easily you will have the blips and then a day like today begin high and moving high and then sort of comes back and hard to find cover outside of energy right now. >> that's a great point. a mudslide good characterization. >> good drink. >> thanks for watching "power lunch. "closing bell" starts right now. thank you. welcome to "closing bell." i i'm wilfred frost at new york stock exchange as we were just discussing there sliding off the session highs. >> welcome, everyone i'm sara eisen let's look at what's driving the action tech stocks see a rebound after a brutal start to the year tesla, microsoft, airbnb among the winners today.

c china cut key interest rates travelers and american airlines with more results after the bell we have a big lineup coming your way treasure secretary janet yellen will join us to talk about the economy as the biden administration marks one year in officer. you don't wanted to miss that live interview joo plus the ceo of csignet jewelers. after the bell the first faang stock to report results. results from netflix when they hit the tape. let's focus on the big stories to watch this hour mike santoli tracking the market mark mobius with us. mike, start with the move and the rebound we are seeing. >> it is kind 0 of a minimally acceptable rebound from a level everybody was watching

we lost some grounld in the last hour, hour and a half or so. seems the downside halted where people were maybe expecting and hoping it should where? points for days at the highs here we have no way to draw at the september 2nd highs that's where we closed yesterday essentially. a lot of stuff coming together 10% pullback in the nasdaq composite. it all was fitting together that it would be where you fight get a rally. we have gotten that rally attempt. even at the highs of the day 4600 and change not at yesterday morning's high always a give and take with a correction tactical dead cat bounce looks like the beginning of a strong rebound and vice versa you never know the stuff beat up is getting the

recover ri and not as if people rediscovering things but stretched the most to the d downs downside look at the mood of traders. this doesn't necessarily mean stocks can't go down from here but we are at the lows it goes all the way back to the summer of 2020 in covid and the market down 35%. had a bounce essentially people are in a bad mood paralleled with hedge fund positioning numbers. this is zone of a stand. that's a positive. a negative factor, a slower moving one and not about the 5% move in the market but the stocks on the nasdaq and new york stock exchange. total number of issues on the exchanges and a bull case is we have fewer stocks than the '80s.

i never bought that but this is something that's been a massive overhang spacs, small ipos and etfs it's records around the bottom of this market and it doesn't mean the indexes can't perform okay but a thing to chew through. capital is threw at the new names and reconciled right now. >> if you look at the wreckage, mike, the russell 2000 is looked to as a cyclical gauge right? down 4.5% this week. almost double that of the s&p 500 and 16% off the intraday high it is a sharp underperformer that's not lumped in the bubble-type stuff that people look at. tech and momentum names, cryptos. >> it does and it doesn't. it is not predominant those things but all that stuff is

there? amc second biggest holding in russell 2000 last time i looked. it is also just unprofitable companies. just those that's not profitable and bettea everyone says fed starting to get ready to tighten past the peak of economic growth has a binge on ipos and time to migrate to quality and at the expense of the russell 2000. i will have a look at how small caps are set up with earnings and not the russell 2000 but a casualties of this environment. >> you both push the russell into the red there, mike. >> like did. >> close to the session lows for the dow and s&p up .2% seeing more of mike in a moment why china stocks bumped today.

chinese tech stocks have a good start to the year. all in the green so far and outperforming the faang names. joining us is mark mobius. good to see you. >> thank you. >> let's touch on this rate cut that we have seen in china is that expected or a surprising potential sign of weakness in their economy? >> no. it was expected because it's clear the chinese economy is not doing well china has underperformed around the world. there's no question but that the chinese government is concerned and therefore wanted to do something about interest rates it is interesting that china is moving in the opposite direction of the u.s u.s. rates going up and chinese rates going down. >> yeah. so what does that mean is it a game changer that rate cut for equities in china or

seeing a brief bounce from likes of the chinese internet stocks following poor performance last year >> i think it's a game changer that the chinese economy will do better not like years ago it is more different to move this behemoth up in terms of economic growth but the lower interest rates will help the property market and other sectors in china now the so-called crackdow regulatory crackdown that the government implemented is having good effect that people have confidence in the big names. so far as that they're not monopolistic and the u.s. is moving in that same direction going after the big internet companies, big tech companies and trying to prevent them from

just monopolizing. >> what i don't get is how you can invest in china right now without understanding what they will do with the covid policies. they have a strict covid lockdown policy and cutting rates and starting to still late but what will they do? open up and let omicron rip or shutdown how do you invest in a scenario like that? >> in a country like china there's no way to have a complete lockdown. just not going to happen if you follow carefully you will see that in province by province are different policies some are closed and some are open if you look at the export figures of china they've been going up and factories have been operating so i don't think that

you are going to see a harsh kind of lockdown that you have seen in the past and you notice that europe is moving into a more open policy regarding covid. you've seen that spain said don't call it a pandemic but an endemic and i think china will follow the same direction. we are pretty much over it on this entire situation. >> elections coming in brazil i note from the notes that you shared with us is that a game changer for a buy or sell own equities there >> it is interesting everybody expects that lulu will come in again and we were positive about lula being president and then becoming president the market went up the policies were very helpful to the market. this time around his people are

peeking about the government becoming bigger and taking the lead in the economy which is not good news so my guess is that it's not good for the market and the market is not going to do very well going forward, at least until the election is over >> the other emerging market to ask you about is russia which has done really well its stock market i think world beating returns last year. what happens now, especially if russia does move with troops on the board irto ukraine whapsz to the assets in russia >> of course for foreign investors it is dangerous. we commented that you just can't invest in the country if you have this incredible political overhang, particularly if there's more sanctions coming. but just remember that the

russian market went up last year because of domestic demand they're interested in buying equities and why you have seen a booming market there we can expect the russian market probably to do okay going forward but no question that sanctions are not going to be favorable. we have to be cautious. >> cautious on russia. mark, thank you. always good to check in with you. >> thank you. >> get a global view. after the break, tailspin. a big scoop out this afternoon about a production halt at peloton. sending the shares lower we'll talk to the reporter that broke that story next. later don't miss the interview with the treasury secretary

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45 minutes left of trading look at shares of peloton down about 25% after cnbc's lauren

thomas reported the company will temporarily halt production of its connected fitness products lauren joins us now. kudos to you on a number of scoops on what's going on behind the scenes in this company tell us about the latest one not making bikes >> sure. thank you for the shout out. there has been a lot of news trickling out of peloton and today the company is planning to temporarily halt prurks of the bike, bike plus and the tread treadmill product. what's happening is so much demand from peloton pulled forward in 2020 and last year 2021 and as a result peloton invested in supply manufacturing capabilities to raumpb production and to meet that covid driven demand and that demand waned in recent

months i'm seeing in the documents that the holiday season wasn't as strong as peloton had expected internally based on the internal forecast so as a result the company is left with ample supply right now. not that same level of demand and will temporarily pause that p production in the months ahead. >> overinvesting in capacity is one thing. are we talking about the company ex-growth altogether cancelation from existing subscribers are not that far >> i don't think we are yet that point. what i see discussed in these documents it is more about future customers bmo was on earlier and speaking to the churn of customers and

peloton kept customers on board. i think that's less of a concern at moment. i do know that there are ongoing discussions about how to get existing customers to buy more, whether that's apparel or accessories. one is a strength product expected to launch this year the peloton guide. another example of something that the company is trying to innovate and put out there and someone that buys the bike will buy the guide, as well we reported that the guide so far early reaction on the peloton website that it's been a bit disappointing and not seen the same momentum in email sign-ups that they anticipated. >> lauren, thank you so much for joining us and great reporting

today. the stock down more than 20% for more check out lauren's full write-up at cnbc.com. we are at session lows for the broader averages s&p in the red fractionally. the dow with gains and up 462 at the high of the session. how the smart money is navigating the tech turbulence thinking about the rocky start for the sector and later cathie wood saying it would be in quality stocks but the dean of ny u disagrees check out the top searched tickers on cnbc. peloton has not made it into the top five 10-year tops the list.

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welcome back nasdaq giving back the gains from earlier today leslie picker has a look at the smart money thinking about tech in light of the volatility hi, leslie. >> hey it is not easy managing a tech fund these days. take for example the performance of the strategy return 1/7 of the s&p in 2020 we wanted to get a gut check, a pulse on what it is really like out there. we sat down with tudors with technology and disruption saying that the sell-off in equities has more to do with the pace than higher levels overall and

sharp hikes should slow for the rest of the year. >> i think at this point we're probably overdone on some growth software sell-off and going into hedges to help you price in maybe in overall slowdown on the index level more than those particular areas of technology. >> using indexes to hedge she's bullish on semiconductors and data infrastructure. to watch the full interview and subscribe to the newsletter go to delivering alpha.com. guys >> when everything moves in one direction like last year harder to significantly outperform and make the case to clients they warrant the higher fees. i guess they welcome the

volatile and they can potentially show clients that they can always create positive returns despite the headline indiagnosises are doing? >> yeah. that's the bull case for hedge funds and what they market to investors the idea of choppiness, volatility they can and do go short to protect the downside and the appropriate time to be investing with hedge funds. we saw that of course in march of 2020 when the major stock indexes took a big hit related to covid they were negative but not as negative as the overall indexes were and rebounded since then and then saw underperformance from hedge funds once again and now with this regime change, rate hikes andso forth, managers are say there's good stock picking selection out there. these are the environments where we thrive.

we'll see if that plays out. >> leslie, thank you. the dow joining the s&p and the nasdaq in the red. the nasdaq now down a third of 1% the dow down 20. signet jewelers reported a big jump in holiday sale just plus we are counting down to netflix earnings after the bell. we'll break down the results as soon as they cross about 34 minutes to that heading to break a check on bonds. a calmer session 10-year around the 1.83% where it was yesterday a little bit higher yields doesn't seem to be the culprit we'll be right back.

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here we go again stocks lower in the final hour s&p down .25%. shares of luminar soaring. the technology will accelerate mercedes driving capability for passenger cars the stock is up. key bank capital markets downgrading walmart. that stock down about 1.3% jim cramer talking about walmart in the newsletter today saying that he's trimming the position.

sign up at cnbc.com or point your phone at the code on the screen wilfred, now the small caps down .75%. >> nasdaq down almost half a percent. extraordinary that intraday slide in the final hour of trade into the red an individual stock to hit is wells fargo said that the occ term nabted the con sent order from 2015 regarding add-on products to customers before 2015 won't make a huge difference to revenues and shows progress in the work in the risk management processes and still have nine other orders from the fed to get lifted so a long way to go and it's not the big one and the fed asset cap that would make a huge

difference the stock down but that's because of the broader market sell-off wells fargo the best performer of the big cap banks. time for a news update rahel? >> hi, wilfred the faa approved altimeters. that includes all versions of some key boeing and airbus models. a report found retired pope benedict failed to act in four sex abuse cases and happened in the 1970s and '80s three of which revealed today and he denies any wrongdoing. we le is back in the hospital for more chemotherapy tumors have been discovered in

the intestines, liver and a lung. here's a first look at what american olympians will be wears. ralph lauren making the pieces in the usa from used plastic bottles. because apparently that's possible back to you. >> all about sustainability. good to hear thank you. 26 minutes to go before the bell and a leg lower losses are picking up steam. the s&p 500 is down by ab about .3%. materials, staples, industrials, communication services down. straight ahead signet customers are putting a ring on it we'll talk to the ceo next and

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the company saw holiday sales surging. same store sales up 35% and raising the forecast to 7.78 billion, 300 million more than the high end of the prior outlook. shares popped premarket. down 7% now. now joining us is the ceo of signet great to have you. >> great to be here. thank you so much. >> the numbers are super strong and you raised in december and the outlook again. clearly the consumer is in a good place and the strategy is also working talk about why you see the better numbers than you expected. >> i think it's a couple of things we have been on a transformation journey for four year just cultural transformation. we are bringinging new and innovative ideas at a faster pace and a strategic

transformation we committed to be the jewelry innovation leader and we are we are able to serve customers however they want to shop. a great example is that during covid we added buy online, pickup in store. curbside service these capabilities delivered twice the sales and the strategies are gaining traction. >> i know you mentioned that you were continuing to see strong sales in january i guess the key question is how sustainable this growth is. >> i think the competitive advantages are growing we are a highly vertically integrated company we are the retail irin the u.s., uk and canada that sources diamonds directly from the mines.

we have cutting and polishing facility in botswana we have a diamond marketplace where we have access to over two thirds, almost three quarters of the world's diamonds and a scaled capability to be able to offer our customers the very best merchandise on trend, in style, fast turning while also being able to offer them a great value and broadening the price points tiering up and great value at lower price points and resonating. >> what are you seeing from consumers of buying in stores and malls and online there's skepticism of the digital strategy are those sales continuing as people come out post-pandemic out of the pandemic. >> sure.

we saw a return to brick and mortar shopping over the holiday season the traffic was improved last two weeks before christmas it was almost at two years ago levels which is really quite a recovery on brick and mortar we saw the e mers sales up almost 18% up 85% on a 2-year basis hundreds of new features to add to improve the search and browse and all of those things are resonating with customers. i think it is a mistake to think about it as a brick and mortar business or a digital business for most customers it is really both so now our optimized store footprint which is still quite broad really gives us a strong

competitive advantage. >> what do you think is going on with the stock down 7.5% on everything you say sounds like good news and should be well received any concerns you arehearing of investors? >> i think we saw some profit taking for sure our stock up more than double in the last year and a best performing retail stock the fundamentals are very sustainable. i'm very pleased, for example, with the share repurchase reannounced today. the balance sheet is strong with the high sales, the improved margin but because of the inventory and working capital improvements we have a lot of cash to be able to

deploy we made two great acquisitions in the last year to help build the business we invested in digital capabilities and talent and pe people i think we'll say 2021 was the year of talent in the history of signet we announced a $500 million addition to the buyback authorization and a $250 million buyback. so while we think the stock is at a good value we are able to make sure that we are giving back cash to the investors through a repurchase. >> didn't have the supply krucrunch that so many others have. >> thank you. >> ceo of signet really slipped as we have

been approaching the clouds. down more than half a percent on the s&p. with 17 minutes left of the session. discussing that sell-off boo the close and peloton shares that are plunging and more in the market zone next and netflix reporting at the top of the hour

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welcome back we have a big lineup in the second hour of "closing bell." we'll speak with treasury secretary janet yellen on the economic priorities for the second year in office live at 4:30 the numbers and analysis of netflix due to report after the close and dean of evaluation of nyu why cathie wood has it latest call on value stocks and new products from beyond meat and if they can help turn around that struggling stock. all in the second hour of the show with 12 minutes left of trading we are in the "closing bell" market zone. mike santoli is here and today strategist stephanie link with us good afternoon. >> hi, wilf. >> stocks losing significant ground over the last two hours of trade we are at session lows approaching the close and

session lows not just a dip. down a percent for all three. >> the market has the look of people who want in going against people who need out. that's the way today went. seemed like based on the 2021 trading patterns we had done brought down to 100-day averages the things that fit into seemed like the market finished with the pullback last year doesn't seem to apply. talked yesterday with a change of character looking at the s&p 500 basically at the early december low just an old yarn that says that if you go below the december low in the first part of the new year is not great some strategies turned negative so i think it's mechanical with an options expiration tomorrow and reasons for people to sit on

the sidelines that it's not really creating the resill yentd we were used to last year but weighing on things to me. >> so much for the minimally acceptable rally >> this morning, yes. >> fell apart. steph, now down more than 5.5% forrian in the s&p looking at the worst month since march 2020 are you shaken by this action? are you coming out of the positions here especially the cyclically exposed ones? >> no. i'm not. as you know the s&p is down 5 but the nasdaq is down more. and it's also having a real struggle and stocks within the nasdaq especially tech and high growth and the high valuation tech names are hit much harder

as they're not in the popular mode last year they sold off last year. i look at rates driving the market and which sectors will do well and which won't and rates coming down from the last couple of days. velocity of the move to today from necessary is substantial and the market doesn't like speedy moves of anything of any kind and the fact it's calm today made me feel better and why i thought growth would continue into the end of the day and the next couple of days but looking at the rotation it is vicious. growth might be leading today but gave it up and then value is outperforming by 700 basis points i think as a result i like where

i'm positioned because the stocks and the sectors have held up better. i thought it was very encouraging airline commentary bookings how they are recovering nicely as omicron we get past it. i like the themes i like inflation is here. did you see that the eurozone cpi number at 5% and germany 24% year over year inflation is everywhere. >> yeah. and comments said she doesn't want to take an aggressive stance and interesting strong inflation surprising and different take expected to be with the fed to be hawkish.

>> and the euro, the dollar stronger today shares of peloton lower this amp following a report of cnbc's lauren thomas saying the company will halt production of the bikes and the treadmills the internal documents showed a demand around the world. peloton down 24% down 85% from the peak in late 2020 steph, some point it's lost all pandemic gains does this look like an interesting stock to buy beaten down too much no why? >> you know i do like to try to find at a consensus contrarian ideas. we don't know what their strategy is. seems to be changing quite rapidly. now all of a sudden inventories are too high

demand is softening benefitting from covid clearly and now you don't know what they will do it is very confusing they don't have earnings competition. i think they need to do a deal and i don't think they have the wherewithal to do a deal and diversify and the management lost the way by the way, the sell side still 50% of the sell sides with buys on this thing all the way down more capitulation has to come down. >> they added the david bowie rides. >> there's something. >> early session gains diana olick joins us now with the story. >> a fan of david bowie. but on to housing. look the stocks are reacting to a mixed bag today. the home building etf rose this

m morning. that after the december read on existing home sales lower than expected for december but the full-year sales highest since 2006 inventory hit a record low and mortgage rates are a nearly two-year and labor and supply chain issues keep them from being as productive as they might like to be back to you. >> thank you mike, i did want to pivot back to the broader market just down 1.3% on the nasdaq giving up the intraday attempted bounce again the vix is spiking does this feel like a washout that we can start to buy or very hard to try to catch that falling knife? >> this is an early astonishings of a washout

it is nervous and anxious and people are confused but i don't think you necessarily seen that urgent run you have seen a pattern of early rallies that fail and have to burn up the tactical capital to making a low maybe that pattern changes a little bit right here. the peloton headline is when things started to accelerate lower in the overall market. a prerequisite of a base is that the stuff that's been really blasted that maybe is finished and maybe sold out and you have down leg there is and the rally in the morning led by the wreckage and we haven't had a 10% pullback in the s&p 500 since december of 2020 for 5 seconds. right? sort of just a pullback off the

lows and not crazy to get one and a painful, jagged process probably if it doesn't cascade lower from here. again, i don't think anything is determined not a way to look and say this is how it will happen because it's a dynamic process and today is not about headlines in my view it was very tactical and figure out whether we have done enough on the downside. >> down 333 on the dow to your point, mike, the ark innovation etf is holding on to gains thanks to bio tech names bitcoin up 2%. holding on to gains. netflix is set to kick off earnings after the bell. julia? >> sara, with netflix the number one thing to watch is subscribers. projected to add 8.5 million in

the fourth quarter analysts are less bullish expecting 8.2 million to be added in the past quarter but even more important is how many subscribers netflix forecast to add in the first quarter analysts projecting 6.9 million net new additions. we do expect the earnings conversation to center on how content investment is paying off. guys >> thanks so much. those numbers due of course very soon the close two minutes away mike >> they started out to the plus side with 80% of all volume in the morning. that's reversed. it's been some pretty heavy determined xitds going on in the

afternoon. once we kind of broke the momentum of that rally you have selling with volume and expiration tomorrow might be an opportunity for a turn growth versus value is slippery. banks, software. widespread the banks given up a little bit. slack isn't taken up by sa software mid-20s. omicron highs above 30 or so we are close to the session lows touched five minutes or so ago only one sector on the s&p

higher that is utilities. we had all 11 sectors higher earlier in the session as the bell rings down just an ugly turn. stocks down 1.3% on the nasdaq back to "closing bell. i'm sara eisen with wilfred frost and mikesantoli, cnbc senior marks commentator comi coming up, janet yellen and results of exit. first steph nir link is with us. joining us is ed lee from "the new york times" awaiting netflix

earnings technology, steph, in the cross hair just the nasdaq down 1.3% could earnings be a lifeline for this group as we await the netflix numbers and the coming big cap tech stocks over the next few weeks >> it certainly could especially pockets hit that have quality earnings and good end markets like for example the semiconductor stocks all of those end markets are quite strong like in the trillions if you go out the decades so there's going to be opportunity and in addition to the earnings i think there's very strong free cash flow and going to save the day there's such a big allocation to tech and comm services notice s&p 500. and so you're going to have to

have the other sectors do better we saw excellent results this morning from union pacific the airlines nk throw away 4q but the rest is encouraging. it is a stock pickers' market. you can pick some tech where you feel confident semiconductors is where i'm at and also into enterprise software and enterprise i.t. recovery names so you want to be careful but find some ideas and we have dry powder. >> want to get to netflix which is sliding 8% because of a disappointing guide for next quarter on the global streaming paid net additions which is where the miss comes in for the most part. 2.5 million. the guide next quarter of paid net additioning the forecast is

closer to 7 million. let's run through the quarter. revenue 7.7 billion in line. eps a beat for the past quarter. 133. the forecast for only 82 cents and the paid net additions a slight beat. 8.3 million. the expectation is 8.2 million with the forecast the revenue part is only slightly light about 7.9 billion whereas people expect 8.1 the eps is a miss. 286. people expect 346. paid next additions next quarter with a big miss and why the shares are sliding forecast of 2.5 million. the expectation is 6.9 let's bring in julia boorstin with color on the numbers. julia? >> yeah.

i think you are absolutely right to focus in on the forecast for subscribers at 2.86. so low indicate that is netflix is not seeing the rebound in growth that many hoped to see in the first quarter. less than half of the anticipation the letter to shareholders saying we're optimistic. we are improving netflix to please the members grow the share and lead in this time and not just competing against the other subscription services and note that the u.s.-canada region added 1.2 million subscriptions in the fourth quarter growth from the third quarter when it added just 70,000 paid memberships and remember in the quarter before that it was flat wh

negative so they are showing growth but it was the largest contributor though it added 3.5 million, a million fewer than the prior year so really interesting to look at the trends here. one think that's interesting is the trend is going higher so it's traditionally it always trenlgds up toward the end of the year they saw that number rise into the end of 2021. and it looks like it's going to continue to ridse through the year and slowing weekly net adds they talk act the strengthening of the u.s. dollar the stock is down about 10%. back over to you. >> thank you so much for that,

julia. let's bring in an analyst. this is clearly a big miss on the guide particularly the paid net adds what is your take and the share price reaction >> good afternoon. i think it's certainly calling into question the ability of netflix to sustain the type of growth that we have seen over the last decade. also commenting on the price increase one has to wonder if finally we see a type of demanld elasticity that's making some of the s subscribers to pull back there's encouraging aspects of the report internationally seen latin america coming back after the weakness asia pacific, the runway seems to be long deexcite the results

this quarter below expectations but i think the long term secular growth story for netflix remains intact we have to see whether there's general trends to parse from this overall trend but all in all the key question is to what extent to sustain the financial profile and communicate to the street of acceleration to free cash flow starting this year which perhaps they pay more attention to and whether it's buyback or potentially users of cash. >> so orn your point of competition, they have a competition section but they admit something interesting. competition intensified as tamtd companies develop streaming offerings.

while this added competition may be affecting the marginal growth some we continue to grow in every country. sort of acknowledgement there that it is impacting and halting a little bit of their growth, don't you think? >> yeah. i think this is for the first time -- yeah can you hear me? >> yeah. go for it. >> i feel like for the first time netflix is admitting in pretty plain language competition meaning other streamers matters. cutting into the ability to grow the market especially overseas they talked about latin america with a covid overhang on the economics of the region. it is a cheapest in terms of rpu, the rev knew per user in that region and covid affecting the economy preventing uptake. again it is going to come down to the fact that there's so many

more choices around the world. u.s. is most saturated but they're oenging more of the content and they can now deliver it around the world with ownership over it. that's the worry for netflix we had this great head start overseas now the studios that produce this stuff playing the same game we are and that's an international company and where the growth is coming from for them it is noteworthy to say that outloud. >> the stocks down back down to $4.50. has it grown boo the valuation >> no. it's always been -- the good news is it's probably at the lowest cash flow that it's been in the streaming era and the last decade for netflix. bad news is above 30 times and

never really been value based much on today's earnings power an issue with the guide on subscriber growth is sometimes when netflix gives a disappointing guide they front loaded some. that wasn't the case this time a lot of folks raising prices in u.s. and canada last week that pop in the stock went away by this morning i think inferring that maybe that meant tough things for the subscriber numbers it trades on value if it's going to be the core of television is becoming i don't know that's the argument. it is not financially how it is performing today. >> i want to highlight something. seeing a reaction in disney. roku i wanted to highlight what they

say act the u.s. dollar because thank you get 60% of the revenue outside the u.s. can they offset that with the price increases? how are they managing this issue? >> that's a fair question. simply i'm surprised they haven't called out that currency impact earlier but i think they have kind of tried to mitigate that >> i was cut off i don't think we were done, though. >> can you hear me i was just saying that the impact of u.s. and canada accounting for 46% of revenues

and about a third of subscribers so i think the currency impact will get more pronounced as we cannot look out and to their credit they have been able to pass through the price increases. latest one now closely watched and something to get more play time to the extent that the dollar remains on the current levels. >> steph, down 12% now netflix could you get tempted to buy it? >> no. because of competition and trades at 46 times earnings. you have to crush it and beat and raise and they lower and admitting act competition. that's the industry. i don't own any of these names i used to own disney

they had record content in the fourth quarter and should have crushed it no touch for me. >> what about you, ed? what are you listening for on the call >> i want to hear more about the operations and spending the money for content. they talked act the gaming platform what's that look like? gaming is an interesting area with facebook talking about the metaverse. everyone is jumping in or reinvesting. people watch on television and netflix doesn't have the capability yet and has to be done on mobile and people don't watch netflix on mobile so capital allocation around that investment is key to understand for the future growth. as enveryone pointed out

competition is hurting them. this gaming thing they need to invest big. >> ed lee, thank you so much tuna, steph, thank you down 12.6% in after hours trade and more analysis later in the show cathie wood thinks value stocks are in a bubble but the dean of finance will join us why he disagrees. later treasury secretary janet yellen on the political pressure the white house is feeling over inflation as they round out the first year in office back in two minutes. that's why td ameritrade designed a first-of-its-kind, personalized education center. oh. their award-winning content is tailored to fit your investing goals and interests. and it learns with you, so as you become smarter,

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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. welcome back if you are just joining us here's a look at how the market finished what was an ugly day, look at

the final hour of trade. a collapse looked like a rebound today and then the spill into the close. session lows there's the netflix share price right now. down 12.75% because of earnings gist released. forecast worse than expected they acknowledge that the competition is hitting the marginal growth rate talking more about netflix later but the market closed at the lows and netflix not helping sentiment. trading down almost 13% after hours. the nasdaq closing down 1.3% dow falling for the fifth day in a row. >> yeah. really big intraday turn around. let's talk about the broader marketings ark invest ceo cathie wood with a warning on value stocks. saying there could be a real bubble building within that group and noted the valuations for many innovation related stocks cut in half not the first time to take a

nonconsensus view on that growth versus value split. >> not only good deflation and bad deflation at work here but now the beginning of cyclical deflation and we got hit today growth strategies got hit. there was a shift todefensives and i think a lot of confusion but if growth is going to be scarce because inflation will come down our kind of strategies which generate revenue growth rates in the 25% plus range are going to shine we are not a bubble. we are not in a bubble our strategies would be flying if we were we have not begun rewarding innovation for what's about to happen and so that's why where the conviction comes from. we couldn't be more excited about what's going to happen now. i think the bubble -- if you ask

me is in the bench mark stocks. >> let's bring in a guest from nyu school of business i don't know where to start but i think the first point is a lot of those smaller mid cap tech stocks that appear in wood's portfolio fallen a great deal and cheaper than last february. >> that's a fact the reason for that is very simple these were momentum plays and momentum shifted against them. sounds delusional to talk about bubbles with tesla and square and teledoc. talking about bubbles then talk about bubbles even at the reduced prices at which you hold the tech companies so i think that if you're going to make an argument to stay in tech stocks it is a little bit

better thought through than pointing to the rest of the market saying that looks like a bubble to me. >> do you think some of those value stocks though are also looking expensive? it is interesting what happened to bank stock this is year despite decent earnings have pulled back a lot. >> if you define value stocks across low ratio pe companies 2021 is mixed. financials had a good year but staples didn't do that well so i think we might need to start using categories that don't fit in the old time value and growth because i think you will see the market different yate across the value stocks so if you want to make the arguments that financials are overvalued i'm willing to listen. what's carrying the market up is this low expected return environment. and if that changes then i think

you will get a lot of great pricing across the board and hit value and tech stocks, nobody's going to be safe in this carnage. >> so what's a fair price? how much damage do you expect, say, for the nasdaq composite with a lot of these muomentum names and the mega cap faang names that act defensive basically correction mode for the nasdaq 10% off the highs. what sort of level is appropriate? >> you have at least another 5 to 10% correction in the overall market and perhaps bigger with tech companies because i think when the value lies way out in the future i don't care what they look like now but the value to attach in two to four weeks from now it is going to be lower.

so i think it's going to be damage across the board and greater with growth companies. you will see the damage greatest in tech companies. >> what about mega tech? >> if i want to hold long term i would rather have the money machines at the top. i'm talking about the apples an facebooks of the world they will be hurt like everybody else but they can ride it out and the pricing power to live through inflation and higher rates. >> always good to check in with you. your thoughts on the market. >> thank you. >> we appreciate it. why small cap names may have more to prove and treasury secretary yellen talking about the top economic priorities of

the biden administration's second year in office. we'll be right back. 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. visit indeed.com/hire and get started today. thanks for coming. now when it comes to a financial plan this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here? options?

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grubhub. ♪ chicka-chicka today marking one year since president biden took office. in that time all the major

averages have rallied. dow, s&p 500 up double digits. on the economic side, unemployment rate has dropped below 4% gdp back to prepandemic levels but inflation is still red hot up 7%. joining us for an exclusive interview is treasury secretary ja janet yellen welcome back nice to have you. >> thank you so much it's nice to be with you. >> so there's the set-up we are coming off a strong year of economic growth millions of jobs created there is this question of inflation. and what the environment is going to look like we had another ugly close on wall street. do you still expect inflation to moderate to normal 2% levels this year? >> well, i expect inflation throughout much of the year, 12-month changes to remain above 2%, but if we are successful in

controlling the pandemic i expect inflation to diminish over the course of the year and hopefully to revert to normal levels by the end of the year around 2%. there is a lot of uncertainty. we are doing all the things that we can to deal with supply chain issues that are pushing prices up of course, you know, the federal reserve has an important role here we strongly support an independent federal reserve. we have nominees to the fed that we think will do a good job in helping the fed, they're committed to achieve the dual mandate of full employment and price stability and for our part there are things that we can do and are trying to do to boost labor supply to make sure state and local governments have the

resources they need to deal with the pandemic to keep schools open things that will make the safer for people to go back to work. and of course, the ports and tried to take steps to facilitate, for example, the number of people who have licenses to engage in trucking but the fed has an important role to play here, as well. >> no question about it. and that's what's causing some consternation i think on wall street what is your expectation for the economy? if the raises four times maybe more to control inflation how likely is it to hang on to this recovery >> well, look. you know, i won't on what the fed should do. they have a dual mandate which is to keep the labor market strong and to make sure that the

economy continues to grow while bringing inflation down and i have confidence in their ability to make judgments about what that takes a year ago going back to the challenges we were facing in the federal reserve facing unemployment was extremely high. we were all worried that we would be facing a situation like we had after 2008 when it took almost a decade to get back to full employment and the decisions with congress about the american recovery plan reflecting the desire to not repeat that to make sure that they would have the resources they needed to to get the

economy back the normal again and the fed played a role with an expansionary moll monetary policy and the unemployment rate has fallen the most in a year in american history we had over 6 million jobs created. we have a good, strong labor market and i think if we can deal with the pandemic so that people feel confident in going back to life closer to the way it was prepandemic and come back into the labor market that some of the supply pressures will ease and inflation will revert and the fed needs to recalibrate monetary policy to facilitate those adjustments. >> i wanted to ask about russia and ukraine if i may

we heard yesterday from the president how some form of action from russia into ukraine could well be eminent. i wondered how ready you are if called upon by the president does it take a matter of hours for sanctions and how crippling might they be for the russian economy? >> we have been preparing and the president has said that he would impose severe consequences on russia if it invades ukraine. and we've worked with our allies and are prepared to impose strong, strong measures that russia will feel we hope that russia will look for a diplomatic solution but we're prepared to impose significant consequences. >> there was a story this week whether the uk delivered weapons

to ukraine they flew them orr the baltic sea over poland to the ukraine rather than to seek clearance over germany you spoke with allies. i wondered if there's a dimpbls in opinion with uk and german allies on the sanctions on russia should be. >> we want to stay united with allies and the economic ties, of course, between russia and europe are stronger than they are between russia and the united states. so we're wokking very closely with them to understand their concerns and make sure that we take them into account in designing our responses. >> secretary yellen, beyond the topic of russia the president was asked about build back better it is something that you have

been pushing for sounds like the administration now expects this to pass in a piecemeal form instead of a whole package and curious what your priorities would be to get pieces of it passed to boost the economy and fight inflation. >> you know, i see that package really as addressing longer term challenges facing the u.s. economy. it's supply oriented package it seeks to make it easier for people to join the workforce by providing support for child care and paid leave that will boost the labor force participation. help with elder care put in place training, workforce training, education programs that will boost skills and labor

productivity over time and really many of the pieces in there are very important and climate change and the portions of the package that deal with climate change are critical. you know, we need 50 votes in the senate to get this done. the president has been working with members of the nat to try to put together a package that has that level of support. and he'll continue to do so. so if there's certain things that drop because of lack of support it will remain priorities of the biden administration and things that president biden will have several more years to try to get done. >> at this point, with no package on the table and nothing passed and the expiration of the child tax credit, what's the fiscal impact on the economy

this year? are you looking at a big drag that could really slow down consumer spending? >> it has been a boost to consumer spending this year. the payments went out monthly and i believe they amounted to about $19 billion a month so we had very strong fiscal support for the economy this year. that's one of the reasons we had a rapid recovery and next year the level of fiscal support and beyond will diminish there will be more fiscal drag but households are in good financial shape. in many ways they have come out of this even stronger than they were prepandemic and there's a buffer stock of savings that's accumulated that i think will continue to support the economy in the years ahead even with

less fiscal support. >> secretary yellen, you have a year in the books now as treasury secretary i just wondered your reflections on that job compared to being fed chair, which you enjoy more and which gives you more power, sway and influence over the u.s. economy. >> i feel very privileged to have had a chance to hold both of them. they are really different jobs the fed job as a narrower focus but it is a very important focus. on monetary policy and financial markets. there is some overlap at treasury i'm very concerned with financial markets, threats to financial stability. and now as treasury secretary chair the financial stability oversight council which i

previously served on but the treasury role is very large. we play an important role in working with our allies around the world on a whole raeng of issues from climate change to support for recovery that's even across the global economy. helping relieve dead of poor countries. and we have a huge role in running almost a trillion dollars of programs here at treasury that are part of the american recovery plan so there are wider range of responsibilities, many operational but also an important role in broader economic policy. >> and you mentioned that you hoped and expected inflation would get back towards 2% from the 7% level if it doesn't who deserves more

of the blame, you and the prt and the political seats or chair powell in the fed seat >> well, these are responsibilities that are shared the fed clearly has an inflation mandate to be combined with a mandate to achieve full employment the world is a very uncertain place. we have been hit by a pandemic that is created economic challenges that none of us anticipated and it is our hope and intention to bring inflation down to levels that are consistent with the fed's sboer preation of price stability but let's remember that we have had an enormous success. when you look at all the bad things that did not happen, that could have happened without the

interventions that we made with the american recovery plan, we could be looking at high unemployment we could be looking at an increase in homelessness with -- we could be looking at an increase in child poverty these are bad things that we were tremendously worried could have happened. young people entering a weak labor market scarring their entire labor market experiences these bad things did not happen. inflation rose more than most economists including me expected and of course it is our responsibility with the fed to address that and we will. >> secretary janet yellen, thank you so much for joining us to mark this one-year anniversary in the biden administration.

we appreciate it. >> thank you, sara. >> we certainly do great to have her with us. shares of netflix by the way as you know plum itting after weak earnings. down good morning almost 20% we will be discussing why it's sliding and what to expect on the conference call next 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 for those you love. vanguard. become an owner.

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time for your rapid recap. stocks selling off this afternoon giving up big gains from earlier in the day. all three major arches closing in the red peloton, temporarily halting production of the bikes and treadmills due to waning demand and cost concerns according to internal documents obtained by cnbc's lauren thomas saying there's a significant reduction due to increased competition and

shares plummeted 24% netflix was the subscriber forecast that came in weaker and the stock is down more than 19%. mike santoli, this is quite a hit after hours. a few things to tee offer of subscriber forecast. they acknowledge that competition is hurting the ima marginal growth rate. >> exactly the market is being forced to radically re-evaluate the ultimate growth trajectory and when netflix is going to get to a certain level of maturity and in theory is a low ere valuation. i think those things together for scaling the guidance shortfall saying 2.5 million net adds in the current quarter, the consensus has adding 24 million

subs each year in 48 million supposed to get epa get you to a point of let's say $10 billion in cash flow in 2023 right? so that's next year $10 billion. so that's why it's so sensitive to changes it doesn't mean that 2.5 million a quarter is a new run rate and they will come back and say we believe the invest mments will y off but i think that to your point about not being so sure that they're getting to pre-covid levels shows you the return on investment isn't maybe what it once was. >> down what 19% in after hours trade and will discuss it more but first time for a news update with kelly evans.

>> hi. ncaa schools approved a slimmed down constitution to open the door for changes governance shifted to schools and conferences after supreme court ruled the n caa cannot limit benefits for athletes but p prohibits them to pay them. the supreme court ruled to strengthen the rights of plaintiffs in trial just the jurors should not have heard of a witness that was not available. justice sotomayor saidthey hav a right to face their accusers. new orleans jazz fest will return the big music event is back after a hiatus because of the pandemic tickets are now on sale. on the news tonight the town that banned tobacco and vaping sales to anyone born this

century. how it's working out join me at 7:00 eastern. i'll see you then. back to you, sara. >> all right see you then 7:00 eastern thank you. we are all over the move in netflix after hour the key themes to listen for on the conference call in a few minutes. we'll be right back. the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments

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netflix shares are sinking following hour the company noting intensifying competition giving weaker than expected guidance for the q1 global paid net subscriber ads among the names are roku, down more than 6%, disney down now 4.5 and cbs and let's bring in alex sherman media and tech reporter where did the biggest surprises come in for you, alex. >> the biggest surprise, sara is the netflix move down, the extent of it netflix gist does not fall 20% or roughly 20% in a day. during the break i was chatting with my colleague artie levy, you have to go back about a decade for netflix to fall 20%

in a day so yes, the subscriber numbers came in light for the first quarter but the extent of the move down, as the conference call begins here in a few minutes, i'm curious what the co-ceos say about the stock move they probably won't say anything they say it is a near term blip and things will right in the long-term. but you don't see this type of action on the down side too often. >> that says something about the overall market as well quickly, alex, any key questions on the strategy for the subscriber misses in q1. >> the shareholder letter that netflix put out said while this added competition may be effecting our marginal growth sum, that sounds like a throw away line it is about as strong as a comment i could remember netflix ever saying that competition is impacting their growth they just raised prices in the united states and canada that is going to be a big point on the call i think.

which is why did you raise prices did you raise prices because you're confident that people will stay with you, because your content is to strong for years to come or is it possible that you raised prices because you see the growth slowing, particularly in the u.s./canada region and you need to generate earnings in a new way. >> what is slowing marginal growth sum exactly mean. alex, thank you for popping on as the stock is tanking after hours. down 19% when we come back, small caps have had a rough start to the year as well falling nearly 10% coming up, mike santoli to break down what is driven this move lower and what it could mean for investors and the rest of 2022 when "closing bell" comes back expect things to be simple. and they want it all personalized. with ibm, you can do both. businesses like insurers can automate it processes across clouds.

so agents can spend more time on customer needs. and whatever comes your way, you've got it covered. saving time and improving customer service, that's why so many businesses work, with ibm. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire thanks for coming. now when it comes to a financial plan this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan...

...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.

welcome back jamie dimon's annual compensation just crossing the wires. $34.5 million for last year. that is $3 million higher than the $31.5 the year before. if you strip out that special award he got in the middle of last year which you should strip out for this particular discussion, whether you thought it was right or not. and you have to say what is a less than 10% increase for what was a record year both in terms

of very strong earnings and revenue and also very strong share price performance is not that big of an increase. you could argue all day long whether the starting point is high but for a bank of its size, a half a trillion dollars in market cap, up from $31.5 million is probably around the minimum you would would have expected it is really interesting to see when the investment banks come out because their performance relative to their history so strong last year and we'll bring them to you when they start crossing which will be in the next couple of weeks dimon getting paid $.5ilon34 mli last year. we'll be right back. this... is the planning effect.

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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 for those you love. vanguard. become an owner. has not been pretty out there. if you are invested in the overall market, but really technology, mike, which is down 5% for the week. going into a friday and it doesn't look like it will get better with netflix shares down double-digits after hours. >> yeah, that is an added pressure point on the nasdaq 100 tight names. you'll see if we get a little bit of okay fine that is capitulation type move s&p 500 down 7% not yet to 10% the market is starting to look over sold.

you never know when the pullback has fully ended but some things are starting to line up for where the market should respond on the upside, at least for an attempt. >> as we hand it over from "closi "closing bell" to "fast money. the happiest of 15th birthday, have a great show and a glaet year ahead happy birthday, "fast money" starts now >> and thank you, "closing bell." tonight we're celebrating 15 years of "fast money." we have a premier guest list for the party. one of the first guests on the show carl icahn and howard lutnick will break down today's market action. and a peloton shares closing mr. the ipo price. can the company climb over this mountain or is this the end of the road and later shaky foundation, the housing trade getting wrecked again, the sector down 15% what does that mean for stocks to break it all down on this special occasion we're bringing