good day, everybody. welcome to "power lunch. along with melissa lee, i'm tyler mathisen form here is the 2:00 p.m. takeout. rising rates wreaking havoc, tech the biggest victim. the nasdaq down more than 1% as it continues to move lower dow moving the other way we'll explore it all rising hates as lack of inventory and siring lumber costs could put more buyers on the sideline rockets, reddit right, the stock

until pressure after a reddit-driven rally. we'll look at how bots could be helping to drive the action. "power lunch" begins right now welcome to "power lunch. the federal reserve releasing a snapshot with the latest beige book steve liesman is digging through the details and we'll bring you the headlines. nasdaq with a big decline, down 7% from its record high just two weeks ago. bob pisani has more.

thematic etfs is getting hit as well. 3-d cloud computing, and there's kathy woods, arkk, getting hit again, subject to the same forces about the rates higher, elsewhere don't forget that reopening trade. oil comfortably over, and a lot of oil names on this, department, chevron, as well as other names. i want to point out to everybody, we topped out february 16th in the s&p 500 that was the day when interest rates started moving up, when the ten-year yields started moving to the up side from 1.1, to 1.2%.

particularly high-growth megacap stocks mentioned today, because rates were basically stable yet, but still sold off into the close. >> re, something, as rates start moving up, it puts a ceiling on the multiple you can have. that usually means prices are going down.

we're just about at session lows at the nasdaq right now steve liesman has the details from the fed's beige book. steve? >> melissa, the beige book saying economic activity expanded modestly across the 12 district washington mutualer spending report to be mixed in regular spending and in auto sales. conditions in the leisure and hospitality remain restrained, though there was some modest pickup tourism. manufacturing, we've seen some good numbers, beige book saying it increased modestly and most districts did report higher employment levels. a curious thing with all the people out of work, they are reporting trouble in attracting qualified workers. there's talk about labor shortages in some industries

there was a modest rise in inflation reported, a big dig the fed has been watching. cost increases were attributed to -- both seen as temporary with the fed believes once the supply disruptions and with the opening up of the economy you would have prices fall for those goods that are affected by supply disruptions finally, this is important, some retailers are president to pass through price increasing, and some retailers were unable to do that not a big red-hot inflation report here, not a big red-hot employment report, either, but things are definitely trending ahead as we wait for the jobs report on friday melissa? >> steve, thank you. steve liesman. all right. for more on the beige book and markets today, scold brown,

chief commit at raymond james are john lynch at c.i.o. comerica do you did i grass we northerly see things cooling off, but you're coming off a relatively soft holiday shopping period, mild weather in january. obviously we have to wait until the pandemic is behind us. some increase in spending. actually a lot higher year over we're.

you've had a lot of -- normally people another check will be on the way and all of that i think is a pretty positive outlook but again, it's all about the pandemic >> john, let me turn to you and how you see it moving into te. >> if you think about 1.9 trillion in stimulus, maybe $1.3 trillion in personal savings, so

i think what the treasury market is tells us right now with all that stimulus, scott made a good point about spending on durables as opposed to services or experiences, but it does appear that's about to change, and while we might be modest or beige, as the book is identified currently, i do think over the next few months, the market is telling us we'll have a surge in liquidity. i think that's why the ten year is moving. it's fascinating when you see big tech pulling back. the equally weighted s&p 500 outperformed if you this i about the year-to-date number, it's probably twice that. >> i think that's better >> we have to bring in steve

liesman into this conversation steve? >> asp tyler making fun of me, i want to use another one repeatedly, which is disruptions. >> i want to real you -- i got rethe first time, it declined modestly, the labor market as remained slugger businesses reported further acceleration prices as well as increasely widesuppress supply disruptions, so that's something i think, guy guys to put on our radar screen, the whole trade flows, and the supply chain reestablishing itself. this particular beige book making a point of disruptions out there in a supply chain.

>> we know, steve, where one of those supply chain disruptions is, it's in semiconductors obviously. >> yeah. >> where else, do they hint at that >> i'm seeing the word "disruption" come up a lot, in a bunch of places in this -- in the manufacturing sector is where they're talking about it, tyler. yeah. >> you've got to wonder, as states start to reopen more and lift some restrictions on capacity in indoor settings, how much of those disruptions will work itself out, scott, how do you factor in disruptions, with the expectation that we are on the other side of what could be a pretty strong recovery >> well, certainly i think we're seeing widespread disruptions throughout the manufacturing industry, gets parts and supplying has gotten to be a

real problem for many industries as such you're seeing input cost pressures, but it takes a gigantic increase in raw materials, to have -- most the the consumer price index is services, dominated by wages, rents, things like that, which i think will be pretty much under control. i don't worry too much about the inflation outlook, but starting things up will be a bit difficult. there are plenty of empty hotel rooms, plenty of airplanes sitting idle on runways in the desert it may take a bit of time to ramp those back up, but may be more different to find pilots who may have retired in the meantime, things like that, but if you offer a big enough wage, you get people back in there the services rebound is what we expect the one lesson from the 1918 pandemic is people were willing to go nuts afterwards. people were tired of being cooped up. you saw record attendance at

baseball games in the years after. you had the roaring '20s, and i think that's where people will be >> i think people are increasingly restless, john lynch. one of the things that bob pisani mentioned earlier is that rising rates tend to arrest the gains that are traceable in stocks to the expansion of the multiple do you see that continuing this year and that then puts more pressure on companies to deliver the earnings side of that quotient, right? you've got to come through with the real numbers here to make stock market gains >> that's right. you always want to make sure the foundation of the e is strong enough to support the p, right the p.e. ratio it would appear with all the cost-cutting that's gone on, all the refinancing of debt, and even share buybacks, it's conceivable we see 30% earnings

growth this year so to the degree that valuation is an issue on an absolute number, i'm as concerned as everybody else when you look at pes on a relative basis, the ten-year treasury has risen certainly, but it's still not to where we were a year ago, whereas the jgb's on a five-year high. the german bund is on a pandemic high while our ten-year hand moved yet, if you think about where we were just a year ago, you get a multiple relative, which are still significantly beloaned historical averages, and a lot of pent-up demand, in his commentary, i do think that earnings can deliver because of the just the cost cutting and tight income statements that we discussed. >> steve, i want to let you close it off there get. >> very quickly, melissa, as

usual zeroed in on an important issue. you have to make a determine the extent to have these price increases of temporary it make look good for a company for a while, but if the flows come back the way they were, the prices could come down, could be good for margins down the road it's a critical analysis that investors have to do when they look at supply isruptions. >> steve liesman, gentlemen, we thank you as well. over to the bond market for more react rick santelli is at the cme. the bond market was not totally enamored with a volatility move based on what they just witnessed. if you look at some two-day charts, a two-day of two year, they started to slip right before the machined came out look at they charts, by the way. you can see how much more

selling pressure there is today. the big story, of course, has been, you know, says a nasdaq phenomenon, and melissa is right on, it's possible to a are with that, but i remember many decades ago, you would find certainly things that would be triggers, you look at interest rates and decide if you want to sell some of that richness, you look at a two-day, it's hofrlg under 91, it didn't move very much the big deal, i think isn't so much the minutes, but the notion that atlanta gdp is looking at first quarter gdp the 10%. you could use the word modest if you want, but that will ultimately be huge if it actually comes out there many believe it will tyler, back to you. >> rick, a news alert on apple and google let's go to josh lipton for the details. hey, josh. >> tyler, a big tech just lost a vote in arizona.

we want to tell you about it there was a bill there specifically in the state's house of representatives targeting big tech companies, appearing, google, their digital stores the bill calls for a big change allowing developers in arizona to use their own payment processing software. therefore, of course, they would avoid fees that are sometimes charged by apple and google. that bill has just now passed. it was a close one, but it did pass 31-29 perhaps surprising some, because we saw a similar bill in north dakota, remember, just last month. it was voted down, rejected. there are other similar bills in georgia and massachusetts. this fight is not over it has to go to the arizona senate which will be debated, discussed and voted on, but perhaps some pricing news. back to you. >> josh, thank you very much when we return, rocket companies falling back down to reports after a soaring on reddit

chatter, and bots may be behind the action we've got those details. plus, is the housing market just too hot to handle riding rates and rising prices could be about to cool off the booming business on housing. we have more "power lunch," next i have an idea for a trade. oh yeah, you going to place it? not until i'm sure. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss. could've used that before i hired my interior decorator. voila!

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welcome brack. mortgage applications are stalling as rates are risings in the fastest pace the average rate on the 30-year fix from 3.08% with loans of 20% down housing prices are going up as well here to explain what that means for the hot housing market and the homebuilder boom is roberts dietz, great to have you with us >> good to join you. >> in terms of coming out of the pandemic, how should we view that will that ease this hot housing market >> yeah, i think one of the concerns we have in 2021 is that housing affordable conditions will erode we obviously have very strong demand, very limited inventory, a shift in the geography of where people are buying homes in 2020, and prices went up the demand-side factors, as well as the demands on the supply

side, it's taking longer for building materials to arrive, all those factors remain 2021 a tough year. >> how are you thinking about how that demand eases post-pandemic, robert? embedded in that question is how permanent have the changes been when it comes to demand for houses, as opposed to apartments we have to be clear that demand is really strong we're talking about an easing we saw, which was really super-charged by the virus itself in terms of permanent effects, temporary effects, the geography of housing demand is really part of that story. we saw a significant suburban shift from where construction took place in 2020 i think some of that persists in 2021 and 2022, but some of the demand we saw come out will roll

back after the vaccine is deployed >> do you think that those urban cores, that's really fascinating to me. there was a lot of building that went on in new york city i would think there's a lot of downward price pressure as people have moved out -- or in washington, which is in my hometown, or boston, where it was desirable to live in urban centers, now not so much how soon do you think it comes back >> i think with the vaccine. in the meantime, we have seen rise in vacancy rates, declines in rents in the urban core we have to be clear some of those changes in demand were life cycle-based the leading edge of the millennial are turning age 40. they were going to move out to the suburbs at some point. i think what the virus did is increase the demand that people were looking for for space, the zoom rooms, home offices, and

the look >> i don't think it happens this year, but we have to wart move interest rates, the housing market did stall at that point we saw 10% year-over-year gains, including lumber up about 190% since mid april. those were add to costs, and we'll see a slight cooling, but still growing this year. >> robert, good to speak with you, thank you robert dietz. >> still ahead shares of lyft surging, another sign that maybe the reopening that's taking hold of course, that's as vaccines continue to roll out president biden moving up the timeline to get everybody vaccinated we have those details, next.

the world's first fully autonomous vehicle is almost at the finish line what a ride! i invested in invesco qqq a fund that invests in the innovators of the nasdaq-100 like you become an agent of innovation with invesco qqq welcome back to "power lunch. dom has a look at the action. >> almost 2.5%, the momentum has

been downhill since around 11:30 this morning yes, ma'amly the down trend is in place we had been watching that, 13,338 level that's now considerably below that watching some slowing, and that brings the nasdaq's peak gain to loss right now, a drawdown of about 8% we'll keep an eye on that. also looking at the individual components within the overall nasdaq trade so far. nasdaq 100 laggards, the biggest ones out there zoom video down 8%, 8% losses for peloton, even moderna down 10%. and, of course, you have to keep an eye on companies like microsoft and amazon, tesla, all those mega-cap-type stories. so tyler, a lot of the action right now, facebook, amazon, microsoft, apple, all of them

contributing to the big-tech weakness we're seeing. >> i may have to get back on my peloton and pedal faster but delivering that production into the arms of people, meg tirrell, that still seems to me to be the bottleneck here talk us through it >> absolutely, tyler we have seen a number of shots being administered daily here climb now almost 2 million a day on average we heard from president biden yesterday, they are setting a new goalpost of having enough supply for every adult in the united states by the end of may. that as moved up from what he was say by the end of july crunching the numbers, it looks like we're about on pace with j&j, but including the partnership with merck and using the production act, they say the 100 million doses from j&j will

be moved up by may than the end of june. though we don't have it cleared for kids, it's more than enough for the adults in the country. astrazeneca expecting results from the phase three trial within weeks we spoke with the head of biopharmaceutical on what supply they would have if they get eua. >> we're already producing at high speeds. we feel comfortable to have 50 million after the first month. after that, we have a clear ambition to supply between 50 and 25 millions, so the numbers are very substantial >> guys, if that gets a eua, it would be a two-shot veeck, but adding potentially more supply a stark warning from the cdc director saying we are at a pivotal point. she says the next few weeks are

transmissible with the new variant, she called it hyper-transmissible. here is her warning. how this plays out is up to us the next three months are pivotal. i'm asking you to reach deeply, to protect our nation's health and protect your loved ones, whether mandated or not. >> guys, with texas removing its mask mandate, other states doing the same, saying they're fully reopening, she says right now there's a lot of flagrant dismissals of the measures that have gotten us this far. she seems very worried >> thank you, me. rates are higher, plus rise of the reddit bots, what is sending viral stocks to the moon. and billionaires bite back what they are saying autbo elizabeth warren's wealth tax proposal, when "power lunch" returns.

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welcome back i'm rahel solomon. here is your cnbc news update at this hour. in his first public appearance since accusations from three

women, governor cuomo rejected calls for his resignation, but did say he will cooperate with the investigation. he asks new yorkers to wait for the outcome of the investigation. he does, however, acknowledge learning a lesson. >> i acted in a way that made people feel uncomfortable. it was unintentional, and i truly and deeply apologize for it i feel awful about it, and frankly i am embarrassed by it tomorrow facebook will lift its post-election ban on political ads. the company has to authorize advertisers and the ads do need to disclose who is paying for them

got to admit we fell for this promotional gambit penguins run around a "friends" replica set. super cute, melissa, but shed aquarium using it as an encouragement for people to get out and safely visit places that are beginning to open. >> rahel, thank you. let's look at the markets right now. the nasdaq broke through 13,000 momentarily. we are almost at session lows, down 2.7%. tech stocks feeling the brunt of it today, as we see interest rates sit at 1.47% oil meantime up about 3% dom chu made it over to the

commodity desk. >> it was a mad dash not cramer style, but i still tried to do my best. oil prices are higher, $61.47, we almost got to $62 per barrel for wti. brent crude gained, $64.22 they're snapping a three-day losing streak. first a drop, a big one in gasoline inventories the energy department saying gasoline stockstyles by, get this, 13.6 million barrels that coincides with a massive barrel build in oil stockpiles that's the most on record. why? because the markets are still feeling the effects of the deep-freed weather reuters is also reporting that opec and its big partner companies like russia, are talking about possibly extending oil production cuts rather than

opening the spigots and raising output the oil cartel is set to meeting tomorrow look at the charts for the energy stocks, at least, by the way, the spdr, exxon, many of the sectors green on the day, despite that we're moving to the low of the session for the storm. bag over to you. rocket mortgage pulling back 30% after a huge gain yet, as the stock became the latest reddit target. let's bring in leslie picker, who's been following the action. rocket company is the parent company of rocket mortgage, as ceo jay farnor was asked about the recent volatility. >> the stock yesterday and the last few days really interesting to see obviously we had an incredible 2020, and had our earnings call last week, where we talked about

the results in 2020. we talked about the fourth quarter, and so a lot of this, for me, is really the recognition of the rocket company's plat much. >> last thursday rocket reported fourth quarter earnings fueled by what they called explosive growth, concurrent with earning, rocket also announced a special different, which seemed to spur the momentum in the stock even further. rocket has been a target of short sellers largely due to its valuation is inns its ipo six months ago, it's been trading well above its peers there's a lot that the prospect of raising interest regard could shall wart demand for mortgages. nearly half of the float is sold short, make it a prime target for the squeeze-obsessed traders. it doesn't hurt that the rocket emoji is already a popular on the reddit forum

guys >> thank you very much, leslie picker now, some are trying to capitalize on the buzz, a new etf hopes to capture it. tomorrow on this -- that is supposed to be a question? leslie i'm supposed to ask you about that. >> ask me about the bus? >> i'm supposed to ask you about the buzz. >> we usually have a water cooler for that, about you we're supposed to socially distancing. >> it look at positive social sentiment. they have 75 names that they are going to be tracking, large caps, over $5 billion each you can see the top holdings, draftkings, twitter, ford, facebook, amazon dave fortenoy has put his name

behind it. it's not necessarily an appear also to appear also way to track this it rebalances once a month, only tracks large caps. if you hope to invest in the next gamestop, that may by difficult. >> why is ford among those >> interesting question. there's a lot of large large-cap stocks maybe people like their fords as well and buying into that stock? i'm not exactly sure. >> thanks, leslie. appreciate it. >> thank you. tomorrow we will be joined by jan van eck to talk about it. by the way, tyler, ford is one of the most traded stocks on robinhood. >> interesting out of all the stocks. >> it's been a stock that's done well as we've been watching the so-called reddit stocks this week, one company has been tracking a different metric,

online bots. being driven by large bot armies trying to push the reddit rocket ship to the moon we're join by aaron barr great to have you about us these bots you're studying, these are bots on twitter. are you finding this activity in bots, is it coincident with unusual trading activity, or is it predictive? >> thanks for having me on the show we are finding when -- we prefer to call it un-authentic social media behavior but there's a range of un-authentic behavior. bots are tess most automated end of that. we are seeing this fluctuation that is matching what definitely appears to match a lot of these stocks that are being pushed in

the reddit sub-reddits. >> i guess what i'm asking is if you look at this unusual -- i don't known what you want to call it. i wish there was an acronym for what you just said, but fake users, that seems to encompass a lot of it, is there an increase in activity that is useful, when you look at it in terms of it being predictive, or is it simply coincident? >> i and, of course pi-q, but when we're looking at spikes in rocket, or -- they certainly seem to be correlated to the strong trading volumes, as well as the price of the stock for the day. >> i guess i'm trying to get out whether or not this is useful. it's not to me after the fact, when i look back and see there's this fake social media activity

that coincides with that spike, but if you can tell me it's predictive, then i say, you know what that data from piiq, that's useful in how i trade. >> that's a good point take rocket last night, as an example, where you saw large conversations, large spikes across all of the social media platforms related to rocket. certainly that was reflected in both the volumes and the stock price yesterday so, yesterday, take me through the timeline yesterday was the day rocket did this today rocket is doing that was there a similar tide of commentary on those sites both days one that was positive and one that was negative or questioning? >> that's a good question, tyler. we haven't looked at the rocket data for today

when we have looked at previous, the gme, amc, some of the other volumes of activity and the -- you know, we want to make sure to point out, what we're trying to do as a company, since we're a threat and risk analytics company, trying to measure these conversations, how they compare and contrast to what we consider more organic or natural conversations. what we are seeing related to some of the reddit-related stocks is we're seeing very unnatural pattern in that activity across most of the major social media platforms as you pointed out, we don't annual reddit data, though that may be in our future. >> in terms of analytics, are you saying this is a risk there had be large armies of bots, or fake activity that could influence your stock price and therefore your ability to tap

and access capital markets >> it's certainly possible the accessibility of these bots or fake account activity, you can guy engagement, up votes, fake accounts today, and buy them in large quantities those could be both a help or a harm to your particular stock price. >> aaron barr, great to speak with you aaron barr of piiq big-tech names taking a huge hit. our clients come to us with complicated situations that occur in their lives. for them it's the biggest milestone, the biggest accomplishment, the sale of a business, or an important event for their family. for them, it's the first and only time. we have seen this literally thousands of times, in thousands of iterations. ♪ ♪ i am vince lumia,

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welcome back to "power lunch. i'm seema mody check out the nasdaq, hitting the lows of today's session down more than 2.3%, extending the big sell-off this week let's bring in the trading nation team. mark, you think the nasdaq can move down another 2% from current levels tell us why.

>> what is interesting, the nasdaq is certainly the largest piece of the puzzle. the broader market is actually acting quite fine today. seven sectors higher today, breadth is positive, but technology being such a huge weight, so ndx, i think it's lowered to around 12,450 or so, about a 50% retracing to the entire rally up from november, so i do continue to think that the nasdaq and technology underperform, it's really important to know -- also the broader market are not the best representation necessarily of the market, because it's so tech-dominated >> quint, just looking at the biggest losers on the nasdaq it's hardware, it's software, social media, even biotech, would you be a buyer, though of

the pullback here? >> yes it's not been a popular view, and said several times we would not be chasing stock we're getting a pullback and maybe attractive the stock, you know, is trading 20 times forward, growing 34%. no debt, has pulled back considerably again i think you have to be very selective we'll be looking at the semiconductors as well they are getting obviously smashed but there's going to be some very good value there so if you've been patient and haven't gotten caught up in the euphoria and haven't been chasing stocks and you have dry powder, you can be very selective here and look at being a buyer. tech is not just going to completely fall apart. there is going to be fits and starts along the way but we will continue to see this rotation and movement in other areas. i think there is some value here to be found.

>> got it. quint and mark, thank you for your analysis and be sure to head to trading nation.cnbc.com for more insight on where technology goes from here. back to you. >> all right seema, thank you and the nasdaq falling 2.5%, near session lows. some of the biggest tech names are lower. netflix, amazon, and microsoft you saw some of them a moment ago. i think it was netflix down almost -- there it is -- down by 5% those declines largely coming into momentum stocks some of them big names zoom, peloton, docusign. we'll be right back. we're watching it all for you. >> now the latest from trading nation.cnbc.com and a word from our sponsor. >> if you are an active trader sitting on the sideline can be difficult but it is important to resist the temptation to over trade. in times of high volatility, you may want to consider trading less or reducing the size of your trades. when things really get crazy, well, sometimes the best trade

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the nasdaq still firmly in the red here as we go into the

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this is no less an interesting year frankly the spotlight right now on nasdaq on track for its worst two day drop in six months there you see the other index is holding in a heck of a lot better than that let's take a look through some of the, what we called last year the stay at home stocks. those are among the ones getting hit very hard today. netflix, amazon, down more than 2% microsoft. peloton, zoom. docusign and so forth. the others that are coming back a little bit are what i call the lose the sweat pants stocks. get off your -- and get out, man. look at some of the airlines, hotels, cruise lines there you see united, american, and delta are higher hotels and cruise lines also, melissa. >> of course a lot of the stay at home stocks the higher valuation stocks which are more vulnerable to the rise in rates we've seen what i thought was interesting so far in the session is when the nasdaq hit session lows and broke below 13,000 we didn't see a commensurate rise in rates rates remained stable at 1.47%

something else pulled the index down momentarily i am watching, though, banks into the close banks of course have been beneficiaries of rising rates. so far this year really out performing the s&p 500 over all. take a look at these moves in today's session in particular. we're seeing some very nice moves in the money centered banks in particular, of course that gain when rising rates are out there. with our loan portfolio. wells fargo up 1.6%. citi up 3.05%. nice raises there. also reopening trades as well as you mentioned. >> you can't really lay the tech sell-off today on rising rates because they're not rising today. right? particularly >> they were pretty stable today. and yesterday. i brought the point up yesterday with bob -- about yesterday's session too and that rates are 1.41% or so for almost the entire session they were and yet we saw a drag on tech stocks into the close so it almost seems like a continuation of

that action here in today's session. it will be interesting to see how this plays out going into that final hour of trading here. >> as i've said many times, a little bit of inflation is not a bad thing for equities at all. it is one of the reasons things get more expensive including stock prices >> yes well, good to be with you. >> good to see you in person >> thank you for watching "power lunch. "closing bell" starts now. >> it certainly does welcome. i'm wilfred frost with sara eisen. the s&p 500 lower but the nasdaq is getting shellacked down over 2% tech stocks taking it on the chin today let's look at what is driving the action rising bond yields at the heart of the story the 10-year reaching 10.5% earlier today though it has retreated from those levels that put pressure on tech and growth stocks. momentum names like moderna, zoom, peloton all plunging alphabet down 3% the stocks that are holding up, reopening phase like retail, travel, energy the big gainer. banks also continue to hol