when things get ugly, and it's kind of worked it's getting its luster back >> as you point out, at thistume of year, chinese new year's buyers of jewelry is a big force behind the metal kristina, thanks >> thanks for watching "power lunch. where is the market? it's come back >> let's see what happens in the closing hour the "closing bell" starts right now. yes, he we go. kelly and tyler, thank you welcome to "closing bell." i'm sara eisen if you thought the market would calm down after yesterday's stunning comeback, think again the major averages making another remarkable turn with the dow now up more than 200 points. it was down 818 at the lows of the day. >> stunning reversal yesterday, almost as stunning today. i'm wilfred frost. good froome. let's look at what's driving the action earnings season wrapping up with ge, american express, and j&j after reporting before the bell.

after the close, we get numbers from microsoft and texas instruments. can't wait for those the fed kicking off its two-day meeting as investors look for clues on policy and the economy. earlier, the imf cut its global forecast in part because of rising inflation concerns. and tech is still feeling the brunt of the pain with chips getting hit particularly hard, as yesterday proved anything can happen in the final hour of trade. almost positive on the s&p 500 >> coming up on the show, two wall street heavyweights teaming up on a spac we'll talk to gary cohn and cliff robbins about their new deal >> plus, a classic bull/bear debate aeric johnston and jp cap arel have opposing views. >> let's get to the market action another stomach churning day for investors. mike santoli is covering all of the action

deirdre bosa focusing on the pain in tech mike, start it off if you will with the broader markets and just a remarkable turnaround once again >> yeah, wilf. we'll zoom in to the action today and yesterday in just a second, but what's fascinating is if you look at a one-year chart of the s&p 500, it looks like almost literally nothing going on the last two days because we have closed and now we're trading around the flat line but in reality, it's the market churning around, minus 9% to 10% range. yesterday's low, by the way, was around right there, the may high, so we're still well above it at this point i think that was job one for today, was stay above yesterday's low. as a matter of fact, it really followed the script as you would expect to see it or hope to see it play out if you're bullish. take a look at a five-day chart of the s&p 500 it does catch all that drama this is yesterday's low, and i mean, if you wanted to sketch it out, you would say, wow, it would be good if we held around 4300 tuesday after an opening

drop because it would show you you're not going back to the old lows but it's a test if there's one little nagging thing, it's almost too textbook going into the fed we'll veer if it continues to act very well, but i do think you have to keep in mind a lot of the ingredients of a kind of a local kind of short-term bottom were in place yesterday at the lows. the volume, the hedging activity, all that stuff checked off the boxes. we'll see how it plays out from here now, alphabet and microsoft, we have microsoft reporting after the close today. take a look at how they have done over two years. it's really important context. this is a pretty savage pullback off very, very strong levels almost exactly the same return for these two. they have outperformed the rest of faang microsoft down almost 20%, but still up big over the course of two years. that's the push/pull there's valuation premium still in there microsoft forward pe multiple, it raced up last year into the mid-30s even at a premium to the overall nasdaq 100 this is relative to the s&p as

well we have come down sharply in terms of earnings but we're still 30 times this again is the off setting current. we have a discount off what we were willing to pay last year but on a longer term scale, not particularly cheap, even though the premium for the s&p is not too different than it has been the last few years >> that's outstanding. mike, in terms of you saying the market has done all we would want to see it do over the last 24 hours, but there's still more to do, microsoft earnings tonight and the fed tomorrow could make or break things >> right if nothing else, those are going to clear away a couple of psychological hurdles, maybe actual hurdles it seems like treasury yields are stuck here they're pricing in plenty of hikes. maybe more hikes than powell is wilding to give a nod to tomorrow, but also they're unable to -- yields run able to go up because the stock market has been weak, and they're unable to come dowo much because investors th

basis. and response to microsoft earnings people think the numbers are going to be good it's all about what is on people's minds in terms of if they own too much and it still looks like an attractive play. >> is any obvious catalyst to these intraday turnarounds >> no, i would say we're in this kind of crucible of intense tactical activity. you have a lot of you have your trap longs selling to the opportunistic dip buyers it is mostly tactical, i would say. we're taking our cues from what the bonds are doing, what vix is doing, but that's the same constellation of factors, it's mostly about the market reacting to itself, to its own dynamics >> yeah, just going into crazy oversold levels. huge moves and then dip buyers come in. mike, stay close thank you.

>> nasdaq is still the underperformer put it also made a significant comeback deirdre bosa with a look at the biggest movers after more than a 3% decline, it's down less than a percent. >> they are attempting another comeback, the nasdaq, as sara said, was lower by 3%, now lower by .9% there are different buckets within tech that continue to emerge there's mega cap of which earnings tonight from microsoft, apple later this week will be key. there's also the bubble versus balloon buckets. which high growth names could pop, which still have their fundamentals in place and are simply deflating to more normal levels what is that normal level. chinese internet names are catching a bid that continues today baidu, netty's, they're among the top nasdaq 100 performers in today's session, and that broader basket of chinese tech, the kweb etf holding up relatively well after the 2021 carnage. meanwhile, software names continue to see valuations, rerate, datadog leading losses on the qqq

okta ceo todd mckinnon told us indeed the fundamentals of his company are strong in the work force identity sector at large he calls his tam $80 billion, so okta, while off nearly 80% from its peak more broadly, some are warning beware of the fakeouts, dramatic reversals in the nasdaq. they can happen months before a market bottom and portend more losses back over to you >> thanks so much for that as you said, we have to keep an eye on what happens at the close. at the moment, a great rebound is on. the nasdaq still the laggard down 1%. the dow up .25%. it's been hard times for the spac market. the cnbc spac post deal index down 60% in a year gary cohn and cliff robbins just revealed a $9 billion deal for their blank check company. they'll join us next to discuss that move and the broader market

turbulence you're watching "closing bell" on cnbc. hey lily, i need a new wireless plan for my business, but all my employees need something different. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone. ok, let's talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime.

it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪ 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

new year, new start. ma and now comcast businesson. is making it easy

to get going with the ready. set. save. sale. get started with fast and reliable internet and voice for $64.99 a month with a 2-year price guarantee. it's easy... with flexible installation and backing from an expert team, 24/7. and for even more value, ask how to get up to a $500 prepaid card. get a great deal for your business with the ready. set. save. sale today. comcast business. powering possibilities. cohn/robbins holdings announcing a deal to take multinational lottery operator allwin public, valued at $9.3 billion, it comes amid a rough year for spacs with the cnbc post spac index tumbling by nearly 60% in the last 12 months for more, let's bring in gary cohn and cliff robbins cofounders and co-chairman of

cohn and robbins along with robin, the ceo of alwyn. thank you for joining us it's good to have you. gary, just on the market volatility, another crazy day here we have seen spac heavy redemptions, we have seen deals get canceled why did you decide to go through with this? >> so sara, thanks for having us we're excited to be here we have a lot of great things to talk about when cliff and i decided to raise a spac a little over a year ago, we made one major commitment to our shareholders we told them we would go out and find a real business we spent the last year, plus, looking at numerous opportunities. and we're really excited to be here talking to you today about allwyn allwyn is a leading multinational lottery player it means they have over 16 euros of wragers on its platform and over 5,000 employees and over 64,000 points of sale and we're expected to earn over $800

million of ebita in 2022 this is a real business. it's in the lottery business they run lotteries in five countries. they have an amazing brand there's huge barriers to entry, and this business has been growing not only in the retail establishment, but they have built an additional platform as well there's enormous expansionp opportunities. this is a real business and something cliff and i are very excited about. >> all right so robert, tell us about why you decided to go this route and go public via spac and not a traditional ipo, especially with all the noise around spacs and some of investors shunning them lately >> thank you for having me and it's an exciting day for allwyn, an exciting opportunity for us as a leading multinational lottery operator. we have evaluated several options, and going together with gary and cliff, you know, seems

to us as a great opportunity first of all, going public means excess to capital, and we can build on our successful track record of inorganic growth, which we have demonstrated over the past ten years and secondly, u.s. market, u.s. lottery market is poised for growth due to the i-lottery adoption this is something that we have demonstrated so well in five european markets which gary mentioned. and having a sponsor, a patron, so to speak, which could help us to explore the partnerships in the new u.s. market is in our view very important. >> i totally get, cliff, i totally get the point that gary mentioned, that there are huge barriers to entry, but at the same time, are there not quite binary hurdles to overcome for

growth namely, winning concessions and having to apply to them as opposed to having it all in your own control? >> thank you for that question you know, we have done a lot of diligence on this, and the company operates with exclusive licenses in almost all its jurisdictions, has 100% track record of renewing those licenses so this business is very, very resilient and very strong. and what's happening now in europe, and it's quite dramatic, is the business is really accelerating because of the growth of the digital lottery. in the past, patrons bought tickets at gas stations and convenience stores and coffee shops. that's still very much the case, but in the last three or four years, they have established a new generation of younger players who are buying their lottery tickets online, using their smartphones. and this is really super accelerating the growth. we know who the client is, we can make offers to them. it's more profitable because

we're saving commissions at the dealers, and importantly, it's really supercharging the growth of the business, so we're seeing very, very strong organic growth in europe on top of their strong growth we had in the retail presence and as robert said, the real opportunity is moving ahead. the company is going public in new york, because it's really going to become a global player. we're the only player in five countries in europe, but we have an eye on coming to the states where it's a huge market, very immature in terms of i-lottery and big opportunities ahead for allwyn >> so there's the fundamental case, gary, but i'm trying to engage you on the markets a little bit because spacs have been thrown in to the category of the speculative bubblishs parts of the marcus with meme stocks and crypto and now you're bringing this deal in. i anyhow you clearly have confidence in it, in the growth potential in the united states do you worry about the investment vehicle and potential

withdrawals from investors, gary, as a result of being a spac in this market where the liquidity tide is turning? >> i'll take that because i really want to talk about it as an investment. as you point out, this is really fundamental to the whole idea of the company going public in the states and i have been investing for 35 years. and this is one of the best investments i have ever seen that's the standard that dpary a gary and i had for looking at the company. we were patient. we decided not to pursue many companies that wanted to go spac with us. many of them were early stage venture companies, immature companies, companies not ready for an ipo allwyn is incredibly different this is an incredible opportunity. coming at a big discount to our view of intrinsic value and where comps are trading and most important and fundamentally, it's a super investment. gary and i have underwritten this investment, bringing it to our investors at 10.8 times ebita, which is a super valuation. we're accomplishing that by

doing two things one, structuring the deal at an attractive valuation, but second, by putting in place a unique structure, a novel structure for our spac holders to participate in the deal and what we have done is we put together a pool of bonus shares. 8% of the shares in the spac, an additional 8% are bonus shares which we're going to be offering for no compensation to our spac holders who stay in the transaction. this will have two impacts one, it will reduce the going in valuation from 11.5 where the deal was structured to 10.8. offering these free shares, but second, and very uniquely, we have decided we only want to reward those stockholders who are going to stay in the deal. we're going to allocate this $6.6 million pool fully only to the renominating stockholders. stockholders decide not to participate, they'll have to be leaving behind quote/unquote

their shares for the benefit of others, even further reducing their entry price. so with the transaction on its merits we think is very compelling and this new structure, we think further rewards those investors who support the transaction. >> gary, i wondered, i mean, i presume you consider sports betting as a rival product in the same vicinity as people playing lotteries and clearly those companies have soared and then pulled back quite aggressively what about stock trading, as retail investors have pile under to that similar? those stocks like robinhood have had similar moves. are those rival pursuits for consumers as i-lotteries and do you worry what's happened to those? they might be cheap but might not have the same growth as a couple years ago >> we have done enormous due diligence. if you look at the demographics of who plays the lottery, it's different. its are very different than sports betting it's different than any of the

areas. in fact, this is more of an entertainment business where people are paying one or two euros or $1 or $2 a week and doing it with a dream. they're doing it with a dream of winning a lottery, winning a big bet. this is not a perpetual betting motion where you're putting money into a gambling situation. this is a completely different business it's a different demographic and we have an enormous history on this. when we look at allwyn, we have history of how people buy tickets in different parts of the economic cycle, and that's what's so exciting about this business yes, we're in a volatile market environment right now, but if you look at our business, our business is thriving through all different parts of the economic cycle because we have a huge diverse player population who come and play the game on a basis that they like and it's not around a game sometimes it's around a bet. sometimes it's around christmas, around valentine's day, around their normal playing activity, which is different for every one of our customers

>> gary, in the few minutes we do have left, i do want to ask you about the market right now, because we are witnessing some extraordinary swings and comebacks just in the last few days a bumpy start to the year. i know you follow this stuff very carefully so i'm wondering what your take is, as we embark upon a fed tightening cycle that may look more aggressive than the economy or the market can handle, whether stocks are still an attractive bet >> well, sara, you and i have had prior conversations about the inflationary environment in the united states here and the fact that we're having both wage inflation as well as input inflation. and look, that's a tough environment when you have inflation on both sides. it's easier to fight one versus the other. zee the reality that we have both right now and obviously, the fed is getting into trying to fight inflation. we have seen their balance sheet activity first and we're going to see their rate policy. we'll get more information on rate policy tomorrow

when we start seeing interest rates go up, obviously, the discounted future value of earnings goes down so we're starting to see or we have seen, we have seen the markets starting to try to figure out what the value of future earnings are. and i would call this a normal cycle. you're seeing a cycle where we're seeing compression multiples. for the last six, seven, eight years we have seen expansion of multiples. expansions of multiples is a great environment. when a company earns the same amount of money or a little more but their stock goes up overly proportional to what they earn, it's an easier environment to understand what's going on when a company is earning the same thing they did last year and the value of the stock goes down because you're seeing multiple compression, it's a much tougher environment but it does feel to me in some respects that we're trying to find a bottom here we have had two really interesting days where the markets tried to test bottoms and it's rallied into the close.

and it does feel like we're in a bottoming cycle here hopefully we're in a bottoming cycle but with our spac it's not going to matter because we have a great business that can ride out any cycle. >> one quick final question for me about goldman i just wondered what your take was, we're in comp season, obviously, as you know, and they had great results, a record year i just wonder what your take was on a number of high profile departures in the last year or so you left yourself a few years ago. but greg, eric, steven, and whether or not today a job at goldman or wall street more broadly isn't the same holy grail for those ambitious people as it used to be, this tradeoff of pain and enjoyment versus stress and hours less attractive than it was a decade or so ago >> wilfred, look, i have been gone from goldman for five years. i'll give you my opinion, but it may not be based on the most up to date information.

on everything i know, goldman is still an unbelievably attractive place to work. and people coming out of college today, both at the undergraduate and graduate level are doing everything they can to find a job at goldman, and other firms. it's still an unbelievable career path. and people have amazing careers. and goldman sachs, like some of the other banks, are very fortunate to have a very deep and very broad bench you know, goldman has always had natural turnover at the top of the organization, but they have been blessed to have an unbelievable deep bench and they continue to have a deep bench and they continue to thrive. >> finally, cliff, i just have to engage you because on the spac story, because jim cramer right now is tweeting, he's on a rampage against spacs. he says the spac blow down is hurting the markets, back buzz kill we must stamp out spacs. they have become cockroaches the traditional ipo process works, he says enough, stop killing our markets with spacs

i would love to have you respond since we're here talking about that >> yeah, i mean, you can't generalize i think that there have been excesses in the spac market in two folds. there have been many people raising spacs who maybe didn't have the experience in investing or managing companies. and certainly, there have been a lot of spacs raised of companies that weren't ipo-ready gary and i have been patient to find the right company, and i think we have some experience in this regard. and we couldn't be more excited about allwyn allwyn is an ipo-ready company it's a company operating on all cylinders. it's a company with $810 million of ebita growing and expanding it's a company that could go public the regular way in a nanosecond they think gary and i can help them and i think we can. coming to the states in a u.s. offering will really help them participate in the next stage of the i-lottery, which is going to be in the u.s., which is the

largest lottery market in the world. and it's mature in its development. >> got it. gentlemen, thank you we appreciate it on all topics. gary, cliff, and robert. >> thank you >> good to see you we have a developing story here out of washington. kayla tausche here with an update >> sara, during an outing this afternoon, president biden briefly updated the press on the status of the security situation in affirmed there will be no american forces on the ground in yie crane but the u.s. felt obligated to beef up its nato presence elsewhere in the region by putting 8500 troops on standby. there's been no change in russia's posture along the border of ukraine and in belarus, but the capability that is there now could be devastating. >> not only in terms of economic consequences and political consequences, but enormous

consequences worldwide this would be the largest, if he were to move in with all those forces, the largest invasion since world war ii >> the biden administration so far has stopped short of pre-emptive sanctions. senior u.s. official pointed to russia's rising borrowing costs as one indicator that future conflict would be costly for vladimir putin those borrowing costs touching nearly 10% for russia's ten-year bond just this week. president biden today also reaffirming the u.s. could sanction mr. putin personally, an element in the sanctions package that is currently being negotiated on capitol hill wilf and sara. >> kayla, thanks so much for that update. by the way, we should mention markets just dipped. the dow went negative again, now positive, but well off the session lows, whichever way you look at it s&p back down 0.8% again we'll keep an eye on those markets in the remaining 33 minutes of trade still to come, bank of america

says it's time to buy some dips in this uncertain market she'll join us with the areas she likes. check out some of today's top search tickers on cnbc.com more macro interest today. the ten-year tops the list, and you have the dow in there, of course, as well. nasdaq, tesla, nvidia. tesla turned negative as we look today. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience.

with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back.

the dow negative there, as

you can see again. we have just slipped great intraday rally remains as the chart clearly highlights, but we're now back off those session highs, that brief moment of green for the dow. and the s&p is now down a full percent. time for a news update with rahel solomon. >> hi, wilf. here's what's happening. in new york city, a second officer has now died after being shot while responding to a domestic disturbance call. he died four days after being critically injures a memorial to him and his partner has drawn dozens of police, clergy, and community members pay their respects antivaccine activist robert f. kennedy jr. has apologized for suggesting that things are worse for people now than they were for anne frank during the holocaust. kennedy made the comments during a rally against vaccine mandates in washington on sunday. this is the second time that kennedy has apologized since 2015 for referencing the holocaust while criticizing the use of vaccines.

>> and new orleans saints head coach sean payton leaving the team after 15 seasons, according to multiple reports. he led the saints to the playoffs nine times and coached them to their only super bowl victory in 2009. he is said to be reportedly retiring which it sounds like he deserves back to you. >> absolutely. rahel, thank you rahel solomon. >> well, the countdown is on to microsoft earnings after the bell following the company's big deal to buy activision. we'll bring those numbers to you and discuss what they could mean for the volatile tech space after the bell the stock is down about 2% speaking of earnings, dan ives says this is the most important reporting season for technology in the last decade he'll join us next hour to explain why. and as we head to break, a check for you on bonds the yields are moving higher today. ahead of the all-important fed decision out tomorrow. the ten-year hovering right around 1.78%, so some selling of bonds. pretty much across the curve right now. 30-year goes to 2.12 we'll be right back.

need your prescription refilled? capsule pharmacy can fill and hand deliver your medications - the same day - for free. go to capsule.com to get started. we handle your insurance, coordinate with your doctor, and text you when your medication is ready. all you have to do is schedule delivery.

we bring your medication directly from our pharmacy, straight to your doorstep. get your prescriptions filled and delivered today - for free. go to capsule.com and get started in 15 seconds.

dow is now down about 100 points recovered all of itsd 800 or so point losses went up 200, and now has swung back lower let's check on individual market movers wells fargo downgrading kroger today to underweight from equal weight the firm citing inflation concerns and the labor shortage for the move that stock is down about 5.25% logitech is raising its sales forecast for the current

quarter. stifel out with a note on the digital platform company today saying it has successfully navigated the backdrop of a challenging pc market and the stock is up 4.5% jim cramer talking about logitech today you can still sign up. head over to cnbc.com/jointheclub or point your phone at the qr code on the screen we have got 22 minutes left, and we're now only down ten basis points or 33 points on the dow, but all three of the major ags are in the red we'll be keeping a close eye on that, of course, as we approach the close with just over 20 minutes left straight ahead, american express posting an earnings beat and the stock is oaring. we'll dive into the report and the key metrics after this break. sales are down from last quarter, but we're hoping things will pick up by q3. yeah...uhhh... doug? [children laughing] sorry about that. umm...what...it's uhh... you alright? [loud exhale]

[ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contract prices around. [ding] get e*trade and start trading today.

welcome back american express, a bright spot in today's session after posting strong earnings results this morning. kate rooney has the details for us hi, kate >> hey, wilf american express up 9% today after that beat on earnings. and upbeat guidance. amex saw record income and earnings looking for up to 22% revenue growth for this year i talked to cfo jeff campbell about what's giving them that confidence on guidance he highlighted younger demographics driving record spending volume. they're changing the value proposition for gen z and millennials to be more about lifestyle, beefing up offers on entertainment and wellness millennials and gen z spent 50 pest more in q4 compared to four years ago. hasn't been as active in the

space. campbell says it's not being used yet in meaningful ways for payment. it's too volatile. he could see a world where amex offers crypto rewards the long game is central banks developing crypt ocurrenccryptos back to you. >> that is a whole can of worms that we don't have time for. kate rooney, thank you very much >> financials one of the two sectors in the green in the s&p. when we come back, chips getting crunched and what to expect when microsoft reports after the bells. that and more when we take you inside the market zone dow coming back,nl oy down 20 points with 17 minutes left of trading.

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable nationwide network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business: powering possibilities. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do.

indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools, and interactive charts to give you an edge, 24/7 support when you need it the most. plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contracts prices around. [ding] get e*trade and start trading today.

welcome back here's a look at what's ahead in the second hour of "closing bell." microsoft's earnings results set to cross in a few minutes. we'll break down the numbers as soon as we get them. and suvita submorainian will tell us why it's time to buy some dips in the market. we'll also bring you a bull/bear debate on equities with two experts on opposite sides, and dan ives tells why he think it's the most important earnings season in decades for tech first, with 13 minutes left in the trading day, we're in the closing bell market zone mike santoli is here to break down the crucial moments of the trading day. today, we have profit investment ceo eugene profit with us as well let's kick it off with markets a volatile day for stocks. the dow in the green but was down more than 800 points at the low of the session

it was meaningfully in the green for about15, 20 minutes. just pulled back a bit in the last 15 minutes of trade and mike, now red across the screen for the major averages, but still a kind of net win. odd to be saying it's a net win when the s&p is down .8%, but probably a net win >> yeah, i would say nothing further broke today. and i think the fact that we spent the entire day in terms of the major indexes within yesterday's range is why when we were down 2% and holding the lows for the day, it didn't seem like it was as dramatic perhaps as yesterday so i think it's sort of inconclusive because we spent the day within the range, but it's part of a process that could result in yesterday's low being significant. i think nothing that happened today kind of pushes against the idea that yesterday's low could have been of some significance we'll see how it plays from here still, look, people are hedged up i dhooing you skimmed a lot of excess away in terms of valuation and people's expectations and we'll see if that's enough

>> is it, mike or is it characteristic of a bear market? seeing these kind of manic swings like this >> well, i mean, it's somewhat got some characteristics of a bear market. in terms of intraday volatility. it's probably not that intense as you would see if we were in the latter faces of a bear run you know, a lot of the days that look like yesterday have happened, you know, around lows of a bear market, but not at the lows i think you should expect things to be bumpier. i look at things like, you know, bad vibrations in the vix futures market that keeps people on alert it's nothing critical, but it definitely tells you the market is not, you know, this perfectly seamlessly operating rotating machine that we saw last year that was getting us ratcheting higher all the time. it's a different backdrop this year >> eugene, this week is one thing. how would you step back and summarize the last month or two? do you think we have seen a meaningful shift in investor sentiment away from buying the

dips and more to kind of fearing that we might see losses and therefore taking profits >> yes, i do, wilf i think that's been a huge shift in investment sentiment, basically, no one has talked about the january bounce if you go back to december, i would have thought we would just now be starting to have the markets sell off as we go to the fed meeting tomorrow i think investors now fear losing a lot of money, so netflix is a good case in point. i think the earnings of netflix were very positive, but yet they gave kind of muted guidance forward, and you see how much that stock sold off. so i think that in the past up until now, we're looking for dips to buy. i think you can sill buy some dips, but i think you have to be very careful because investors are looking for reasons to head to the sidelines because of the increasing interest rates and sort of the valuation dislocation. >> let's hit some individual

stories. ge, one of the biggest losers in the s&p today after reporting earnings seema moda has the details >> despite gains in aviation, general electric saw fourth quarter revenue decline 3% telling cnbc supply chain issues have not eased due to omicron. >> when we talk about supply chain, we're really talking about availability of material and labor, be tit in our own shops or from our suppliers around the world we saw what many, many companies have seen through the course of 2021, with respect to shortages and extended lead time >> kulp telling me his team is doing all they can to source, redesign parts, working through new processes with supply partners, and does expect the story to improve midyear but still questions pertaining to its renewable business. he says unsure when, getting hit by inflation and a tax credit tied to build back better. breaking ge into three is still on target, health care, followed

by power and renewable in 2024 back to you. >> seema moda, thanks. >> what do you do with ge stock ahead of the -- ahead of the split that we're going to see, and with some of these revenue pressures coming from supply chains, if you do think that that crunch is going to be temporary, is the stock a buy? >> i don't own it. i'm not buying it here i think if you do own it, you can hold it. ge has come a long way from when it was selling off asset management, and certainly with supply chain issues it's going to be a while before earnings are completely stable. so i think that there are just some better names out there that you can buy that have a little bit better risk/reward relationship but that being said, the last two years for ge have been quite positive because the stock has definitely run quite a ways. >> mike, before we move on to the next story, just wanted to come back to the broader markets. we have slipping again

again, well off the session lows, but 2% of a decline on the nasdaq hard hit to start, to think that today is a positive day, and also just interested in particular the names that have reported as well and the losses ge one of them quite significant declines >> yeah, been pretty hostile reaction to the very early phase of earnings reports out here we knew that beat rates weren't going to be as good. we'll see if that changes with some of the growth bellwethers coming out i think the character of today's market where yesterday the most dramatic recoveries, the biggest upside from the afternoon on was in the most beaten down areas of growth it was a growth over value market that's different today so today is back more to the more recent form of growth not really having a lot of strong handed sponsorship and value holding. just a little better >> chip stocks are part of the reason the nasdaq there is selling off today. and nvidia dragging down the

broader smh. kristina partsinevelos has the details for us >> semis looking to give back their monday gains and then some one driver, a new commerce department survey showing u.s. companies who use semi-conductors are down to less than five days of inventory for key chips. back in 2019, that average was actually 40 days shares of amd, lam research, applied materials all trending lower, down anywhere between 5 and 10%. and then shares of nvidia falling today on a report it's likely dropping its $40 billion bid to acquire british chip designer arm, the deal faced intense scrutiny from regulators over unfair competitive advantages good news for competitors like intel and qualcomm after the bell, we'll have earnings results from chip maker texas instruments. >> thanks so much for that i remember eugene when we were discussing whether nvidia would defend $300 a share. amazing how it's gone dow to the

low $200s, $220s it's hard to catch a falling knife, but this is a stunningly good company, a hell of a lot cheaper than it was ttracted tot >> i like nvidia bull still trading at nearly $70 pe, and the growth rate next year is estimated to be 20%. so it's still very, very expensive, in the current market when something has changed to the point it has, you have to be careful. when arm was announced for nvidia, it was supposed to be dominant in cloud storage, and certainly, it has been but with a 40-year growth rate in the next five years still at 69 pe, i wouldn't rush out to buy it here. i think that you're much better in a lower pe in stocks until we get some handle on what's going to happen interest rates increasing and how it's going to impact the market. you're safer in names like b

broadcom you would have had much better performance in intel than nvidia >> all eyes will be on microsoft when the tech giant reports earnings julia is here with a preview as the stock is down into that report julia. >> the stock is down today, but microsoft is expected to continue its momentum. we have seen in the past quarter. and grow revenue by 18% this quarter and grow earnings per share by 14% now, the number one most important thing to watch is microsoft's cloud business, azure. the average estimate among 15 different analysts is 46% growth from the year earlier. 46% growth teams could be another tailwind for microsoft, while foreign exchange, tough comps including slowing growth for office 365, could be some downside risks now, the company's stock is 17% off recent highs but it's still up about 29% over the past 12 months and analysts are very much bullish going into

earnings 93% have a buy rating on the stock. guys >> julia boorstin, thanks. mike, i know you watch microsoft as a sort of tech barometer. it's down more than 14% for the year >> yeah. and at the recent lows, i have to say, had a 21% pullback, huge outperformer last year to me, it always just is a measure of how much investors are willing to just say look, i'm just going to kind of buy the known quantity, which is this huge behemoth, massively diversifies with monopoly economics in the core business, and happy to ride the cash flows and pay a very hefty price for it one thing to look for, there is a sort of a nonconsensus view that there was a pull forward of demand for microsoft during the pandemic in terms of work from home kind of purchases pc related and software related. maybe look for that as a wrinkle within the results, but in general, i think it's about are we still going to go back to the old reliable tech megacaps in this type of environment

are they also going to be attractive as defense in this take >> just a reminder of how high the bar was coming into earnings season netflix, which of course, tanked on friday, down over 20%, was slightly negative yesterday, is down arth 5% today so not like it's bounced despite that initial reaction to earnings and another example i have mentioned before, goldman sachs on the other end of the spectrum on a cheap stock, negative reaction to earnings, lower again today and not enjoying a bounce despite minor misses for both of those companies. all eyes on microsoft in a few minutes. as we approach the close, how are the internals looking with us now down 2 and a bit percent? >> they skew a bit negative. it was 50/50 earlier if you look at the volume splat. on the volume side, it remains just slightly tilted to the downside the nasdaq is a bit more negative it's about 70% downside volume take a look, too, at these offense versus defense type

measures dow transports versus dow u utilities over the last six months pretty much exactly on parity over six months, but you see over the last couple months, the transports have really declined from that peak, and utilities have had some relative outperformance that shows you a bit of a defensive cast the volatility index isn't able to settle down still above 30 it's okay that we're down nicely from near 40 yesterday so you have that good spike. we have not kind of outright panic, but until we get through the fed, i'm sure we're going to stay somewhat elevated here, sara >> less than a minute to go. tremendous volatility again for the second day in a row. look at the intraday dow chart, tells the story. started off lower. got as low as 818 points on the dow and then rallied all the way back in the final hour of trade when we started this hour, we were up more than 200 points on the dow. since then, woo vegiven back all of those gains and are now down about 48 points. american express is your biggest contributor to the gains, having

a 9% up move on earnings the biggest -- the weakest link there on the dow, while a lot of them are weak, a lot of weakness in names like industrials, technology in particular, the nasdaq is down about 2.3%. the s&p down 1.2%. energy and financials remaining positive into the close. everybody else is lower. worst performing groups, communication services, technology, and consumer discretionary. that's borne the brunt of the selling. small caps down 1.4% all red at the close >> welcome to the "closing bell," everyone. i'm wilfred frost along with sara eisen and mike santoli. investors now ready for a pair of big tech earnings we'll have instant analysis of results from microsoft and texas instruments as soon as the numbers cross. eugene profit still with us, and mark layman joins the conversation mark, i'll come to you first of all, and your take on this tech

sell-off ahead, of course, of the microsoft numbers due any minute now have we pulled back enough >> probably not. although we're certainly getting closer i mean, the big multiple compression is obviously well behind us. we have seen such a big fall in some of the big tech names in some of the profitless names of the ipo wave of the last two years. i think we're getting closer to the bottom i'm not calling thattin today, i think you'll start to see investor pick through the rubble of the names where they feel like they have good strategies, good management teams, good prospects. i would expect closer to the bottom than a lot of investor think, we'll be choppy through the rest of the quarter. >> why do you say that we're closer to the bottom is it encouraging we have had these dip buyers come in at these extreme seemingly oversold levels is it the rebound action or do those swings make you nervous because that is

something typically characteristic of a down market? >> yeah, i would say both, sara. listen, i think we're clearly not done with the volatility today is a perfect example the last couple days are a perfect example. the vix over 30 tells us it's not behind us. i think we're going to see the separation like we have seen in past bear markets. in 2016, sas markets were down 30% or 40% in the first two or three months of the year, and then huge m&a activity, huge private equities swoop in. we have yet to see any of that my sense is there are plenty of buyers on the sidelines and that's what i'm looking for. we haven't seen a whiff of that. i'm not saying the whole market is going to come right back, but i would be paying particular attention to the class of the last two years of ipos and you're going to be happy you did. >> what do you think, eugene you think it's a bull trap >> well, i note that only nasdaq has touched bear market territory. you still haven't hit an s&p or the dow, so i think the

volatility is going to continue. and until we actually see sentiment go back much more positive, you might have days like this where it swings back and forth. but i don't think we're going much higher anytime soon >> just want to mention, sara, we are seeing some numbers cross. microsoft has moved down by 5% now. interestingly, the full release isn't out, but on the wire, the quarter just passed results, a beat the eps, 248 the forecast, 231. the thing has just crossed now the past quarter was a beat. let me dive into the guidance and perhaps we'll find something there for why we're down 5%. >> mark, anything enticing to you about some of these tech names? especially the mega caps that have been dragged into the selling? >> yeah, listen, sara, i think we're seeing everything fall apart. we saw the faang stocks, i call it mt. faang because i include microsoft and tesla in that

group. everything started to roll over last week. i don't think we're near that bottom for some of the stocks. we have seen huge reactions to earnings we saw that in netflix last week and right now in microsoft these things take time to digest i think it's going to give people ample opportunity to rebalance their portfolio. growth outweighed -- the s&p was outperformed by nasdaq five years in a row that's rarely happening over an extended period of time. it's time for people to adampt their portfolios we haven't started to talk about biontech the stock was up almost 50%. there are so many places to find value, but right now it's sell everything first those times, things rarely last forever, and that's what we're picking through, where there's solid management teams, solid pro prospects. that has not changed despite this bear market >> looking at microsoft, down 5%

after hours. go ahead >> i can go through the line items of the past quarter, which largely were in line 18.3 billion for intelligent cloud. people always focus closely on that that was in line productivity and business processes was 15.9 billion that was in line and then the beat on the revenue line, personal computing, came in at 17.4 billion the forecast was for 16.5 billion. that explains the revenue beat for the quarter just past, and the forecast was a beat. i haven't found any guidance which of course we're also waiting for, as to why we might be down 5 billion, and mike, i don't know if it's just this quarter past, which is a beat on both lines, that's not big enough beat to explain this fall >> that's essentially the initial takeaway if you look at the history of microsoft's beat, the last ten quarters, this is by far the smallest that we have going back at least three or four years let's say three years. so just in general, the idea,

the cadence of surprises was a little better than this, and as i was saying earlier, it's really going to be a bit of a litmus test as to people's appetite for paying up for a still nicely growing, very large company that does not kind of blow you away with the surprise. maybe there's something else in the numbers we're not seeing in terms of the business mix, but to me it seems like a company that's still in the process of having that valuation premium tested and not beating by all that much on the quarter >> yeah, i mean, down almost 6% after hours, eugene. this is a punishing market for a company that had a beat for not a good enough beat, and didn't really show any red flags as it relates to the growth businesses like azure >> right we haven't heard much about whisper numbers. i think the whisper numbers on microsoft expectation was that the numbers would be a little higher so even though they beat, i don't think it was a big enough beat for the market to be

completely satisfied but it was enough that we're not down double digits here. so i guess we'll go on to the next one to see what happens with apple and intel and texas instruments and some of the other tech names tomorrow. but yeah, unless microsoft had extraordinary number, i would suspect much outperformance on an earnings announcement >> let's get more. jeulia has been digging through the release for us what stands out for you? >> what's really interesting to me is we have been talking to analysts about the importance of the azure number and cnbc polled 15 different analysts and the consensus or the average consensus was for 46% growth so though the number came in a hair ahead of the street account estimate, it was right in line with those 15 analysts' consensus. what that says to me is that the most important growth area, it was in line, it was not a beat, and i think that expectations are so high right now, this is a stock that has outperformed the

broader tech sector, if you look back over the last 12 months, i think the expectations are incredibly high, especially after the sell-off we have seen in the first half or the first part of this year. >> joll yeah, thanks so much for that mark, were expectations too high we're talking about beats relative to consensus. we're talking about azure growth in the mid-40s percent, as expected but that's not slowing growth. it's a beat on the bottom line as well. the margin was good. i think this says more about the broader market, doesn't it, than it does about microsoft? >> wilf, i would agree clearly, we had expectations going into this. people were hoping once these tech bellwethers reported it would put a bottom in the tech market, and clearly that's not happened today it was a fine quarter, clearly like you said, it beat some numbers. the guidance was fine. and yet the stock was down 5% in the after market, and it is down substantially from its high. let's not forget where the stock was a year ago you put the year chart up there, it still looks like it's fine.

and frankly t is i think that's what we're going through. we're going through a valuation correction in the overall market there's no problems like we saw in 2008 where we had a whole sector that was in trouble there's no problem with companies who went public, and like we saw in 2000. like many companies that went there that went out of business. we have a valuation adjustment going on now, and those things take longer to digest. i think that's what we're going through. the demand is there. we're going to have a much better outlook on omicron in the spring, and that's a good backdrop for the overall market. supply chains are going to clear up by the end of the year. those are great things for the market in the long term. in the short term, we're going to have this consternation and again, this is fine. if the market went up every day, we would all do it for a living. this is what makes it fun and makes an opportunity for investors to make real returns when things are gray that's what we have right now. it's a little gray >> well said coming back a little bit, we should note, down only 3.3% after hours. think the outlook will be key, what they say on the call. texas instruments also just out.

that stock is higher it's rallying after hours, almost 6%. mike, you have been digging through those numbers. what do you see? >> this is a much clearer beat from texas instruments earnings per share at 227 for the latest quarter that was compared to a forecast consensus forecast of 194. revenues, 4.83 billion in the quarter. the forecast was 4.43 billion. so both top and bottom line, pretty clear beats and the guidance for the first quarter from the company, 4.5 billion in revenue to 4.9 billion. and earnings per share of 201 to 229. those look like on the earnings per share level above the consensus as it stands right now of below $2, about $1.87 a clear beat right there also pretty good free cash flow growth so things look to be on course here, and the stock had come in along with the rest of the semi-conductor group down about 15% off its highs. now getting some of that back in the after hours.

>> mike, thank you yeah, 5.75%. mark, another example showing that for companies and some of these industries, the fundamentals are still strong and they're still good chip stocks, one of the best performers last year, got really beaten up so far this year are there opportunities in that sector to buy? >> i mean, there are clearly, texas puts up a big number today there are some issues with the sort of political environment that we're talking about with the china/taiwan consternation we're starting to feel and whether that affects the semi-conductor market. this is not in any way analogous, but texas earning 2.25%, you had microsoft earn more than that per share, different companies. one is $100 a sheare higher it's a valuation driven story in my expectation right now value stocks are outperforming growth stocks for now. and i think that's not surprising because fundamentals for both companies remain

strong there's lots of opportunities in semi-conductors. we get easing of political tensions globally, which we haven't mentioned, you'll see the stocks go up because some of that fear of taiwan will abate and all semi-conductors will go up if that happens fundamentals are strong, valuations are in question this is a great time to invest for the long term. near term, it's a little scary >> microsoft, by the way, is off its after hours lows it was down 5% it's now down 4%, and of course, still plenty of time for it to move in either direction significantly when we get the call and the guidance, which is always going to be even more important than the quarter, just impressive to see it move so much off just the past quarter when we saw a beat on both lines. eugene and mark, we want you to zine in on your top trade idea eugene, what are you going for >> well, i'm going for intel i tell you, the discussion we're having today, a lot of people don't like intel however, it's trading at a pe of nine growing the next five years at

seven. very strong balance sheet. basically in an area where semi-conductors are going to be in high demand, and looking at what just happened, texas instruments at 22 times earnings also very strong in autos, in sensors and the like i think thatintel our texas instruments are a way to play this market where you're not getting paid for higher valuations or higher pes intel over the next five years will continue to perform and because it sold off after missing the last two quarters with its earnings tomorrow, you're going to set yourself up being here for a bit of outperformance in the course of the next year while providing downside protection. >> all right it's held up better than the rest so far this year. mark, what's your pick >> i'm going to stick with doma. which is a name that went public by spac last summer. i know jim cramer isn't happy with the spac market and a lot of people are on his side, but

this is a company revolutionizing and digitizing the close and purchase of sale of housing in this country they're continuing to gain market share they will continue to gain share. you'll want to own this when we come out of this kind of tech correction and spac correction i'm sticking with doma >> a bold call a spac as the zone in. eugene and mark, thank you both for joining us appreciate it. we are just getting started here on the second hour of "closing bell. up next, much more reaction to microsoft's earnings wheo thinks the stock can rally sharply from its current level it is coming back after hours. down only 2.6% >> plus, is it time to buy into this volatile market after another big reversal we have a bull/bear debate you cannot afford to miss. later on "closing bell." 'rba iju t mutwee ckn stwoines

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable nationwide network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business: powering possibilities. shares of microsoft lower,

but only down 2.7% now was down briefly 5% in after hours trade. both top and bottom line were beats. let's bring in brent phil. brent, your take >> it was not what they wanted this is not good for tech. certainly is the smallest beat we have seen in microsoft for a while, so they have been averaging 330 basis point beat, and they beat by 200 so beat is lower than anticipated. and if you look at the intelligent cloud business and productivity, that was in line most of the beat was in personal compute, and that's not where we want to see the beat the bright spot, 37% bookings growth, was phenomenal that accelerated >> but i mean, brent, i'm so interested to hear you say this, it wasn't enough analyst forecast should factor in expectations. a beat is a beat, is it not? >> right now, it doesn't matter about what happened in the last quarter. it matters about the guide and what's happening

so i think ultimately, this was not asgood as the street wanted and therefore, the assumption is that are they going to be more concerted on the guide based on what is happening. that's what's driving this that's what's going to matter in the comments coming out of conference call. microsoft is a phenomenal story. right now, we're in a tech downdraft, a software evaluation reset, and there's little these companies can say right now other than, you know, pipelines are phenomenal, we haven't seen any deterioration in the overview of what the customers are doing. if they say that, that will get the stock going. ultimately, there numbers are the numbers and it wasn't quite as good as we have seen. and clearly, we have been talking about this, this covid pull forward are we seeing a little digest from what we have taken on in the last year and a half good numbers we still like the story. it's not an expensive story, but it's not what the street wanted. >> are you talking specifically, brent, about the azure numbers the 46% growth there that wasn't enough >> so azure was right in line,

maybe at the bottom end of what the buy side wanted. it was 46. they were at 48 last quarter that was good, but again, it's not what we have been seeing these big beats out of tech. so now we're seeing in line prints, now what happens to the guide in this environment when everyone is on edge and tech is falling off the side of a cliff on valuations right now. this is not reassuring microsoft sets the tone for tech and the rest of software we're not off on the right foot. now, they can address this on the call they had a great bookings number 37% bookings growth is fantastic. so i don't want to make too much out of the current quarter but what we can see so far is not what we have seen historically out of microsoft. again, bringing in the theme of digestion and are we going into a slower tech tape in the next couple quarters. that's the word. >> so brent, talk us through this the valuation now, for microsoft, because it's down, with the after hours move, down like 23% or so from its high

is it cheap now? is it attractive if you're a five-year view, is this a good entry point even if it were to slip around 5% in the next month >> we have a $400 price target, it's 18 times ebitda so a discount price to earnings, it's mid-20s you have the large caps offer a group of 30. it's at a discount there on ebitda free cash flow, it's on a discount. all the metrics we look at, we look at a group of metrics, it looks very attractive. i think right now, we're in a spot right now where our clients are saying, look, is it better to wait on tech? because clearly, it seems like we're in a digestion risk off mode and this may not even have anything to do with the numbers. this has to do with tech fund flows and we're seeing money leave quick, as we say in the industry, big hat little cattle, and the cattle aren't there right now. >> wow, well, you summed up the mood

brent, thank you >> mood is tough right now sorry, it is >> no, it's tough out there. tech has been a tough road for investors. no doubt about it. we'll get more reaction to microsoft results later when we are joined by another analyst, web bush's dan ives who thinks this is the most important tech earnings season in a decade. we'll see if he sounds as downbeat >> first, bank of america's suvita subramainian is shifting through the rubble to unveil the oc tt ulbeorth buying on the dip. thanks to voy, i'm confident about my future. voya provides guidance for the right investments. they make me feel like i've got it all under control. voya. be confident to and through retirement. this is the new world of work. each day looks different than the last. but whatever work becomes, the servicenow platform will make it just, flow. whether it's finding new ways to help you serve your customers,

orchestrating a safe return to the office... wait. an office? what's an office? ...or solving a workplace challenge that's yet to come. wherever the new world of work takes your business, the world works with servicenow.

(doorbell ringing) (bustling office sounds) - [announcer] eggzilaration, when the cheesiest guilty pleasure breakfast sandwich starts your day on just the right note. on time, lowest price, or we'll make it right. (chicka-chicka) grubhub. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today.

that president biden will be hosting ceos at the white house tomorrow they'll be there to talk about his build back better bill, and how he might get parts of it to pass we're also getting the names of the ceos that will be in attendance meeting with the president. they include gm's mary barra, marc benioff, ford, semens, kind of a broad spattering of industry joining the commercesecretary in discussion about build back better which has been stalled

from opposition from senator joe manchin. the president says he wants to look at passing parts of it. this is a discussion on what that could mean for the economy. >> meantime, the market, stocks staging a big comeback for the second day in a row but did close lower. it was down at one point more than 800 points, decide the volatile swings, our next guest is finding buyer opportunities joining us now, savita subramanian of b of a securities where do you look amid the rubble right now when you're looking for what to buy? >> well, you know, i think it's an interesting correction, and sort of a reasonably well behaved correction, because if you think about what sold off, it was really the crowded rate sensitive areas of the market. so sectors that did well, you know, held up better than others, were generally cheaper higher free cash flow yielding as a single stock level, markets like this are a boon for stock

pickers. where we're seeing opportunities are really across the board. so we did a simple cut of the s&p as of yesterday's close, which is similar to today's close. we found that, you know, there are basically stocks in tech there are stocks in consumer, in small caps that are trading well below their 52-week highs. in fact, half of technology is its in own bear market at this point. by some measures so where we're finding opportunities are really across the board. we're finding in health care, pfizer looks like one of the more attractive free cash flow yielding companies that has been, you know, really beaten up but has great cash balances. great liquidity. our analyst loves that it's a buy. it's got very significant upside to its price target based on our analyst and the rest of wall street some of these companies are really showing up as kind of like what we saw in march of

2020, where you had a blood bath in the market and what felt like this, you know, insatiable selling pressure, and what that left us with was some of the best entry points for high quality companies. so pfizer is one of the stocks that shows up. yes, go ahead. sorry. >> no, i was just going to ask, so pfizer is a good one. how do you do tech, though you mentioned tech because it's been beaten down the hardest but at a time where there's so much macro risk around rising rates, how do you know what the right valuation is microsoft reported a decent quarter and the stock is selling off after hours? >> yeah, it's interesting. i think within technology, there are sort of two cohorts. there's high-growth buy the dream tech, and those stocks are still going to suffer. but when you look at other companies like high free cash flow yielding tech, software, semi-conductors look great at this point i mean, i think this is one of the the sectors that has generally higher free cash flow

yields there's a couple semi-conductor names that showed up on our screen we see cisco as a good entry point from the tech perspective. kla corporation is another semi-conductor that benefits from capx, which we think will be relatively strong this year, barring a full blown economic recession. so i think the economy looks okay the fed is going to tighten. it's kind of what we should have expected all along it's not a big surprise. we're at full employment and inflation prints are 7%. so it's not shocking to us that the fed is likely to tighten i think the market reaction to it is a little bit surprising. we were expecting the market to digest this more last year, but we haven't necessarily seen a reaction until just the early weeks of january so here's what i would do. i would look within each sector for companies that have less macro risk when you think about high growth tech, these are companies that

have a risk of a higher discount rate, higher hurdle rates, higher cost of capital they need capital to survive i would continue to avoid that area of technology but i would move into some of these beaten down stocks that have really attractive free cash flow yield, can weather the storm, have earnings visibility for the foreseeable future i think those are some of the areas where we see opportunities. but i will tell you this, i think it's a very interesting sell-off in that interestingly, earnings haven't really been driving performance. in fact, you mentioned microsoft, but what we have noticed is that companies are beaten by a slimmer amount than normal or than what we have seen over covid, but the reactions of beats and misses are much more muted. i think this is really more about macro risk, about increasing cost of capital, and it's not necessarily about fundamentals at this point >> savita, we have to leave it

there. thank you for joining us >> thank you it is time now for a cnbc news update with shepard smith hi, shep >> hi, wilf. from the news on cnbc, here's what's happening two popular covid antibody drugs are off the market because they don't work against omicron that's from the fda just today it pulled emergency use authorization for the monoclonal antibody treatments made by regeneron and eli lilly. the fda reports the drugs could be reauthorized should they prove effective against any future variants. the s.a.t. is going digital. the college board announcing other changes today as well. the s.a.t. will be shortened from three hours to two. it will have shorter reading passages, and test takers will be allowed to use a calculator for the math section this new format comes as the national center for fair and open testing reports almost 80% of colleges and universities no longer require standardized test scores for admission and new life for novak

djokovic at the french open. well, he got deported before the australian but there's a loophole, it seems, in a new french law and that means the tennis superstar could play at roland garros. under the french law, anybody who shows proof that they tested positive for covid within the previous six months is exempt from having to show a vaccine pass djokovic says he tested positive for covid in mid-december. whether there's proof, we don't yet know >> tonight, a major american city wants gun owners to get liability insurance and pay an annual fee critics call that unconstitutional it's part of our reporting on the news right after jim cramer. 7:00 eastern, cnbc wilf and sara, back to you >> shep, thanks so much. we look forward to it. >> stocks staging another dramatic comeback on wall street, although we closed in the red. is the worst behind us or more pain to come we'll hear both sides of that argument coming up next. as we head to break, here's a

check in on today's after hours earnings movers. shares of microsoft are lower, about 4% holding that level now texas instruments moving the same amount in the opposite direction. both earnings calls still to come thanks for coming. now when it comes to a financial plan this broker is your man. let's open your binders to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab. worker's comp can crush a small business. every year it would

jump 5, 10, 15, 20 percent - even though there was never any claims. and that's where i was struggling as a growing business. i'm very happy that i moved over to pie for my worker's comp. from start to finish, it was extremely easy. they quickly came back to me with a plan that was affordable for me so that i could grow my company while not breaking the bank. ask your agent, or get a quote at easyaspie.com.

it's been a rough start to the year for stocks and a wild week of ups and downs following two days of shocking intraday moves. is the worst behind us or is there more ahead joining us, phil camarely, asset manager at jpmorgan. let's start the initial case relatively briefly if we can, and then we can dig into it. eric, your view. >> sure, so we think there's more downside to go from here. it's for a few different reasons. number one, the fed has ballooned its balance sheet. it has suppressed real yields. it has really wanted higher multiples and wanted speculation of higher asset prices that's now about to go in reverse. we have seen this, a high correlation between the fed balance sheet and pe multiples and the balance sheet to contract the second thing is we think earnings estimates have peaked this is a big deal

last year, earnings estimates were up by 26% from where they started the year to the end of the year now, you fast forward to this year we think they have peaked. economic data is softening, and the most recent sell-off in equity could impact the data the third would be positioning the vestors for the most part have not adjusted to this new world, this new fed world, this new peak estimate world. and we think they still need to adjust the individual investor has been adding dollars to this market for the past year. they have not turned seller yet, and we think that's going to be a big overhang along with other investor types >> phil, why do you disagree with eric? >> good to be here, wilf thanks for having me we're still very confident in our view in stocks in a multiasset portfolio, and here's the reason why again, it goes back to the fed i think some of those concerns eric mentioned are warranted

but now, which is very different from last year, the market is hearing the fed loud and clear the transmission mechanism is open what do i mean by that ever since the fed made their pivot in december, what we have seen this year has been a reduction in the most growthy names and increase in rates, an increase in real rates and i think one of the things in my career that i have seen is when interest rates go up and stocks go down, people freak out. right? i think that paralyzes people. but from here, what we would expect is no news is good news with the fed it's hard for them to get even more hawkish than they are now with how much is priced into the market and then you settle into an environment where the vix, so equity volatility, and rate volatility settle down, and if that were to happen, that creates a really good environment for taking risk. and most importantly, even though the fed wants to establish credibility on inflation, they do not want to do it at the expense of growth

right? so if you go back in history, 11 out of 12 tightening cycles since 1950, wilf, the market has been higher by an average of 9%. so as mark twain said, history doesn't repeat itself, but it often rhymes i think the fed is in a position where no news is good news they can't get more hawkish unless they're wrong on inflation. thatcrats creates a good fundamental backdop. >> it seems like the biggest point of disagreement is on how the market is going to react to the fed tightening eric, do you not think this market and economy can handle a few interest rate increases, slightly higher rates? >> i think it goes beyond the rate hikes i think the issue is that the balance sheet potentially as soon as four, five months from now is not just going to stop growing. it's going to start to decline and if you look at the last 12 years, the balance sheet has gone sideways or up in all every

year except for 2000 and '18 it just happened in 2018, equities sold off at one point 20%. so investors right now are used to the fed just pumping money. that's been for the last 12 years. and that's about to go into reverse. and that's not -- this is not something that's going to be the fed hawkish for two months or three months inflation is going to be well above their target all year long so this narrative, and what the fed is actually going to do, the hawkishness, is going to be persistent throughout the year it may just be beginning people may be aware of it, but they haven't adjusted their mindset and their portfolio to this new reality >> sara y think that's where we would politely disagree, the fact that we don't believe that the fed is going to get more hawkish than here. they do have a core inflation rate forecast for 2022 in dotality at 2.8 and a growth forecast of 4.8% in that environment, that keeps

them on track. the point that eric brought about 2018, the fed were deer in the headlights when the market dropped like that. what did they do in january? they said we're going to pause the other thing is, just operating from a position of strength, their balance sheet, as eric pointed out, has ballooned to $8 trillion they would have to do $4 trillion of quantitative tightening just to get the balance sheet to where it was in the last cycle, where stocks did really, really well. i think the point of contention is really around our fundamental story which remains strong, and the fed's ability to gradually move if we're wrong on inflation, we got the wrong view and that's really what it comes down to. our view is inflation comes down and settles between 2.5 and 3 by the end of this year which creates a lot less urgency and hawkish kind of chaos from what we're seeing right now. >> i would just interject on that point that i think right now, unlike prior periods, i think the fed would actually be

okay with stock price selling off. one of the big contributors to what wehave seen around inflation has been the wealth effect, where wealth has grown last year by historic proportions and that has allowed consumers to pay higher prices to the extent asset prices come down, whether it be crypto or whether it be the stock market, that will be one of the better things for the inflation picture. and so i don't think it's the case where as stock prices go down, that the fed will make adjustments. i think the fed will make adjustments when inflation gets closer to their 2% target, which i think is a long way off. >> eric, very quickly, what are we talking about, a further 5% down for stocks or more than that >> so in these situations, stocks always overshoot, so what i would tell you is that i think going to 4,000 or 4,100 is very, very real and very realistic i would also tell you there's a high likelihood of an overshoot, because when you get into these

momentum type situations, where once you get down to that level, you do tend to have overshoot. so probably end up below there >> what about you, phil inwhat's your target on the upside? >> so we believe stocks will be higher, which is why wre're overo overweight stocks versus bonds the key is spreading and diversifying the risk. european equities are part of our overweight, but we have been very pleased with how emerging markets have hung in this month. because guess what, china is the only central bank not worried about inflation, and they're easing policy. i think spreading the risk to beyond just u.s., and sara y have been on this show a bunch of times talking about a u.s. overweight it looks more diversified now. >> it has been interesting to see emerging markets outperform. gentlemen, good debate very civil

>> we're all friends up next, mike santoli, our friend, is back with a closer look at how investors are positioning themselves in bonds ahead of tomorrow's key fed decision >> and later, analyst dan ives with the one thing he's looking out for on the microsoft earnings call as that stock pulls back after a decent quarter. whether he says now is time to buy the debt we'll be right back. what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge.

today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. - [announcer] at southern new hampshire university, we're committed to making college more affordable. that's why we're keeping our tuition the same through the year 2022. - [narrator] i knew snhu was the place for me when i saw how affordable it was. - [narrator] find your degree at snhu.edu.

let's go to mike for a look at the bond market amid the recent stock -- excuse me, volatility mike >> wilf, take a look at the chart of the treasury yield curve. ten-year minus two-year yield. this goes back a decade. it's been an odd cycle you see a much lower peak in the yield curve, so that spread between those yields did not get up above 2 percentage points, as it typically does in the meat of a cycle. we went from 10% unemployment to something close to full employment in a year and a half. here we are down around .75% as a spread why this has relevance to what the fed is likely to do in the coming several quarters is the fed doesn't want to see this flatten and invert that's the market's way of saying we have to look at rate cuts maybe the cycle is going to end. that's not what the fed wants to do so what you're seeing too is the long end really staying hankered in part because implicitly,

traders and investors don't see the fed having more than three, four, five hikes because they think there's somehow an upper limit there. take a look at positioning this is from jpmorgan. you have institutions positioned most bearishly toward treasury securities playing for higher yields than they have in quite a while this is the beginning of 2018, late 2017. now, it's not as if yields immediately started going down in a contrary move to this, but most of the move higher in yields by early 2018 went from 1.5 to above 2, 2.5 or so. we did get higher but something to keep in mind, people are already positioned for higher yields we'll see if that comes through. >> i think all of these things have been surprising to watch. mike, thank you. mike santoli >> up next, the most important earnings season of the decade. that's what analyst dan ives is forecasting for this quarter's big tech reports his thoughts on microsoft's numbers and what he's expecting from app sait ealetrghahd.

as a business owner, your bottom line is always top of mind. so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable nationwide network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business: powering possibilities. welcome back we have an earnings alert on f5. hi, frank. >> shares of f5 done 11% right

now. the company is beat on the top and bottom line. but they significantly cut their revenue guidance for the next fiscal year due to supply chain constraints. right now they're cutting revenue growth range from 8 to 9% and reducing it down to 4.5 to 8%. they expect this due to supply chain constraints for the remainder of the fiscal year shares of f5 down 11% right now. back to you. >> yeah, supply chain strikes again. frank, thank you microsoft shares are also down after-hours, down about 5% when the news just came out on the tape wall street expectations was a beat on microsoft numbers, now down 5 and quarter percent let's bring in dan ives. 20% revenue growth, azure 26%, not as high as the buy side hoped. are you a buyer on this

weakness >> clear buyer -- beat azure by a hundred -- going into next year, you have only a third installed moved to cloud this is not a cloud story that i view is halfway there. i view it as bullish the knee jerk reaction will be sell off, we're buyers all day long. >> so why is there a 5% sell off? does that part of it not worry you, given what we seen following netflix numbers and cheap stocks like banks given their numbers. could you now be wrong on this for another 15, 20% pull back? >> i think that's always risk on tech here, if i look at underlying cloud in terms of transformation, doing it at 50%, so anyone expect the azure number that would be 200 or 400-bid beat i think this is

just the start of the next phase of the microsoft story of course there's nervousness going into guidance but look at pi growth for cloud and core 365 with the price increase, this is a knee-jerk reaction in a jittery market we'd be buying nothing with the numbers i look at i'm disappointed. >> key thing on the call which product guidance is most important? >> it's all about cloud. there's no moderation. this is a green ride any sort of conservatism will be laser-focused. i looked at what we needed in terms of bullish or broadish enterprise i view this as an a-minus quarter >> okay. dan, thank you for joining us so quickly after numbers, still 5% microsoft down after hours we await the earnings call. another crazy day on wall street, dow iglyslht up after

lowering more than 800 points at the low. up next the fed decision discussion on how it could impact the market. cody! hi!! hi! how are you? i'm good! i'm crocheting. i see that. started off as a hobby. kind of snowballed from there. and alex, i don't want to stop. well, i don't see why you should have to. let's set you up with a side gig savings goal on the u.s. bank mobile app. this way, you can turn it into your main hustle before you know it. you're my hero, alex! what are you working on now? pool cover. that's fun. oh! i made my wife a bathing suit. oh, did linda like it? she did not. oh. you should see what i made for max. max! look at him. he loves it. the confidence to make your dream a reality. u.s. bank. we'll get there together.

another volatile session on wall street ahead of the big fed decision tomorrow.

earlier i did catch up with imf first deputy managing director about her take on what would be a bigger risk to the market, the fed being too aggressive on interest rates or not aggressive enough gita said there's risk on both sides because of inflation listen. >> this is inflation that is not tradition, it is driven by pandemic-specific factors like shifting the demand towards goods, the fact the labor supply is not coming back as expected and supply chain disruption. we haven't seen the end to any of this. it's clear there's tremendous uncertainty and i would make the point when it comes to markets, we've made the point markets seem over valued in some areas but do expect to see some correction >> down grading the global forecast on the u.s. and china for tomorrow's decision. news conference from the fed expected to hear that the fed

starts raising rates as soon as march. and i guess, mike, if you think about what could surprise the market what could move the market, it's going to all be in the tone of fed chair j powell how hawkish he sounds when it comes to get on top of inflation, potentially, at the expense of growth. or whether he can kind of commit to doing both. i guess that's -- we're just parsing the words as always to figure out just how vigilant he's sounding on inflation because he's made a big u turn here. >> absolutely made a big u turn. the market has seen it and pretty much takent message and really gone and extrapolated it to the hawkish end the spectrum of likely policy actions here. if he says we're still on track for three rate hikes, possibly four if things break a certain way, i don't think that is a particularly hawkish surprise. there's still a possibility he can say, it's still march or

april before we know if inflation will revert to the mean at all because of the year ago effects on the data. it seems of he has the opportunity to say yeah we hear you and are on the hunt for inflation but it doesn't have to be incrementally more urgent we'll see how the market takes of that's what we get. >> let's have another look what microsoft is doing and tex instrument which has given up some gains microsoft still down about 4.8%. we can bring that up mike, i guess what we're seeing is very high expectations because it was a beat. and we haven't got the guidance yet. which will be more important >> yeah, high expectations, whether it was outright they wanted a further beat or there was i sense we got used to people coming after the numbers and bidding stocks up or buying them when they had been down 15 percent as microsoft had been. it's different market. it's not as quick to rush in on

the buy-side we'll see what happens in the call the s&p you look at that it's trading off a little bit after hours with microsoft so we'll see ahead of the fed if we sort of try to hold on to what we have left of the big rebound yesterday. >> another roller costar on wall street s&p ended lower 1.2% microsoft trading lower by 5% after hours. the earnings call due to start soon that ask it for "closing bell. thanks for watching, "fast money" starts right now. wlif from the if . live from the nasdaq this is "fast money. tonight's trader lineup -- tonight on fast, assessing the damage, tech trade taking it on the chin again the fall fast and furious. we're picking through the r rubble plus, gold barely budget in the recent market volume at. what gives the one chart that could explain it all