saying he likes the high volume and he weed nat bounce this morning we didn't have it yet, but this afternoon, we have the start of one >> we know the last hour and first hour typically have a lot of those surges. we'll have to see what happens with the closing bell. >> closing bell, did someone say closing bell >> thanks for watching pl "power lunch. "closing bell" starts now. >> i'm wilfred frost more agony for the bulls following the worst week for stocks since 2020, but the major averages, as kelly and tyler were saying, off their lows as investors weigh geopolitical tensions, earnings, and the fed. >> welcome, everyone i'm sara eisen let's look at what's driving the action in this final hour. technology, once again, seeing heavy selling pressure, even as treasury yields dip today. the nasdaq is now down 14% on the year with names like airbnb, netflix, and tesla among the hardest hit today. bitcoin making a turnaround

after touching the lowest levels since july many crypto related equities remain in the red. energy losing a chunk of big gains this year as oil pulls back we have every sector lower right now as jim cramer noted this morning, the final minutes of the session have been quite a roller coaster lately. >> any time you buy anything in the last half hour, you're obliterated, and i don't know, i would tell people, look f you really want to know where to buy, keep your paddle dry the last half hour because the last half hour has been a nightmare >> here we go. we'll see what happens in the final 59 minutes left of trading. wilfred. >> we have a great lineup of experts to make sense of the market turbulence, including bill nygren, lindsey bell, alley mccartney, and joshua friedman from canyon partners >> let's get straight to the action mike santoli tracking it as always for us. and mike, what are you watching in this big sell-off where we have seen the losses get cut in half as volumes explode?

>> yeah, the key is looking for that urgent indiscriminate wave of panic selling that maybe does alleviate itself and you get a little bounce. it's sort of a crescendo of selling. tactically, that's one of the things that traders would be looking for, in fact, we're looking for coming into today. in a sense, it's been techbook you have not recouped the losses but a lot of concentrated liquidations were happening at the lows today and at the lows today, we were all the way back to levels seen in may. so you kind of wiped away seven months worth, down 10% from the recent highs, also down 10%, year to date and month to date, keep that in mind because a lot of systematic disciplined funds are going to take that kind of monthly pullback and say we're going to cut back on risk. a lot of the last couple percent has been that activity as opposed to people discerning specific fundamental changes they were reacting to. sometimes when the market does have one of these downturns, it kind of operates on the first in

first out principle. take a look at the small caps or microcap stocks as well as the eq equal weighted russell 1,000 this basically shows you they both have gone back to a year ago. they have sort of wiped away whatever upside they had in 2021 still above the panic lows in 2020, but it does show you that they're actually outperforming on the day in fact, the russell 2000 was also positive for a little while, so maybe a little bit of a short covering, which is the way the snap back rallies start. it doesn't always turn into a great recovery, but that's how they start short covering and the idea they have taken their punishment, where a lot of big stocks, for example, microsoft at its lows today was down 21% from its highs but it barely made a dent in its 2021 gains. now, take a look, too, as a two-year look of netflix versus disney this is a great parallel two-year charts are taking you right to the market peak before

covid hit. disney had been struggling and rolling over for a while now, basically, more of them more or less flat for two years. in fact, dizmy might be that kind of name where you say it's been so distress for a little while. you wonder if the contrarian move is to say rebuild positions in big quality companies when they are on the outs like this i think there's a lot of this activity going on, whether it was wanting to buy one of the secular winners or looking at the wreckage in small caps and saying maybe the risk reward is improved because of all the relatively kind of blind selling that's gone on, guys >> mike, let's talk about the why. so we did get some economic data today that was pretty disappointing. some manufacturing numbers that if you look inside showed new orders are slowing the employment component of the manufacturing index contracted services was a big miss. is this about a slowing economy into a fed tightening, the russia geopolitics angle i noticed gold was up. what are you hearing

>> keep listing things because it's about everything. when you get into one of these episodes, all of a sudden it seems as if every direction you look is a plausible reason why we have been selling off, even though all last year, what did the market do? it ignores every potential negative on the way up i'm more in favor of the idea we tend to retrofit the reasoning to the market action, but yes, absolutely, if you wanted to name the fundamental fear, it's we're getting a fed that is tightening and more determined to tighten because of the inflation picture than they would otherwise be at this level of growth and this level of perhaps pullback in the equity market i think that's where the anxiety sits, and the rest of it you can fold in and say oh, and here's another reason i shouldn't buy the dip because russia and ukraine and all the rest of it i think all of that stuff gets into the mix, but it's almost a good thing when it seems as if we're beset by so many challenges it tells you more of the bad news is already in the market. >> mike, thanks so much. we're down 1.8 percent in the

s&p 500. for more on what he's watching amid today's sell-off, let's bring in bill nygren, portfolio manager for us equities at harris associated. great to see you thanks for joining us. what ultimately do you make of the sell-off we have seen year to date so far >> thanks for having me on we have been saying for some time that we think this has been a bimodal market there are parts of the market that are very, very cheap, and parts that are very expensive. and we have expected somewhat of a reversion to the mean. and i think we have started to see that there are definitely stocks out there that are trading at prices that are hard to justify on fundamentals but we think the oak mark fund portfolio has invested in a very different part of the market with its largest holding be ally financial, they reported great numbers last week. companies expected to earn a little more $8 a share this year it's trading at $46.

they'll be buying back more than 10% of their stock they pay a 3% dividend yield barely sell at a premium to book value. a number of other banks we could tell you the same thing about. capital one is selling between seven and eight times expected earnings >> does it worry you when you see those banks which i totally get the buy case for, particularly following pretty good earnings for most of the names, does it worry you to see them selling off with the rest of the market and wonder whether we're just in a bit of a downdraft that's going to affect everything no matter what for a period of time, at least >> certainly, we don't enjoy seeing the stocks we own go down, but at oak mark, we try to look about five to seven years in the future, and we're highly confident that these companies will have larger book values, larger dividend yields, larger dividends, hopefully not higher dividend yields. higher earnings. because they're serving growing markets with growing needs, and

they're going to have a declining share base so we invest based on thinking we're going to get a very good five-year return from these levels and when the prices go down like they have been recently, to the extent investors give us more capital, we'll put that to work in these same ideas. >> what about netflix, bill? wanted to ask you, i think you had netflix in the fund, which was always a little curious for a value investor and now what we saw happen after earnings, i'm wondering if you're adding to that position, because it looks even cheaper. >> obviously, we can't tell you what we are doing or have been doing in the stock but i couldn't talk positively about it here if we had sold it after last week. we think netflix is a very, very cheap stock. fw you look at traditional metrics like p.e., it's less than 25 times expected earnings. about five times revenues. under $800 a subscriber for the first time in the modern

streaming era. we think it's just a very cheap stock that's still the clear market leader. it's cost advantaged customers consider the prices to be a bargain so we think it's a great opportunity today. >> i mean, interesting that it's cheap relative to where it was, both five years ago, before it grew into its multiple and two weeks ago, before it pulled back but it's not cheap relative to the market >> well, at 25 times earnings, it's a very small premium to the market for a company that we think is still in its early to mid cycle growth the company is growing much more rapidly than any other sector in me media, subscribers are still growing. the amount of programming that they're providing is growing substantially. so we think this is a very good company that deserves to sell at a significant premium to the

market >> do you think that value stocks in general can shine in this environment, bill that was the great hope of this year but what you need for that to happen is the economy to stay resilient in the face of rate hikes. there are now questions about that given some of the data and some of the market reaction we're reading into what's your assessment >> i don't think the banks or the energy companies need an incredibly strong economy to justify selling at the mid to high single digit pes they're currently selling at most of the energy stocks look cheap if oil prices fall back to $60 a barrel oil after a decline today is still above $80. at this price, free cash flow ratios are into the mid to high teens, some over 20% these companies are going to be returning a lot of capital to

shareholders and i think that's going to happen regardless of whether we have a real strong economy or an economy that is more at trend level. obviously, if we go back tothe way things were at the first quarter two years ago, at the beginning of covid, that's a different ball game, but we certainly don't see that in store for the economy. >> what's your expectation on the fed in the year ahead and whether it's this week or in the months ahead, if they significantly alter market expectations of four rate hikes, does that make a difference to what equities do >> i'm probably the worst interview you can have for fed policy it's something we don't focus on at all we do think about fixed income in a value framework, and in the oak mark bond fund, we have had very low duration in the portfolio because we think investors deserve a positive real interest rate we value all our stocks based on a positive real interest rate,

and the fed needs to raise rates over the course of this year to get rates back to a positive level. >> you said that energy stocks would still look good to you even if oil falls to the $70s. we're down 2%, still at $83 on wti. which energy names do you like best because we have seen a pretty strong run-up over the last year >> we have seen a strong run-up in the last year, but that came at the end of an awful decade for energy names we have positions in eog, conoco phillips, apache, i think eog is the highest quality e & p company in the united states they'll be profitable at prices down to about $40 a barrel they have got a lot of low-cost opportunities still ahead of them stock sells at a single digit pe based on earnings expectations for this year. at the other end of the spectrum, you have a smaller

company like apache. it's got a little more depth it's a little more speculative but they're selling at about a 25% free cash flow yield based on oil being at $80 a barrel we think this area has been oversold we think esg investors have kind of mindlessly avoided this area because of it being hydrocarbons rather than saying that the u.s. is a worldwide leader in its hydrocarbon efficiency, and its carbon efficiency for producing hydrocarbons so we're very happy with this industry, and we love the fact that they're returning capital to shareholders. >> bill nygren, thanks for joining us good to see you. >> thanks for having me. >> we'll be all over the market moves throughout the show, with more ideas to help you navigate the volatility after the break, a select few names seeing strength today after a busy weekend of activist news we'll dig into the big drop in

coal with an analyst who jus upped his price target on the stock. you're watching "closing bell" on cnbc.

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the nasdaq falling today, but well off its lows. now down less than a percent here's a look at the nasdaq 100 heat map as you can see, currently down about a percent, trading at 14,285 well below 14,000 at the low of the session. it was in fact down 4.8% at one point. so significant rally off the

lows the likes of peloton towards the top of the list there, as you can see those that have been beaten up the most of late whereas moderna, baidu, net flex remain toward the bottom there >> it's incredible recovery. the dow now down almost 400 points it was down 1100 earlier kohl's is one of the bright spots. that stock rallying following reports of two takeover bids from activist investors. sycamore offering to pay at least $65 per share for the retailer acacia research offering to pay $64 a share. kohl's did confirm it received the letters of interesting, saying in part, the board of directors will now determine the course of action that it believes is in the best interest of the company and its shareholders joining us now is oliver chen, senior retail analyst from cowen. what's it worth in a takeover? >> we think it's worth $75 or more, as much as $80 per share

there's a few things happening here one, real estate real estate could be valleyed at $3 billion to $7 billion $3 billion of that could be achieved in a sale lease-back, so monetization of real estate, unlocking value here two, kohl's has very healthy free cash flow, about a billion a year that's 15% free cash flow yields third and finally, kohl's is trading at a very modest pe, about nine times versus an 11 times three-year average these are factors that give us optimism as well as the base business, thinking about sephora, active, the brands they're developing and the exposure and don't forget about the amazon partnership as well >> right so you think that management and the board is going to go for it? you think this is ultimately how this saga ends >> our take is that there's a high degree of likelihood, 60% to 70% or more that being said, the risk factor and the hurdles to look at

include monetization of this real estate through a sale leaseback, achievement of the financing, and if that can't be done, can a bidder raise the right amount of debt and equity to complete the deal those are all factors to watch that being said, this company is in play. the kohl's cash event is happening and the board of directors needs to evaluate all potential outcomes and act in the best responsibility of shareholders >> it sounds as if you're talking a lot about a lease-back of the property, that there's a bit of financial engineering that a buyer can do, slightly unfair description, but it's more a few one off big moves like that that will create the value to justify this price. as opposed to this being strategically attractive medium to long term is that fair or not? are there lots of other strategic levers they can pull >> i would say certainly that's a big part of the value creation kohl's owns about half the

stores and they're off mall. those have become increasingly valuable properties and there's as much as $7.8 billion in real estate in terms of what this company owns that being said, if a sale leaseback is not able to occur, the leverage ratio would move to four times or higher that would require a bigger check in the financing needs around that. that's possible, too we'll just have to see but the name of the game in retail is real estate does have tangible value and rethinking retail in terms of unlocking that, that's another avenue that we're seeing across a lot of department stores, you know, we like macy's as well. there's about $2 billion of real estate value there, $7 per share. we're watching that as well. >> kohl's up 33%, oliver says it's worth $75 at least per share. thank you for joining us on the move oliver chen. >> we have less than 40 minutes to go in the recovery continues. this final hour feels a lot

different than what we have been accustomed today check out the recovery the russell 2000 index is positive, it was off 20 pest, it's up 1.3% the dow only down 3% the s&p only down 1.25%. the nasdaq down 1% a lot of these beaten down names are getting picked up. we might have seen the wash-out earlier when we saw tremendous declines with the nasdaq down 600 and dow down more than 1100. after the break, the crypto market wiping out $130 billion in value in 24 hours the bitcoin making a midsession comeback as well in fact, it happened first we'll take a closer look at what's behind the wild action next as we head to break, a look at the tickers people are searching for on cnbc.com amid all this volatility there's a decidedly macro focus. then-year note right on top, 1.74 yields moving south today followed by the nasdaq, tesla, which was hardest hit, down almost 5%. the s&p 500 and the dow, which all continue to be lower, but

very well off those session lows we'll keep watching it for you with about less than -- about 38 minutes to go in the session

we're back check out the s&p 500 sector heat map every sector still in the red, but of course, far from the worst levels of the session. s&p down just over a percent energy, which was really suffering, it was towards the bottom of the pile, in fact, earlier in the session, is now the best performing sector, albeit still down half of 1% utilities at the bottom. there's been some rotation earlier in the session when we were at the lows, consumer discretionary, oil, and tech were the worst performing sectors, but discretionary and energy in particular have led the rebound, sara. >> arc innovation etf about to go positive. it's down 55% from the highs crypto also getting caught up in the volatility as well with bitcoin touching its lowest

levels since july before turning higher a little earlier this afternoon. kate rooney with more on the moves that were kind of a leader for the overall market >> bitcoin bouncing back above $36,000 after a pretty choppy day of trading we also had ether recovering from the six-month low the big crypto related stocks also following coinbase, block lower as well. they're off the lower levels robinhood, meanwhile, hitting a 52-week low today. been a tough year so far for fintech. and bitcoin has been trading in line with a lot of those tech names. it's mark row funds have bought crypto in the last couple years. it's one of the first things they look to sell when taking risk off the table as they have been doing lately. analysts are also citing retail investors losing conviction lately the last note says you're seeing most of the selling coming from short term holders who appear to be taking any opportunity to get their money back one way to measure investor sentiment is called the fear and

greed index. that's now measuring at a 13 out of 100 last month, it was around 39 retail investors backing off here lately. they say that fear and greed index is now at extreme fear levels sara >> kate rooney, thanks so much we're well off the session lows. ethereum still down 5% or 6% following a tough weekend for crypto as a whole. >> the final half hour of trading has seen significant selling pressure over the last week or so we'll keep you up to speed on that as we approach the close. 32 minutes left. we are well off those lows, down only 400 on the dow. after the close, will ibm's earnings help turn things around for tech or will they add to the pain we'll break down the numbers as soon as they cross at the top of the hour and as we head to break, here's a check on bonds yields have been lower all day, but the ten-year just inched higher we're back to 1.75 in fact, it's fractionally lower now. but either way, 1.75, the level

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the nasdaq falling to its lowest level in months but it is making a comeback right now along with the rest of the market let's get straight to kristina partsinevelos for a look at how chip and tech companies are performing, seeing some buying >> right into 28 minutes left, and we have the nasdaq coming off the earlier lows, but we were teetering at the eight-month low.

you had some of the major tech players lower, microsoft, and they were some of the biggest drags on the that dac100 you have mega cap tech player microas microsoft as well trading lower today. it's not as bad now, just about 1% lower, but still a heavyweight when it comes to the dow and nasdaq and semiconductors also not spared micron, qualcomm, lam research, all selling. look at that reversal. you're seeing qualcomm up now 2% lam research the same thing, micron teetering in the positive territory. nvidia was one of the biggest losers it was the third largest point impact on the nasdaq and tracking for its worst month since july 2008. you can see it's a little bit of an uptick but still trending in negative territory, and amd, one of the maz dac's biggest decliners to start the year, off roughly about 19% year to date 30% from its 52-week high. its competitor intel

outperforming amd on a year to date basis lots of volatility, especially right before coming on set you can see the movements continuing into the close. back over to you >> thank you very much, as you said, some serious bounce pback going ob the dow down less than 200 points, it's erased four fifth or a bit more than that of its losses let's look into other individual market movers. netflix continues, well, let's look at the share price before i continue, continues its weakness from last week, down 20% on friday then was down 10% at the lows today. now only down 3% jefferies did downgrade the stock from hold, sorry, from buy to hold, excuse me the firm says there's a luft uncertainty around streaming service and expects to see slower growth this year, but well off the lows as i said, it was down about 10% today earlier in the session >> web bush downgrading snap to neutral. the firm cites increasing

competition from tiktok as one reason the stock is only down 1.5%, jim cramer spoke about snap earlier today. to sign up, head to cnbc.com/investingclub, or point your phone at the screen and capture that qr code there >> down only 183 on the dow, it's wild because we were down 1,115 points earlier consumer discretionary just turning green, and the s&p 500 let's go to rahel solomon for a cnbc news update >> hi, sara. here's what's happening at this hour and other news today. 8500 u.s. troops have been put on stand-by for deployment to europe to help nato forces the move brings the u.s. closer to military involvement as russian troops gather near the border with ukraine. prosecutors say three former minneapolis police officers stood by while derek chauvin killed george floyd in front of them during opening statements, defense lawyers counter that chauvin called all the shots during the encounter sarah palin's defamation suit against "the new york times" has

been delayed after she tested positive for covid she claims an editorial piece hurt her reputation. >> and a burr keno faso military officer says they have taken control of the country and elected the democratically elected president. they have suspended the country's constitution and dissolved the national assembly following a day of gun battles in the capitol there you're now up to date. back to you. >> rahel, thank you very much. want to show you what's happening with the dow, which is only down 173 points right now a major recovery from what we saw earlier today from the session lows, down more than 1,000 points what's leading us higher home depot, biggest contributor to the dow gains now travelers, nike, and salesforce are also higher right now. the buying is done in a lot of these software names and some of the retail names with consumer discretionary going positive in the s&p 500. biggest drag on the dow continues to be visa, johnson & johnson, merck, and apple.

we're seeing this recovery with all of the major averages. the nasdaq is only down now a third of 1%. it was down today almost 5% at the lows of the session. for more on this and how to play it, let's bring in karen tam bor, bridgewater co-cio of sustainability it's great to see you. do you see all of these wild moves as tied to what the fed is going to do? >> hi, sara. yeah, i think we're entering a phase that's a really interesting phase and a tricky one because the economy is likely to do fine. inflation is likely to remain high but the fed is withdrawing liquidity, going to continue to withdrawal liquidity, and we're experiencing that sort of suck when the fed withdraws liquidity, it brings down asset prices i don't think the fed is likely to tighten enough to stop the self-sustaining momentum in the economy and get ahead of the inflationary power it doesn't want to cause a down

turn, but it's been printing money for so long, so many dollars floating around, that removing liquidity, even if you're tightening ehind the curve, it really hurts assets. we're experiencing that. and it hurts most whatever is most liquidity sensitive, wherever you saw money go during covid is what's really the most now. >> exactly how it's been playing out. would you be buying on the dip then, karen, some of these hard-hit equities if you don't think the expansion is in danger and the fed won't go so far as to kill it off >> no, i think you really could get a case where the economy outperforms financial assets and financial assets don't look nearly as good as they did six months, a year ago, where the fed had a lot of room to stay easy because they're going to stay in this situation where they don't want to cut off the expansion all the way, but they really do have an inflationary set of circumstances to deal with and the easiest way for that to play out is that financial assets just do worse than the

economy, so they're less attractive than they were. sometimes the most attractive assets are the ones most exposed to either inflationary pressures thor real economy. the best exposure to nominal spending but when you get real spending, when they're not cutting off the expansion, you're still getting people going in, buying things in stores, buying houses, you're getting inflation but less expoetzed to the financial excesses where you see bubbles popping. >> what commodities do you like, and what's the best way to get exposure oil had a strong run, maybe there's further to go, but it's pulling back today i guess showing a glimpse of the fact that it's probably not got as much upside as maybe some other commodities. >> a broad basket is really most appealing. for most investors that look at commodities, they end up overly concentrated in oil because that's the biggest piece of, say, the gsei index, but oil has a lot of risks there are only a few big producers. you have everything around climate change, which makes

pressures sometimes the upside sometimes the downside as regulations change i like metals. they're somewhat ignored by investors, because you need them in so much of what we need to use in the real economy, and you have structural pressures to say even in a somewhat slowing economy, if we want to make any progress on climate change, we need more electoral vehicles, more solar, all requiring more physical inputs from the metals which makes them particularly attractive in an inflationary backdrop that also needs to deal with these environmental issues. >> nasdaq just went positive, karen, which is amazing to see, because we were down, as i said, 4.9% at the low of the session so clearly, volatility, you guys expect this to continue as the fed -- we haven't even started in terms of tightening or removal of liquidity, the fed is still buying assets and keeping rates low. but we are expecting that tone to change very much on wednesday at the fed meeting you expect this kind of action

to continue? >> i mean, look, you can never predict intraday volatility at this level, but what i would say is it is a different market today than it was pre-covid in terms of who the participants are. the fact that you have created these kind of platforms for retail investors to really get engaged, to invest in stocks in a very gamified way, off their phone, looking at prices minute to minute. there's a lot more retail participation than there was previously, and that can cause more extreme volatility. obviously, these retail players, a lot of them had literally received checks from the fed that funded this new interest in investing when everything else was closed and those checks aren't coming anymore, but the pipelines are still there. you have a lot more people engaged in the stock market and it can cause different kinds of price moves. it's buyers and sellers so you need to know who the players are. >> what about the bounceback in crypto today what do you make of that >> i think crypto is a really interesting asset to look at in

this case because there's so little institutional investor participation. our rough estimate is bitcoin is probably 5% held by institutions so there you really are getting a lot of high net worth, a lot of retail, a lot of excess liquidity that went into this asset from a very wide swath of kind of more retail participants so on one hand, when you get the liquidity sucked out, that is one of the first places that's going to get hit even if an asset like bitcoin you imagine one day might become like a store of wealth, short term, that's a high risk asset that was affected by all this money printing going to people who were able to buy it. you're seeing it act as an early life cycle, early stage risky asset that has a lot less institutional participation. the second piece is a lot of the bet the institutions have taken is this is going to stay a volatile market with a luft opportunities for arbitrage and market making. seeing volatility there is no surprise and what you would expects at this stage of

development. >> up 3.5% rebounding here with the market. karen, it's great to have you here especially through these dramatic swings. thank you. straight ahead, the final minutes of this wild comeback session on wall street plus, what to watch in ibm's earnings report after the bell those stories and more when we take you inside the market zone. we have 18 minutes, about 17 minutes left of trade. dow down 221 nasdaq briefly went positive wiping out a nearly 5% decline the s&p 500 down only .7%. we'll be right back.

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quite a remarkable turnaround for the market. welcome back here's arlook at what's ahead in the second hour of "closing bell." we will get earning results from ibm which will be closely watched amid the volatility in technology hedge funder joshua friedman from canyon partners will join us we'll talk about how this week's fed meeting is impacting investor sentiments and what fed watchers think will happen on wednesday and we'll discuss the rising tensions on the russia/ukraine border and how geopolitical concerns are affecting the market we have 13 minutes gee in the trading day and we're now in the closing bell market zone cnbc's senior markets commentator mike santoli here to break down the crucial moments of the trading day and we have lidsy bell from ally invest back as well. we'll kick it off with the broader market major averages are in the red, but significantly off their worst levels the dow is down 1115 points at session lows it's currently down 47 points

and looks like it wants to go positive you have a number of sectors in the s&p turning green. bitcoin led the charge earlier in the session do we get that sort of wash hp out that you needed to bring the buyers back? >> i think we got what would qualify as one you never know if it was enough until you're looking back in retrospect, but without a doubt, i think this rebound, more than 3% rally in the s&p from the lows this morning, were mostly a measure of just exactly how overdone we got on the downside. nasdaq most oversold in 22 months friday saw the most downside put option in history on a single day. we rur all geared for something like this. in some respects it's also textbook you come in bad, down, open. you get a lot of heavy volume selling near the lows and some of the most beaten up stuff starting to have a glimmer of light. i also think we have a fed meeting or decision on wednesday. nobody wants to be leaning too

far in either direction ahead of it and the market's been going down in an almost straight line for three weeks. if you're going tocome back toward somewhat of a neutral footing, it means doing some buying, covering some shoerts. we'll see fitsif it's decisive >> lindsey, which sectors deserve to bounce most, if we have seen the bottom, which sector from here do you think will have the best rest of this year >> i think it's going to be the sectors that really got hit the hardest. and i think that's what you saw today in the action, especially in the rebound you saw the russell 2000 was what turned positive first today, and it had been hit the hardest. it was down 20% basically in bear market territory. crypto assets weredown hit hard bitcoin down gift%, in the green today. so the risk assets have been hit hard they're starting to come back. maybe tech is next nasdaq, like you guys said, looking to maybe make some upside move here today we don't know. it seems like we don't know

where we will land today, but it seems like the buyers are coming in to buy the dip here maybe we did get that wash out that you guys were talking about here certainly things looked a little overstretched to the oversold side, so it's not surprising but that doesn't mean we're going to be in the clear if tomorrow we get an up day, wednesday is certainly at risk with the fed commentary from jay powell there's a lot we have going on this week. we're finally getting into earnings season. maybe we'll have clarity by the end of the week, but there's still room for volatility over the course of the next several weeks until we get the first fed rate hike. >> we now have the dow and nasdaq in pause tiv territory. the s&p nearly there ev stocks had a voltie day let's get to phil lebeau for a breakdown. >> they were down anywhere between 5% and 10%, but like the rest of the market, they have come back a bit. let's start with tesla remember, this was a stock that was trading under $900 a share briefly today. i believe it's back up over $900

a share. we get the q4 numbers from tesla after the bell on wednesday. rivian, fisker, and lucid. we'll show you these going back to november 15th that was the near high shortly after the rivian ipo if you look at the stocks, they have come back today they're down anywhere between 35% and 65% since that mid-november date, and finally, we want to leave you with workhorse and lordstown motors we're going to show you these two. lordstown did go back positive late this afternoon. these stocks are down more than 90% over the last year more than 90%, guys, but overall, the ev stocks coming back a little bit after being down 5% to 10% earlier today >> certainly coming back a lot, as has the broader market. thank you so much. mike santoli, all three of the major averages are now higher. astonishing when you think about where we were in the middle of the session. but just to link the broader markets to phil's report there, we mentioned the importance of the fed later this week.

also some hugely important tech related earnings reports if you put tesla in that tech company coming during the course of this week too >> yeah, the actual big earnings contributors to the nasdaq, we're going to hear from a lot of those i think it serves often as a reminder for people to, you know, they do have a lot of ballast in terms of their cash flow if you're talking about microsoft and apple. microsoft hit a negative, down 20% threshold this morning that's of some significance. when it comes to tesla, though, i think this is more exactly how are the risk appetites flowing at the moment. you know, tesla is still 25% off its highs. it's never been about next quarter's numbers for them, really obviously,deliveries have to cooperate, but it's pretty much just about exactly how much adrenaline we have kind of flowing through a handful of tickers. >> most sectors in the s&p 500 are actually higher right now, lindsey. consumer discretionary led us, but now it's energy, industrials, financials, real

estate, materials, technology. if this is a bounce from things that just gotway oversold and way stretched and washed out, what does that tell us about where we go from here? >> well, i think you have to think about where you think the economy is going from here, right? and while q1 seems like it's going to be a little softer because of the covid impact that we saw coming into the start of the year, the rest of the economic environment seems like there is opportunity for things to continue to chug along, especially once we get past q1 i think that you're going to see earnings expectations. they have remained solid we're not expecting anything outrageous as far as numbers go. just over 7% for 2021 on the eps expectation. that's where we're at right now, which is about average for the s&p 500. the question, big question mark there, is margins as inflation and the fed begins to take hold. the fed, i think, while they may

move faster, more aggressive than what many had anticipated coming into the start of the year, they're not going to be able to get interest rates significantly higher than from where they are, and at the end of the year could still be 1%. we have seen the pe multiple contract just over 20 times from where we are at today. there's opportunity, potentially in the sectors that got hit the hardest or even some of the more sirklic sickle cyclical sectors. >> we have tauklked so much abot the importance of the fed and whether that would change the kind of discussion points this week are we seeing today that's not the key factor for markets in the short term given we have done such a round about turn without any real fed developments >> i think it was a key pressure point for weeks now, and it's all a matter of whether the market just kind of overshot the likely reality when it comes to what the fed might ultimately do and say on wednesday

so i think when you're down 10% in a month or less than a month, it shows you have gone a long way toward pricing in whatever you were afraid of when it came to the fed so yeah, a lot of those things i think it's more about what's been on people's minds as opposed to the observable numbers. the fed has done nothing but talk so far, so we're front running it if the market is tightening ahead of anything that the fed is prepared to do. >> down 8.6% from the highs. earlier today, we were at a point where the market closed at those levels, it would be in correction 10% off the highs. it feels like it's this guessing game of how hawkish the fed is going to be and how much tightening they're willing to do if the markets continue to throw a tantrum and we start to see the impact in the real economy with economic data already starting to weaken you know, can they tolerate a 10% correction what about 20% in four weeks these are the kind of questions that you're hearing, which does

relate to financial stability and the economic outlook >> yeah, no, i think it's certainly something that they're weighing on their minds, just as the market is. i think the market is grappling with exactly what the fed is going to do. you know, jay powell has been very transparent throughout this process. the question is, though, is he late to the game in the tightening process does he need to use all of his rate hikes he can possibly get, given the fact that we're loaded down with debt are we going -- can he get to where he needs to be quick enough to make a difference in theflation spectrum? but then on the other side, is the supply chain going to be able to self-correct as we cycle some of those higher inflationary numbers in the spring of this year? so i think there's still a lot of questions that need to be ironed out over the next couple weeks. i don't think that even if we get a bounce over the next couple days it means that we're out of the woods yet here. there's still a lot of question marks and a lot of uncertainty

you see investors really having anxiety and experience stress about that, which is why i think you have seen such a sharp sell-off in such a short period of time. i would remind investors at the same time after you have such a great performance in one year, up more than 20%, in the following year, it's not unusual for there to be a dramatic pull back in the first quarter. by the way, we're going on two years without a proper correction and really great performance. so i think if investors can hold tight and remain patient and keep their eye on the prize at the end of the year, where the economy is going to chug along, earnings are going to tin to move, and hopefully we'll see some fiscal side of the stimulus support and corporate spending support, with the fed and monetary policy taking away. >> unbelievable, nasdaq up .5% the russell index led us out up

2.3% s&p up .25%. the dow up .25%. almost 100 points. that's a 1200-point swing today. as we head into the close. ibm gearing up to report results. deirdre is here with what to look for there >> so this is big blue's first quarterly report since spinning off kinderal, its legacy business the results could be messy in terms of comparing it to earlier periods and their revised segments what we're certainly going to look out for is that guidance which analysts say will be key, but even sorting through that is going to be difficult. remember, this is sort of a classic legacy play, so it has been outperforming the s&p over the last few months, which is a change from of course the last ten years where it really hasn't done anything, but this is part of the turn around plan. we'll see if this shows early promise after the bell when it reports. backto you >> got it, deirdre, thank you. two minutes to go in the trading day. mike, what do you see in the market internals as we witness

this incredible recovery in the market >> it started out today as an absolute blood bath, 95% of all volume to the downside in the first half hour or so. we have really come back still more downside volume than upside that's not uncommon when you had a big intraday turn around but it's much more evenly balanced two-year note yield has finally kind of curled lower, below 1% not a dramatic move from recent highs of 1.05, but it does show you that maybe the market is rethinking just exactly how many hikes we have to price in at this stage that coincided with a two-year note auction that went pretty well as well. and the volatility index is putting in a pretty good spike we got up toward 40 today, and now have come back in. that was a perfectly appropriate response to the market being down over 4% or so we'll see if we close it below 30 not going to be decisive either way, but a step in the right direction to have one of those spikes on the chart. >> just 30 second left, and unbelievably, we're up across the board for the three major

averages and especially so for the small cap russell 2000 index, which is up 2.2%. the s&p 500 is up .25% the dow up .3% the nasdaq up .7%. it was down close to 5% at the lows of the session. the dow is up 120 points it was down 1,115 at the low of the session. an extraordinary intraday market turnaround >> just a crazy session in the market unbelievable close there at the highs. and what a turn around more than 1200-point swing for the dow, left us higher across the board. welcome back to "closing bell. i'm sara eisen here with wilfred frost and mike santoli. senior markets commentator we have a lot to talk about this hour coming up, canyon partners josh raw friedman is here to weigh in on the market rebound. why he says we're at a fork in the road and where he thinks

we're headed plus, wells fargo institute, invest lt institute scott wren sees opportunity now and what he's telling his partners. first up, lidsy bell is still with us, joining is alley, what were the conversations with your high net worth clients like today? at one point, we were down almost 5% in the nasdaq, which closed higher by .6% >> what a day, what a week, what a month. today was as epically crazy and volatile intraday as friday was the other way. i am so relieved, as is everybody here at the summit, to have the result that we had today, which really, you know, look, we are in what i call the triple threat as someone who really loves alliteration, of rapidly rising rates the market has been working overtime as has all of the al2 rhythms to try to figure out

what that means and what that pace means for valuations and global equities. i think that today is there capitulation, is there a bottom? i don't think there's -- all eyes are going to be on that we have over a third -- yes, please >> no, sorry we were losing your connection there a little bit >> sorry about that. >> so finish your thought. i think it's back. >> yeah,so look, we have a third of the s&p reporting, ibm is about to come out we have a lot of mega caps we're expecting large scale beats. expect ag12% year over year earnings growth. i think that's finally going to start to be the story now that we have this behind us but volatility is here to stay make it your friend. buy in, establish long-term positions. get defensive with health care and stay in the game this is normal >> mike santoli, cnbc just

sending us an email saying this is the first time the nasdaq comp has shown this level of turnaround from 4% down intraday to close positive since november 13th, 2008 which of course, does not bode particularly well given that markets didn't bottom for another three or four months after that >> right now, the textbook says the most violent short term rallies happen in bear markets i don't think we can draw a conclusion from a precedent of two at this point, only one of which we know the result of. i think we could look at today's activity in the early part of the day and say it's totally plausible we got a pretty good purge. things people had been waiting for, and on a near term basis, it could use a mental marker for the lows for now it's not going to go down in a straight line, even if we're in a bearish tape i think it makes a lot of sense. very squeeze type activity into the close today. that's okay, as i said, it all starts with short covering when you have one of these intense

sell-offs. so tactically, you would expect there to be a lot of back and forth action that would be another thing textbook would say it wouldn't necessarily be a v back to the highs even in the best case scenarios. but it looks like it was pretty constructive today people are going to look at those charts and say this looked like the market made a little bit of a short term stand and i think it if you're an investor, if you're not in the business of looking for things to buy at a better risk reward bargain when the market goes down 10% in three weeks, you're kind of not in the right game. >> but alli, it doesn't change the fact we're still in this environment where we're seeing the highest inflation rates since the early '80s, an economy that is doing well but is losing some momentum, and a fed that is getting more itchy to tighten policy, raise rates, potentially tighten on the balance sheet so with those risks out there, and the constant, is the fed behind the curve, are they going to make a policy mistake, all of that noise in this environment, i know you still like stocks

what part of the markets do you go, given we're still facing all of the same risks we were before this recovery today? >> yeah, i think that's a very important point. all of this comes to one concept, which is for the last decade, the market has been able to count on the fed to support growth they are now likely going to be swinging the pendulum and have a very different perspective and acts to take care of the market is figuring out how to interpret what that means for valuations what that means is yes, we still think there's going to be growth yes, we're still leaning in to the first half and cyclicality, but you need to add a little bit of defensiveness you're still searching for yield, so whether that's in stable dividend payers or whether you're getting into senior loans, that's really important. and even if you're getting into tech, think about the least growthy tech think about the things that are exciting revenue producing,

disrupters and that have a long -- but this is a really important concept, and this meeting is going to be really important because the narrative that the fed has been there for a decade with a singular perspective, which is to report consumer and corporate growth and spending, that may be changing, and so both the volatility and this rerating, this reset, they are real. >> such a crazy rebound today, lindsey. in equities. and also in contributo assets. bitcoin ended the day positive ethereum was still down slightry boat are down significantly since friday what's your take as to whether this is a good moment to buy and whether these assets will in fact act as an inflation hedge in the year ahead? >> i think the action that we have seen in cryptocurrencies is just really a reminder to investors that this is a very, very volatile asset class. doesn't just go up, it goes

down it goes down in a big way. it can fall more than 20% multiple times a year. we have seen that in the past. so i think when it comes to kr crypto, you need to know what you're investing in. if you want a small chunk of fund money in it, that's just fine but it depends on your personal situation. i think that when you look at crypto, if you look at bitcoin in particular, it has been very highly correlated to the market over the course of the past five years. you think about what the market did over the past five years, but in the matter of the last six to eight months, we have seen bitcoin actually decouple from the s&p 500 and i think that's as it has become more popular, it's gained -- it's increased in volatility and there's just a lot more speculation about where regulation goes, the risks continue to rise here. so i think that that is telling us something, that from an inflationary perspective, while maybe over the longer term, the

returns are high and can outpace inflation, the volatility is something that you have to be aware of it's not necessarily your traditional type of inflationary hedge. >> mike, i just want to bring it back to earnings because we're about to hear from ibm a lot of people look toward earnings season to refocus on fundamentals and get off the fed and macro. netflix doesn't do that because it provided a lot of anxiety, certainly around that stock and some of the streamers. but if you look toward the chips, for instance, which had pretty good fundamentals and shortages and all that, and some of the other beaten down sectors, could that be a way to change the narrative or this is all cuming with the fed? >> it's certainly going to be a distraction or really just a new fixation look, the fed is going to be done wednesday after wednesday, we're done until march in terms of what they say we'll know the story yeah, we're going to obsess probably about the implications for march, but it will give way to a little more kind of company

by company two-way type action in terms of figuring out what's priced into this market. everyone is expecting a step down in growth i don't think it's an easy way -- i don't think it's easy to generalize about how earnings are going to go because it never is it's always kind of winners and losers relative to expectations is the whole thing i think that's what we're going to focus more on >> let's head to ibm, which is just out, and it does look like relative to expectations, a beat at least on earnings and revenues 335, earnings per share is what ibm is posting the estimates called for 330 as far as revenues 16.7 billion dollars in the quarter. the expectation was around $15.9 billion. if you look at that revenue number, that's about 6.5% sales growth it would have been 9% without the currency swings. that's the best growth for ibm in more than a decade. below the line, a little stronger on each of the segments remember, they're breaking them down now in a different way because they have done that

spin-off of kin drldrel, which was a slower growing business. consulting, 16%, hybrid cloud up 19%, and red hat up 21 first strong numbers for the growthier parts of the business that ibm is trying to focus on. we want to get to deirdre bosa who is digging more into ibm, which is up after hours. particularly on the better sales growth this is what they were promising post spin, and it looks like he started off with the delivering. >> well, let me tell you, there's a lot to dig through because these are very different results than what we had in the past we mentioned this ahead of the results, there's the spin-off which is making it very difficult to compare, which is why you might see some volatility in the after hours. i'm going to keep watching the charts the shares are up 5.5%, but what the market really cares about is that 2022 guidance we did not get that in this report it says they will discuss 2022 expectations on the earnings call that's likely because they're going to need a lot of context

this is a very different company than it looks like a couple months ago it spun off a legacy business, so the results were always going to look better it's how sustainable is that, because we have seen in the past that ibm has had a quarter here, a quarter there, where it's return to revenue growth they have to convince investors he can sustain it at what he calls single digit revenue growth that's been a challenge for ibm over the past decade so see if he can do that the hope, though, is that it emerges more agile, more profitable another number i take out of here is end of the year with $ $7.6 billion of cash on hands, so some analysts are wondering what to do they made that huge red hat acquisition, so this is a company in hybrid cloud that, you know, is still really trying to turn this huge ship this isarven krishna's strategy. we know ginni rometty had a hard time doing it, but so far, the

market taking it well. that call and guidance is going to be really essential >> yeah, looks like as far as the outlook, what they're saying is mid single digit growth for 2022, which would be consistent to what is promised. deirdre, thank you the stock is shooting up 6%, so this is one of those where if you were looking for a value stock that has underperformed and you're starting to see grun chutes like we're seeing in this quarter, would be a good bet barrons had picked it as one of its better stocks for the year >> there's no doubt that there's very low expectations baked in to the valuation, but that's been the case for years. we'll see what that consensus goes to after we get guidance. the stock is up, but you know, it's kind of back to levels we were at a couple weeks ago it's not as if it's plowing new ground here. the fact that it's, you know, a 5% dividend yield tells you the company is now valued for virtually no growth over the

long term or at least no really profitable growth. i think that's probably the opportunity if you have a divergent view and you really think they can put it together and streamline the portfolio the product portfolio enough to get that done. always said the consulting business in theory looks a lot like other publicly traded companies that have much higher valuations there's pieces of this people might want to own at a higher level. i still think it's a show-me situation. >> either way, good start for the week when it comes to earnings after the challenges, of course, we had last week. much bigger names still to come in the week ahead and we still have to get to the earnings call for ibm, but an initial bounce lindsey and alli, we want to get you to zone in on your top trade ideas right now. lindsey, what are you going for? >> so i am looking at noble, which is the pro shares s&p 500 dividend acrristocrat, a lot of people when aren't talking about

dividend aristocrats because rates are rising, this is an etf that yields about 2% on average. but the nice thing about this is it's a way to diversify across the spectrum, across the market during a volatile period of time while 21% of this etf is invested in the consumer staples business, which has done well, actually, over the last couple weeks, as the market has taken a more defensive tone, there's another 33% of this etf that is invested in industrials and materials stocks so what's nice about that is it gives you cyclical exposure for when the market does begin to turn around. during the post-covid run up, the post-covid bull market, this etf hasn't performed as well as the s&p 500, but that's over a short period of time when you look at the dividend aristocrats over a long period of time if you're long term investor in this type of index,

you can see an outstanding outperformance by this type of etf. that is because simply the compounding of the dividend that you get every quarter. so that is something that i have got my eye on, especially as we're in this volatile period of time over the next several months i'm not saying it should be a huge part of your portfolio, but it's something to create a little bit of stability in a period of uncertainty. >> nobl, highlighting the dividend alli, what's your pick >> playing on the same relative theme, which is adding a little bit of defensiveness after all of us feeling beaten up over the last couple weeks. i'm buying msci health care index. think about health care, it has very defensive qualities in a lot of it is value stock basis. you also have a little bit of growth and the ability to take advantage of the massive, massive amount of intellectual and monetary capital that has gone into health care and

biotech since the covid pandemic was with us. trading at a discount. defensive qualities. really should be a part of every portfolio. and the past two commercialization. the incorporation of ai, nornormen >> thank you for joining us. great to see you >> we are just getting started here on the second hour of "closing bell. up next, we'll have much more on ibm's post market pop when we talk to an analyst with a $140 price target on the stock. it's climbed closer to that in the last few minutes and canyon partners josh friedman will join us in an exclusive interview. his thoughts on today's head-spinning action 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.

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spin-off of kindrell joining us is evercore isi 6.5% sales growth for ibm, the best in a decade and really below that line, we saw growth across the new businesses software, hybrid cloud, even infrastructure turned positive does the stock get another look from you i know you're neutral now, but given this is the first report out of the gate after the spin, does it change the outlook >> listen, this is a very impressive set of revenue numbers that ibm is putting out, to your point. 6%, 7% top line growth a little kindrell in there, but without that, consulting grew double digits. software fwrgrowing 5% the challenge with ibm, it always seems one step forward, one step back, and a lack of consistency. so if they can live up to the expectations of what these numbers are looking like, this becomes a very interesting asset

for investors to own as you go through 2022 >> tell us what you're looking for, which i guess will come out in the earnings call, the key things you're waiting for in the call >> you know, i'll tell you, there two things i really focus on, one is what's enabling this mid-single digit growth. i think they talk about that in the press release for 2022 how much is by kendrell because it's resale that's happening there. how much is organic? that will be crucial to understand the second part is what is the profit or eps road map look like for next year? and the fear i think i would have is is there a lot of stranded cost potentially to have with the spin that you need to restructure out, so it might have a good eps number, but it could be back half heavy those two things are what i would focus on into the earnings call in a bit over here. >> well, they are going to say they see mid single digit growth

continuing for 2022. that's the guidance. my other thought here, is the market, we know it's been happening with overall the market and tech stocks and software stocks. i don't see any evidence yet, especially from ibm, with this report, that i.t. spending is slowing down or the fundamentals of the businesses are changing or that ceos are pulling back on technological investments. do you could that make for interesting opportunities, this earnings season >> yeah, i mean, sara, i almost think what you see with ibm is the opposite of this, which is look at the consulting growth of 14%, that almost says the digital transformation journey happening post-pandemic is accelerateling, not decelerating this almost validates ip spend is going to get stronger in 2022 versus not the mid single digit growth guide for 2022 that they talked about, what you want to understand is how much is done by the kindrell resale

relationship, and if that's the case, maybe you dial back expectations this is good that price gets better in 2022 versus worse. >> thanks so much for joining us >> thank you after the break, hedge fund manager josh friedman joins us with his take on the massive swing today and where he's looking for upside in the uncertain environment. plus, we'll tell you about action in kohl's, peloton, and unilever, 3 stocks that rewe higher in the wild session we'll be right back. i'm just wasting time. 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, so do its recommendations. so it's like my streaming service. well except now you're binge learning. see how you can become a smarter investor with a personalized education from td ameritrade. visit tdameritrade.com/learn ♪

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miami today for the mfa conference where top asset allocators and firm managers are discussing strategies for the years ahead. leslie picker joins us with canyon partners josh friedman. good afternoon to you both leslie, to you >> thanks so much, and thank you, josh, for joining us. first of all, i want to get a sense from you on what you're hearing with regard to the market as wilf mentioned, you're in miami at a hedge fund conference pretty dramatic moves today we saw in the overall markets i'm curious, what are people talking about? i wish i were there with you in person, but give us a sense of what the dialogue is like on the

ground >> there's been a bit of a debate as to whether we're on the verge of some enormous recession, and markets are not only temperature takers in terms of what the mood is, but they're osmood determiners when things are down as much as they were midday today, and it was the worst start in 90 years in the market, intraday today. that produces a lot of talk about whether we're entering into a great recession and whether the fed and the treasury are going to pull away the punch bowl in a way that hurts the market dramatically. my own view is a little different from that and the other narrative really is one that says we had very, very good economy going into covid, and then we proceeded to react almost immediately with the fed and the treasury stepping on the gas to enable a quick recovery but once we got that continuation of a very positive market with low unemployment and nice demand, a good productivity gain post covid first phase, we continued to use very muscular

fiscal and monetary policy, which was almost like pouring care seen on a burning fire. and it was designed to encourage tremendous risk taking so it shouldn't be surprising to see a certain amount of inflation in that environment. driven by a quick recovery in demand and an inability of supply to recover district so quickly. there was a lot of debate about that, and the question is will that inflationary pressure be more transitory or will it be more long term >> what do you think, josh >> i think it's more -- the markets are saying it's more likely to be transitory. if you look at the long term treasury rates, or you look at ten-year treasury rates, they haven't incorporated long term embedded inflation my own view tends to be that this will work itself out as markets do however, i think there are some risks in that. i think a couple of the risks is omicron has been quite well contained in china

if that proceeds to spread, the could exacerbate the supply chain disruptions, and energy price increases could cause some interruption to that reequiliberating of the markets. labor participation is another issue. people who just left the labor force are not likely to re-enter immediately, so the shortages might be a bit persistent, but generally speaking, it would be unusual given the circumstances here to see the markets completely give up to some sort of more recessionary demand driven downturn. >> i'm interesting, josh, in your tame of how cheap equities are at the moment. i totally get your point that maybe the fed won't take away the punch bowl in full but valuations have got pretty stretched. have they come back enough or are you much more drawn to other parts, other assets as being significantly more attractive?

>> we tend to be largely credit players but we certainly look at equities, particularly arbitrage and complett event driven situations it struck us going into this period that equity was poised for a correction when the fed keeps rates extremely low and when you pump liquidity and you have the type of stimulus that we had, you get late market cycle truly frothy beh behavior we saw that in so many ways in the market just in a very simple way, whenever you see an explosion of the number of spacs that are printed, that's usually an expression of a buance in the market when you see rates go as low as they are and every credit spread to drop to the levels they were at, it's a cautionary expression that forces, and by the way, this is exactly what policy was designed to force, was longer term equity oriented more speculative investment and that's what was achieved it does mean that valuations get off kilter, so it wasn't

surprising to see a downdraft. today's downdraft struck me as a little bit of an excessive reaction to the fear that the fed would completely raise rates, sell assets, can cause the entire market to tank. it did impose a certain amount of maybe more rational thinking on valuations and equities the credit markets are another animal although they're certainly related. it's hard to invest in commodity type credit vehicles when i say commodity, i mean straight high yield bonds, straight treasuries, anything that's easily accessible publicly traded highly liquid dead instruments when almost every dead instrument, like over 90% of all of those globally, trade at lower yields than the inflation rate so the conundrum we face, you ask where am i finding opportunities? we're trying to find credit instruments but ones that don't fit into the normal credit market easily tradeable securities because none of those solve the problem that investors have, which is where do i find ballast

for my portfolio i know i'm supposed to put x percent in equities. maybe that's 60% in traditional models and maybe some of that is private equity or venture, but where do i see ballast when i think equities are overly high in pricing and overly high in multiples. that's the challenge we're really focused on. >> certainly a complex time with regard to portfolio construction josh friedman, thank you for helping us make some sense of today's market activity. we appreciate it >> thank you sara >> thanks to you, leslie picker. and to josh as ell >> a trio of stocks moving higher today after a busy weekend of activist news first up, kohl's that talk soaring or news it's fielding ofs from sycamore partners and acacia research, which is backed by activist investment firm starboard value. acacia and starboard would likely partner with oak street real estate capital to sell off kolh's real estate assets, which

is key kohl's has been facing pressure to boost its stock price then there's peloton, after a rough year for the stock, blackwell's capital calling for the ceo to step down blackwell says peloton haas gotten too big for our ceo to lead it. he does have voting control, though, and finally, unilever, trionpartners reportedly building a stake in the consumer giant as he looks to put pressure on that company unilever recently received backlash over its pursuit of glaxosmithkline's consumer business the stock shot up 8.5% what i would add there, they're not commenting on this news, is that all you have to do is look at a stock chart of unilever against procter & gamble, which is a big competitor, one that pelts, remember, had that big proxy fight, ended up on the board, and helped p&g steer through pretty big changes when it came to restructuring the

business p&g has been such a big outperformer since that march addition march 2018, of nelson on the board. look what's happened p&g up 105%. unilever up only 4%. it has been a huge disappointment, unilever, that is peltz stepped off p&g because he wasn't needed there anymore. they announced a new ceo, and they have been outperforming unilever has some of the similar problems that a lot of these cpg companies have, really complex overhead and matrix like structure, something unilever says it wants to approach and address itself but you know, from an outsider's perspective and a shareholder perspective, it might behard t do that without the extra push we don't know what exactly he has planned and he hasn't commented, and we'll see if there's any engagement with management, but you just have to look at those two comparisons. >> they were unsuccessful with spending, what is it, $50 billion on glaxosmithkline's consumer business, and he would

be more of someone that would want them to raise capital than spend it but we'll wait really interesting, and that chart is striking back to march 2018 >> wall street is awaiting the fed's big meeting, which kicks off tomorrow mike santoli heads to the telestrator with a look at what the markets are expecting. >> plus, much more on the stunning market comeback we'll ask a strategist what he's telling clients to do after today's frenzied action. the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential.

welcome back time for a cnbc news update with shepard smith. hey, shep. >> from the news on cnbc, here's what's happening president biden convening a virtual summit with european leaders this afternoon the white house says they're discussing diplomacy, deterrence, and defense efforts as tensions mount over a possible russian invasion of ukraine. the pentagon put up to 8500 u.s. troops on heightened alert for deployment to eastern europe today. the pentagon spokesman admiral

john kirby says no decisions have yet been made on whether they will deploy >> nbc news reports defense secretary lloyd austin briefed president biden this weekend and that among the options presented were bomber flights in the region, ships positioned in the black sea, and troops and equipment being moved into countries that border ukraine. tonight, we'll take you live to moscow and kiev. and we'll talk with the former supreme court allied commander of nato, and of course, continuing coverage of the wild swings in a volatile market today on the news. right after jim cramer, 7:00 eastern, cnbc. back to you. >> yeah, it was a crazy one here thank you, shep. we'll see you then shep smith >> wul street laser focused on the federal reserve's january meeting, which begins tomorrow mike santoli taking a look at the market's expectations for the fed. mike especially after the action today, what does it tell you about what the setup is? >> will, interestingly, it just

is a dramatic turn in terms of market employs expectations. this is the market implied probability that the fed will not just hike rates in march but by a half point as opposed to a quarter point. before today, it was around a 50/50 proposition. basically had market saying it could be just as easily a half point as a quarter that seemed aggressive even before we had gotten this unsettled equity market and even today, credit softened up a little bit one might take this and say that it couldn't basically be the case that it's very hard at this point for the fed incrementally to deliver a hawkish surprise compare today what the market already assumes. that's what remains to be seen as of wednesday. take a look at how the economy is set up. we don't really anyhow how it's going to play out at the soft patch in the winter, but based on the leading economic indicators which is this blue line here plotted, this is how the gdp rate tends to come in

relative to it, and it's sort of shoiing around a 4% pace yes, it blasted off above the chart when we got that big recovery off the low, so that's not a bad cushion if the fed is in fact going to be initiating a tigh tightening in 2015, we were at stall speed. here, the inflation is stubborn, not the slow growth. we have to see how those two interplay. >> yeah, and make sure it doesn't come down significantly more mike, thank you. president biden holding a call this afternoon with european leaders to discuss the escalating situation in ukraine. we'll break down how the rising geopolitical tensions could impact the market. later, it has been a rough start to the year for microsoft. now the tech giant is gearing up to report results tomorrow the key metrics to have on the radar when "closing bell" coming back after ibm has a blowout quarter. the stock surging almost 6% tehos. 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?

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a breathtaking comeback for the market today joining us, scott wren, senior global market strategist for wells fargo investment institute. scott, i know you're a long term investor, but i have to ask you what your take was on this extraordinary reaction both today and of the last week >> well, wilf, i have a lot of trading in my background, and any time when you see days like that, you have to think like a trader to really try to understand what's going on and i think really when you see the dow, when you see the market down as much as it was, and then

close strongly or at least in paositive territory, that should make you feel pretty good. we were really close, if we would have closed over the 200-day moving average in the s&p 500, i would have felt really good, but we're 25, 30 points with low under that, so that's what we would like to see next, short term, but we have been pounding the table to our clients for a long time. you see a pullback, especially we haven't seen a 10% or it's been a long time, you need to have a plan. when you see the pullback, you need to execute it >> so what is that plan that you have been talking to your clients about over the last couple weeks what's the top sector buy at the moment >> yeah, i tell you, right now, wilf, these tech stocks have gotten hammered. from a sector perspective, we have liked technology. we like communication services those are the two growthry type sectors we're more interested in, and then industrials and financials i thought it was interesting, i looked ed to see what the best

performing sectors were for the one day, today, and those four sectors were in the top six performers today so i think that makes you feel good about our positioning as we look out over the next 12 to 18 months so that's really where we want to be. we think this recovery is going to continue. we think inflation is going to decelerate we don't think the fed is going to make a mistake, and we certainly look for some supply chain easing up, at least late in the year. so i think you have to believe those things to really be buying stocks down in here, but we think it's time to step in, for sure >> but tech and communications services, they may have been in the top today, but that's because they have been in the bottom of this whole market downturn over the last few weeks to tart the year if we are going into a tightening mode, doesn't it stand to reason, i mean, and this might be consensus at this point, that everything that did well during this enormous period of liquidity in the last few years will get -- will pull back

because it's going the other way? >> sara f you look at the first 11 month of last year, technology was on a pretty good tear there and it's really been, let's call it close to two months that it's underperformed in this rising interest rate environment. for us, the way we think about it, where are the steady earnings going to come from? who is going to be able to make money whether the economy is slowing down like it probably is going to do, or not, and technology is one of those areas. we're looking for interest rates, the ten-year to maybe work its way up to 2.25% by the end of the year. that's not much higher than where we are now while technology is certainly sensitive to interest rates increasing as people have devalued the future cash flows back to the present, we don't think it's going to stop technology from being one of the best performers as we look out over the course of the year. >> a case for tech scott wren, thanks for coming on always good to talk to you

>> thanks. >> straight ahead, with the rising geopolitical tensions between russia and ukraine could mean for the market. and more on the big rebound when "closing bell" comes right back. ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

stocks staging a major comeback with all of the major averages incredibly finishing in the green after plunging earlier in the session rising geopolitical tensions between russia and ukraine among the factors on investors' minds these days president biden meeting with european leaders this afternoon about the situation, as debates -- as he debates potentially deploying military personnel and equipment to the region over the weekend, the state department urging u.s. citizens in ukraine to leave the country as russia builds up its military presence at the ukraine border let's bring in zachary witland zac zachary, all of this plus the potential of russia to use its gas supplies as a weapon, what do we expect to happen next? >> we're going to see a lot more back and forth and there absolutely is a risk this can get worse before it gets better. first and foremost, i point to very significant development that's going to happen probably later this week, in which the u.s. is going to present its own

proposal to follow up the last round of talks between blinken and lavrov the usa promised to do so, and russiana is going to provide its own comments and reaction. we're going to see more nato deployments to member states, but it's really the main talks and negotiations we have to watch to get a sense of whether diplomacy looks like it's going to hang in there >> what about the potential for sanctions? what do we expect, and how disruptive could it be for the financial system >> if diplomacy fails and we see a major military escalation on the part of russia, maybe even a moderate military escalation, there is going to be harsher sanctions than we have seen anytime in the recent past the u.s. has promised a target major russian financial institutions there likely would be a tightening of the sanctions regime against russian sovereign debt, and we can see some export restrictions likely against

different pieces of technology that russia would -- that russia purchases, just as a few examples of the harsher range of sanctions under consideration. there has been some talk as well about whether there could be a cut off from swift, the financial messaging system that's looking less likely than in the past, but in the case of a major escalation, there will be sanctions that will have an impact on the russian economy. >> if those were put in place, what power does russia have to, you know, totally cut off gas supplies to europe in a way that would be equal or perhaps more severe of a punishment in the opposite direction and do you think there is unity amongst nato members within particularly germany and the u.s. and the uk or not is that just a bit of a kind of talking point at the moment for western allies >> on the first question of gas supplies, gas supplies work two ways it's russia can cut them off,

but they also lose revenue and they also undermine their status as a reliable supplier in the past when there has been gas disputes or accusations russia is using gas as an energy weapon, it's tended to be against ukraine or other neighbors. that seems unlikely as long as russia thinks there's a chance to play off divisions between the u.s. and europe. likewise, as long as russia thinks diploem ashas a chance of going onward that leads to the second point i think there is more unity than it might look like right now certainly, the u.s. and france have not been on exactly the same page this week. u.s. and germany, the same way but if you take a step back for a moment, on the fundamental point of making sure that there's no russian military incursion, rather no further russian military incursion into ukraine, making sure that in the worst case scenario, there would be a coordinated sanctions response, and likewise in insuring that nato does not as a

matter of principle reject any new members outright, i think that they actually are on the same page about that it's the details in between and how to deal with escalating tensions that fall short of these worst case scenarios that i think are still being worked out, but i think that if we get to that point, that gap is more likely to close than not >> zachary, thanks so much for joining us good to see you. >> my pleasure ibm's beat results sending the stock higher after hours tomorrow, it's microsoft's turn to report. we'll discuss the key metrics to look out for when we return. staying up half the night searching for savings on your prescriptions? just ask your cvs pharmacist. we search for savings for you. from coupons to lower costs options. plus, earn up to $50 extra bucks rewards each year just for filling at cvs pharmacy.

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ge. building a world that works. microsoft set to report results tomorrow after the close. julia boorstin with a preview for us hi, julia. >> well, wilf, microsoft's results will be closely watched as a key indicator for the broader tech sector. analysts expect the company to grow its revenue by 18% and to grow earnings by 14% as demand for microsoft's cloud business is expected to build on momentum from the prior quarter. now, analysts are watching headwinds around foreign exchange they do see more momentum around cloud deals in the year ahead.

while looking for more commentary for how the blizzard activision plays into the broader consumer facing strategy analysts are bullish going into earnings 93% have a buy rating on the stock. guys >> yjulia boorstin, thank you. >> if it is an indicate that it is strong, they're coming from different places as we look toward tomorrow, we have to reflect on what happened today. a wild turnaround. the s&p 500 had its best recovery from its deepest hole since october 2008 and same thing for the nasdaq, which we know was a very difficult period for the market, which raises the question, are we going to be in for this kind of stomach churning volatility with the federal reserve shifting its stance? >> yeah, i mean, i have looked at some other precedents here. no matter how you want to frame it, there russell 2000 did, down

2%, then up 2%, finishing on the day. all those things get you into all of these very tumultuous market periods, whether it was early 2000s, 2010 or '11 or '08. that's because you had massive intraday volatility, more opportunity for two-way markets. i would say it makes sense to expect that there's going to have to be a chopping around process, maybe you're going to have to make new lows in the short term after those dates, there tended to be just a little more kind of windiness through the market, put it that way. so expect it you may not get it this market has shown nothing but upside surprise in its resilience through 2021. the big question is are we in a totally different market environment this year. >> and mike, in terms of microsoft, couldn't really be a better stock to report to give us a clearer idea whether there's more selling to come or a big bounce to come for those trusty mega cap tech names >> yes, or whether investors still have an appetite to pay

frup it. it has gone from 35 times forward earnings a few weeks ago down to under 30, but 30 is where it was at an 18-year high two years ago. it's gotten rid of the big premium they built up. we'll see if there was any pull forward during the pandemic for a lot of their products. >> crazy, crazy day for markets. that does it for our analysis on "closing bell. "fast money" starts right now. >> live from the nasdaq markets, overlooking new york city's times square, this is "fast money. tim seymour, karen, dan. tim will join us in a minute we're charting this comeback, stocks staging a big about face, so where are we headed next? the chart master is breaking it down plus, wall street's biggest bear says get ready for more selling. why he's calling for another 10% in stocks and we're all over shares of ibm, stock popping on earnings we'll bring yo