarter of 2020 is truly

remarkable performance in this day and age of higher labor costs, higher expenses, pretty much across the board. but microsoft -- and stephanie can debate me on this -- microsoft's cloud revenue saw a decline in growth in q3 of 2022, a little bit of a bounce in q4, up 7%, but even though google is facing that same revenue growth slowdown, google cloud actually has been growing while microsoft has either been declining or just so-so obviously microsoft is much bigger and that gives google the opportunity to grow that business in the meanwhile, google search is still a monster we forget this is a business that hadded 42.6 billion in revenue just standalone in q4 of 2022 youtube will be important. i think youtube shorts are start to go catch on as a social media format

hopefully we'll hear more color on that as well. i think both companies are really well positioned i think the bigger opportunity now is in alphabet >> i think the bogey for cloud for google, for alphabet is 20%, down from 24%. the bogey for microsoft's cloud is about 22%, down from 30%. these numbers are coming down pretty darned fast, and i totally agree. microsoft is expensive, but its long-term history is about 35 times forward tiestimates. it's come down historical average. i don't disagree alphabet is cheap at 19 times, i just think if i look at all of them, meta is trading at 17 times this year and trading at 13 1/2 times next year the second half of the year this year should see double digit revenue growth and 30% earnings growth i just think the valuation for what you're getting, i know, again, the stock is up a it wast last year as well.

>> jason, you own alphabet and microsoft. what would be a catalyst for you to double down your position, buy a little bit more? what do you want to hear from the ceos on those calls? >> for sure. what's interesting the conversation we're having about cloud, 9% of google cloud, google cloud is only 9% of their revenue. search is almost 60% of their revenue. last year $282 billion in total revenues google search about $162 billion. the concern for me about google, and when i think about thi whole story with bing and the platform story and also with apple, let's see how that plays out. i think that is a material development as it relates to the stock. i continue to like microsoft microsoft is expensive to your point, 31 times. historically, somewhat at a discount but still a very expensive stock. >> but the free cash flow is so incredible, right? >> 100%. >> and they do have a lot of

catalyst ahead of them, ai >> ai is a revolutionary story >> do you worry about in search that they have a lot of exposure to financials? >> oh, i think so. i think that's an issue potentially. the other point i wanted to make is on advertising. advertising is starting to grow. it was a miss last quarter i think it was a miss around 3%. it's going to be a slower miss -- it's predicted to be a slower miss this quarter we'll see. there's mixed catalysts here and there. >> what about with the ad spend and the read through for the broader economic picture, for all of us, for the entire economy, but for the future of that company say go out two or three quarters >> ad spend is always a concern in a slowdown, looking at macro. that's when the ad spend slows i think that is a concern but there's enough strength in other areas of the business that will give them some strength going

forward. >> josh? >> yeah, i would just say we know that ad spending will be challenged in an environment like this. it doesn't quite work the way some people think. what actually ends up happening is that advertisers still need to spend money, and what they do, they consolidate to only the best platforms to do their advertising. and those are meta and google, and i don't even know who the third place would be so what ends up happening in an ad slowdown is all these random websites and all these third, fourth, fifth tier social networks, tv networks, they starve, but google, facebook are the proven best solutions for advertising, the ones that advertisers know are going to give the highest hit rate, the most bang for their buck and the least problems from the companies that pay them to do the advertising.

and so i don't think that phenomenon, that secular -- cyclical slowdown will be a challenge to these two companies. microsoft is involved in advertising, so is amazon. i don't think they have anything to worry about >> we forgot to mention that apple privacy comps get a lot easier going forward meta, mostly for meta. that will be something that gets talked a lot about and the solutions that all of these companies have put in place to get past this. >> great point great point. let's talk about some of today's other big earnings reports general electric beat on the top and bottom lines and raised the low end. this is a pretty substantial beat for ge.

>> finally and i think this stock along with boeing, they both trade on free cash flow and the free cash flow came in much better than expected and the guidance was higher than expected i'm really just that much more obsessed about free cash flow. they have to get their acts together there and i think they will. i think over time the story gets much more simple and much more easy to understand it's an aviation play, right once they spin out power and renewables, which will come in january of next year so then can you decide which ones you like. i happen to like ge for sure ge health care is getting hit very hard today. i think that was profit taking and very high expectations, but i think that story is also very attractive and i would be a buyer on weakness. the same on ge >> the ceo telling seema mody renewables looking to turn a profit in 2024 the stock trading at levels not seen since january of 2018 are you in at a level where you

feel comfortable and you're not ready to buy more because of where we're trading? >> i've owned this for a while it's had a nice run, up 50%. i'm not inclined to chase it i'm still trying to decide what i want to do to the renewables piece. that's a real turnaround, but i think in the second half of the year that orders could actually double, orders were quite strong this quarter i think there is some upside to that piece of the story, but overall aviation is really just a gem and it's just getting to be a cleaner story >> josh, do you have a take here on general electric? >> i don't stephanie is definitely the ax on this stock for our show, but i would point out to the extent that ge is susceptible just to the global economy and obviously some of the big drivers there, health care spending, energy, et cetera, those are really, i

think, areas that people are not specifically worried about right now from a macro perspective hopefully for her sake and the shareholders of ge's sake, those forces remain intact and that gives this company the backdrop for the improvement to continue. >> let's move on to mcdonald's beating on earnings and revenue. same store sales up 12%. stephanie, mcdonald's trading at all-time highs they're going to give us innovations on big mac, extra big mac sauce. they have it going on. >> digital drive-thru. consumer staples, they're all reporting really great numbers i know we will talk about other names reported if you think about -- jason mentioned p&g, kimberly clark, coke, pepsi, so many of these companies are doing so well,

even loreal, lvmh. >> sales above consensus in the last couple of minutes >> there's a lot of ways you can play consumer staples. i've been adding -- i added keurig, dr. pepper, i added procter & gamble as well but on the flip side i like discretionary, too, tjx i added while were you on maternity leave. i think there's a way to play consumer -- especially as china reopens. if you think about that is going well you look at macao, lvmh, the numbers have been impressive i think the consumer has been hanging in there, to my surprise, but i actually have a lot of exposure. >> jason, what do you make of mcdonald's here? >> i don't own mcdonald's stock but to steph's point just on some of the staples that have done well the last couple of weeks, the earnings that have been surprising, the thing for me is pricing power, pepsi,

procter & gamble, organic sales getting to the 6% to 7% range. on the high end of the guide from last quarter. this is a positive i think the market has early on in the season, early on this year, i think the concern around staples has been they're expensive the multiples have come in some and i think the earnings are backing up the story i really like some of these names. >> josh, i know you're not in mcdonald's but you are in shake shack. any read-throughs that give you confidence in the position in shake shack? >> not really although they both on the surface sell burgers and fries, i think it's a different customer base. >> sure. >> i think it's a different use case, if i could borrow from the lexicon of technology. shack really is benefiting now because of the return of tourism and most of their locations are in high-traffic areas, in cosmopolitan cities, in airports, in destinations, and they're in midtown and downtown

locations where people work. so to the extent that has not come all the way back yet, there is still room for improvement, but i think if you think about the fundamentals of shack relative to its market cap, this is still a fast growing company opening a lot of locations, still gaining traction with the consumer, going to places where people even haven't really had the shack experience yet or have had it while they were away and now they can have it at home it's a $2 billion market cap it's the cheapest valuation you've been able to buy at since it became public i like the stock here. it's been tough because it really hasn't performed in the last couple of years, but i think it will be fine. i want to highlight domino's pizza, which has been a horrible stock, suffered with the rest of the work from home stocks in this post pandemic period. a couple weeks ago the ceo just bought a million dollars worth

of stock on the open market and he already owns tons of stock. there's a lot of reasons why insiders sell. they often sell on a predetermined schedule, but this guy is buying and his stock has been absolutely trashed. it was $560. now it's $300. it's one that i'm keeping on my radar, still in a down trend but if you can break that downtrend, i think the comps get easier they were really tough last year, and this is the type of stock that could go up very quickly once the sentiment around it changes. >> domino's down about 4% year to date. let's move on to general motors. that company beat estimates and raised full-year guidance. josh, back to you. you used to be in this name, anything that you heard from the call, from the earnings release make you want to dip back in >> no. this stock is like watching paint dry. it was $32 a share today in 2013 it's $32 a share today

i really don't know what would have to happen to change that. it's trading right smack in the middle of its range back to the prepandemic period for three years it's been down, up, back down. it does nothing, goes nowhere. it's only a 1% dividend yield so not enough to keep me interested i think the company has done all of the right things. i think the push into electrification, the si simplification from a business model standpoint, there's nothing you could really complain about in terms of how they're managing the business and the strategic initiatives. it just doesn't matter nobody cares i could envision where this stock trades at three or four times earnings and they keep growing earnings it's really a frustrating situation and i would say to the people that are in it, call me when it breaks out then i want to look back at it and say, okay, why is it breaking out now until then, i mean, you might as

well own a cd at a bank. >> before we move on, i just want to get your thought here because you brought up electrification. gm doesn't believe it needs to match or follow the recent price cuts on the evs like tesla did do you think that's the right decision is that the right thing? >> oh, me? i couldn't speak to which models they might want to cut prices on, et cetera, how important market share is to their strategy versus pricing power, but i would say if you're a shareholder and you're in this stock, that's not the real question the real question is what is going to bring other investors into this stock at higher prices and i really don't think that would have anything to do with it the thing is i don't know what the answer to that question is, and so i wait and see if the market decides to figure that out without me >> fair enough stay with us up next our "chart of the day"

on one regional bank stock plunging to all-time lows.

we're back on "halftime. check out our "chart of the day. shares of first republic plunging hitting a new all-time

low. over to dom chu with the details on this. >> the volatility in the stock is something that was expected but the down side direction may have caught traders off guard begin the big upside move into the earnings print so it wasn't really all about the better than expected earnings or better than expected revenues deposit levels were key here, much worse than consensus estimates. they were $176.4 a nearly 41% drop. deposit levels did stabilize in the first few weeks of the current quarter but still fell by another $1.8 billion from the quarter end through april 21st there's a concern building that the relationship banking model could be in jeopardy with clients potentially leaving the bank including those all-important high and ultra high net worth wealth management

customers something that the ceo addressed very early in yesterday's earnings call. >> despite the uncertainty in the past few months and while affect account sizes have decreased we have retained over 97% of client relationships that banked with us at the start of the first quarter. >> so first republic laid out plans to cut jobs and real estate costs, executive compensation and, courtney, i will give this as color. the call lasted just 12 minutes, and there was no q&a before it just pretty much ended that was the first republic report and call. i'll send things back over to you. >> oh, wow that is an interesting note on that 12 minutes, no questions from analysts >> that's just dumb. >> i was going to say, how many questions must the analyst community have holy cow >> that's ill-advised as my friend jim cramer would say. i mean really. that doesn't make any sense.

then you get more questions or leaving more questions to investors in general look, i think the regionals are really hard. they're hard to even bottom fish to look and see, even the highest quality ones they're going to continue to lose share and the big banks will gain share. that's what we saw jpmorgan was stellar and raised net interest income and that stock trades at a premium as it should wells fargo did well, 45% of net income expenses were flat trades at 0.9. i like that one. morgan stanley had a very good quarter and capital markets were in the process of bottoming. there are a couple names you can own i wouldn't touch the regionals here >> do you think the big problems are over >> i do. >> i think that's good news. josh >> i was going to say one of the

interesting pieces of the story that touches on my industry, first republic had a very large wealth management operation and the future of that is very much in doubt this is now going to be maybe a single digit stock price when all is said and done, a company that has stabilized itself they said they have about $45 billion in either capital or access to capital which should more than cover about double what their interest rates are and all the debt they had to take down. that's on the bank side. 200 financial advisers, wealth management ten years ago was about 5% of their revenues now it's 15% they claim they have $271 billion in aum from the wealth management side. fortunately they work with outside custodians i think they were with some

others how many financial advisers will stick around there now and want to introduce themselves to new wealth management clients as, oh, hey, i'm with first republic think how difficult to be a financial adviser and gain someone's trust and confidence telling them you work at a division of a bank just bailed out by seven other banks and the federal agencies it's not great optics. that was a big part of their growth maybe they'll sell it, gradual attrition. i would not be bottom fishing in this name. >> too bad the analysts didn't get to ask the executives. you're not off all regionals, jason. >> pnc is a super regional we have exposure to

the average loan grew 12% in the quarter. net interest margin growth was solid. goldman sachs had a mixed quarter, still trying to figure out the market and the retail business when we think of financials in general, we're late stage of the expansion. these aren't names we're running towards. nser ratish commentary on coumeled stocks. how the committee is positioned coming up on "halftime." what if we live to like 100? that's 35 years of being retired. i don't want to outlive our money. and i have been eating all these stupid chia seeds! i could totally live to be 100! why do i keep taking such good care of my- since we started working with empower, we're able to get all our financial questions answered, so we don't have to worry. so you never- no. never. join 17 million people and take control

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sfx: [alarm] every day you get to choose. do i want more? can i grow stronger?

can i get better? bodyarmor lyte. more than a sports drink. welcome back to "the halftime report. i'm kristina partsinevelos and here is our cnbc news update the united states office of management and budge said president biden will veto mccarthy's proposal to increase the debt limit the limit save grow act would

return total discretionary spending to the fiscal year 2022 level and get rid of biden's student debt cancellation program. the omb said house republicans must, quote, address without demands and conditions jury selection set to begin in e. jean carroll's lawsuit against trump saying he attacked her nearly three decades ago trump denied the allegations calling them a con job this trial comes weeks after trump pled not guilty in a case involving hush money payments. ed sheeran in court in the copyright trial over marvin gaye's "let's get it on. sheeran was sued on claims the hit song "thinking out loud" has striking similarities to gaye's 1973 classic the trial is expected to last up to two weeks >> thank you very much, kristina

partsinevelos. two big analyst calls out today. nike has outperformed and paypalace a buy. let's start with nike. i assume you probably like it. >> i like it i don't know if there's a real short-term catalyst to be buying it here today. >> not china >> well, i do like it because of china. inventories are high but they're coming down. that was up 43 the quarter before they are actually getting better at that and i do like the china piece as well. that has very big implications for operating margins. i don't know if there's a catalyst today to be buying it i would be interested. >> josh, what do you think of nike in general with the backdrop of the consumer and what we're seeing now as we brace for maybe a recession, maybe not but, hey, we're still

spending how do you play this >> i mean, it looks like it wants to break out 130 1/2, give or take, would be the trigger and it's right there. i'm looking at a one-year chart. the stock is above its 200 day it seems like it wants to go i would give it a little bit more time and maybe be willing to miss a few points from a trading perspective. from an investing perspective, i agree with stephanie it's a great company, a great stock. valuation is not particularly compelling i'm not sure there's anything fundamental to serve as a c catalyst for a big jump in valuation, let's say, or in fund a amentals i'm not in it currently. >> to the bullish call on paypal jason, you own this one. this was given a reiteration at deutsche bank again as a buy here with the price target of 100 bucks. >> paypal is interesting the multiples come in

dramatically down trading at 15 times forward. through the pandemic it was way above that as an example elliott has been in there for some time. that's value they're starting to work through optimizing the existing consumer base which i think is going to be total payment volumes, expectation of growth there and this idea of through the pandemic coming out of the pandemic we have shifted our spending to services, and i think there's e-commerce growth coming back on line. >> what about the risk it's potentially losing market share? >> yeah, no, i think that is concerning because there's more players in the space now, but i do think elliott will help with that they'll help them restructure their business to continue to benefit from the e-commerce acceleration >> 25 times forward estimates, right? it's now trading at 15 times that's just amazing to me.

>> which is attractive we were thinking about it as a high beta stock through the pandemic and now almost as a value stock. i think there's opportunity here >> interesting stuff >> unfortunately, i think you could sum up why this stock trades at 15 times versus 70 times in two words, apple pay. this is going to be a really tough -- this is going to be a really tough fight back. google wallet, also. i don't see how these guys win >> and that goes back to deutsche bank's point about potentially losing share coming up u.p.s. is under pressure our frank holland speaking with the company ceo. the headlines and the trade up next on "halftime. we'll be right back. >> announcer: grade my trade send us your latest stock move and the investment committee will debate it and grade it.

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welcome back to "the halftime report. we're following another earnings mover, u.p.s. is on pace for its worst day since 2015 following its first quarter results. our frank holland spoke with ceo carol tome live from u.p.s. headquarters in atlanta. hi there, frank. ceo carol tome was confident business would rea-acceleratere that includes, of course, the holiday season the stock performance, investors are keying in on the declines and u.s. volumes that accelerated during the quarter u.p.s. says stabilized in april. broader macro factors are weighing on the company's e-commerce business. >> a marked decline in the month of march and we saw that in our business as well

there's shopping behavior moving from goods to service spending more on things like food, 9% of household budgets is going to food now compared to 7% just a couple of years ago. >> today is the first time the u.p.s. ceo commented on negotiations with the teamsters, two-thirds of the workforce. the union is seeking pay increases and other concessions. that contract expires end of july tome says she's confident there will be at least a handshake deal in place by then but did say negotiations are having some impact on sales and new customer acquisitions >> there's no guarantee in life except for death and taxes so it would be naive to think there wouldn't be some volume diversion and there has been but not much we saw a decline, as you mentioned, in our average daily volume in the first quarter.

>> tome said u.p.s. is beginning its use of artificial intelligence it's use it had for technologies, so not talking about that, but on pricing models to adjust supply and demand is something tome calls both exciting and scary. courtney, back over to you >> frank, what's going on with u.p.s.'s amazon business >> the last read it was about 11% of business but the company is actively trying to reduce that percentage of business not only when it comes to u.p.s. but all customers focusing on small and medium sized business. it actually reached 30% this quarter so it's the highest it's ever been. that business, of course, higher margin and in general the more those small and medium sized businesses grow, the more the profit line grows. >> interesting stuff frank holland in atlanta, thank you very much. let's trade this jason, you don't own u.p.s. but you own fedex and i found comments interesting about the consumer she sounded more worried than

the other ceos we've heard from that were more wait and see. >> i mean, that's exactly what see says as it relates to fedex, a turnaround story this year a very difficult last year up 30% year to date and you could see they're trading in sympathy. fedex is down close to 3%. new management team, they're focused on cost reduction, lining up a little over $4 billion in cost reduction this year quarterly dividend, so i think there's some runway there. similar businesses but i do think i prefer fedex given what's happened over the last quarter and their trajectory going through the rest of the year >> it's surprising this ceo, who is great -- >> former cfo of home depot.

>> she's great you know her well. it's surprising she's just figuring out going from goods to services we've been talking about this for over a year n. fact, target, a year and a half ago, started talking about this you know what happened to target >> oh, yes >> and i do, unfortunately, because i owned it j.b. hunt said freight is in a recession. thanks for the information but i feel like this ceo at u.p.s. should have known and the management team should have been more aware 6.2% drop in average daily volume is a big number, that's a big surprise >> it is those are good points. up next mike santoli with his "midday word." starting a new chapter can be the most thrilling thing in the world. there's an abundance of reasons to get started. how far we take an idea

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welcome back we've got to get another check on the shares of first republic. the bank is weighing up to $100 billion in asset sales stock price down 30% mike santoli joins us now. we've got to get your take on

this first >> we know they're in salvage mode, trying to raise liquidity. so this sort of shows you that they have to kind of liquidate whatever is in house there's other reports of further big wealth management adviser groups leaving the firm. so i think it's one of the things testing the market today, just a sense of, we have a problem child in the banking sector we don't know what to do about it i don't think it's about contagion, but much more about every other bank in the -- in that similar size range, or where the regional deposit base is going to be we want to let cash build up, so hard to say what it's going to mean for first republic's stock. the way the stock trades is it's just a weird sliver of equity below this big balance sheet that is going to get worked out. so i don't think it's about what the business is worth. it's like what is going to be left over once this process plays out. >> what else are you watching

today? >> it's just the way the market has gone from being kind of -- correcting under the surface to having a little more of a defensive tone to it still contained. we had a 1% drop in the s&p for about a minute so we'll see if we go below that small cap underperformance, that's been a theme. it's more pronounced today if you look at utilities versus transports, i think it's one of those days where just the same set of issues that is in front of us, but now we're more focused on the risk to grow. it's still a routine pullback until we break below and we're not there yet. >> a big way ahead with earnings thank you veryuc m mh,ike. "grade my trade" is up next. send an email to us or tweet us. we'll be right back.

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it's time for "grade my trade. jose bought 1,000 shares of cvs and wants to know should this be a long-term hold >> i think so. this trade has been a very frustrating trade all year, down 21% year to date

i think there's upside potential in the integration of oak vote and signify, so a long-term hold >> stephanie, do you see more upside on this wynn resorts? >> you're up 8%, but a great job. long-term, it's all about them reopening and we are starting to see that jgr is up erov 50% year to date. i like this for the long-term. >> "final trades" is coming up next

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we're back time for "final trades." josh, you can start. >> ao smith, earnings this week. about to approach a 52-week high i'm in the stock and i like it long-term. >> jason, you're up next >> i like unh here they had strong earnings here. the stock is down about 8% in the last ten days. i think there's some value here. >> stephanie, what is your final trade? >> j&j they also had a very good quarter in terms of their various different businesses pharmaceuticals grew north of 4% med tech 7%. eventually the story gets more simple because they are spinning off the consumer, which you are going to cover i like it at 15 times. >> nice "final trades" and the dow sitting in the red here still, as we have been sort of

treading watter the last couple of days, getting ready to hear from some big players today. the dow off a half percent the s&p 500 down by a percent. we are at the session lows the yield on the ten-year is 3.4% that does it for us, as utilities are the leading sector here today consumer staples pretty defensive and energy is the biggest lagger thanks for joining us. "the exchange" begins right now. ♪ ♪ courtney, thank you very much hi, everybody. i'm kelly evans. ahead this hour on "the exchange," it's a red day for regionals led by first republic. they hemorrhaged deposits in the first quarter and now it's a battle for survival. we will see the same with west pac? google or microsoft? microsoft ha