the cnbc stock draft returns, thursday, april 28th at 2:00 p.m. eastern time 60 assets will go up for grabs, grab your assets and ten teams will be on the board including old favorites and some new big names and we will announce the winner of last year's draft, won't we >> i think i know who it is but with the market -- thanks for watching "power lunch." >> "closing bell" right now. looking forward to thursday, stocks are sinking and the nasdaq is tanking. most important hour of trading starts right now welcome to "closing bell," everyone another down day where the nasdaq is down 2 1/2%. the dow down almost 600 points, low of the session was 657 points but every dow stock lower except for chevron, energy is the only standout which is sector outperforming today here's where we stand overall, the small caps are are down 2.2%, nasdaq heat 100 map shows you tech is in the eye of the

storm today with the broader nasdaq composite on pace for its worst month since october 2008 and as you can see every name almost in the nasdaq 100 is lower. the biggest drag, tesla, down about 10% or so. let's see. yeah, 10%. it's also dragging some of the other ev-makers like lucid down. pretty broad sell-off of the faang names ahead of the results and after the closing bell today and also some other software names getting slammed as well. we're looking at salesforce, big drag in the dow, lowest level we've seen since 2020. bond yields, ten-year yield now below 2.8% that's different than what we've seen lately with rising rate and higher yields pressuring technology today maybe more of a flavor of slowing growth where treasuries are getting bought and yields are coming down. we'll be all over the sell-off with great guests for you coming up interactive broker chairman

thomas peterffy will join us and top tech analyst pulling back ahead of earnings including alphabet and microsoft down 1.5 and 2.3% reporting later trait to the market sell-off and the key question for investor, is it a buying opportunity or is there more pain to come? joining us phil camperelli and eric john stand. good to have you both. i know you're on opposite sides of this trade. bill, i'll start with you. harder to make the bull case on weeks like this week and months like this month and on years like this where the nasdaq is now 22% off the highs. what's your case >> yeah, sara, good to see you good to be with you again. listen, we fully acknowledge this is a rate hiking or normalization cycle that not many investors have ever seen before there is 100 priced in for three basis point hikes in a row and

250 for all of the year. what makes that jarring is as recent as december the fed thought we'll do three 25 basis point hikes. go back to '94 to get anything like this. why is that clear or key because in 1994 there were no faang stocks there was not even an internet so i think that false sense of security of low rates, low inflation and low growth which helped since post-2008 is no longer there so you have to recalibrate. however, there's an important piece here we've taken our stocks lower but resisting the urge of taking them lower into an underweight to our index for three very important reasons. the first is, listen, we're in the camp that we're right around peak inflation and if we are, and rates stop rising, that stops -- that could put -- stops putting pressure on internet stocks, the second thing there is a cyclical trade still

opening. omicron prevented us from re-opening over the holiday season airlines, hotels, diners, all those things we could see upside for and third piece, really important, if you're buying into a balanced fund and near and dear to my heart, if you're buying into it, you are sitting at 275 ten-year note and average, 5-arm on p/es if you're -- then you're getting the benefit of diversification from here, sara, so it's all -- the first time stocks and bonds have been down 10% at the same time post-gfc a good entry point. >> yeah, aside from the whole peak inflation which you have to have a view on that, eric, there is a few good points that phil raised including that a lot of this is just getting priced in the extreme hawkishness of the federal reserve, the fact that valuations have come down to reflect that and the fact that everyone is so negative. why do you remain so >> so i think within the rates

market, i think the fed's hawkishness has gotten priced in but i don't think at all it's gotten priced or not enough into the equity markets, if you look at prior bear markets that we've had and this is not like anyone we've had in the past but if you look at the year 2000, people think the bubble bursting in march of 2000. in september of 2000 and then during the 2007 crisis, we had companies that had gone bankrupt by october of '07, citi bank yet the s&p still at highs so things can be known but not priced in and we think we are in the process right now of pricing in this massive reversal that has gone on from a fiscal standpoint and from a monetary standpoint that is all just beginning to happen. >> where do you see it to be priced in? i mean the nasdaq has gotten hit hard is there more pain there

>> i do. perfect example is megacap equities so essentially faang mt two weeks ago we turned negative on the group and reiterated last night. we think there is a lot downside for megacap tech names relative to their growth rate is just far too high. number two is people have had this view that they are not levered to -- not levered to the economy and the economic slowdown is going to hurt apple, microsoft, nvidia and the individual investor is piled into these names and one of our strong views is that the individual investor is just starting to sell equities. their allocations are at the highs. they're just starting to sell and that the megacap names are really going to suffer based on that still 23% of the s&p we think that's going to come down and be a drag on the overall market >> phil, i'll let you take the other side

final word. >> so i think from a faang stock perspective it's important to have earnings. we felt that last week with netflix, however, if you go forward from here, you got to be really selective with your securities we haven't even mentioned value stocks which we still like still at a discount to growth, right it's not just do you own the equity market or not but be selective and think profitable tech with some value makes a lot of sense here and we didn't talk about it but credit as well. if you don't have a sue that the u.s. is going into a recession over the next 12 months things like corporate credit make sense to get higher quality than a fire on the equity market. >> seen that credit risk rise lately eric, do you have something really quickly >> just wanted to say, you know, just quickly you have had a lot of stocks sell off but i put out lucid as an example. it is down call it 50% from high, still has a $30 billion valuation and not many revenues to speak of so we are in a new environment where even though

it's down 50% as an example, still a $30 billion valuation that looks far too high from my perspective. >> lucid, one of the biggest losers today off the tesla slide. eric, phil, thank you both we'll have much more on the sharp sell-off throughout the show down 600 on the dow after the break we'll talk to an analyst about the pain specifically in tech ahead of the big name results coming after the bell from microsoft and alphabet you're watching "closing bell" on cnbc. ♪ ♪ well would you look at that? ♪ ♪ jerry, you've got to see this. seen it. trust me, after 15 walks it gets a little old. i really should be retired by now. wish i'd invested when i had the chance... to the moon! [golf ball bounces off rover] unbelievable.

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pressure nasdaq down about 3% and tracking for its worst month since october 2008 this comes as a number of big tech names report results after the bell including alphabet and microsoft and texas instruments. let's let's get to a tech analyst who covers two out of the three. angelo, you have a strong buy on a $3400 price target we are a long way from there what do you expect them to report today >> listen, thanks, sara. you know, overall when i think of big tech here i mean, listen, this is a big of the beaten raised quarters we've seen in the last three year, probably the most headwinds we've seen in years now, right but the hope here is valuation is discounted many of those challenges whether it be, you know, consumer issues or supply constraints, russia, ukraine, you know, a stronger dollar, i mean, tons of uncertainties out

there but i think at the end of the day as far as alphabet is concerned it's all going to be about the search business, it's going to be about youtube and the cloud and expecting fairly good results out of all three of them in terms of the search side looking at 0% plus growth. on the cloud side of things i think that's going to be really important as long as we can see a clip of 35 to 40% growth on that side of things, i think, you know, i think overall the quarter holes up very well but, again, all going to come down to q2 guidance in the second half of the year. as far as the downside consensus estimates say maps 3% to 5% to the downside and given that coupled with the valuation of about 17, 17 1/2 times earnings to our 23 estimate, i just feel like it's a bit overdone here. >> the problem, angelo, all those headwinds you mentioned that have been hurting the stock and all of stocks, rising dollar, guess what, it's still strengthening and still making new highs going back to 2020 the war in ukraine still

happening. the weakness in the economy starting to come so my question is, what sort of insulation does alphabet's ad business have to these cyclical and factors that don't appear to be getting better because that's going to be the key, right, for geithner. >> absolutely. i think as far as alphabet is concerned typically most marketers out there on the last thing they'll usually cut is kind of the search side of things that's typically holding up much better than other aspects of the ad space and i think maybe that's why alphabet is kind of seen as a bellwether relative to other ad oriented or ad driven type of companies out there. that being said clearly a lot more tied to alphabet here rather than just kind of the search side of thing, again, we do see good results of the youtube side of things as well as the cloud side. decelerating growth but nonetheless i think the tailwinds remain intact despite some of the concerns that we kind of highlighted.

>> if you like alphabet as sort of a value play, that it's been beaten down what about meta? you're on hold but price target 294 and the stock is trading, i don't know, 182 or so so do you consider it also a good deal >> look, so, listen, as far as meta is concerned, to us it's a bit of a value trap. we're not as bullish on that side of things our concern definitely here is more on the user side of things, whether or not that can continue to grow, i mean currently the looking at 2% to 3% for q1 and 2. i don't know if you're there the bigger concern is potentially seeing negative numbers as we go into q2 in a year over year basis and all of a sudden the meta story looks similar to what we're seeing out of the netflix story where you had higher numbers and capex amid a period where those ad dollars aren't kind of offsetting kind of the growth

trajectory or investments they're looking to make. >> you cover apple which has been a little more resilient and reports on thursday. what do you expect there given especially some of the new concerns this week about china and expanding lockdowns? >> so, you know, as far as the march order is concerned we do expect them to be overall, i mean, you know, as far as the iphone side of things you look at smartphones on aover over over year basis probably dropped 10% year over year more pronounced on the china side of things to see what they have to say about china but at the end of the day the market share gains have been phenomenal for apple talking about 15% market share a year ago, about 18% in q1 of this year so the overall market shares gains some of the declines in the broader market but i think as far as apple is concerned the key is going to be services we do see about 17% growth on the services side of things and that's really the crux of the growth story for apple. as long as that holds up we like

the story. then on a capital allocation strategy, we're looking for $100 billion and a 7% dividend hike so, you know, probably another thing that investors are hanging their hat on right now. >> if apple is now down 11.5%. angelo zino, thank you for helping us pregame some of the earnings, the dow down more than 700 points we are making new session lows as we speak down 712 unh united health care the biggest drag along with boeing and microsoft ahead of earnings after the bell goldman sachs, visa, weakness across the board, chevron going lower, 30 out of 30 dow stocks are down, 4.2% decline on the s&p. every sector red energy staying positive. speaking of the consumer lululemon and chipotle are both lower along with the broader market their long-term charts look remarkably similar mike santoli, of course, here to tell us what the correlation means in his dashboard as we head out check of today's top tickers on cnbc.com,

ten-year yield getting the most interest and yields are falling followed by tesla which is falling hard down 11.3%. the nasdaq, twitter, which is also falling a little farther gee low that and the s&p 5 'lbeig bk.00

>> announcer: market dashboard brought to you by nuveen alternate investing. welcome back dow down 700 points right now. we are at new lows there's the s&p 500 sector heat map, the s&p down almost 2.5%, every sector lower except for energy consumer discretionary slammed 4.3% down. tesla is a big part of that story which is down 11% or so. carnival cruise also sinking news that arnold donald, long-term ceo is stepping down and weakness in under armour and nike as well

we'll stick with the theme chipotle shares are falling ahead of q1 results after the bell mike santoli here with a look at the stock's performance against another millennial favorite for his dashboard, mike. >> yeah, sara, you know i'm not one to stereotype millennials but lululemon along with chipotle did come to prominence along with the millennial generation and for the last two years stocks have been religion in lockstep right here why is that? they both trade around 40 times earnings and peaked around 70 times earnings and argue they both essentially created their segment of retail and dominate it and still a lot of runway for additional store expansion so it's this unique kind of combination of they already dominate the space and a long runway at least theoretically. premiums are coming out of all the great growth stories and that's happening right here too. chipotle going to report after the market they're still holding above the lows of the last couple of years and both of them are down about 25%, 26% from highs but they

probably are better positioned than a lot of other purely consumer cyclical companies that are out there, sara? really interesting and first of all, it's amazing how correlated they actually are. i'm not sure that burritos and yoga wear necessarily go together but, mike, there's a difference between these are sort of quality growth stories and then the unprofitable tech stories, a lot of those names in the arc innovation ift down 5% today so it's important to draw a distinction there. not just all of growth getting totally thrown out. >> oh, no. these are kind of quality brands, people think there's a long-term still growth story in there. not about catching lightning in the bottle but it is about what you're willing to pay up front for that. >> just overall markets, another deterioration here as we go into the bell, not really a catalyst especially for tech names. you can't blame rising treasury yields to your point it's not always exactly correlated because they're falling today.

what's happening with growth >> people are essentially trying to step out of the way of any further bombshells like you've got in the nasdaq from knelt flikts, from last quarter from facebook and very unearn couraging trend, discouraging trends in a lot of bellwether stocks i wish there were a new story. the dollar is flying there are global growth concerns and new layers to the issues right here but it's more a matter of investors looking in every direction an not seeing daylight down at these levels in the s&p in the third week of january, in the third week of february also part of march i'm not saying it's all the same where we'll bounce off these levels but it's been the same wear and tear on the market. we keep revisiting this ground. >> i will say we just broke below 4200 on the s&p and a key support level so we'll keep an eye on it and see if we close down there >> we've been below it. >> we've been below but nearing march low, aren't we. >> 4170. >> so we're above it 4193 see you in the market zone

sea of red, nasdaq taking the brunt of it, down 3%, 3.4% joining us is chairman thomas peterffy thomas, great to have you back on the show. how are your clients, the retail investor dealing with all this volatility in days like today? >> well, so it's interesting in the last several months interested brokers, customers have turned cautious and at the end of the quarter cash reserves have increased to all-time highs, margin loans have decreased and short positions went to all-time highs again so since that time this month that has been moderating a little bit in other words, people are beginning to be in the market. i think there are lots of reasons to sell. first of all, geopolitically, the war in the ukraine can drag on pushing russia more and more

towards china. i do not think putin can tolerate defeat. if he's denied some face-saving concessions, he will have to resort to tactical nuclear weapons. china moving to incorporate taiwan would be another unpleasant surprise. >> i know you've been warning about that >> also social mores in the west are in turmoil advocates of collectivist ideas including socialism are in their eyes. some corporate managers appear to be confused about the proper role -- the proper role concerning various social issues if they lose their focus from product innovation and efficiency that is a problem inflation is ranging -- raging all over the world interest rates must rise that will deliver a shock to many businesses and the -- >> it's a laundry list

>> yes now we go to the other side. the other side of the coin is that what are you going to do with your money? in an inflation aerovironment, you just can keep it in the bank, right? so i think that after some more down market it is going to turn around and people will start to realize that they have to own stock. right? >> i'm interested in what you said about your clients, how they have been bearish as you said and they've increased cash reserves and starting to put it back to work i'm wondering, thomas, specifically within technology where we've seen so much main, now the nasdaq down about 20% this year, how much has that shifted, the allocations towards technology it was such a beloved sector during covid and before. >> yes, but i think that buying is more not oriented to low p/e stocks like the old-fashioned

auto stocks and -- industrials, right? basically. >> that's where the buying has been lately. >> yes, yes, yes, yes, yes, yes, yes. >> what about energy how much exposure do your clients have because that's been an outperformer. is there more to go there, do you think, in terms of positioning and portfolio managers loading up on those names? >> obviously it depends on how -- to what extent the u.s. will relax prohibition against drilling and these issues, right, absolutely. so, you know, i say to traders that they should hold on to shorts or should sell, but the investor should hold the longs and prepare to long positions because they are not as nimble as traders so i think eventually the market, you know, maybe we have another 10% to 15% to go down but then it will turn

>> what about the decline we're seeing in gamestop and amc, still a good proxy for retail and the kind of pain we've seen as a result of the hype? >> yeah, that game is still at $130 and worth nothing so i think -- i think that we have to see that stock to go to zero yes. >> to zero but what would that do how many of your clients are holding gamestop >> oh, no, my clients -- >> a robinhood crowd >> they're on the long side game. >> really? >> yes >> your own stock -- i wanted to mention your own stock which has been hurt, you know, i think of interactive brokers as a beneficiary of higher interest rates. even more so than some of the big banks. >> yeah, that's true, but on the other end, you know, our investors' assets are falling along with the markets, right, so, you know, the less assets we

have, the less activity we'll have in the future right now activity is very high, but in the future if the market settles out, say, further down by 10, 15%, we will not have that much activity in the future so -- >> what about options activity that was a bright spot for you and some of the other retail brokers? is that holding up given some of the moves we've seen >> options activities is very good especially vertical spreads in a down market like this, people often will say on an apple, say which right now -- 157 or something, so you will sell at 160, coal, you will sell at 160 coal and buy 175 or at 180 to protect yourself, right, so that kind of -- those kinds of spreads are people are

trading and, you know, when they catch the market, this down market, you know, they make a lot of money on this, yes. >> so overall, thomas, the participation of retail investors right now is what, bullish or bearish for the market >> oh, for the market, no, i mean, yeah, they just -- most of my -- most of interested broker customers are slightly on the bearish side but they are starting to cover. >> got it. thomas peterffy, valuable insight, thank you very much for sharing. we appreciate it >> thank you very much >> let's go a little deeper now into some of the hard hit parts of tech with the nasdaq near session lows down 3 1/2% and stove kovach is there and julia boorstin covering social and streaming and frank collins watching the cloud stocks. >> sara, big tech under

pressure just ahead of earnings week too big ones reporting microsoft and alphabet are both off nearly 3% ahead of their earning reports in just a few minutes and apple is down more than 2 1/2% but it's also the best performer in big tech so far this year down about 10% year to date and apple is reporting thursday along with amazon which is the worst performer of the group today and last year's big tech laggard down more than 3%, sara. >> steve, thank you. let's go to social and streaming stocks having a pretty rough session. julia boorstin, with more on those names including twitter which is selling off. >> that's right, and social stocks are plummeting pretty much across the board on the heels of twitter's sale to elon musk and ahead of meta's earnings which are tomorrow afternoon. meta shares are down about 3%. we see twitter and snap both down more than 3%. pinterest shares down about 3% now, those stocks are hurting on concerns about a pullback in ad

spending meanwhile the streamers are also suffering after netflix's disappointing report and on the heels of warner brothers' discovery warning its 2022 profit would be lower than anticipated. that stock is now down over 7% paramount global is also down over 5% and then roku down the most of the bunch down about 8.5%, meanwhile we're also seeing netflix continue its decline and disney off 3%, sara. >> question, julia, now that you've been talking to a lot of the analysts and investors how do you think that twitter's takeover is likely to color or manifest in some of these big tech earnings we're about to see especially from advertiser competitors like a meta or alphabet >> well, look, we already got a hint from snap that the macro environment is not great snap really laid out how it's seen a decline in its growth rate from 44% at the beginning

of the quarter down -- at the beginning of the first quarter down to about 30%. now, and this is snap that has managed a lot of issues better than, say, especially when it comes to the ad targeting issues better than meta had in the past couple of quarters so red flags there, analysts, a number of analysts are saying they see twitter's move to make this deal before earnings as another red flag of more macro economic challenges whether it's inflation or supply chain constraints pushing advertisers to pull back and we'll have to see how that shows up in meta's earnings tomorrow. >> another headache for elon musk when he takes the company as well, advertising slowdown, julia, thanks. the wcld cloud eff down and looking at the cloud names getting hit hard, frank. >> well, sara, that is on pace for its worst month ever among the names, cloudflare, fastly, mongodb and asana down

how they'll compete for the roughly 25% of the cloud market left after you account for amazon, microsoft and google, legacy players in cloud caught up in the sell-off salesforce and adobe down 22% and 2% higher than their 52-week lows but widespread. digital ocean and twilio falling. back to you. >> rough year for that group frank, thank you back to the broader market, near session lows 739. barry knapp joins us. you can't blame this time fed speakers they're in quiet period or rising rates because treasury yields are actually lower today. nobody wants to get as mike said in front of something like we saw from the netflix in terms of a disappointment on earnings what do you think happens here with the big faang names about

to dictate the direction of the markets? >> well, i think that they still don't -- even the biggest highest quality names like microsoft that's reporting after the close still don't really represent growth at a reasonable price. you know, we had such things, don't blame the fed and i'm going to kind of blame the fed, sara, but, you know, obviously we've had such a hawkish pivot here i've heard for investors time after time, well, the fed is going to tighten until something breaks you and i have been watching some of the same things break, the dollar yen has broken, euro has broken the rnb which was hanging in so well for so long is completely fallen out of bed over the last week or so so there's been -- there's a lot of cracks as a consequence of the fed tightening policy and it was always going to be difficult for the market going into that when they increased the pace from 25 to 50 basis point hikes and

start balance sheet contraction so i would trace all of what we're seeing today back to that but i also think that that's likely to coincide with a low in equities like we've seen in the rates market >> i just want to bring it back to earnings, barry, that's the story of today and of this week and i know the fed is in the background here but even, even the losers today, i'm looking at ge down sharply now double dig digits even 3m also getting beaten up hard today, we're in terrible results and still seeing growth and still seeing pricing power dealing with all these difficult things like supply chain risks and global economic so is it jarring to see a market that is starting to price in a more severe slowdown when what we're getting from corporate america is still growth, still pretty solid balance sheets they're still investing. what do you think? >> so i think that the pandemic

was two thing, one widely recognize, the other reflected in the comments you made about earnings, places like triple m where they showed margin expansion not contraction. there was an inflationary shock but also a positive productivity shock so, you know, i've had this discussion a lot with investors where they pointed out that divergence between consumer discretionary and staples and describe it as late cycle activity that's true, but it's also activity that's characteristic of when we're going through these fed policy normalization related corrections like in 1994, 2004, 2010, '11 and '16, you get periods when the fed, we move towards the fed normalizing policy and you have these very highly correlated sell-offs and the cyclical stocks get hit and people try to fit a narrative and say, oh, the fed is going to drive us off the cliff i'm not seeing that in the data

or the corporate results we do have a lot of sectors that were wildly overvalued you guys just walked through it with all of your reporters >> yeah. >> that stuff still needs to come do you know but the cyclical stuff looks cheap and i expect that as we get through may 4th and things start to settle down, that's what will lead us out of this as well. tech to me still means another quarter or two are what are likely to be good results but they still again they still don't represent growth at a reasonable price >> so what cyclical stuff as you say looks cheap, financials are down 2.25% they've had a pretty tough run, down % is that a part of the market, industrials where we heard from a number of companies this morning on earnings. retail, what do you like >> yep, financials, industrials, materials and energy, i loved morgan's interview with the freeport ceo last friday you know, i do think all of those sectors are really cheap but we're going through one of

those liquidation stages where, you know, you just sell everything but, listen, today is really about backing tech down, it may be set up for a little bit of a bounce around earnings but, again, i still can't see my way clear to going overweight that sector because as i keep saying it's still not growth at a reasonable price yet. >> sure, but you have to believe. to believe in the cyclicals that we're not going that a recession and definitely a debate on that right now, barry. >> i am definitely not in that camp i don't see any evidence of that i would argue that the fed tightening of policy is going to be a big problem for asia. it's something of a problem for europe remember, the dollars become something of a petro currency, sara, so where japan used to think they could devalue their way out of their troubles and try and drive their export channel, they have outsourced a lot of their manufacturing activity, they're big importers of energy, the dollar trades differently with respect to oil

than it used to so this is clearly a problem for asia this is a problem for germany. it's not such a problem for domestic u.s. economy. if there's one area that is worth watching it's the housing sector that is an area that could, you know, we have to watch -- so far today, right, the results today weren't too bad. sherwin-williams -- >> sherwin-williams is up. horton wasn't bad and raised the revenue guidance we have to go. thanks for joining us from ironsides, we've got less than 0 minutes to go, dow down 700. getting breaking news on the confirmation at the fed. yian mui >> lael brainard did pass, 52-43. now, the senate had also hoped to move forward with lisa cook's nomination to the board of governors as well as well as possibly later on philip jefferson to the board as well

as jay powell as fed chairman but now that two democratic senators have covid along with vice president kamala harris, that is upending the democrats' narrow majority in the senate and throwing the time line for those additional nominees to be confirmed into flux but at least for now lael brainard has been confirmed by a margin 52-43 as vice chair of the federal reserve's board of governors, sara >> yian mui, thank you for the update on brainard. we are going straight into the "closing bell" market zone mike santoli here to break down the crucial moments of the trading day and craig irwin on tesla. shares tanking and piper sandler and we'll start broad markets because they're selling off. now at session lows and took a dip lower in the final hour and, mike, it's pretty broad. every dow stock is lower every s&p sector is lower except for energy treasury yields are lower, the dollar is stronger, oil is

stronger, how do you make sense of all these cross currents as it relates to today given we've already been through so many tough days like this recently. >> yeah, there's a lot of sensitivity to just this pothole risk from a lot of the big earnings reports it doesn't mean the market will be correct and reports will be bad. maybe we're pricing in some expected downside to the likes of alphabet which has lost 300 billion in market cap this month. so i think you have to kind of see both sides we are revisiting and spending a lot of time at the low end of this index range market as a whole is really not super oversold each week we seem to get a 1%, you know, one-day rally that keeps the market from really getting stretched to the downside but i think that's where we're set up it's a growth scare combined with all the other things we were dealing with which is, you know, that megacap kind of draining away of the excitement and valuation premium from those stocks. >> it's stagflation scare. problems that the fed is going

to be dealing with it in terms of rising rates. now concern, mike, that the defensive parts of the market that had been working really well, utilities, staples, health care, real estate are getting too expensive and mike wilson at morgan stanley's note now that s&p could enter a bear market because those places have been stretched and everything gets dragged down. >> right, if basically if they're deemed to be, you know, too high a price to pay for defensiveness right now and people start selling out of them and it doesn't really go somewhere, sure, i mean i think it's almost semantics at this point but i'll say the equal weighted s&p 500 isn't even down 10% from its high so we're still with all the issues we're dealing with with most stocks being weighed down you're still not seeing it mostly be about the average stock getting smoked it's been magnified but what's happening with the largest ones, it's not kind of trying to make excuses for the market but it's just the fact, the math says it's mostly about money coming

out of the trillion dollar club is there on the earnings question, mike, i'm looking at 3m lower ge sharply lower, horton which barry mentioned, none of this was bad news, i watched the larry culp interview it's not like things are all falling apart. aviation a bright spot what is the message from corporate america and does it matter in this environment where the market is just ahead of them in terms of pricing in a slowdown >> it ultimately will matter if the story is intact. the ge to me seems like it keeps getting pushed into the future when they're going to start to click and earnings power is going to show up again with other industrials, a, it's about, look, we're sort of preoccupied with china's shutdown, dollar surging, all these things that seem like it's a complicated moment to start the bet that they're about to get it together and stocks are cheap enough right now so i think that's why it's complicated. it's a high friction environment. nobody is very -- nobody has

high conviction about which way it goes. >> how about tesla, mike down 11% today really collapsing, it's the worth performer in the nasdaq 100 after seeing elon musk officially announced he would acquire twitter for $44 billion, fueling some speculation that musk may have to sell twitter shares to fund part of his twitter bid. i think there's also the risk, right, of musk taking over twitter and what that is going to look like and whether tesla may be collateral damage in some way. >> right, to me it is a little more immediately about the prospect for this overhang of selling by musk. i mean it's very difficult to see if he doesn't name and draw some outside equity investors which to this point have not emerged alongside of him how he makes his $21 billion contribution to buy twitter without selling a fair amount of tesla shares in addition to what he's already using as collateral for the margin loan so i think that's the overhang right now. it's very important to the way the overall nasdaq trades on a

short-term basis, there is a lot of hot money that flushes in and out of that name and kind of bumps up against a lot of other stocks alok the way. >> consumer discretionary as a start. it's the worst performing sector because of tesla down almost 3 -- no, more than that. 4.7% right now. >> by far the largest. except for amazon. >> julia said snap warned that advertising might be starting to slow down. if we do get a sharper contraction in the economy and in advertising, twitter as a private company under elon musk, then to tesla shares get punished as a result >> i mean that shouldn't necessarily have any effect on tesla's shares what it does have an effect on tesla's shares, if his side business starts to fail, it shouldn't necessarily matter to tesla unless he gets a margin call which happens because tesla's shares go down to me it's more about there's obviously always been an elon musk premium that accounts for a tremendous amount of teddy balkind's market cap and that

gets revalued in realtime here depending on what else is going on. >> down 11.3% being revalued right now down 28% from the highs. mike, i want to hit the chip stocks dragging on the overall tech sector, amd, nvidia among some of the biggest decliners. just cyclical concerns have the fundamentals of these businesses changed >> they've changed the margins for nvidia people are concerned about some pricing issues. it does seem as if some of the momentum has come out of the fundamental story. clearly people are very defensive about what it means that china is shutting things down honestly a lot of them were -- amd trades pretty horribly and also doesn't look particularly expensive anymore. i mean, it used to pretty chronically and so i do think it's about broken charts, you know, the reversal of these multiyear winners, the people just feeling like the money has

been made and then, you know, a little of an overlay of fundamental concerns but that's the way it always looks, you know, when people find some reason for relief. i wouldn't want to foreclose on the idea that over the course of the earnings season, people might see the weight of the evidence and say, okay, maybe we prematurely got too scared about recession on the way. >> down more than 20% for the year on some of these names, 26% for the sub sector how do the semis sell-off compare to software sell-off and some of the other parts of tech that have been -- it feels like it's all gotten dragged in lower. >> yeah, software led the way lower. much deeper pullback it was a lot more, you know, the cloud stocks did get a lot more expensive as a group for semis it's much more about kind of giving way and they've had this floor in the chart over the last -- little over a year or so that seems to have cracked so, again, i don't want to make it all about the technical

mechanical stuff but it's one less reason to buy a dip when it seems like a chart is impaired and i think that's what we're dealing with with some of these stocks. >> ge which i mentioned before, one of the worst performing stocks in the s&p, the industrial beating on the top and bottom lines reaffirming its full year profit outlook but in the release ceo larry culp warned inflation and supply chain issues will result in earnings falling toward the low end of the guidance end. seema moody joins us now neutral rating, $55 price target and everybody watches him. rbc has a buy rating at $118 price target why is the street so divided on this stock. >> sara, this just speaks to how diverse tied general electric is and there is something for the bulls and bears in the report. rbc capital pointing out ge has outperformed the broader sector by 240 basis points in the past three weeks so not really surprised by today's market reaction larry's plan is largely intact pointing to the strength in

aviation which by the way was impressive orders up 31% as travel demand returns but steve has been a long-term critic and doubling down on his price target, 55 bucks, the lowest on the street pointing to the challenges with renewable energy, as to who wins this debate it may rest on the two big unknowns first how the china lockdown story unfolds and the ongoing conflict in ukraine. what we do know is that splitting this company into three will make it much easier to fully understand the story we're seeing out of power renewable, health care and aviation, sara. >> well, what i was wondering if it's ge -- if there's anything here ge specific or this is a broader macro tell with everything that they're dealing with, supply chain and economic weakness as the main factors because it's also a stock in the middle of the turnaround story, right? >> absolutely, the macro factors affect ge in many ways but the renewable challenges it's facing are company specific the competition it's facing from

siemens energy, that competitive landscape adds to a market here in the u.s. which is already meaningful soft -- meaningfully soft where it's not getting the subsidies it needs to make its products more competitive. >> seema, thank you, mike, you know, ge makes everything from mri machines to wind turbines to jet engines. it is also a read for broader industrial part of the economy and potentially a leading indicator though interestingly they did not change their guidance just sort of warneded around it >> that's right and no doubt i mean there's certain macro tell in there somewhere mostly, you know, kind of in the industrial business to business area, i think one thing that may be kind of reality check a lot of the top line guidance out there is when, you know, a company like ge more or less affirms high single digit revenue growth that's what cpi is at. nominal gdp growing in that range so even though it's better

than in years past, it's not something in itself for investors to get marginally excited about relative to where we were yesterday. >> long list of 52-week lows some of them, verizon trading at lows we haven't since march 2020 disappointing quarter last week. domino's pizza, starbucks, blackrock all trading at lows going back to 2020 so really giving back a lot of those pandemic wins when the stock market did so well blackrock lowest since november 2020 and jpmorgan making a new low since december of 2020 nasdaq on track for its worst monthly performance since october 2008 let's bring in the senior market global strategist joining us on the phone. i feel like you've been one of the few that have been embracing technology this year everybody hates it it tinges to be in the eye of the storm. are you still a buyer? >> i tell you, we do -- we still do favor technology. a lot of this, we think there's going to be good earnings growth in technology.

it's not as cyclical for the most part. the parts we like are things that deal with automation and efficiency so we continue to be overweight technology here we don't think interest rates are going to go much higher let's say, for instance, the ten-year yield than we are right now and think this is an adjustment period. obviously there's been some turn here in technology hit but we expected as we move through the year to regain some footing here and do better certainly in the second half of the year if not sooner than that >> so you think -- i think you have to feel that inflation has peaked and that we've sort of priced in max hawkishness from the fed to have that view, right? >> yeah, and i think, sara, you know, right now if you think about what's been worrying the market lately, i mean this china and the supply chain and slowing growth and what that is going to

do, those are the kind of concerns that is taking the air out of the market lately i would argue the market was hanging in pretty well until this china shutdown situation, lockdown situation really started to accelerate because earnings are coming in overall slightly better than expected. slow growth in earnings but that's what the market expected so, you know, maybe you're up toward 7%, 8% growth in the first quarter. that's a couple of percent better than expected so i don't think it's earnings. i think it's the bigger concepts, supply chain, inflation lasting longer, fed making a mistake, those kinds of things that are really creating some head winds for the market here. >> just want to zero in on the action right now into the close it's getting worse, down 3.7% on the nasdaq composite right now, the s&p is now down over 2.5% and there is the dow jones industrial average losing 7 and almost 40 points into the close here, scott, just be specific. so what parts of tech would you

buy here and does any of it have to did with valuation at this point as we head into heavy earnings today we'll get alphabet and microsoft. tomorrow meta and amazon and apple. >> yeah, sara, you need to focus on the companies that own their nets, that are growing their revenues and as i said if they are involved in increasing automation for companies, if they're involved in increasing efficiencies for these companies, those are the ones we want to focus on that could be equipment company, it could be a software company, it just depends. it's a company-by-company type of basis but i think our message to our clients is that, yes, interest rates are higher here, they've made a big move. but if you look back at the last six or seven hiking cycles on average what sector has done the best through those hiking cycles technology so i don't think it's a right to

count technology out here. obviously taking it on the chin here. >> but they had such a strong run-up. >> they did. >> we just talked to barry knapp. so much more to go, hard to make a case at these levels when you have an economy slowing and interest rates that are rising even if you see a peak, there still could be more downside. >> there still could be. calendar year 1920/'21, s&p up more than 92%. technology did better than that. so, you know, there has to be some giveback here at some point and is this the beginning or do we still have a lot more downside we don't think we do and this is where we want people to, you know, we want them to be putting their toe in the water here incrementally if they have cash on the sidelines if they want to dedicate it to stocks. >> i think there's also some fears around tech and changing trends, scott, the pandemic is -- we're in a different place right now. netflix subscriber loss i think was sort of one of those moments where people -- made people

wonder how much behaviors are changing and how much some of these seemingly structural growth trends are peaking. and that's a problem >> companies need to own their niche and they need to not have a lot of competition as streamers there is a lot of competition. >> sounds great. >> take it on a sector by sector basis. >> understood. scott wren, we appreciate you joining us from wells fargo investment institute session lows down 770 on the dow, two minutes to go in the trading day. mike, the internals? >> pretty lopsided as you imagine to the downside, sara. really not a lot -- not quite 90% of all the volume to the downside it's pretty close. as you can see it's more like 7-1 declining to advancing and wanted to take a look. mentioning treasury yields, two-year note down off its highs close to a quarter point or

actually a little more than that from the highs several days ago and that equates to roughly one-quarter point fed rate increase anticipated over the next two years not quite that specific but that tells you a little bit it's come off -- still holding near those prior highs around 2.5%. the volatility index obviously got some upside here above yesterday's highs which are around 31 so into 32 you saw there back in march we are well above 35 before we peaked you always have to see that fever break by peaking and starting to pull back, sara. >> absolutely, mike, thank you under a minute to go take a look at the nasdaq where the sell something happening 3.75% lower on the nasdaq 100. nasdaq is having its worth day since september 2020 dow sinkin the close, nasdaq down 3.9%. every dow stock is lower right now. as far as the nasdaq tesla is down now more than 12%, lucid motors right down with it down 9% or so but you've got weakness in all the megacap, apple,

amazon, nvidia, google, facebook, all lower, ahead earnings from microsoft. consumer discretionary the worst part of the market that is going to do it for me on "closing bell. dow going out with a decline up more than 800 points i will send it into "overtime" with scott wapner. >> all right, welcome to "overtime. you did hear the bells we, of course, are just getting started on the new york stock exchange begin with our talk of the tape. earnings from some of the biggest tech companies on the planet beginning right now alphabet and microsoft imminent. the pressure couldn't be higher given this very unsettled market you saw what happened today. how much pressure the nasdaq was under. does this stem some of the selling? we'll see or does it keep the nasdaq under severe pressure our experts are here to answer those critical questions