>> thank you as things get choppy we'll take a quick final check of the markets looking to open in the red again. dow down about 350 points. nasdaq off 242 points. s&p 500 off about 60 points. then bitcoin trading below 35,000 we'll see whether it breaks 33,000 for now we're going to hand it off to our good friends at squawk on the street make sure you join us tomorrow good morning futures are rolling over here as the nasdaq looking set for a fifth straight 1% loss a fed meeting, a third of the s&p meetings including ibm tonight. it begins with the ongoing market volatility. futures point to more declines the s&p down 8% year to date.

>> plus keeping an eye on oil as it moves lower traders are watching the russia/ukraine pressure. kohls and unilever appear to be the latest targets. we'll start with the markets after rough week for stocks. jim, friday pretty ugly. we're not starting this week with the best note. >> yeah. we've got the problem. we have 600 companies who became public had the spak or ipo in the last year. it's hard to value them. i was going over this the cbnc millennial index and i've got dismal for tonight, too, and the club i've got 10 of them that are interested at least not by sales but it's interesting. the average index is down 57%. average. now down 57% we can say, okay, it's just getting started. like i heard so many people say. >> wait, what average stock is

down 57% >> chase andindex. jason gilberts -- the millennial index. >> okay. what includes on this? >> all the stocks people the millennial's like. >> i see okay >> and so what happens is you look at it and say, oh, jeez, rigs we're starting to roll over no they're down 57% i hear people saying it could get serious. i say what is down 57% they have to go to zero. no, the answer is you have to struggle and every negative -- every single tick down versus what we had when there was 13 seconds of left of a big bills victory, which was a lot, by the way. so, i mean, just as easy we said that when the chiefs beat the bills and the market goes lower. i mean, there is so little to cause what is doing this, other than the fact that -- >> the fed is raising rates. >>well, that's kind of they've

been doing that for weeks. >> i know but -- >> biden sends families home as if somehow putin is going to innovate ahead of when he has the meeting with xi at the olympics i don't know. >> interesting that the market suddenly seems to kused on the potential conflict in ukraine when, obviously, the tensions have been rising at the same time the troops -- >> well remember -- >> trump fractured nato. and germany gets much of its energy from russia it's not them saying listen i'm trying to draw a line on the ukraine. >> let's talk about the marger market here. it's been more or less day after day of 1% down, significant. nothing that sparks us have a special night, by the way. not nothing. instead it's been a lot of pain kind of every day. it's not just these millennial indexes. you're talking, i mean -- i hear

from a lot of hedge fund buddies they're down dramatically. a lot of them are down 10, 15, some 20% for the month it's not yet over. we have another week here of january. >> i think people decide the earnings are bad that the fed will tighten, that the russians will invade, a lot of companies that have become public are not worth anything there's little take over activity other than kohls, which we'll talk about. >> i remember an act vision deal last week that was big. >> i'm not negative. i'm trying to give you a positive scenario here i'm saying when stocks are down this much, karl, that you shouldn't just say holy cow, i'm gifting killed because you should be realizing you've been getting killed so now you have to decide what stocks are down from a certain percentage of their high that can be worth a great deal. these are ones you have to do buying. >> some analysis over the weekend that a good chunk of crypto holdings are now

underwater. >> yes. >> was it your view friday you thought some money would roll over from crypto to equities >> yes i do and crypto is collapsing i have to say when you see crypto down as much and people who haven't been into crypto said i have to get a position in this the issue that keeps happening to me, there are absolutely so many different securities all over the place the [ speaking in italian ] s -- spaks never stopped you have so many companies there are redemptions and funleft and people don't understand spaks. >> a year ago we were talking about it i was taking a critical eye toward spaks there are still hundreds of them that haven't done a deal, as of yet. it became a speculative part of the market they have suffered as have many other high multiple low earnings companies or let's call them not low earnings or any earnings but the prospect of them

jim, it extended far beyond that names you know well that are down dramatically off their highs. after a very strong year last year, many of them but it doesn't mean that the pain is not felt broadly speaking here. >> should we just decide it's over and let's cool off selling here >> that's the question. >> and we can get back in. are you that good? i mean, is this something you can do easily. can you decide, you know, spotify is down 7. this is the level to buy spotify at 188 they'll really report this week. i don't know any time you buy anything in the last half hour you're literally -- and i don't know i would tell people, look, if you want to know where to buy, the last half hour has been a nightmare. we don't know. a lot of what happened is we don't know what is going on. we don't know who is selling look at docusign that's a good one. it's up about $10 billion from

before the pandemic. then you say to yourself, well, didn't they add at least $10 billion in value given the fact we now all use it? so docusign is a dream. >> it was one the arguments on peloton on friday. saying they're a larger business than they were before th pandemic started yet they're back to the ipo price. >> the problem there, i think docusign gained a lot of adherence and still gaining and there's transactions where peloton may be full up i don't know the circumstances of what happened in terms of manufacturing. i know it's possible when you look at the planet fitness numbers, they show you that people want to get back together again, david, but there's no sign that docusign is being used less. >> right. >> i had two regional banks on last week and transactions are immense. >> the consumer seems to be strong. >> yes. >> it would seem to offer positive things, broadly speaking you have a lot of hedge funds

who are, you know, who did not effectively short because that hurt so much last year and the year prior who are taking risk off. maybe a lot of that selling at the end date of the is people capitulating saying i can't take it anymore i have to make sure i don't lose the year coming up already i'm going get out >>well, but -- >> so i don't know i don't know when you get to the end of it but it's may be something contributing what you're talking about. >> let's talk about the case of kohls. we couldn't giveaway it. i've known john for 30 years he cites it's time to ex -- the stand still is over. he's going to make a move on kohls. >> yeah. >> and michelle goss is doing okay and who is that he comes on the judge's show and he's like you know what is he talking about. then you wake up and there's two huge firms that both of them have been critical one kohls. so, i mean, yes i know you can't make a stand saying that this is where people texas instruments

coles is not a standout player. >> it's not. >> act vision is not a standout player we decide those are needles in the haystack and decide maybe there's value and we have to do work >> that's a good point that's a good point. and i think from star boards's point of view, they certainly believe this is cheap. and there's real value there and brick and mortar retail has been overly personalized. that's true to me it's necessarily focussed on changing management as much as simply taking advantage of an opportunity. by the way, you've got two potential bidding parties here, remember star board with kco it's kind of the p.e. strategy it controls that holding company that can be used for deals if you can get that to work for you, by the way, as a hedge fund it creates permanent capital you know, like that. but that's kind of where they're working from and then you have sycamore, which where leslie picker confirmed it's coming.

i believe it's $65 a share >> yeah. >> and sycamore, obviously, as we know has dabbled in this area in the past. they're the ones who, unfortunately, for them, or perhaps some would say stupidly had a deal to acquire victoria's secret and got out of the deal in may with the first wave of the pandemic and regretted it. they may be interested in kohls, as well. >> by the way, we have word receipt of interest. >>well, michelle gass is putting the heisman there. willing to do this and suddenly on the invitation of after this -- i'm bringing this full circle because if i look at a bunch of retailers the way that jpmorgan -- i mean, sudden there's a dozen retailers you should be looking at. >> that's quite a move this morning. >> yeah. potential $64 or $65 bid. >> feels a little like whole

foods and amazon can come in, for all i know it was kohls. i'm saying are these two buyers who have come in, are they making a big mistake and whanybd everybody who is selling is genius and everybody is selling because everybody else is selling? or they created so much merchandise it's year 2000 and it's april 2000 and everybody has to sell everybody and end up with coke coca will. >> retail sales have not been good households starting to use credit card debt a big piece over the weekend how pay hikes are not keeping pace with inflation on a real basis they said slowing growth is the threat. >> see that? i like mike very much, but remember what larry kudlow used to do. you know, with all due respect, larry kudlow, you know, you can't have it both ways. you have a very living,

breathing fed guy who wants these slowing economy and then does he ignore there's a slowing economy and just give this august speech? that person doesn't watch tv or listen to anybody. he's the opposite, of course he does it all he didn't in 2018. i look at a market like this, i say to myself do the companies really lose this much value between when, you know, let's say when mahomes got it? no, no i'm serious. i'm using an analogy was it -- i mean, when you look at the time that things fell apart, did everything lose that much value on the idea that people are leaving here it is this is where it started that was when was down 1%. and now 1.5% and now the feield goal is out here we go watch this

oh, my god. >> i have to sell apple. if it would have been tyreike. >> you're referring to 13 seconds on the clock and mahomes managed to move the ball 77 yards. >> yeah. >> so set up a field goal that put it inover time you saw what happened there. that was the most incredible game i think many of us have watched. my heart goes out to the buffalo bills. and now i want to move on. >> i want to say that the capricious nature. the nasdaq down 12 let's say s&p down 10. are you able -- down 10. down 10. to say, you know, that's the level i got to buy unit lever! but, i mean, i'm just saying no one is this good all the people come on the air and act as if they're this good. when it's down 10% -- i mean, i know it's not mahomes. you're not as good as mahomes. >> nobody is if you bought kohls on friday, you're happy. >> yes you couldn't have because you

see the market is down. >> now there are potentially two bidders want to buy it i'll come back to activism with unit lever, as well. i can tell you in terms of the potential interests of one of the bigger activists out there that we've talked about for many years. in good times and bad. p & g a success and not so much. the journal and the ft was the first to report they have an interest here. i can tell you a few things. we talked about '00 lever last week, guys three times they made a bid to buy the consumer health care business that is being spun off and rejected in the fact their own shareholders seem to be in opposition to that. >> yeah. >> and the price that kept going up now they have stopped raising that price but this was unexpected in some way. there have been no conversations that have taken place between

unilevr and tria it's been my understanding there's no conversations about the investment that conceivably trian has unilever or what they want or whether or not they're going to be a threat to the current ceo in some way or potentially try to push for change the only meeting that did take place, jim, defeat nelson peltz at trian and -- do you know how to pronounce his name in the ceo of unilever was in seventh it took place in london, from what i hear. it was about the ben and jerry's boycott. mr. peltz had great concerns i think the israeli government asked him to see if he could intervene positively to have them lift the boycott where they won't sell ben and jerry's in east jerusalem it the only meeting that i'm

aware between them was that. was solely focussed on that issue. there may not have been any issue whatsoever that trian had. didn't succeed, by the way, in getting them to lift the boycott. i believe it remains in effect we'll see, if anything, develops here in this story. obviously, again, following on last week with unilever saying finally we're not going to raise the bid any longer for the health care business consumer health care business but that's meeting that took place, we can tell you. >> i'll tell you what is interesting the irony. david, do you remember when nelson fought -- >> yes. >> a lot of his ideas were carried out and a lot of -- if you look at the last quarter, what is incredible proctor is crushing unilever overassess it wasn't necessarily e nelson

it made the division nor aggressive so proctor pushes unilever which was crushing proctor over the period of 2010 to 2015 now unilever is crushing proctor. >> unilever has been in an interesting place. you had the focus on esg some of their shareholders aren't happy with that, perhaps, overreliance on esg. >> what do you make about the fact that glax sew there was a moment where he had everything they had everything the big unilever bid and doing fine and unilever people got hurt do you think there's any coincidence that unilever suddenly nelson is off proctor suddenly he serves as unilever -- what if unilever screws up? >> it's an interesting time. i'm not aware there are any real conversations about what they're up to at trian

sometimes they take positions and sell them. sometimes they follow through and sometimes they're a passive investors. i think we wait to see. >> it's exciting to see. some would say turn coat proctor would say, wait a second, you helped us and now you're helping our enemy but then again sean mcdermott was the defensive coordinator to andy reid. i come back to that because i like to come back to perfect. >> how do you let kelce to get off the time not for the -- >> for the best. >> in the 13 seconds. >> if you have answers how to handle the big guys in the middle, then by all means. >> why didn't they kick off and actually -- >> the kickoff thing is a much different question. >> and can microsoft deliver they're the ones that matter the most. >> thank god it wasn't the jets. i would never have recovered. >> wouldn't you be so thrilled they got there >> no. >> all or nothing. take a look at futures here. not benefitting much from a

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nasdaq looking at 1% plus decline making it five in a row and the s&p looks to open right around the 10% decline level from those all-time highs of 48 purks plus we'll get cramer's

d shndoumada a cnt down to the opening bell in a moment

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welcome back we can't stop talking about football here. i feel like the rest of the country. but left's get to a mad dash. >> okay. i keep coming back to the two worlds there's the world of the futures crushing everything and people being scared then the real world. so halburton reports this morning and halburton, you know, the ceo is not really given to hyperbole. the stock is down. everything is down but the ceo is talking about it earlier. everything is up 10% globally. halburton is a good service company. in this country, we have 36

moving to 34 i'm excited about the accelerating multiyear upcycle so if you're selling it here why? why? and this is why i'm making facetious kmechbt about the nfl. you don't have the basis for selling other than the fact you think others are going to sell and you want to beat them. it says, wait a second, i want to get into halburton here i keep saying no one is that good no one is going to be able to get out here and get back in there and yet we just got a really good earnings -- i mean, excellent! so before you just sell it because you thinks other will sell it. why not say it's better than it was on friday. it's better than it was. that's a good point. >> good point. >> trying to be rational. >> we'll continue to try to be rational here with the opening bell f mut ay. n't go anywhere!

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energy markets paying attention to geopolitics today

the state department ordered family members of u.s. embassy staff to leave ukraine amid concerns about a possible russian invasion in the meantime, the president reportedly considering troop deployment near ukraine moving troops from person europe to eastern europe jim, on friday jpmorgan rolled out a scenario in which there is a dramatic escalation and brent goes to $1.50. >> yeah. the timing is difficult because of the olympics. there are so many at tiffs other than the worse case. i think this is about russia not wanting ukraine, which really a failed state, by the way, it's taking care of by the west not to be part of nato if you're germany, you need for may tow, what are they going to do cut off the source of energy they have? is biden able to go in unilaterally sop, david, the way i look at this is we keep hearing basically it's going to be a war

over ukraine and that's the least likely of the scenarios given the fact that we not necessarily want to go forward. >> but the question is what the fallout is and other things. [ opening bell ] >> oil at 150. i think oil goes higher. i've been saying this but i just really people to understand that it is not a shooting war or nothing. you know, karl, it's difficult for us to talk about geopolitics, but we can read like everybody else. and i think that some of the sources of russia just saying, listen, we'll move in on the border and not necessarily to kiev but russia going to nato saying if you agree to pull back, we're fine there's the sense that united states folded in afghanistan so they're weakened and putin feels that our country is weakened because of the split that we have

very real split in our own government so i don't want anyone to think, you know, i have to sell mcdonalds which reports this week because of ukraine. that's what happens. it isn't like that you don't get lucky. things don't get to be accidental high yielders unless we have a recession. i know using we start talking about the winter and the winter. >> fire and ice. >> yeah. fire and ice how about the fire and straw coalition of nixon can we step back from the metaphors and look at individual stocks and say, you know, that's interesting. that's what it'll come down to i think there's a lot of stocks that are interesting. >> yeah. and our parent maybe one of them comcast leading the s&p at the open along with foxa on upgrades rbc said that 19% drop in our parent share price has been

overdone i'm glad you mentioned the parent i'm sitting there and watching live tv this weekend which if i hadn't, i feel like i would be totally deft out. what network am i watching >> nbc. >> there's another should it be less? >> no. people figure out in their infie nate wisdom that maybe live sports is something, unfortunately -- >> when it's football which, actually the take really would be the power of the nfl as a brand. basically every nfl game ends up being the top rated program in the year. >> yeah. >> and last week the issue was did -- how come there wasn't more staying power to, you know, netflix's programming. i'm watching these games this weekend and i said i don't need staying power on the program i have this. and now you may say, well, look

it's just only 23 weekends of the year. >> yes. >> there's a lot of scarcity. >> who said it would be the case. >> yeah. but they're not watching baseball >>well, that's not our fault. >> no. it's not. >> those teams, you know, those leagues have to start looking at what is going on. >> or watching this much hockey. the nba is pretty strong. >> it's very exciting now with the playoffs. >> yeah. so what i'm saying the masters 1udly you say this cord cutting it's -- oh, that's a little harder. >> last i looked, you can put a digital antenna and get games for free. >> not every game will be that good. >> i'm just saying netflix threw the market into a tizzy. ukraine, obviously, pal and that is creating great value. i come in today and discovered that and where was i 57% ago for the millennial index

look to the reason we're talking about moderna, alphabet, coin base, netflix, paypal, zoom video i mean, these are real companies. or they were until this thing started. >> yeah. >> okay. i will what will you like me to look at it for >> i don't know. >> i'm just saying we value the company and have taken it down because we think they didn't use their currency to make the buy. >> they tried. they tried they tried. >> but i just -- i'm just saying i'm mentioning that as being a hated company that has come down so much i have to think, all right, let me open the book on zoom let me see. >> focus on 62%. >> right. >> docusign. i had had huntington bank at 4%. they are having a best year they've ever had they got the ohio gift. >> yeah. and their numbers are terrific

i guess i got to sell that because -- tell me why because, i mean, cincinnati is -- oh, because it's from columbus no i mean, i don't -- i need a reason to sell is what i'm saying i need a reason. >> we'll have a reason on rifon to sell but i noticed the stock. it's interesting because it's reflective of what jim is talking about the. the speculative nature of the nation it's an enormous amount of value for those who owned it when it was a private company. at least the earlier round it's below the ipo price down another 7% with e got the deliveries for last year they delivered a 1,015 vehicles. obviously it's about what they're going to be doing this year and the years following but it is a good proxy to a certain extent for those spalative nature it's 42% this year 24 year. >> all right i just, i mean, i want to find a reason why i must, this moment, sell american express.

it's obviously because american express has, you know, come on. >> sell because somebody else will sell it as you said with halburton it will keep going down fed will keep raising rates and fwher a different environment. the fed may not finally have your back, even if we're down 20 or 30%. >> and something a giant fed that's another thing. >> yeah. yeah. >> said it was nothing and i'm sitting here hoping for the positive pill. just in case my loved ones get this and in the meantime, people are selling fiezers. they're selling pfizer because it ended in the pandemic ended well, how about pfizer now has the ability to be able to go through? i think that pfizer is interested. >> how about for the first time we're going an apple quarter it looks like things are sold through and the stock is not at the 52-week high what a gift. >> and we've got a couple of reiterations of apple on friday from morgan stanley and today on microsoft out of goldman

reiterate by 400 jim, we'll be reminded of the reasons we bought the names. >> of course. >> and you look at microsoft and some will say i'm not paying 30 times earnings or some that says the reason why i'm buying the company it's it opens beating earnings but is that no longer important when the stock is down 60 from the high now we've got a new metric and it's i want to get ahead of you. i mean, this is like when you go, hey, you know, a bear is chasing me. >>yeah

go back to the fundamentals. where is it trading? >> 30 times earnings >> probably serves that. that's the problem again i'm playing this devil's advocate line. i don't like selling it for the sake of beating someone else okay, so google and alba fete it probably sells at 22 times earnings got the cash when you're talking about it 19 times earnings is that expensive in the answer is no. you can then karl will say who cares about whether it is. the answer is a few months ago from now you'll be caring a great deal you're looking, you know, money is not going to come out of the market to .2% cds. it's going look for situations where the momentums come out and the business is good

we stlilt and say these are sitting ducks. the sitting duck thing, well, those are the spaks and those are the companies that came public those are sitting ducks and the fa fact no one has come in seeing and bought a lemonade or upstart. i say no one i mean a company. it tells me be careful there i'm not going to sit here and say this is the moment to sell because even though they're doing well, have a great yield, i'm not going to say -- i'm going sell because, el with, everyone else is. >> there's a good example on today. btig hopes to buy target 155 lead is to believe company is turning a corner we see a few dynamics that could help the name rerate later in the year specifically the accelerated makeshift to cloud. >> see they're not making money. and my problem there is that i had doug on multiple times doug meredith one day disappeared. i don't know he's interim ceo and that, i find to be because

of that i'm more concerned i absolutely like the turn but, look, here is the service down so service now adobe a couple of these. but service now is down 200 points from the high sells 85 times earnings. it could make the number that means it's good except for the fact it's gotten momentum buyers look at the chart. i know, david, you're not chart but reviewing whole foods. does that matter >> i don't know. >>well, the answer is that -- >> what is the answer, jim >> that you -- if you liked it at 700 -- >> you'll love it at 500 >> yes. >> okay. >> okay. >> yes yes. >> let's take look at snap if you liked snap at 80 will you like it at 30 this morning it's a downgrade to neutral how to outperform on the stocks. take that for what it's worth. what is interesting here -- >> i'm glad you mentioned that it's the thesis which is snap currently has a strong foothold in the 13 to 34 demo

it's about tik tok the audience is the most similar to snap. it means it puts both snaps engagement and time spent and ad dollars at risk. tik tok is a power bite dance the owner of tik tok. those numbers continue to soar higher advertising an important growth component. putting snap at risk by the way maybe others, too there are some that argue short form is everything that matters. they won't be watching television. >> no. >> any had any form. >> i watched the apple ads it seemed like people were trying to figure out how to put their tik tok together i look at snap and said last quarter was terrific i don't know maybe bottoms at 25. i'm stuck with the concept of if you want to buy a stock you should want to buy it when the stock is not 83 where it was but 30 where it is now the last hour that stock could break down to 28 there's no need to be aggressive i'm looking at stocks down from where they were and i'm saying, all right, those people who bought it that high they're

young. i'm not going to be as wrong as they were. i want to do some buying today i'm forcing myself to buy. that's discipline. >> okay. >> 13 seconds. >> okay. >> we'll get some pmi data in a bit. we'll take break reminder, get in on the cnbc investing club with jim. find out more at cnbc.com/investingclub we didn't get to 10% discount from highs we're back in a moment

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welcome back to squawk on the street rick santelli here some of the first pmis of 2022 and they're not pretty january preliminary market pmi manufacturing 55.0 that's the weakest going all the way back into october of last year essentially following 57.7. on the services side, 50.9 50 pnlt .9 that's the weakest since june of last year. and essentially following 57.6 and, finally, the trifecta of weakness composite pmi at 50.8 the weakest since june of last year following 57.0 we see interest rates are slipping a bit they probably will now slip a bit more "squawk on the street" will return in two minutes.

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they're disruptive to children we know they've had a cumulative impact on the socialization of kids in schools. the other thing is the vaccine mandates you saw connecticut announce they're going to suspend their vaccine mandate to state workers because they've achieved most goals. they have vaccinated a high percentage of state workers, well over 90%. the population has a lot of immunity cases are declining. it doesn't make as much sense to have that mandated in place. >> that's dr. gottlieb with his take on mask mandates and the omicron spread obviously, a big story for the uk where a lot of restrictions are going to roll off in the coming days, including having any test when you arrive >> i follow him, of course, very closely. to me, what he is saying is, if you are a fed chair, you have to say i don't know i listen to gottlieb maybe four weeks from now things will be different. let's not be too harsh the biggest problem is the

quarantine of the quarantine has made it so somebody gets sick, you can't fill the shift david, if gottlieb is right, and he is pretty solid, then i think that it says, listen, we are going to make a move, but then we have wait and see what happens when people come back to work. >> i am fascinated by what china is doing we talked about it in terms of their zero-tolerance policy, locking down cities, slowing of certain industries to a certain extent what i am hearing now is supply chain issues may be getting a bit better in some areas, but out of asia there is concern they may be worsening because of china and other asian countries' policies, very different than ours, in terms of continuing to have very little tolerance for any cases. >> yet when we hear about it, it seems to be hit or miss and people just -- they like china's strategy here, when you see somebody like intel, they don't want to be dependent on taiwan. remember, the chinese, what,

sent over -- 30 jets this weekend. >> a lot of naval activity on the east coast of taiwan. so we're down 4301 that is a full 10% down from the s&p highs. hey, bob. >> that's significant. we haven't seen that in a long time a 90% downside day not a lot of places too high not surprisingly consumer staples up a little bit earlier on kroger and clorox and colgate, procter & gamble holding up. not much else. health care down 2%. energy, which had been the market leader this month, down ark innovation down, 5%. look at the tech stocks. this typical that we are seeing megacap techs like apple and microsoft are down today but the more speculative stuff, the shopify and the blocks, they are down about twice as much this is a typical pattern. something we haven't seen in a long time, new lows. we have almost 450 new lows on the nyse

the last time you saw that, here are some surprises, paypal new low, etsy, amazon a new low, 2800 on amazon that 3200 a week ago we have got two big market issues i wrote about this over the weekend. we have a multiple compression the pe ratio, how much people are willing to pay for a dollar of future earnings, has been dropping under 20 right now it was in the mid-20s. people are getting a little more cautious, not willing to pay as much for a future stream of earnings that are out there. then we've got earnings headwinds that are there 8%, folks. that's closer to the historic averages, it was 40% in 2021 modest earnings gains. there are concerns that the federal reserve is going to slow down the economy a little bit, maybe a little bit more than people were anticipating so that's a big, big issue right now. remember, last year earnings estimates were going up practically every week throughout all of 2021

that is no longer happening. so you are dealing with a multiple compression and an earnings headwind and that's an issue. another problem is the play for january was let's go buy cyclical and value stocks. well, energy has done okay, although it's off today. banks have been a little bit of a disappointment th industrial is another value group. so this idea,let's go buy smal caps, let's go buy cyclical and value and sell technology hasn't worked that well because the one side of the trade, let's buy the side, the cyclical and value, really hasn't worked that well and you see technology stocks down about 12% if you look at some of the other groups that are out there, value in january, okay, you know, small gains. exxon's done well. down little bit today. deere and smucker's. but these are not enough to overcome the big, big dough klines that we have seen throughout the whole month of january in the deck group and the domination of tech stocks that we have seen. so you see something like an nvidia and most of the big

semiconductor stocks now down 20 20, 21%, broadcom down 22% growth names in the consumer sector, for example, starbucks and home depot, these are considered growth names, actually, now, and they are consumer names, they have been getting hit. you sew a big cap name, microsoft. so i think the point here, carl, is this idea let's go buy value and cyclical is not a bad one. it's just not weighing out against the big declines we are sewing in tech a lot depends on what the fed says this wednesday. they are in a very difficult position right now they have to sound hawkish if they sound more hawkish, the market's g going to drop more. >> thanks, bob pisani. jim and "stop trading." >> last week shopify, it looks like it's not doing as much business with certain fulfillment operations and that people said, wait a second, maybe i am in etsy and that's wrong, maybe i am in this universe of companies where you

buy things online and they are buy now, pay later and that's wrong. shopify had been a leader and people are saying, what do i pay for that and these are the problems what do i pay? i'd rather be in a company where i know what i should say, which is, say, under 20 times earnings with good growth than, like, wow, that stock went to 1,000 and it was raise prices. >> we got an upgrade out of stevens. they think the gmv guidance is good. >> that's a great piece. they had a sell. i like that. they go to hold. they have the opportunity to go high the ceo, i think he can do a good job you have a coinbase where you are now just down, down, down, and if bitcoin bounces, it's a win. >> what's on tonight >> we are going to figure out where the bitcoin bounces. >> interesting. >> yeah. >> got a good take and then this gentleman, ryan peterson, he counts the boats.

he is the guy, david, to find out whether we got the end or the beginning of the end. >> the go-to guy on supply chain stuff. >> yeah. interesting company, too. >> isn't it? >> yeah. good luck. see you tonight. 6 pchl "mad money" with jim cramer the sell-off, drawdowns on the s&p ten. russell 20 all sectors red and the vix at 35 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

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good monday morning. another hour of "squawk on the street." i'm carl quintanilla with morgan brennan and david faber. dow down 600 to start a busy week of earnings the fed meeting, gdp, s&p is down 10% from the highs, and those pmis this morning did not help, close to 18-month lows. >> it is an ugly start to the week 30 minutes into the trading session, three big movers this morning. kohl's spikek up more than 30% today's trade with takeover interest and the retailer ramping up more on this later in the hour plus, snap shares sliding as the

social media name is downgraded to neutral, sooutperformed at w bush shares down about 6.5% right now. finally, we'll end with our parent company, comcast, getting an upgrade at rbc capital, subscriber growth concerns have been overblown and those shares are up 2%. carl. >> thanks. turning back to the broader markets. stocks under pressure as we are trying to hold 4,300 on the s&p. it got the vix mike santoli, closer to 40 than 30. >> yeah. things are starting to line up friday's close, things are arranging themselves where you look at the conditions for some kind of tactical relief soon when i say soon, that usually means in time as opposed to in price. now you see a little bit more inskrim in any event selling nasdaq more oversold than on a technical basis since march of 2020 those are the prerequisites to

have some kind of snap back. it doesn't mean we are back towards the highs. we have broken trend, obviously, below the 200-day average. first 10% correction bins before election day 2020 and it takes you back six month we are in a phase where we are stretching for negative reasons to back fit to the price action, right? we are talking about ukraine, now talking about a domestic economic slowdown. it lines us up for the fed the key question is, has the market gotten to a point where the hawkish kind of leaning of investors in the market are positioning now exceeds the likely harshishness of what the fed says on wednesday? that's where we are in the exit from this storm, whenever that does happen, it's going to probably be interesting finally for stock pickers because you do have almost half of all nasdaq stocks have been cut in half, a third of s&p stocks are down 20%. at least you have the hunting ground for folks to look for wreckage

you see the activists today, which is the early edge of that type of activity >> got attention over the weekend. mike, meantime, vix curve inverts and the bull bear ratio near multi-year lows some of the desks argue if earnings come in halfway decent, those three things set up opportunities? >> without a doubt those are the positioning and fear gauges that are telling you that people have down an awful lot of retreat from risk in a hurry. you have to throw out a caveat mechanically speaking, this kind of high-stress environment that shows the mechanical breakdowns, you know, that's when you get these big air pockets. crashes happen that's not going on now, but just because you have that setup doesn't mean in a timely way everybody together gets the reward for buying the open, for example. >> mike, we talk about this a lot. looking at the setup, is it akin to playbooks we've seen in years or decades past?

i have been hearing the increased chatter again about 2000, for example, and the idea of a tech bubble bursting. >> there is no doubt that there are aspects of what's gone on in tech over the last 11 months, not the last four weeks, that absolutely look a little bit like that where you have just this tremendous rush of untested companies that swamped the market the no profit kind of moonshot stocks that have been dismantled and now it's reaching the higher levels of the nasdaq and of growth stocks. yes, all that stuff fits i think it's maybe nor prosaic than that. it reminds me of 2015. the market an episode, pulling back 8% or so. a chinese devaluation. it seemed like an inopportune time for the fed to raise rates. they squeezed it through in december many, many differences, including the run rate of growth in the u.s. now versus then, which is better now. a lot of that stuff is sort of

textbook the market is going to tighten before the fed actually does it. that's what we are seeing. >> mike santoli, thank you charles scharaab, jeffrey, guys, good morning to you both we have major averages all down significantly again this morning. the s&p down another 2%. 4295 is the level there. jeffrey, i'll start with you is there more pain to come i ask that knowing this is a week with a trifecta of news potentially between earnings, the fed, and also all the geo geopolitical risk simmering as well are there signals you are watching for to know that we are hitting a potential bottom in this correction right now, or what would you be looking for? >> i think earnings are really important. but we are also going to be getting economic data here for the month of january starting to roll in like the pmis this morning that are showing that omicron is having an impact, negative impact on services.

we have seen that in the numbers here we know that in like open table reservation data we are seeing services really pull back sharply. we know about the potential invasion of ukraine by russia and a fed tightening cycle if investors shift their focus out a bit, and they may given the earnings releases, they look to a brighter q2 the rebound from omicron in europe, pentup savings and stimulus and inventory restocking, russian conflicts in europe have not led to sustained stock market sell-offs in the past there is reason for investors to buy the dip here they may want to favor european and value stocks what led when interest rates were higher in the past. >> interesting i want to dig into that a little bit more first, the same question to you, especially this idea of, quote, unquote, normalization and normalized growth since investors seem to be trying to

wrap their arms around a post-pandemic world right now and how that's playing out in the market >> the investment teams are accepting that as you look at q4 earnings they will be looking at that last week when we saw earnings surprises on the downside from certain companies. we saw those companies be punished more. as mike alluded to earlier, the contagion is spreading pretty wide in the first phase of the sell-off and i think some areas have been hit harder than others you know, it is a time for stock pickers who are willing to look at company fundamentals to go out and start looking now and putting together your buy list certain segments of the market have great opportunity. >> so, jeffrey, i mean, the situation with ukraine and russia right now, which certainly seems to be a risk tha that mountk, i realize in general geopolitics from a efficacy market standpoint tends to be shrugged off by investors but it's certainly adding to the

maelstrom, if you will, this morning of negative sentiment in general and there are areas this could potentially have a bigger impact to think about oil and kmad tease, for example, at a time we are talking about inflation and we are talking about the fed. are there certain areas to just steer clear if you are concerned as an investor about the potential with go owe politics >> you know, historically we haven't seen a big impact. obviously,on the upside, we ar seeing impact of oil prices and natural gas in europe, maybe lithium, other commodities but on the downside, nothing much russian stocks have disconnected from oil prices. usually they are the exact same chart. we have seen a big disconnect. but they only represent 3% of the emerging market's index. it's not having a huge impact there. if you look to 2014's russia's invasion of ukraine, less than 1% drop in the s&p 500, less than 1% drop in the em index and

they rebounded in a week or to two. while we can't measure the human toll, the market toll sends to be minor from these types of events i add that russia is waiting for written response from the u.s. on security concerns and that won't be until i think the 30th. so probably nothing to happen this week militarily in russia. >> it is remarkable to watch energy trade lower in a day where the tape is full of geopolitical warnings. i wonder, we got pmis getting close to 50 once again it's certainly going to feed if not recessionary talk, talk of a slowdown, and people discussing how the fed manages to hike three or four times in the face of slowing growth. >> certainly will. and i think that's kind of greatest fear, is how the fed reacts and keeps this balancing act. will they react slowly to inflation? some say they have acted too slow but will they watch the data and see what happens to growth and if we do start to get more

normalized growth, mean, i think it's all fair to say, we cannot keep sustaining the type of growth we have seen over the past 12 to 18 months if we see a slowdown, will that impact their change? or their actions sorry. i do think it rprobably will. there is going to be a lot of turbulence as we march through these next, you know, couple of months, but turbulence can bring opportunity for investors. >> anne, to get a little more specific on that, where do sigh opportunity? >> well, you know, more specifically, it is in -- from the bottom up, right, looking at very specific stocks but there is a segment of the market that was sold off very, very hard. if you look at small cap growth stocks, referenced by the russell 2000 growth, if you take in account all of 2021 and just what happened this year, that segment of the market is down 13%, yet earnings have been up 32%.

that's in comparison to the russell 1,000 growth, which is up 11.5% for the same time period and earnings growth has only been 4% that means we have seen a lot more multiple compression in the small cap growth space by the index, i would definitely pick just certain stocks >> okay. jeffrey, given the fact that we have the fed meeting tomorrow and wednesday, i am just looking at one of your notes one of the things you talk about is the correlation, positive and negative, throughout really the last, i'd say, 50, 60 years between the bond market and the equity market. are we poised given the fact that the fed could potentially hike the most aggressively we have seen in a number of decades? are we poise odd see that correlation shift again? >> morgan, that's a really important question thanks for asking that we have seen periods like from the '70s, '80s into the '90s when interest rates went up, stocks went down we are used to the current

environment where they move in sync with each other i think we are likely to see this movement in sync. as rates go up, stocks move up as well. the reason is we moved from a period when rising interest rates, when rates went up, leading economic indicators went down in the '70s and '80s and that created a negative correlation between rising rates and a falling stock market we are not in that environment any more when we see rates move higher it's because of stronger real growth and that pulls stocks higher i think we are generally in an environment are where rates are likely to move higher this year even as inflation slows. accompanying that is better stock market performance >> just to take a break here and show where we are, dow down almost 750 we have lost 4,300 on the s&p. in fact, the worst day for the s&p 500 since october of 2020. vix set a 15-month high, as we are getting close to above 37.

and as we wait for the earnings prints this week and the guidance recorders to come, what is the incentive for companies to do anything but underpromise, given the likelihood that they are -- they are not going to get rewarded for it on the tape? >> look, i think most management teams just want to be honest with investors and tell them what they are seeing and for them the water is murky, as well, right they can't predict what the fed is going to do they, you know, the outlook for growth for most of these companies is pretty clear in the short term, but it's murky in the longer term. so i think they will be completely honest and it's all about what is in the investors' expectations and what's in the models of the street, both buy side and sell side so that's where, you know, really knowing the companies you are invested in will matter. >> so, finally, i guess just to

wrap all of this up, zbrefry, i mean, on another day that is very ugly with lots of broad-based selling across all the averages, the sectors right now, your words of wisdom to investors who may be looking at this and saying, my gosh, should i put cash on the sidelines now? should i be buying gold, getting out of the equity market what do i do now given how much red we are seeing on the screen? what couldo you say >> great question. the markets are going to be more volatile this year do tree things, one, invest internationally. the other thing you want to do is backs. i think that's probably going to be the case this year. so look for the companies making buyback announcements. and guard against gluts. this theme of supply shortage in 2021 turning into gluts in 2022

as we're seeing with peloton could continue to unfold watch out for those companies that are seeing inventory begin to surge that could begin to weigh on their prices. >> a pendulum swinging thanks for starting the hour with us, jeffrey and anne. >> thank you well, it's not just stocks under pressure crypto also, bitcoin is now down sharply as well. you can see, yeah, about 50% from the all-time high kate rooney with more on what's going on in that sector for us kate. >> hey, david, good morning. cryptocurrencies have been battered along sides tech and growth stocks. bitcoin trading und34,000 this morning. ether hitting the lowest level since july as well this is partially a result of cryptocurrencies becoming more mainstream seen as ballish sign of the asset class was maturing the last couple of years but it's an been a catch-22 as macro funds adoptedbitcoin over the past two years they are turning to crypto as one the first places they are

looking to sell and get liquidity. as a result, bitcoin has been trading right in line with equity markets you got bitcoin and stocks hitting their tightest level of correlation since 2020 analysts are pointing to retail investors losing conviction lately analysts saying that the lion's share of losses are coming from newer buyers or short-term holders who appear to be taking any opportunity to get their money back right now only 32% of bitcoin's market cap right now is held at an unrealized profit so a lot of people underwater there. low profitability and sustained investor losses have usually been a sign of early to mid stages of a bear market in crypto these periods are also marked by low investor sentiment one way to look at that is called the fear and greed index. it's at a 13 out of 100. last month it was 39 some bulls are holding out for a

relief bounce in crypto. the next key level of support to watch this week is 29,000. guys, back to you. >> just going to ask you that question, kate, about some of the technicals and the key support levels here. one of the other things you reported so expansively on in recent times has been the level of leverage and the role that that plays in the cryptocurrency market and how that trickles over into other markets like equities as well i guess key data that you're seeing right now around how that is adding to this risk reversal and this drawdown we are seeing in the thiprices of things like bitcoin. >> that has been one of the key factors that added to -- the forced liquidations. when it hits a certain level, you see stop losses and people needing to sell automatically. you have seen automatic selling and it now seems to be a little bit more even. a couple of weeks ago we were really reporting it was some of the bears really leading the leverage in sort of the options market in crypto it seeps to be evening out this

week so it's a little bit less of a factor that's not a real factor that analysts this week are pointing to as sort of a warning sign in the markets though it's definitely still a sign but reducing, not seeing it as a big factor to watch. but it's sort of a new phenomenon in ycrypto people taking more risk and betting on the direction of crypto prices versus holding the asset as a long-term stable investment >> i mean, is it broad based across the entire asset class? we talk about bitcoin and ether, for example, but there had been these other types of coins, whether they are stablecoins or some of the so-called meme coins. has it been painful across the board or are there certain outliars in this discussion? >> it has been across the board. some of the smaller cryptocurrencies, it ends it to be inskrim anytime selling bitcoin is the leader. it's outperforming some of the

smaller coins. names like block, a lot of companies now holding bitcoin on their balance sheet, tesla, microstrategy. so it does -- some companies in terms of corporate balance sheets and people taking their salary in bitcoin. you may see the knock-on effects in earnings even that they may have to report losses because they now hold bitcoin on their balance sheets. >> thanks for that we will keep a close eye on that. >> crypto investor william quigley, good have you back. how important is this level here, the 50% drawdown from the highs? >> well, i'd say a few things about that first, if you look at the halfening which began in may 2020 and typically the upswing in those happens for about 18 months, which would have been november 2021, right around where we peaked at about 65,000, we've come back from there to

33,000 today that is not unusual for bitcoin to retreat after an 18-month period of going up but it should have stabilized somewhere between high 40,000s and maybe 50,000s, except for a couple of both geopolitical and governmental impacts that it hit in the past, let's say, 30 days. those drew it down from roughly 50,000 to where it is now. >> right your point about large drawdowns not being new is a good one, and one that we keep in mind when we think about wicked price action, but the backdrop of a reduced liquidity, certainly policy, less stimulus, rates going higher, not being near zero, that is a change from those prior drawdowns. does that mean this time may be different, that stabilization may be tough to find

>> first, since 2016, we forget this because bitcoin moves so fast up and down, but since 2016, bitcoin in any given rolling 90-day period has dropped 50% or more 14 times so it's not unusual. there is always different factors that drive it. i do believe what you are saying, there is something to it in the most recent bull run from 2020 mid to now, wall street and a lot of other institutional investors got into cryptocurrencies, particularly bitcoin. and i think what we've seen happening is they looked at boirn very much as the way they would look at, let's say, an ipo, a recent ipo of a tech company that was still unprofitable, high risk, a lot of growth potential, but also a lot of potential for downside. and so when the fed started tightening the monetary policy as a result of wanting to control inflation and de-risked,

i think bitcoin was one of the assets that in their models was classified as a tradeable asset they would also like to de-risk. so that is new historically, for people who are in bitcoin and other cryptocurrencies, it was looked at as an alternative or a hedge against these types of movements. but with a lot of wall street money in crypto now, it's behaving the way a lot of other assets that normally behave when the fed tightens monetary policy. >> william, i mean, such a key point in this discussion around the price action we've seen, and i wonder, given the fact that this is an asset class that has seen deep and dramatic drawdowns at times in the past, whether those past playbooks are going to apply now, if there is key factors or key things that could signal that you are seeing an actual bottoming out in the selling in something like bitcoin? >> yeah, i'd say, you know, it's

really hard to predict where bitcoin goes because so many things impact it but it does follow a lot of patterns it goes up and down frequently, far more frequently than any other globally traded asset. so that explains a lot of why we see even now when the stock market starts to have negativity in it, bitcoin has it as well if you look where bitcoin and other cryptocurrencies have come in the last two years, it's extraordinarily more useful. look at nfts they are the way bitcoin and other cryptos have started to become mass market phenomenon. if you look at nfts, that has been decoupled from the other impacts, negative impacts on cryptos. in the last seven days, while bitcoin dropped from h43,000 to 33,000, nft volume has actually gone up by about 60%, roughly 5

billion in incremental volume. so we can't just look at cryptocurrencies that like a homage nous asset class at this point. you have ethereum, half the value of bitcoin, very strong, a very big event in ethereum is supposed to happen this year, where it shifts from the old model of proof of work to proof of stake, and that should make it more energy-efficient and less costly to use also you have the metaverse. you have a lot more applications being done in a decentralized way. so there is a lot more activity being done now than, say, a year or two ago but, yeah, it still reacts to global events. on thursday, you had the u.s. federal reserve issue a white paper, long awaited, about the stablecoins and whether or not the u.s. government should issue one, and that dropped the price of bitcoin because people were worried. and then now you have the white

house signaling it's going to issue an executive order that brings to much more involved into managing the regulation of crypto and i think that's what happened in the last, let's say, over the weekend, the last few days we saw a lot of concern there. >> not to mention some headlines regarding micro strategies, bitcoin accounting from the s.e.c. on friday i wonder, where do we think right now, what supply of crypto is underwater, meaning less than people paid for it, and what does that do to the erosion of the so-called entertainment value of trading it, which is, obviously, a factor in the price action for at least the past year >> well, people are in cryptocurrencies because they want to either use it for various decentralized applications, which are becoming increasingly popular they are also in it as a tradeable asset where they can

get some appreciation. it moves so much for most people, they don't have a lot of ex pposure to it most traditional investors generally less than 5% so it's not something that that's going to ruin them in it goes down. as far as how many people underwater, i haven't looked at the recent data, about you there are a massive amount, far greater than 60% of people who are long-term holders, let's say more than 18 months. so the drop more recently, i don't think it should be worried about too much also consider that the ups and downs of bitcoin have started to be compressed. the last two times bitcoin dropped 50% or greater, it took 95 days from peak to trough, and then the prior time it was maybe 73 days from peak to trough. and then the upside was also decompressing. so it took a far shorter period of time to go back up. so probably i think the median

time for bitcoin to recover from where it was before has been about five months. that's not that long so if we think 50, let's say $50,000, roughly $50,000 is about where it should wind up, then i'd say sometime before july of this year we'd probably see it go boack up unless the white house executive order brought a lot more fear around what they are intending to do. what i hope is just trying to assign which federal agency is going to manage it because right now that is not being done there are multiple federal agencies >> yes can't separate the policy risk from the price, at least not right now. william, thanks for that william quigley talking about the decline in pretty much the overall market cap, david, of crypto, 3 trillion to 1.5 or so. >> yeah. you can take a look there at the broader averages the s&p off the lows

the nasdaq had been down 3% a few moments ago. not to call it a bounce, but not down quite as much as it had been many of the names that performed so well last year going on significant heights in terms of multiples, even if they had earnings, retreating and retreating quite a bit we are taking a look at that ev maker. it's getting some autos on the road not too many at this point remember, it had been a $100 billion market value, i think, briefly it is down 44% this year so that is just with, obviously, a few more trading days to go in the month, rivian shares down another 10%, well below the ipo price. and remember there were quite a few investors who invested in the private markets, were able to mark this up towards the end of last year as a result of that ipo. wow, the perspective that they were able to get as a result of

that company coming public was quite significant. but it is down sharply remember, ford, we were talking about it, they are still up enormously, by the way, on that. but would they have been able to sell it earlier they probably would have benefitted a great deal tesla shares, phil lebeau pointed that out, morgan on twitter, down about 17%. below a $900 billion market value. we get to netflix, which reported -- very disappointed guidance last week, netflix is off 40% now, let's called it 39.2% for the year with that 8% decline there. many of the names we watched, all the netflix, by the way -- had a decent year, not the greatest performer many of the high flyers, nvidia, amd, the aforementioned rivian, tesla, backing off dramatically with the sell-off of late. >> yeah, netflix down another 8% today. it's just very indicative of the broader, to your point, to the

broader action we are seeing in the market right now and the fact that you have some of these high-flying or previously high-flying pandemic beneficiaries, stay at home so-called stay at home stocks that have soiled off just so aggressively in reweeks and cou be a canary in the coal mine in terms of normalization and what that looks like and the equity markets in the midst of a federal tightening cycle that could be aggressive, slower economic growth here domestically and globally this year and the like. netflix has been considered an example of that. also the names like zoom, peloton, which we talked so much about and have sold off so aggressively it will be interesting to see what earnings this week brings we have more of the big megacap tech names reporting results, but also companies from across industries, across sectors, something like half of the dow components, the blue-chip stock o putting out their numbers this week the russell 2000, the small caps

wh which weigh started the hour talking about, have fallen 20% from the all-time closing high on november 8th for that index there is a bear market playing out in some corners of equities where the smaller stocks are concerned. and we'll sew how it goes. geopolitics are involved earnings are involved. macro data, which has been mixed or disappointing to say the least, carl. >> yeah, pmis today not so good, although in europe this morning 59 on manufacturing was a little bitter better than expected for the eu we were looking for 57.5 clearly, we are not quite as good the dow is off of the lows of about 750 to the downside. currently down 572 we are above 4,300 joining us on the news line today, arthur carbon it's a good morning to have you. to what degree is this a washout, if it is at all

>> well, it got awfully close. as you know, carl, because you see my morning comments every day, about two weeks ago i sai we were going to go into some seasonal selling hopefully, the bottom on the 24th, which would be today and i came in. i said, look, weaker on the opening. but then they began to pick up they are trying to rally here, which time, classically the timeframe is pretty good between about 10:15 and noon is a good time for the washout you get a lot of them near the end of the month, so they all -- that's why i was looking for the bottom possibly on the 24th. if they sell them again and get down around between 800 and 1,000 in the dow, i think that may qualify for that washout i certainly like the spike in

the vix. that gives you a sense of a little bit of a washout selling. but i'd like to see a little bit more throwing the baby out with the bath water. >> right vix above 30 raised some eyebrows down here then 91 downside volume has been historically a decent signal is that valid today? >> no. i think we're reasonably close, carl th i think there is a couple of things going on, talking about russia and ukraine # that's a dangerous spot, but not an immediate one putin had to send troops to kazakhstan to protect the government down there and the troops he had to send were among his most experienced so that's left the guys up around the ukraine more than draftees, the con scripts. i don't see a nearby overt move

by the russians. what you might see is a move, since you have the draftees up there. and china, i don't think they are going to make any overt move there. they want to get into the olympics it's a global show they want things going you have the lunar new year coming up. so, yeah, we have those geopolitical dangers, but i don't know how immediate they are. >> art, days like this, after days like this for a few times over, people say, oh, when is the fed requesting to have our back again are they going to back off because of the market dislocation? do you have any thoughts on that >> yeah. i think it won't be immediate. but i think now that powell has been reconfirmed, so we find out his role that the fed is not transitory so that's going to give him a little latitude. i think the fed and powell are

nervous. obviously, the selling started before them, and clearly the selling is not directly related to them. if you look at the bond yields, et cetera. but the fed is very nervous about these things so it might give them a reason to slow their step a little bit. i don't think they, too, want to be too overt about it. but believe me, i think they will have the markets back if things turn worse, if we don't bottom here and turn around and they keep selling into late spring/early summer. i think you will see a little bit of a difference. >> yeah, you do. it's interesting i mean, you could argue the opposite though, that powell feels emboldened to take the market on and say, i'm going to do what i need to do, and yet you guys can lose some money for a change >> i think, carl, what he is doing now is playing for the history books, you know? i don't think he wants to be the

fed chair who gets blamed for, even though he might not be the cause, but causing things. so i think he will remain cautious yeah, he has latitude here burke i think he is playing for the history books. >> it's morgue nlt you could say three things have been driving the market up until recently and it's been copious amounts of monetary stimulus and liquidity injected into the markets by the fed, which is now going away generous handouts from the federal government, also going away and then of course booming corporate earnings now, we have had a lot of folks come on the air and say they expect the s&p, for example, to finish this year higher in large part because earnings will continue to be strong and margins will fold up if you take the other two pieces of the puzzle away, i mean, just how much is actually hinging on earnings here? >> i think that's a very bright observation. i think that the fact that you are going to begin pulling back

and it looks like the president and the fiscal stimulus will not be there as readily. so i think that's what the market is seeing i think that's where you are seeing the market going down without yields going up. everybody talks about they were prey to the fed. yields are not going up. i think they are looking at a stagnating economy and some of it for the very reasons you just mentioned. >> when you say stagnating, do you actually mean stagnation here, art, or is a -- is the reaching the point of demand destruction and finally getting relief on inflation something the market will applaud at all >> well, i don't know that it will be applause directly. i think what will happen is, and i do believe that inflation will be begin to decrease i think the supply chains will begin to work out here, particularly after lunar new year i think those events in asia

will be critical and the economy will have a different look after it i think at first the market will look at it and say, my goodness, is the economy really slowing? only much later when they see that it has not slowed greatly but inflation is coming in, and then there might be a bit of a cheer. >> finally, we have been talking about crypto in the lens of risk assets overall, art, but i wonder does this change the structural narrative about blockchain overall given how much institutional money has come in? and lloyd blankfein argued earlier on the air this morning, use cases validated by people who have very large assets to deploy >> well, i think there has been a good deal of that. i mean, you could see on a separate note the non-fungible tokens people were dabbling back to morgan's point, there was some excess liquidity around

and it's being eaten up. but i think the bitcoin and what we're seeing here, this is a liquidation of risk going on, carl and there is an old saying they've got to sell to meet margin calls, whatever when you get a market like this, you don't sell what you want to sell you sell whatever you can sell and sometimes that's your k grandmother's necklace so that's and what we're seeing here people are being forced to sell things they might not have wanted to sell just to make sure they stay liquid enough. so let's see if it's a rally this could be a very, very interesting day. >> it's been a while, art, since you rolled out that line certainly applies today though thanks so much good to talk to you. art cashin. >> thanks a lot. bye. >> we are off the lows of the morning, which is saying something when the dow is down nearly 500 points, or 1.4%, and the s&p is down 1.9% to 4413 and

the nasdaq down more than 2% now. we are going to turn to defense stocks specifically. some of the biggest names reporting this week as risks of a russia ukraine conflict continue to sore the ishares aerospace and defense etf. it is under pressure, down 1.5%. it's lagged the broader market the past 12 months with geopolitics in focus, it is actually outperformed, still down 2% now with sod's sell-off today. but it's still outperformed the s&p. two reasons for this, as i mentioned, dgeopolitics, you hav seen this rotation into some of these beaten down so-called value stocks so this week we will be getting earnings from the prime contractors, lockheed martin and raytheon technologies. that happens tomorrow followed by general i do nammics and boeing and northrop grumman on thursday

it's a mixed picture for trading this morning while the conflict between russia and the ukraine could translate into the demand for more weapons in the near term, not just u.s. defense spending but foreign military sales, analysts are largely cautious on pure play defense names coming into the tape. many preferring aerospace names with commercial aviation exposure and the recovery play that could be happening. ex supply chain issues, possible la labor headwind amid the omicron variant to be in play. so vcs continuing resolution expiring mid-february, it's chipped away at the pentagon's bunch as, guess what higher inflation has meant unexpected billions more spent on rising costs. we talk about it in corporate america. it's playing out in defense -- or in government agencies such as the defense department as well guys, there is going to be key factors to watch as 2022

unfolds. but it does go back into this broader market discussion and negative sentiment and selling that we are seeing in the market overall today. >> it's going to be fascinating, not to mention the other sectors that are going to report a healthy dose of faang out of apple and microsoft today. by the way, david goldman says, look, we've done it -- look at microsoft. at least as the quarter goes, reiterate target at 400. a lot of it is going to depend on their view of how the enterprise and the consumer holds up in the face of some of these pressures. >> speaking of the overall market sell-off, whichmorgan pod out, the broader market still deeply in the red. those high-flying stay at home names continue to tumble zoom shares, for example, down 63% over the last year down another 4.5% today. cathie wood says it's not over. >> the fear with zoom is, okay,

going back to work, this story is over. well, it's not over. if their guidance is correct and we're -- they issued it pretty close to the end of the quarter, so i think it's close, their revenue growth in the fourth quarter will be from the 19 to 20% range. we think their revenue growth rate will accelerate that is when i think a lot of investors will get an ah-ha moment what is going on here? >> joining us now is wrolfe research -- alex is there going to be an ah-ha moment for investors in zoom >> far be it for me to disagree with cathie wood here. we don't think revenue is going to accelerate. we are forecasting revenue growth to continue to decelerate we have got close to a 15% growth rate next year and a 13%

growth rate the following year something very important is happening at zone. the margin story is starting to come out and we do think from a march perspective free cash flow margins are, you know, almost billion dollars in our model in free cash flow in 2024 that's a 38% free cash flow market, one of the high nest our space and we think that's an area that investors will havehave a ah-ha moment can it be a 15 to 20% grower in a bold case scenario longer term if they cross sell other products, phones, events, webinars, rooms? he with think that's absolutely possible. >> all right again, 2 billion, free cash flow 24 not that far way and we got a $42 billion market value. we are actually below that now with this bit of a decline

as you said, 20 times. you are saying buy it here >> look, we are saying that if people can get -- we don't think zom is going away. it's one of the bissinger brands in the world in our opinion. they have great products clearly the pandemic was a massive moment, a massive brand awareness and just connectivity episode for the company. we are saying that if you -- if you step back and you have -- you're an investor with duration the next three to five years, companies that have the best march profiles in the business, those are the companies that are going to continue to do well, they are the companies that outperformed nif significantly companies with to% or more free cash flow margin since november 9z have outperformed the companies that have no margin by 3x and that's a powerful statement. zoom's participating to some extent we think on the upside, or they can participate, when investors return to the segment. >> we just talked about zoom

how about some of the other names that you cover since you do cover so many software and cloud names that were once high-flying and for which we have seen stark sell-offs in general in recent months. >> yeah, look, we are of the opinion this sell yaufr has nothing to do with fundamentals. we don't think that earns was going to be a catalyst for our space because the confirmation that fundamentals are solid doesn't really change the current reason for the sell-off. having said that, where we think the fundamentals are the best is in cybersecurity we think names like crowdstrike, where you can get the fundamentals and you can get the margins, that's an area we are really pushing investors then enterprise software, similarly, names like salesforce, zoom info, names like adobe and workday, names you can start to get comfortable with free cash flow multiples,

free cash flow margins and still leading growth rates on an overall sector basis, that's where we're really pushing investors to i think we got to get through earnings i don't necessarily know that's going to be the catalyst for the space. >> i am going to ask you a bask question tied to the fundamentals in part because they didn't seem to until more recently totally matter because people are busy chasing growth in a low interest rate environment, that is how much onus to put on the tech companies that are actually profitable and generating cash flow right now >> i think that's -- i mean, you are seeing it in the returns they are outperforming now again, that means they are down less than, but we think that, again, free cash flow multiples form floors typically for conditions than revenue multiples perform ceilings we don't think there is anything wrong with the growth. the ones that demonstrated the ability to generate

profitability that's where we are focusing investor attention. >> finally, alex, i think it was on friday, citi directed its workers back to the office beginning february 7th i wonder, does the return to office impact the trajectory of overall i.t. spending and the reinvention of corporate i.t. as they work through a hybrid model? >> i think we are in a new world. i think the hybrid one is the one that's going to prevail. whether it's a three-day in-office, two-day at home, you know, some variant or version of that, there is just a significant cost benefit for hybrid, even for -- you talk about the great resignation. the amount of ceos who ttell mes enabled them remote to hire in places to places they never accessed talent pools before, it's a huge positive and step change function.

we think the future of work and a lot of these collaboration names, it's not over it's just a new -- net new starting point they will build interest from. again, the first place we think this is going to matter on the return to work is cybersecurity where you really -- we think that this new vulnerability law, it's digital covid, it's everywhere and we are going to continue to see the threat factor increase and, therefore, the cybersecurity budgets follow suit pretty meaningfully >> the metaverse may also present an opportunity for the enterprise in terms of remote work it would seem that perhaps some of the names like microsoft and the bigger players may have a much more significant market share than a zoom s is that a threat to them. >> i think for the metaverse, microsoft with the recent acquisition is thinking heavily. don't sleep on adobe adobe has a position in the metaverse and nfts that isn't really well understood anything -- all the digital content that's created for the

metaverse or these immersive video experiences, that's going to have to be created on a platform like adobe, we believe. in ermd terms of whether that's a headwind or tailwind for zoo i am not sure that collaboration in the enterprise pretty long po time, but i do think that at some point they will need some vector >> alex, thanks for your time. >> thank you guys. >> well, it's been a busy morning for the markets with the s&p down 2.3%, the nasdaq down 2.8%, but also a busy morning for activision two big names in focus this morning. let's start with kohl's because that stock is up more than 33% it started as an activist play late last week there's been activity in that name for quite some time but it has turned into potential offers for this company, both from

someone associated with starboard and the private equity firm sycamore. our leslie picker confirming, i believe, has made a bid as much as $65 a share for its part. kohl's said it has received expressions of interest and that's all it's going to be telling us at this point starboard's interests seem to be based not as much, perhaps, on changing management's approach completely as simply the idea that this thing looked cheap and they seemed to have followed through on that belief, of course their belief that perhaps brick-and-mortar retail's future is better than some would believe, based on the future cash flows they saw coming from kohl's i think 675 is the number i saw for consensus estimates for next year gives you a sense of where multiples are for fiscal year '22 so that's some perspective in terms of how cheaply the stock had been trading

the other name, unilever one of the biggest activist funds tryon. there have been no conversations that have taken place between unilever's management and trian. no comment at all. so unclear at this point what they're looking for, whether they would try to follow the same playbook they used to such great effect at procter & gamble the only meeting that i'm aware of that took place between trian and the ceo of unilever was last year at london and it had nothing to do with any stake by trian. it was specific to that boycott that ben & jerry's currently has in terms of selling its ice cream in the west bank and in east jerusalem that remains in place. my understanding is mr. pelz was

meeting at the behest of the israeli government with management to try to get them to change their approach there. but again, that was the only meeting that took place, so we'll see what develops here, carl >> the activision -- the activist conversation, we mentioned unilever and kohl's. didn't talk much about peloton, but peloton is up almost 2% in a pretty rough tape year, david. >> it's not an activist i'm familiar with. peloton's market value is far smaller than it was not even long ago so a smaller activist can take what might be a sizeable position although it is said to be less than 5%. >> and peloton has that dual class voting share structure, which means that any kind of activist investor pressure in that stock may be limited so we'll have to see how that plays out. let's get to dom chu with the sector sort. he's looking at utilities. dom.

>> defense everyone is playing defense these stays. stocks in sell-off with the s&p at one point trading 10% below its recent record highs. every sector you can see behind me is trading in negative territory. we are seeing that relative outperformance in those defensive parts of the market that tend to hold up a little better relatively speaking during bouts of volatility you can see consumer staples and utilities, the two best performing sectors that includes names like duke energy, also eversource and american electric power so watch those utility names. they have been relative outperformers. we'll see, carl, if that continues in today's trade with those dividend payers and less sensitive stocks doing some of the relative outperformance, carl back to you guys. >> by the way, vix settled back below 34 let's get to bob pisani once again. >> and that vix over 35 or so, that's a two standard deviation

point move there's a real battle going on 4273 was the low for the s&p we regained almost a third of the losses and now slipping back a little bit so it's not clear where this is going to play out. let's take a look at the early sectors. consumer staples, modest gains, usual defensive moves. kroger, clorox doing a little better health care holding up better. but energy slipped significantly today and of course ark innovation down rather notably show the tech stocks mega cap tech down 1 to 2% but shopify and block down about twice as much. that's a very typical pattern that we've seen many times here. what's surprising is the number of new lows. 450 at the new york stock exchange we have not seen this in a long time here. a number of big tech names at 52-week lows amazon, for example, paypal, skyworks and even twitter at a 52-week low. amazon, 3200 just about a week

ago, now $2800 some big consumer names as new lows not just etsy, but walt disney and best buy, ross stores and even starbucks which is a pretty big growth name in the consumer sector sitting at a 52-week low. starbucks has been straight down for a number of weeks. the minute we hit 10% down, everybody says this hasn't happened in a long time. that's true. what's unusual in what's happened here, we haven't seen a 10% correction they are fairly common actually. i'm going to show you since world war ii, declines of 5% to 10% are very, very common. it's happened 84 times since world war ii the average recovery time has averaged about one month so we're right in a very normal pattern. what's not normal is that we haven't had a 10% decline in so long that's why people are so shocked. 10 to 20% declines are far less common but that's not uncommon

it happened almost 30 times essentially since world war ii and the average recovery there has been four months so the point is that we have seen these many, many times before the market has dealt with them we're in some unusual situations with the federal reserve essentially -- there's a lot of debate in the markets whether this is a cyclical move in the markets that we're seeing or whether this is a secular shift, a long-term shift that the federal reserve is instituting very much like they did, guys, back to in 2009. that soocean of liquidity was definitely a factor on the outsize returns we had if they withdraw the liquidity we might have some periods where we'll be underperforming instead of 10% gains, we've seen 15%. this is where the market is debating back to ou. >> some crucial historical context that you just folded in this conversation. the ipo pipeline, something i know you watch so closely. we've seen a number of companies

looking to go public since the start of the year who have pulled those plans as well is the expectation that that's going to continue to happen amid the market tumult. >> the ipos, how well they price and whether they go at all is the state of the market. nobody wants to go in a down market right now this is going to be a very difficult market for ipos to happen. but given the spac market, and i think we'll get a more normal market in a couple of months, i think you'll see a lot more interest in ipos this year and some of those companies that were considering spacs might in fact turn to ipos. i'm a little more optimistic on that front than some people. >> bob, thanks yeah bob pisani keeping an eye on all things market related for us speaking of which, we're still down 2.3% on the nasdaq. that's kind of been the key component that at least i'm

watching questions, of course, morgan, about how far the selling will go i know plenty of hedge funds have already had what would constitute a bad year, perhaps taking risk off and just saying i can't risk anymore and not short enough to have benefited from this so we'll watch that. netflix shares, pointed this out earlier, down almost 40% so far this month $160 billion is the current market value of course guidance was pulled in dramatically by the company last week you can see, though, those shares down along with so many of the other laggards there. moderna, nvidia which hit $800 billion in market value is now down below $600 billion. but netflix also taking disney down, remember, because many investors paying or willing to pay a fairly high multiple for the prospect of direct-to-consumer, of the continued growth and what that meant for these companies. some of that put into question

by netflixlower guidance in terms of subscriptions in the coming year. >> some of the biggest losses play out today are in some of the names that were among the highest fliers last year, at least until later last year. energy, by the way, the only sector now in the green to start the year everything else has turned negative amid this broader s&p correction that's going to do it for "squawk on the street. "tech check" starts now. good monday morning, welcome to "tech check." i'm carl quintanilla with jon fortt and deirdre bosa the nasdaq is down another full 2% today and leading the declines, ark funds, tesla, netflix down another