biggest losers just in today's session and echos the trends are the semiconductor stocks >> all right thank you very much. thank you, everybody, for joining us for this hour of "power lunch." i'll see you tomorrow. >> "closing bell" starts right now. welcome to "closing bell." i'm wilfred frost. a short trading week off to a painful start. the nasdaq down 1.8% heading into the final hour of trade. >> dow down 400. i'm sara eisen let's look at when's driving the action in the final hour of trade. the 10-year well above 1.8%, highest level in two years putting serious pressure on tech with chips in particular falling. goldman sachs weighing on the dow after earnings missed

estimates. activision is a winner surging after microsoft said it would buy it for nearly $79 billion. we'll be all over the market sell-off into the close and beyond and coming up two key executives in the financial space react to earnings. hearing from the ceo of charles schwab and interactive brokers chairman thomas peterffy >> both good reads we are watching the big story just mike santoli tracking the market sell-off. wilfred with goldman sachs's earnings miss and joining us is an analyst from rbc and light shed mike, the market action. what are you watching? >> broad weakness today but orderly orderly, that might be a

positive or negative obeying the traffic signals. around 4570 or below that. it was both at the index's 100 day average. basically hilt last week's low undercut last monday's low and stays right here at the bottom of what might be developing as a trading range and we'll see if that's true. we had traction in the last hour or so and up .5% looks like the fake breakout up there. that's what people are wondering about. in terms of how the market looks internally, is it oversold yet yes and no see the percentage of s&p 500 above the 50 and 200 day averages rolled over well but not near the lows marked when sell-offs ended last year in september and december so if you want to wait for the market to get more washed out for a flush it is not here yet

you don't always need that at the lows today. at a 5% pullback seems to be an area where the bidders do show up and seeing the highest quality stocks take the brunt recently it was mostly the riskier lower quality speculative stuff. microsoft, activision, huge story today. it was by far the better performer than microsoft and then the bid itself as well as the sell-off in microsoft with the big cap nasdaq stocks has brought them closer together in terms of 15-year performance back 20 years activision is up of course coming off a low base and now going to get swallowed into a company for which it is only about 3% of the market cap,

microsoft that is. well over 2 trillion in market cap. >> wow amazing how tiny that seems when it's a $70 billion deal. on the prove up in yields, did anything trigger it? because overnight china cut rates and this morning new york manufacturing weaker than expected is it just still the focus on the fed with some of the economic data coming in weaker >> i think it's certainly the fed. the more time we have to the fed meeting when the fed is going to actually officially speak the more time there is for hedge fund managers to say the fed has to go 50 basis points in january and somebody believes it the yield did not come in after the good run-up to 1.7s and then blasted through and you have breakout talk. i don't think anything beyond that occurred why it is not about the inflation data short term it is pretty much about trying to reprice and get in front of

what the fed is going to do and that's the -- one of the dominos that's causing what's going on in the equity market. >> thank you time to pivot to goldman sachs operating expenses 7.3 billion forecast 6.7 billion with higher wages and bonuses a big factor there. earnings call the ceo said i want to reiterate the importance i place on investing in the people of goldman sachs and a personal priority to invest in their success. that's said, the cfo did note that full year compensation ratio 2% lower than 2020 within noncompensation costs goldman said engineering expense is strategic expense for the firm and an area we expect to continue to invest both comments on costs which they were asked about quite a lot on the call did suggest

levers to pull to modify them and the stock of course selling off, off the session lows. despite that comfortably a record year of revenue and earnings equity trading missed estimates. fixed income trading and the consumer all largely in line and contributed to the record year investment banking strong and up and on the call the cfo suggested the pipeline remained strong there either way as we said the stock tadinging lower. off the lows but down 6.7% remarkable and only can be explained by a strong run into earnings period and a strong start to the year. >> i was just going to ask what this does to the thesis of pretty much consensus call of

loving the banks worked last year people thought this is the year to get the rate hikes with a stronger economy steven shoeback, the analyst at wolff research, didn't he downgrade jpmorgan ahead of earnings only one that called out the weakness everyone else loves the banks. >> he did. because, of course, they are a sector to benefit when rates go higher the question that we already were asking in january was, they're all saying buys on the banks but the price targets are close to where we're run up to and seeing that pressure play out now in light of that what will be interesting tomorrow is morgan stanley and bank of america, two to make arguments for for various reasons that may not suffer from the same factors

wells fargo a relative winner from earnings season and year to date so we'll see if it's the whole group that deserves to be punished or individual names tomorrow. >> they have a self help story going on activision blizzard is soaring today. microsoft will acquire it in an all cash deal at $68.7 microsoft approached activision after questions around the handling of sexual harass chltd and misconduct claim just the ceo addressing the concerns earlier on cnbc. >> any issue of harassment or discrimination is something that i would take seriously and do, and like many companies we had some challenges and worked through them we are committed it is a focus of mine and continue to improve the culture

with the expectation of being the most inclusive workplace culture. >> let's bring in the guests brandon, how much did this scandal which no doubt tainted the reputation of blizzard, bobby kotick himself how much did that play a role in getting today's deal done? >> absolutely the catalyst for this deal happening. basically, in the studio business the talent is the life blood of the business and bobby had unfortunately lost the talent at act ivision blizzard there had been walkouts, revolts, a lot of employees and management quitting and it was time for him to wave the white flag. >> so what does that say about what microsoft is now inheriting, brandon? >> microsoft is still inheriting

amazing ip "call of duty" has been at the very top of the sales charts for games. you're inheriting king with 260 million mau. there's a lot of great building blocks for their few which you shall -- future. >> are they overpaying, microsoft? >> thanks for having me. i don't think so activision is profitable and this makes microsoft the third largest gamingi vendor out ther and fully vertically integrated between xbox, game pass so much more valuable and so on a standalone basis may not be that expensive. this is a $70 billion

acquisition and $2.3 trillion market cap company and layer in the potential advantage and what microsoft can do with the deep pockets for activision and future development this is a great acquisition for microsoft. >> you are not worried about the culture issues that brandon laid out and embroiled in the scandal and with it questions whether bobby kotick stays on. >> yeah. the scuttlebutt is bobby is gone as soon as the deal closes there are definitely changes that need to go on culturally. i think that work will get done starting now not something to wait until next year when the deal closes. i think that work starts right now and the board has a mandate to fix the issues and so it is fixable. it feels like there's a lot of strong ip here microsoft has a strong

reputation coming to workplace culture and e s g so there's work to be done and i don't work that microsoft is inheriting toxic workplace. >> does this price that's being paid or the move from a mega cap name to go further into the metaverse and gaming bring other gaming companies into play >> you would have to think so. the question is whether anyone else can actually get a deal done because if you look at across at the larger platforms that want to stake the claim to the metaverse and look at meta itself, all facebook, google, amazon we are not sure if they can execute on m&a in this environment, not necessarily even in the united states but this is a global regulatory environment and have to look to europe and the uk where things have been a lot tougher.

>> thank you so much for joining us microsoft remains down a couple of percent really in line with the nasdaq more than anything else. shares of charles schwab falling today. we'll speak with the company ceo about the headwinds and the retail trading forecast going forward. you're watching "closing bell" on cnbc. your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire at vanguard, you're more than just an investor, you're an owner with access to financial advice, tools and a personalized plan that helps you build a future

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shares of charles schwab lower today. joining us now is ceo of charles schwab good to see you, walt. thank you for joining us. >> thank you for the invitation. i'm thrilled to be with you today. >> so talk us through the quarter. we're mentioning the shares are down but down less than srivals are you seeing a tradeoff? >> not seeing much of a change from a client engagement stand point. i'm in this chair now for the 14th year. i suppose the timing is bad. i should do "closing bell" more on the time of an earnings beat than miss but it is important to put things in context that we still grew revenue 13% year over year net income expanded by 22% when you adjust for one-time costs related to the ameritrade acquisition and expanded the

margin so it was an outstanding quarter from a financial standpoint and i think when you look at client engagement we were fortunate the clients entrusted us with about $80 billion in net new money in december alone so whether you look at any aspect of the quarter and the year it was outstanding and did miss the estimates that analysts make a couple cents this quarter. >> share price performance is fabulous on most short and medium term time frames looking backwards and clearly a factor you mentioned still seeing inflows from clients what is their positioning at the moment cash balance is high what are your forecast for how you can monetize that if rates keep rising? >> i think clients are still very engaged in the market they're managing their money in a manner that has been fairly

consistent since the pandemic began almost two years ago there are those who actively trade and view that as an effective strategy the majority of the clients are longer term investors either on their own or working with an independent adviser or advice from schwab and they stay with the strategies as they have in place, not any big change or shifts from an asset allocation stand point but designing a plan and staying with it. >> the other big theme, walt, we have been talking about is interest rates going up and the fed changing the tune. a lot of the banks are seemingly the big beneficiaries like bank of america but you guys also should benefit, right, from higher margins if we see three or four rate hikes from the fed what does that do to your business >> it generates meaningful

revenue for us of course we are now waiving large amount of fees to ensure the clients have a positive yield. those will go away with the rate hike or two. maybe more importantly the clients will generate more interest on the money fund balances from a balance sheet standpoint higher rates will in time felt irthe way through the balance sheet, widen the spreads and the numbers can be quite significant for us from a revenue standpoint why the jaoffset is they want to watch the asset alab -- allocation. >> stepping back from the quarter to the bigger push you tensioned the ameritrade deal.

who today sitting as you are do you consider as a single biggest rival? you merged with or acquired the name we would have put in the same bracket with you and there's growth with traditional banks or fintech companies moving in. who's the biggest rival today? >> you are right at this point i think it's safer to say there's no competitor staying in their lanes i don't know that lanes exist anymore in our industry but we have a large array of competent come pet toer that is we have deep respect for certainly fidelity is a firm we have respect and admiration for. jp jpmorgan i think competition is outstanding and good for clients because it keeps all of us on our toes and innovating and making sure to keep the costs as reasonable as they can be while

providing great service and leave as much money in the client's pocket. it is their money and competition is fierce. but it's solid companies for the most part and we have great respect for each one of them. >> with the size and scale, walt, we put up the market cap, close to $200 billion and the ability to invest in tech and offer the same types in their hand services that the new fintech companies have, who will provide a longer lasting threat to you is it the bigger traditional banks opposed to the robinhoods of the world are finding it harder to keep that engagement going. >> again, i have great respect for the competitor just the greatest threat is ourselves we need to continue to be a company that innovates, that is

willing to be disruptive to ourselves. whether you go back to the '90s when chuck schwab eliminated fees on iras or the mid-2000s eliminated nuance fees and zero commissions a couple years ago we need to be a disruptive company and driven the success for 50 years and need to continue to do i say the size of an organization has no relationship to the willingness to be disruptive that's who we need to remain in the coming years and confident we will. >> what about robinhood? they had really early success with attracting millennials. how did that happen? do you feel that was a missed opportunity for you? >> when you focus on a very specific segment of a market and able to tailor and customize your services, capabilities to that very narrow segment you can

be quite accurate at succeeding there. the challenge is to really grow a significant firm you have to have a broader perspective i often say that it is not possible for a foirm to be trul successful if they don't offer the means of interacting with the client in the way that the client wants to interact with you and just pursuing one segment. look at the growth with well orr 3 million households in 2021 60% under 40 and more than half of those under 30. we're not suffering in terms over winning clients who are younger and the average balance among the clients is quite significant. many multiples of the fintech type of firms that have pursued the millennial investor. >> are you going to start offering crypto soon or waiting

for regulatory movers? >> it is hard to inspector general -- ignore crypto, of course i don't know if you see firms offering direct trading but we would like to be in a position to offer direct trading in crypto at some point we have a variety of ways that the clients can invest in crypto today but direct trading is not a part of that at in this point in time and safe to say if we were in a position to do so in the future we would look to be as disrupt nif that field as other areas. the cost of kr crypto trading i very high. there's room for a disrupter to come in and allow investors to invest >> walt, keep us posted.

thank you for coming on today and come back. beat or miss on "closing bell." >> all right thank you. >> have a good day just about 34 minutes left of trading. seeing steep decline just the nasdaq down 2.25%. energy is only positive sector we'll keep you up to speed throughout the close on the sell-off and the declines are worsening. talking much more about the brokerages when we are joined by thomas peterffy. due to report results after the close. check out the top searched tickers on cnbc. yields surge to 1.86 activision microsoft, the rate story, deals and earnings that's where people's interest lie. we'll be right back.

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30 minutes left to go in the session. another ugly one for stocks, especially in technology let's hit the market movers. shores of kohl's higher after activist investor pushes for a change at the company saying kohl's isn't doing enough to improve the business and push comes months after kohl's reached another deal including to add two nominees to the board. here's the ceo on "halftime report." >> a year ago they say we're doing better than department store just macy's up 130%. dillard's up 300%. looks like with people in the board room not enough change and more is required if shareholders generate returns. >> kohl's said it is standing by the strategy and disappointed in the path they're taking. the stock higher by 5% hanes falling after week second

quarter revenue. and peloton says it's getting hit with supply chain issues the home fitness company charges customers for delivery and setup and peloton is working with management consulting firm to review the cost structure and potentially cut more jobs. the stock down again today 3.3%. 80% off the highs now. >> yeah. big decliner of late. time now for a news update with rahel solomon. >> here's what's happening after this hour. president biden is thanking verizon and at&t for temporarily delaying the rollouts of 5g. international airlines say they're suspending some flights to the u.s. with the new

deployment. the cdc warning against travel to 22 more countries and territories because of rising covid cases with israel, australia and argentina. all of which are now in the cdc's highest category for risk. one person is dead and more injured. it happened three miles away from that deadly bronx fire that killed 17 people earlier this month. an app that's mandatory for many going to the beijing olympics has serious security flaws. it's hope to hacking and surveillance they alerted them a month ago and they have received no response back to you. >> thank you. rbc's analyst is changing the tune on small cap just she'll join us to break down the call and the broader market

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welcome back sell-off on wall street today. looking for tips to navigate the volatility there's a premium membership as a paid club member you can gain access to the portfolio of the charitable trust any time jim cramer and the club make a

move to take advantage of special pricing point the phone at the qr code on the screen. sign up to become a premium member today don't want to miss out on that. dow down more than 500 points tech stocks in particular crushed today. if the nasdaq closed it would be a correction more than 10% off the highs. kate with the look at the biggest movers. >> tech stocks continuing the slide to start 2022 amid rising interest rates nasdaq today hitting the lowest level in three months. 2% today now all negative year to date and in the red today microsoft down almost 10%. to start the year dropping today as well after announcing a deal to buy blizzard. chip names selling off today, too. look at smh etf.

all notable decliners in that sector cloud software stocks, too, down big. tracking the names down about 15 pat 15% on the etf you have shopify, cloudflare finally fintech having a tough day, too sofi biggest laggard, affirm, robd, paypal and block back to you. >> kate, thank you looks like the video gamers and the chinese internet plays are spared. sticking with the s&p 500 target of 5050 for 2022. joining us is laura kalvacina. does that mean that you would be buying on days like today? weakness if you look for modest gains on the year >> thank you

it depends on the time whorizon. it is tough to argue that the pain in the market is done tech is a bellwether and shares don't look cheap yet and when rates are rising you want ch cheaper stocks got to see the valuation froth come in more i think we'll get to a buying opportunity and end up with a decent year of 6% type return. if you like to peg that bottom we are probably not there quiet. >> what about the areas that have pulled back the most already? the russell's down themost today, 6.3% year to date do you think the smaller cap end of the spectrum is looking attractive yet >> the problem with small caps is they have looked cheap for quite sometime and should have been doing well to start the year valuation was simply not enough to get people back in the small

cap space a problem that we have is the timing of fed liftoff is pull ed forward dramatically. and frankly large caps have higher quality small caps have lower quality and a time when you do longer term want to shift to higher quality and not a good mix with the lower quality and cheap valuations people are not willing to go that far out on days to invest in cyclicals right now. >> so we are facing higher interest rates how does the market rally in a year like that when you say we're used to seeing multiple contraction especially after years of what we have seen in the market how does it turn the tide? >> if you look at what happens to stocks when the fed raises

rates stocks manage to rally through that we see an impact on multiples. how long the compression lasts is the multiple and what i would leave you with is this is a different environment with secular growth getting that valuation froth from the market you will see the pressure on tech shares and the market ease up coming into this secular growth over 51% of the market cap of the s&p. but once we work through that i think you will see that tech will be able to stabilize and actually help bolster the market just remember about secular growth that tends to really not do well heading into the first fed rate hike but after liftoff we do normally see the cyclical trades stops leading and secular growth takes back over in part because markets sniff out a slowdown in economic growth that's friendly to the trade and 2023 gdp expectations are already for growth to go back to

average type levels so i think it's a complicated year and ultimately tech will start to benefit from the secular nature again once the valuation froth is out. >> on a day like this, the heavyweight call on financials rates are higher earnings beats for the most part why are they performing so badly? run up too aggressively in the first few weeks of the year? >> feels like that happens a lot heading into reporting season. we had financials come in today and they do tend to be the early leaders and come out first and have the spotlight all to themselves and not always a good thing with a significant run-up. one thing we noticed just coming into the reporting season we noticed a week ago financials don't look cheap anymore. don't look expensive relative to the s&p but the relative pe multiple back to the long term

average a week ago so we think the bar is higher for the financials going forward. >> certainly acting that way today. a hardest hit sectors today. thank you for joining us on this sell-off day. we'll have much more on the selling seeing and the big news in the deal of the day microsoft buying act vision blizzard interactive broker set to report after the bell we'll talk to the chairman before the conference call the dow down 568 we'll be right back.

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welcome back we have a great lineup in the second hour of "closing bell." a top analyst joins us and ask him whether he recommends buying the dip. we'll talk to chairman thomas peterffy we'll talk to the head of the national retail federation about the soft consumer data and how inflation and supply chain concerns are impacting that industry and we'll take a closer look at what's pressuring the homebuilders as some see big pullbacks today. we are now in the "closing bell" market zone. cnbc senior markets commentator mike santoli here is break down the trading day and we have icapital anastasia am rosa back, as well. welcome back selling under prr into the close

as bond yields rise. 10-year hitting the high ers market in two years. mike, energy and financials outperform irs on the year financials not getting it done today. it is just energy that is higher in this kind of environment. is that all that can work with rates headed higher? i don't think so just based on what rates do alone. obviously the set of things pressuring financials and i think it is a time with messiness to this row taugs or if it's not a rotation a market in general compressing valuations after they overshot in a lot of ways late last year so it is not as if it's always a perfect handoff and the case today. s&p has been oppressive and not a bolt for the exits i don't know if that's a

positive there's not a big flush of emotion on the downside. seems like it's burden of proofing -- bumping. >> are we getting close to a buying opportunity, anastasia? >> i think we are. it is hard to call the bottom but i would tell you there's a few things to be watching here the trouble with the market right now is as long as the upside in rate continues there's nothing to stop this but at the same time history does suggest it doesn't continue in perpetuity and get to a priced in levels and fair value levels on rates should mean a pause in risk off sentiment what do we price in for the fed to do? we priced in more. at least in the last set of projections. even if they say four rate hike this is year and another three next year that is largely

already priced in. you also look at the 10-year treasury the fair value models, they're somewhere in the 1.8 to 1.9% range and we are there today right in that range on the 10-year treasury and starting to price in more of that. and then the third point to come to is valuations no, we are not significantly lower on the s&p 500 but a high flying tech shares that needed to correct when i look at price to sales ratio for some really high flying multiple tech shares they see the multiples come in 50% or so so i think what's starting to emerge is a better level of what's priced in but again we need a positive catalyst and so far the fed has been hawkish and led the market to extrapolate more hawkishness >> not getting a positive

catalyst from the banks today. goldman sachs is biggest drag on the dow. down 7%. the bank did beat revenue estimates but a slowdown in equity trading and jump in expenses weighed on the bottom line attributed the expenses to increased pay for employees, similar to peer js. here's david solomon. >> there is real wage inflation everywhere in the economy. everywhere if you talk to any ceos and they have different employee bases but looking at the 45,000 people around the world, the vast majority of those 45,000 people fall into what you call more traditional corporate compensation model >> interesting thing on this, mike, with it down 7% is two factors. on the call they were pushed

multiple times about the korss and unlike jpmorgan there was more comments from both solomon and the cfo of levers on costs as a whole to pull so that it doesn't have to go up every year going forward and yet a 7% decline in the share price other point, as well, coming into this year after trying to get comp under control, this is a record year and we knew he could couldn't do that again this year and a number of analysts are just surprised to see a big pullback in the share price today. for what is not the most groundbreaking issue. >> no, i wouldn't say it's groundbreaking but a sense of structurally higher. comp or expense levels as well as you have to keep in mind, it is only the third or fourth time in 20 quarters that

goldman missed in other words, yes, you can kind of write it off but you have gotten a bigger cushion because of the results just reported and usually trades better might be the opportunity all the banks got to the upper end of the range and manier to come out of them and doesn't have to be the rule from here on out that all of a sudden they remain under pressure. >> energy only sector higher cnbc.com's pippa stevens here with the details. >> moved between gains and losses on the session. holding on to that gain after oil surged to the highest level since october of 2014. an upstream players leading the way today.

con cophillips with an all time high exxon is the group's top performer. the stock up more than 1% why the company announced today that it will be net zero carbon emissions by 2050 across its operations the energy sector is benefitting from the shift to value and sick lack names and despite the gain for the year evercore isi saying the sector is not stretched. guys, back to you. >> soaring pippa, thank you anastasia, it only complicates the picture to get oil at the highest level since 2014 what is the strategy to pick winners in the space >> you are right inflation picture is complicated but i like the energy sector a lot and should be a part of the strategy what i would say right now in

the market environment you want to have maybe three trades something that does well with this value rotation but i might show away from financials because they're the big winners last year and not just the rate story but concerns around financials like expenses, for example. looking at the energy space it is mobility recovers, supply is constrained and not rising how people expected so energy is a favorite value trade for the year and same time talking about the broader strategy you take that and couple that with some of the tech shares on sale right now and as a previous guest mentioned tech doesn't trade on sale for the duration of the feds raking hike cycle and takes place ahead of it and step in and buy the shares and last part is reopening trade.

everything is under pressure today but looking at airlines we'll see a surge in activity postq1 >> down on the s&p 500 with four minutes left of the session. today m&a stands for microsoft and activision, a few winner after microsoft announced it is going to acquire the company julia boorstin has the details >> that $70 billion price tag is 45% premium over friday's share and sent shares up 26 in trading today. other game makers are rallying on the news. you see take-two interactive shares up after announcing to buy zynga last week. up today and up 48 prsz in the

past week. microsoft shares down 2.5% on news of the deal but the news does speak to the increasing importance of video game f franchises and investment in the metaverse. >> thank you probably not the reason microsoft is down 2.5% it is in line with the nasdaq. microsoft quietly nursing a significant pullback now. >> it had certainly a kcorrectin before the deal was announced. so up 50-plus percent last year. gave some back it is about the valuation premium built up i don't think this is a direct reaction to the deal but arguably the weakness in meta is related to the deal strategically. i think the market likes the

idea of microsoft turning basically free cash into a good business that fits in with their other gaming assets and activision trading at a big discount probably builds in skepticism of regulatory hurdles set here. >> noticeable that ea higher >> and take-two. >> people wonder what's next what are you seeing as we look at this sell-off only getting deeper into the close? >> yeah. the selling is broad taking a look at the new york stock exchange market breadth not to a 90% downside volume day. take a look at the momentum etf. momentum strategy within the s&p 5 500. not living up to the name. you have gone back to last

february it is like 60% tech and financials so that obviously you can see some "v" bottoms on the chart. be careful the vix is kind of doing what it is supposed to do. migrating to where it was a week ago monday up more than 3 points. pretty much reacting in line with this somewhat orderly though certainly significant pullback down to the recent bottom end of the range. >> 50 seconds left of the session. close to the session lows. the dow down 560 points. nasdaq is down 2.7%. one sector with a gain is energy fractionally higher as oil prices rise again taking the year to date gain to 13% other ten sectors on the s&p

lower. some sharply with four sectors down more than 2%. tech the worst financials suffering significantly. goldman down 7%. sharp declines on wall street today, down 1.8% on the s&p 500. small caps down 3% welcome to "closing bell." i'm sara eisen along with wilfred frost and mike santoli interactive brokers releasing earnings in a few minute just the chairman will break down the results before he talks to analysts on the conference call with us this hour. first up on the market anastasia amarosa with us and delano joins the conversation i'll start with you. on a day like today do you sit

back and hold? do you do some buying now that we are seeing the nasdaq down more than 7% from the year and 10% from the highs >> thank you for having me on again. thinking about what clients are doing, talking about wage inflation, clients have extra cash look at the alternatives they're not that great in cash obviously you want to be careful seeing the sell-off but investors start to look where the market is dislocated and an overselling of the high quality names especially with tech sector and the different growth stocks that sold off significantly. we are starting to look at that and think about the defensive names. energy and financials is struggling i'm starting to look at the areas and nibble i think there might be sell-off in the near term and areas that look at the valuation and been

rerated and that look attractive right now. >> mike, just to go back to the start of today's selling, was goldman numbers came out or rates before that? europe europe had a big impression on sentiment this morning. >> i think all of the above but mostly a ratcheting up of the same set of concerns overall market's repricing for higher yields. a lot of rhetorical momentum behind the fed having to tighten more i keep saying this we have the space to the next meeting next week and we are going to fill it with hot air how far behind the curve the fed supposedly is. yields moving that direction it's the market everyone kind of said we would have this year which is rotational. value outperforming. maybe not absolute gain just rates going up the market has to make the peace

with higher levels of yields i'm leaning back on the idea that the credits markets have massive issuance it is not that much of a macro stress event but an adjust and compression. it feels wrong and more treacherous. >> are you referring to bill aik m man tweeting over the weekend? >> he is representative. >> shock and awe. >> right. >> i don't know. i don't know if they are losing. might be losing the battle not sure that credibility issue is the way. >> there's one way which is longer term market based expectations of inflation are not moving much. long term yeeblds at 1.8

if people thought runaway '70s style inflation i don't think we're there. i think that the signals are out there in terms of what the fed is likely to do. surprise might be to the dovish side but obviously remains to be seen. >> also about valuations contracting. we expected that that's natural to happen in a time pricing in some fed rate hikes but some of the weakness, 3% decline on the russell. dow transports down. really breaking down here. a lot of cyclical trades and even value stocks are not working as well. i wonder if there's a broader message about the economy. >> that's true obviously there's a growth soft patch. the russell 2000 is overweighted in financials and i believe amc is number two holding so there's a lot of low quality in there

and there's beta and what the market doesn't want is beta at this point cyclicals can only go up so much i don't think in an absolute way an aggressive upside engine. >> we have been talking about tech names selling off talk us through a chip name you have been buying on weakness. >> a chip name is nvidia we talked about the demand a lot of chip sector is oversold so we are looking at the chip names, the mega cap name just talked about the microsoft acquisition or the announcement and microsoft pulling back on that news but just overall i think the rerating that we are seeing in the market, obviously especially with the tech names, simply been priced in.

as far as four rate hikes. my focus is shifting towards these names that i think i have seen a way of overdue selling pricing and that's the shift to focus on right now, wilf. >> so chips and maybe some mega caps anastasia, is there a sub sector of technology dragged in with the selling in the nasdaq that looks appealing in this kind of environment? >> i look to the software space because this was a sector where valuations were off the chasrts and where the bulk of the correction needed to happen. we've come down a pretty significant way. for example, looking at enterprise value to next month's sales on the software stock from 17 times to 10 times and if you looked at the market today you actually saw that pockets of software, there's

select stocks in software that are green on the day at least earlier so i would be looking to that, stocks that are leveraged to the digital transformation and the next big thing is artificial intelligence and want to look at the stocks. it is metaverse, of course look at those. but specifically for me looking to cyber security because when this is all said and done and priced in the fed. i agree with mike. i think this is more likely a dovish than hawkish fed next week and people will look to secular growers with visibility and cyber security is very much one of those. >> delano, another stock is netflix. talk us through why and the timing. >> with netflix there's a couple areas to focus on right now. digital contents the big area is digital content.

we saw the price hike that they mentioned investors cheered that we'll see a top line growth continue and we have been buying netflix for a while. the focus is making sure that the competition isn't in there and did continue subscriber growth in competition and content is biggest driver. we like the content pushed out so that's one of the big reasons to continue buying netflix. >> let's zone in on now on the top picks. anastasia? >> hack. a cyber security etf we have had a very significant correction in some shares and the average price to sales for the average cyber security stock is 8x. a significant correction same time looking at the stocks within this hack etf many are

growing revenues at 25% per year higher than the s&p 500. so within this etf you have things tied to single sign-on technology, to privileged access and the key trends in cyber security it is top of mind for everybody. if you look at where the i.t. spending dollars are going not just this year is going to be in cyber security so i would be looking to buy this one on a pullback. >> okay. that one's down 2% today for a mini pullback. let's get your pick, delano. >> i look at shop. i think it'sstill a high quality asset. still earning on the bottom line market share of e-commerce going great in the merchandise value output there and the trend of

smaller and medium-sized businesses to sell online comes back and had a major pullback in the stock and continue to look at shop, wilf. >> thank you so much down 4.4% today. thank you so much for joining us. up next discussing the interactive brokers earnings and goldman sachs the worst performing dow name. we'll ask if this is a buying opportunity or not

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commissions adding 11% joining us now interactive brokers chairman thomas peterffy welcome back. >> thank you. >> tell us what you are seeing in the business in terms of sentiment and engagement as we see the markets turn pretty volatile in 2022. >> well, you know, up. i can only speak of what happened up to today because i can't see into the future just like nobody else can but the year was really a very good year for us so i kind of puzzled why the stock fell we had adjusted revenues of 2.78 billion. up 26% for the year. expenses only up 8%. so that resulted in a gross lean

to profit margin of 67% which is unparalleled in the industry adjusted earnings for the year were $3.37 per share which are 25 -- 29% higher than the previous year. in the course of the year we added customers and executed 2 million trades on the average day. hired and trained over 500 new employees. we introduced a number of new products such as google analyst to let the clients to discover undervalued companies and provide data of global stocks. introduced crypto currencies two thirds lower than the next least expensive provider

rolled out the esg focused impact to bring on the platform to help clients find the investing companies who share values, who share the values we introduced u.s. gold trading. >> yeah. >> and as far as the industry's concerned the most notable event of the year is huge increase in listed option trading. in the last six months, u.s. option volumes exceeded 40 million contracts a day. interactive brokers has roughly 10% of the volume. >> so -- >> yeah. sorry. go ahead. >> i just have a question. it is a good preview of what to expect on the earnings call in a few moments but are you taking back market share from the likes of robinhood users as they have

maybe matured or gotten wealthier to take advantage of the sfis katrinaed products? >> we never have lost market share to robinhood we have gained customers from robinhood and never lost customers to them but i take my hat off to robinhood because what they have done to bring 20 million young people into the business is absolutely fantastic and that helps the business because as some of the customers become more serious and they decide to have a more serious platform, then they -- some of them come to us. we get roughly ten customers a day from robinhood. >> thomas, i'm interested what your take is on whether the rate rise environment or if we move into a significant moment of risk off sentiment from equity

investors what that might do your business. if they keep the cash in the interactive broker account you can make money but is there is a concern? >> well, i don't think it is a risk i would encourage my customers to invest their money in -- if not stocks at least things that provide a yield. and so i think that inflation is going to continue and given the background of 7% stocks have to rise by 7% just to keep their relative volumes so i think stocks going forward will be a good investment provided that the social and structure and strategic instability sort of

calms down a little bit because i'm worried what's going on in politically in the united states and in the ukraine and in china. so that could bring down the business but that could severely impact the business but if those things calm down i think the market looks very good. >> what are you seeing in terms of cash balances right now what does sentiment look like to you? >> the balance is always gradually increase some increase faster sometimes they increase slower right now in the months of december usually a difficult month because nothing much happens so basically in december nothing happened we didn't get or give away -- give up additional cash.

new customers have come in on a slower rate but with january it is picking up again so as far as the business is concerned basically nothing, nothing is changing drastically that i can see. as long as the political situation remains stable i think we'll be all right >> thomas peterffy, only down 2% or so. thank you for joining us always good to hear from you. >> thank you. up next, mike santoli back to look at how history says the market could react to the fed's aggressive tightening. goldman sachs shares hit hard today. so could this be a buying opportunity for investors? we'll discuss when "closing we'll discuss when "closing bell" comes back!

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another tough day for the market s&p closing down 1.8%. now a look at how the market is reacting to expectations of fed tightening that's what it's all about. >> been aggressive in the short

term over there the end of the chart is treasury that's most sensitive to the expectation of fed rate hikes see the massive move above 1% today a first for this go around a pet peeve. i have a bunch about how people talk about the markets as if we have been on the zero rate path over a decade. no we had a tightening cycle in late 2015 that was right in here 2-year popped up and took a year off and then eight more rate hikes into late 2018 that's how the 2-year navigated that very directly. the longer term yields did go up and not as much. that's when the stock market couldn't take it anymore and buckled for a 20% decline. look at the economic surprise index. the economic data are looking a little bit soft. this is relative to economist

forecasts. it just sank below zero. manufacturing report today was a miss but this is late 2015 when we did push through the first rate hike in the prior cycle below zero on the economic surprise through 2017, 2018, touch and go and the economy as stall speed to say there's precedent even if it takes the market a while to come to terms with it. >> the difference here is inflation is much hotter and an expectation that the fed has to do more and faster and the real predicament is to do that when the economy is already weakening. >> right that would be the predicament. in other words if two things go wrong -- >> we haven't seen that necessarily. >> the fed will be in a bad spot that's what we are saying opposed to inflation moderates and while inflation is higher this time around real growth is

coming off a higher base there's a growth cushion and a headwind from inflation and why they play the games and see how it plays out. >> thank you. up next, time to bet on the banks. out performed to start the year. we'll discuss if it could be a buying opportunity later the ceo of the national retail federation on how inflation is impacting the industry and consumer spending. event planning with our best business unlimited plan ever! with 5g ultra wideband now in many more cities and up to 10 times the speed at no extra cost, the downloads are flying fast! verizon is going ultra, so your business can too.

dow's worst day since november time now for a news update with shepard smith. >> hi. thank you. tensions between the united states and russia escalating over ukraine the secretary of state is set to meet in person with the russian counter part that meeting scheduled for friday after he meets with the ukra ukrainian president on

wednesday. the white house earmarking $50 billion to attack the wild fire threat in the western u.s the plan aggressively thin forests in areas where neighborhoods bump up against forest land, expanding controlled burns analoging that are kindling in the hot spots. the agricultural department said the focus on california's sy irra nevadas and the specific areas of arizona, oregon and washington state. the world getting the first look at the island nation of tonga after the massive underwater voluntcano that e rud over did weekend the local government reports at least three people killed in the explosion. new zealand's military is set to send water and supplies but flights have been delayed so far by a full day because of ash on the runway.

tonight plant based meat all the rage what about meat grown in a lab rather than a farm would you eat that details on "the news" 7:00 eastern cnbc back do you. >> shep, thank you so much. shares of jpmorgan falling hard today after missing expectations on weak trading jason, the two factors i just mentioned for why the shares declined don't sound that severe yet the share price decline was se severe why? >> buying the rumor, sell the news strong on the shares in the last year and financials in general got off to2022 on a strong footing so that you had to thread the needle this quarter and didn't quite do that and saw the sharp reaction downward. >> we could go through the calls

and which of them with the highest price targets but morgan stanley traded back 4 or 5% today. down 12.5% from the high in january. should it have pulled back as much as it did today and this week ahead of the report tomorrow >> yeah. i think so similarly the shares performed there well last year but not as reliant on trading revenues so not relying on trading. expenses is still a question mark you saw last week and this week that the banks are investing and look for the cost pressures on morgan stanley. >> did the -- did you guys and investors not appreciate the exteptd towhich inflation hits

the banks? inflation in all aspects of the real economy and ramp up the expenses is that the surprise here? >> i think rev knews have come in generally in line to the expectations and seen companies do and reinvest the proceeds to kind of aid future revenue growth and in 2021 saw banks bank excess fees and looking ahead to 2022 it looks like better than expected interest rate benefits will go to the investment spending against banlgs and nonbanks and fintech alike. >> what is the take on the entire group we mentioned already based on the individual names how much they ran up in the start of the year there's upside to them had rates rise today

we saw the group sell off. are you fearful that they're stretched? >> i think obviously the group trades around earnings tough to predict looking over 2022 i think the banks in general is optimism margins expanding from lows. loan growth improving after 2021 even the capital markets revenue while trading revenues are down we expect them to be above historical levels. and investment banking backlogs ended the year in strong position so i think they're good and despite the fact that expenses elevated we think you see operating leverage improve why

while valuations in line with historical levels they're cheap and upside as the year played out. >> which one's your favorite based on the valuations you look at now and the sell-off we have seen lately? >> bank of america reports tomorrow the bigger banks are interest rate sensitive plus with wells you have some kind of a built-in expense opportunity given how missed managed the company is those two stand out as a better place to be. >> jason, thank you so much. we appreciate it. >> any time. tomorrow another big day for ba banks earnings and of course more broadly the

outlook for the sector and the economy which is just not performing everyone picking it as a sector in the year ahead. >> supposed to be the winning sector on rates. first on this show retail has had a rough ride with a 10% decline. up next we'll discuss whether the omicron surge will continue to weigh on the stocks plus rising mortgage rates turning into a house of horror just dai lern longetlsat o"csi bell." new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria.

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retail hit in today's broader market sell yaump with the gap among the biggest losers falling after morgan stanley downgraded it. yesterday i spoke with ralph lauren ceo here in new york. he weighed in on how the company is handling inflation and supply chain disruptions. listen. >> we are prepared for an environment that will be inflationary through both the pricing power that we have demonstrated over the past about four years and also through the supply chain conversation we are having, through the capabilities built around did world that allow us to drive productivity and efficiency to offset the cost pressures. >> i had a chance to talk with

albertson's ceo about food inflation and whether that rise will continue. >> we are prepared to go on six to eight months and tnormalize and supply comes in and some of the transportation changes ease up but right now what we are doing is prepared to give choices on brands, different price points and different cuts of meat. >> let's bring in president and ceo matthew shay who joins us now on a "closing bell" exclusive. kudos for pulling off the event in new york in the middle of a pandemic it was great to be on stage with those folks. how would you characterize what you hair from the lead irs in retail with supply chain and omicron clouding the outlook >> sara, great to have you with

us yesterday really nice job on the conversations that you had as you know john of walmart was on and target. we really had a nice group of execs there to talk about the issues two highlighted the inflation issue is real and persistent across all categories. david solomon's comments wage inflation won't go away and even if the other inflationary pressures ease later this year in some categories the wage inflation will only go up. we have challenges and supply chain issues persist i think this year until we get it back in balance and that won't happen until everyone gets back in the economy and the economy is fully

open. >> what about on the demand side what are you hearing and picking up with consumer spending and the outlook and might be different than last year >> it was very strong and as you have reported the forecast for retail sales for the holiday season about 12% and did 14% the numbers came out on friday very strong numbers. consumer were engaged. they were in october pulling the sales forward. lapping this year's sales will get challenging as we go into the year and maybe consumer shifts on the service side and moves to the goods side there's strength in the economy. trillions of dollars in savings.

paid down debt so i think overall we are in a good place and have to manage through the inflationary challenges and get demand back in line with supply. >> what's your view about buy now pay later? we have seen the growth and might well mean if consumers default the punishments and fees are low irbut getting to a point they default there's a huge amount of growth in lending to consumers there. >> i think that's a thing we always watch is what sort of consumer credit is being carried and the debt load. consumers are in a good place. savingsrates are high. households have paid down dead there are all kinds of ways in which companies and partners trying to serve consumersas i think they continue to meet consumers' needs and i think people are going into this

understanding they have a range of solutions to work for themselves and families and find the ones that work best for them gi given the risk to take on. >> what's on your plate this year, are you lobbying for build back better? would it help with the extension of the child tax credit that's expired and have helped the economy somewhat providing stimulus does that hurt >> we were really supportive of the infrastructure bill. we think that's critical investing to help the entire economy. that made sense to us. it was a bipartisan bill supported by parties in the congress and worked hard to get that across the finish line. there's elements of build back better that presents more

chal challenges, potentially the funding area why the industry performed so well in the pandemic is because the industry was healthier and part is because of the 2017 tax reform act to lower the corporate rate the big focus is on keeping rates competitive, the united states and globally and probably continue to be a number one priority. >> as we come out of hopefully this last spike in cases with omicron and also out of the cold winter, do you think the balance the way that consumers spend tilt to in-person shopping and services opposed to online physical shopping or since it is kind of a third lockdown that that big difference between the two won't be so pronounced >> the amazing thing i think in the pandemic is that somewhat counter intuitively first few

months of 2020 going into this it was all about the world is going to become driven or primarily by e-commerce and what we saw retailers do, open full-time or reopened in some jurisdictions, stores became the center of the experience and fulfillment and curbside pickup and something that every one of the speakers talked about. walmart, target, best buy. the physical location in the new world i think is even more important and the key is how do you use that real estate to create the best experience for customers and those that can do that at a high level continue to perform at a high level. >> a lot of companies talked about technologies that were exciting to them or new areas.

nfts and making revenue selling units for avatars on snapchat and places like that what's the most exciting thing that you ahead that could be a growth driver for the industry >> i think that as you walked around the show floor we had nearly 800 exhibitors there. some key traditional partners and think of the front and back of the house and some technologies are being deployed in customers feel that and see that whether that's in payment or fulfillment, delivery options, social engagement and some solutions in the back of the house. customers never see it and never appreciate what's happening. robotics or consolidate goods and don't ever see it and feel

it in the spexperience and taki friction will be a high priority as expectations increase for customers. >> cost savings as well. thank you for joining us. >> thank you. it was crazy 15,000 people in the javits center in manhattan. a blast from the past. >> wow i didn't know that many. i knew it was big. mortgage rates on the rise and weighing on the builders taking a look at the sector. "closing bell" back in a coue.pl it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off.

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1 of 10 million people that comcast has connected to affordable internet in the last 10 years. and this is emmanuel, a future recording artist, and one of the millions of students we're connecting throughout the next 10. through projectup, comcast is committing $1 billion so millions more students, past... and present, can continue to get the tools they need to build a future of unlimited possibilities. mortgage rates jumping, and that's weighing on the home builders in a big way. >> we're seeing the highest rates since those first weeks of the pandemic take a look. the average on the 30-year fixed hitting 3.7% today it was well under 3% a year ago at this time rates are now up well over 50 basis points in just the last month. and we got the latest read on

builder sentiment in january which fell for the first time in four months. higher rates didn't factor into that early read, but higher material costs and supply chain issues did and the chief economist noted that higher rates will surely hit the builders next month. all that sent the home-building etf down 4% and big names also down more sharply than the broader markets. tomorrow morning, we will get the latest read on housing starts, building permits and mortgage applications and that last one, i'm telling you, it could be ugly. guys, back to you. >> yeah, we've been warned thank you. up next, billionaire investor in hot water over recent comments about china and his latest statement may not be helping matters. we'lha dail veetls when closing bell comes back. careful now. nice! you got it. and thanks to voya, i'm confident about my future. oh dad, the twins are now...

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billionaire investor chamath palihapitiya under fire over recent commence about chinese. yesterday he and his co-host were discussing the biden administration's stance on china. palihapitiya said he would be lying that if he cared about the uyghurs. the minority group that the

biden administration says faces widespread state sponsored forced labor and other abuses. >> nobody cares about what's happening to the uyghurs, okay you bring it up because you -- >> what? what do you mean nobody cares? >> the rest of us don't care >> you're saying you personally don't care. >> of all the things that i care about, yes, it is below my line. okay, of all the things i care about, it is below my line >> he's now walking back those statements on twitter, writing, quote, after listening to this week's podcast, i realized came across as lacking empathy. as a refugee, my family fled a country with its own set of human rights issues. this is part of my lived experience human rights matter, whether in china, the united states or elsewhere, full stop, end quote. and, guys, i went back and listened to this i didn't know whether a few

comments had been taken out of context or not, he really keeps digging that hole and given multiple chances to clarify the comments i think it's worse than any kind of write-up that you read. what stood out to me is not that quote that we just listened to, but this line, every time i say that i care about the uyghurs, i'm really just lying. which was an astonishing thing to hear him say. many of us, when we watch all of his interviews and comments, on much less controversial topics over the years, wondered whether he's a disingenuous character and that added fuel on that image. an image that perhaps applies to all sorts of other comments he's made down the years on less controversial topics and, you know, he's made that u-turn and pseudo apology to say that he was lacking empathy is the understatement of the century.

but we, of course, now question how genuine that comment was, the lack of empathy comment when he's admit that had he lies about these things unbelievable >> well, i agree i think it's going to be hard for him to put this one in a box because he was very clear and as you said, repeated it multiple times and pretty pointed about his comments he's, you know, the hyper rational vc guy. he's very articulate about what he's thinking and saying i think it's hard for him to sweep this up. i think it's a hard position to defend it's not like he was saying, you know, as americans, this is not a front-burner issue for us. which would be something that a lot of americans can relate to we're not checking the news on it every single day. but to say he doesn't care suggests that human rights is not important. and i think that is a really hard position to defend and is going to stay with him, for instance, there was a "financial times" story today that his fifth spac had announced a deal today, but in the lead of the

article, amid the comments about chamath not caring about uyghurs. this is going to stay with him and his representation and what he does, i think. >> his company is called social capital. it's not really a laughing matter these comments that he's made but that title of his company is laughable in light of what he said over the last couple of days >> 100%. well, with that, we've got a few minutes left to go here, mike. we saw another really ugly session in the markets the dow had its worse day since november and the dow had been actually fairing better. but today goldman sachs shaved more than 100 points off that average. s&p down 1.8%. nasdaq down 2.6. should investors just buckle up? is this what we're in for as long as yields continue to rise? we did see a little bit of a breakout today and the fed continues to get into inflation-fighting mode. >> i don't know if we should buckle up in the sense of just completely extrapolating these

trends indefinitely in a straight line. you know, it's never the way it happens. the s&p is at a 5% pull back from its record high the nasdaq composite hit the 10% pullback threshold you're in the zone of where 2021 pullbacks were basically finished, even if we had to go sideways for a little while. it's a little bit of a test to see if there are those bids underneath the way they had been for a while. credit markets are not flaring up it remains about equity positioning and repricing according to what the yields are doing. 1.87 on the ten year, it's not completely a game changer, but clearly, people have confidence maybe it's going to settle down. by the way, i can't settle down because stocks continue to sell off aggressively and you finally get a flight to safety bid to treasuries maybe that is a way a pullback

matures. >> i want to say congratulations to my best friend, lauren, who had a baby today i know she's watching it in the hospital that's why i'm mentioning it. we can end the show on a good note. >> congratulations from all of us at "closing bell. what a great note to end the show on for this evening "fast money" picks up now. ♪ tonight on "fast money," there's much more pain ahead for the major averages and maybe your money just how much further he says some stocks can fall and what moves he's making right now. the shares of amc completing their round trip back to earth is this the end of the reddit revolution plus, oil and gas burning hot again. energy, once again, outperforming the overall market after this big run, really just how much gas is left in the tank we