>> saved by the bell >> all right, thanks >> thanks for watching "power lunch. >> "closing bell" right now. >> welcome, kelly. thank you, kelly and tyler welcome, melissa the major averages are mostly higher following s&p 500's best week of the year the dow is near session highs. energy is in the lead as we head into this final hour of trading. >> i'm melissa lee in for wilfred frost. hitting the tape over the past 72 hours, low cost airlines spirit and frontier announcing a merger and reports say peloton may be drawing buyout interest as well. bit coin bounces back in a big way, over $45,000 and up around

15% in a week. and earnings remain front and center, of course, following the wild tech action last week meta taking another leg lower while tyson jumps on results 59 minutes left to go in the trading session, sara. >> yeah, communications services only sector red right now, thanks in part to meta coming up, your volatility playbook two experts sharing their strategies to navigate this up and down market. we'll talk to ben eamons who says the fading impact of omicron could lead to rotation into beaten down parts of the market plus adam parker makes the case to buy old tech instead of some of the more buzzy newcomers. >> let's get straight to the big stories we're watching for you today. mike santoli is tracking all the market action. mike, what are you focusing on >> melissa, a little bit of a rally over the course of the day, really not much to speak of at the index level s&p 500, modest gains so far very much in the middle of its range since the beginning of the year but you know, more stocks up than down. kind of a never short of dull market type of day

you have weakness in things like meta and alphabet suppressing the s&p 500 whereas underneath it, things have gotten traction. in fact, some of the cyclical groups reopening type trades are working well talk about right in the middle right here, about 4510 or so, we're about 300 s&p 500 points from the high, 48 and change, and about 300 up from the low, which is 4220. so obviously, we're in the middle right here. looking for a little bit more direction. i think we're still kind of burning up some of that really profound negative sentiment that we got near the lows a lot of caution this might be one reason for investor sentiment being a little restrained right now. if you look at the performance of the van guard balance fund, this is basically a proxy for the 60/40 equity fixed income mix. it's all the way back to april levels so obviously, bond prices have been going down, as yields have gone up. good you have owned the 60/40 portfolio, you're losing on both ends bonds have not been a bit of

ballast for the volatility in equities you really are dialing it back nine months or so whereas the equity market is still up from that period of time. so it does show you that maybe it's sort of reducing the amount of risk taking firepower out there in the system. i will say treasury yields today very quiet, not adding to gains, housing, home builders, take a quick look at an interesting spot the itb home builders index. kind of bumping up right along this sort of floor that's been set for a while. the stocks look really cheap, but sometimes cyclicals that's because they're overearning and profits are peaking. you have affordability issues going there, but so far, not breaking down as rates are quiet, up about 1.4% the

consensus forecast for s&p earnings that goes back to the typical pattern where estimates kind of start high and then they get trimmed over the course of the quarter and companies beat them. so i don't think right now we're seeing a lot of clear indications that overall 2022 estimates have to really be hacked lower by that much, but it's one of the risks out there because margins have been hit or miss depending on where you are. earnings growth is patchier than last year. so it's tough to make that call right now. you will say, s&p, the pe, the price earnings multiple, is down around 19. so maybe that builds in the possibility of softness in earnings even though that's not particularly cheap >> all right, mike, we'll check with you later shares of meta sliding more than 4% the stock is down nearly 30% in the past week after reporting its fourth quarter results joining us, brent phil of jefferies he lowered his price target to $350 but maintains a buy rating the stock can't get a bounce even on friday when the nasdaq

at large was higher, big tech was higher facebook is not. it's acting like it's mortally wounded. what is wrong? >> i think the concern over the future and the next several quarters of investments that they're putting into remake the company. and the other side of the house, you have google and amazon, microsoft, service now all doing really well. and so there's just phenomenal stories that are really having, you know, no speed bumps, so facebook puts up a 20% growth don't keep picking on me apple was doing all these things to the ecosystem tiktok is doing all these things to the ecosystem we're not a monopoly in tech

so i think zuckerberg, part of me believes he's saying look, stop picking on me look at the rest of tech this was a phenomenal opportunity, as you know, facebook always guides conservatively, why not try to bring the rest of tech into the equation, which is we're not the monopoly, and let's focus on them, mr. regulator, and investor so i think ultimately, you know, they have some issues. as we have seen in the past, right? companies like microsoft and adobe, even apple, you have seen a lot of great tech companies go through transitions. and facebook is going, you know, into a pit stop. and ultimately, are you betting, you know, at 16 times 23 earnings now, that it's over i doen't think it's over, but there are better stories in the short term that are executing better that investors want to be in they want to sit on the sidelines, wait this out and come back to it. again, at 16 times earnings on 23, you know, we think long term investors are really going to be

able to take advantage here. and again, i think the same analogy was, adobe was 30 when steve jobs said adobe's flash was dead and everyone thought adobe was dead, and went to 700. microsoft, when balmer was there on the operating system, microsoft is dead. we went from 30 to 3000. so i think there's a parallel here, which is all big tech go through these pit stops. >> yeah. it would be a costly gambit, brian, if what you say is true in that if it's basically saying that we're being wounded by competition and therefore we're not a monopoly just to get the government off its back, to what end is that gamble what are they -- what are they, you know, spending $200 billion plus in market cap to get if that is the case >> i'm not saying that that's the only reason why they're doing it there's no question there's issues as it relates to market share loss and what they're doing with this transition of the company. but i do believe that they have

been a focus for quite some time, and i think they're also saying, hey, look, there are other issues going on that no one else is talking about, so i think part of that is them fighting back. that's my own personal belief. that's not anything they have said but they guide conservatively, and this was just extra conservative they threw in the kitchen sink on this one. so no one anticipated that magnitude of slowdown. so look, we know that advertisers are still saying, hey, we're not running for the hills away from facebook they're embracing other things with connected tv, trade desk should benefit we're seeing snap, everyone thought snap's numbers were going to be awful. they were amazing. how could google's numbers and snap's numbers in their forecast be that amazing and facebook, the advertisers are saying hey, we still see it. it can't be that bad i don't think it's as bad as they're saying, is my personal belief that's based on our expert network. so i ultimately think it's going to be overly conservative.

>> brian, aside from the fundamentals you just laid out, i brought this point up last week when facebook was plunging on thursday. i do wonder, you know, this is one of the most widely owned stocks by mutual funds you had a lot of these closet index funds that hold it, so they already have benchmark like weightings they can't increase their exposure i wonder how much of that has continued to put pressure and that there's no major marginal buyer there, and then at what point it becomes interesting for value funds? >> well, if i work in a value fund at 16 times earnings, we have software companies 30 to 50 times revenue. a mid-teen multiple is not crazy. so i think the value funds are kicking the tires here when you look at the allocation, though, clearly, there's a portfolio reallocation and you're starting to see the fact that snap was down 20 plus percent into a print and put that print up, like, the volatility is incredible right now. and so i think ultimately,

there's better stories right now where pms are saying in the short term, i want to be in amazon, google, snap, other tech names, service now, salesforce.com, that are executing in a better way. who knows how long these investments are going to take. to your point, we don't know if the move into the metaverse and what they're putting into it is going to be successful but i think, let's be careful. their parallels with adobe and microsoft where people gave up, and it was the wrong call. it was just the wrong call so i'm not here to defend facebook i'm just saying look, the point is, i think it has been overly kicked, and you now trade at a mid-teen multiple. if you can get that in a great technology platform franchise name, like, you would back up the truck in historic terms. >> are there also parallels with cisco, which is still underwater >> facebook is not cisco this is not -- >> just in terms of -- >> like, i'm not saying, again, i think right now, the call is

our clients want to be in the other names. and that's going to last they have tough comps through the first half of the year so everyone is assessing this. in the short term, people are moving off of facebook into the other tech names but i think, again, long term, for long term investors, if you get an opportunity to buy it at a mid-teen earnings multiple, you know, i think for a three-year term, investors are going to be excited about this here relative to some of the other valuations we're dealing with across tech >> all right, thanks for joining us you're on the record down 4% again. meta shares. there's a split in tech. google, alphabet is down, paypal is down, but names like nvidia and amazon are higher. >> up next, are deal wheels in motion peloton shares are popping on reports of buy-out interest from the likes of amazon and nike we'll ask a top analyst if the tie-ups make sense you're watching "closing bell.

dow is now up about 222. we'll be right back.

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peloton shares surging, up more than 20%, 23% now on the back of rumors of opotential takeover from names such as nike and amazon, but the stock is still down 80% off its highs joining us is simien siegel of bmo capital markets of the downgrade peloton fame now

let's get nike out of the way because i don't have any intel from the company, obviously, they're not talking about this, but as someone who has covered nike for the last ten years and i know you cover the stock as well, it would seem an oud fit because nike focuses on software and digital, to buy a heart ware company, especially one, peloton, which has a relationship business, an apparel business deal with adidas, but what do you think? >> so, first of all, great to see you. listen, i think that, to use the exact same caveat, i don't know anything let's throw that out there in many fields, but in this specific one as well i think you and i, how many times have we talk pd about whether it was nike, under armour, lulu, we have watched them try equipment and pull back i don't think that's the appetite to use kevin plank's line, they want to sell shirts and shoes, and right now, whether that's physical or virtual, i don't think they're looking to take on this big equipment business. >> and then we have the amazon rumor as well. do you think there's something

to this? or is it just bankers putting out little feelers all over the placer which is clearly bringing up the price of peloton >> i was looking at this it's little bit surprising you look at where it is, it's not far from where it was last week the peloton price has been incredibly volatile anyway listen, it's a very valid question why did this come out on a friday afternoon when the market closed a couple days before earnings there's clearly a reason for this and now we're talking about it ahead of a print tomorrow i could be completely wrong. a large company could come out and say this is worth it, they want to buy it, but i think we have to ask, at the end of the day, is the reason it's so cheap relative to the size of these companies because it's also small relative to the size of their businesses and what do they really offer them from the amazon perspective, again, i don't cover amazon, but when i think about it from this perspective, peloton is finally working to do is reelevate the brand, go back to a theme we

have talked about with victoria's secret and under armour, charge more, make more money. io went too far too fast the amazon story feels like the opposite way if the whole value of peloton is that $39 a month, that notion of subscription as opposed to equipment, then folding this into a business that tries and rolls it out, what does that get you? we known peloton doesn't have price elasticity how do we know that? when they cut the price, they didn't get more orders >> i appreciate the notion that this perhaps is a trial bloom, because it very well could be, but it would be extremely disappointing if they came out when they did report earnings and say there's nothing we have to say, i'm not sure it would be fruitful if there's no there there, so to speak in terms of amazon, when the news crossed on friday, i thought this is interesting because amazon has the delivery network. it knows how to manufacture things and get that done it's got a delivery platform

it's got a subscription business and if they were able to roll this into subscriptions and the do have price elasticity and are able to raise prices, maybe this is an interesting gambit amazon is the kind of company that might be able to afford to lose a couple billion dollars a year, whatever peloton is losing at this point. at least at the get-go >> yeah. listen, great to see you i have been saying this a lot, i just don't know, i could be wrong. we'll be saying that a lot through this period. at the end of the day, does this benefit peloton? that the news is out there if they come out tomorrow, is this brought on by them, by the bidders? it does beg the question of who stands to benefit from the news being out there. i don't know that peloton stands to benefit that's the first part, which is interesting. vis-a-vis the amazon point, which is a great point, there's $1.3 billion of inventory sitting on the books as of last quarter. right now, the issue in the past

was manufacturing and getting the amount of supply right now, there's a lot of inventory out there that hasn't moved. it hasn't moved with price cuts. i don't know that the idea, i think the idea we're seeing the question of peloton, did covid expand the audience or pull it forward? the numbers are arguing it pulled it forward. if amazon enters the picture, what do they offer there if you think about it, and i haven't done this survey, i don't know this answer, but if you think about it, how many peloton users are not already prime subscribers. at the end of the day, peloton is 2.8 million very loyal customers. that's a fraction of the large companies. and so that's going to be part of this question of what do they really add other than this brand. i think the big question is if these big companies didn't buy peloton during covid when they were going like this, do they want it now as it's this fixer upper restructuring company. >> it was a lot more expensive then you said it's going to be

interesting tomorrow what do we expect from earnings tomorrow >> we have a sales number. we have to understand the composition of the sales number. i take a look at receivables and understand the health of the sales and then the guidance. i think the question of what they choose to talk about in terms of going forward, do they guide kitchen sinking. are they measured, do they pull guidance we'll have to find out how far along we are on the mckinsey plan there's questions on the quarter and going forward plan and have to digest the news today >> should be a good one. thanks >> we have about 39 minutes until the bell rings the dow right now is higher by just a fraction of a percent s&p up by 16 points. coming up, tesla's tokens new details emerging about how much bitcoin tesla owns and the nine-figure hit it took on impairment charges as we head to break, check out some of the top searched tickers on cnbc.com. ten-year yield in the top spot followed by peloton, meta, amazon, and tesla. "closing bell" will be right back

welcome back tesla disclosing new details about its crypto holdings. kate rooney has the story for us >> tesla had about $2 billion worth of bitcoin as of the end of last year but volatility and some accounting rules added complexity for tesla, and likely will add the same issues for companies like it. holding crypto on their balance sheets the carmaker disclosed its first crypto purchase a year ago we don't have exact timing, but analysts think it was right around when the price of bitcoin was $32,000 or $33,000 according to a new s.e.c. filing out this morning, tesla bought a total $1.5 billion worth of bitcoin last year. it calls out the volatility and, quote, unique risk of loss that comes with these types of crypto investments. last year was no exception on volatility bitcoin finished the year up about 60%, but at one point, it

fell under $30,000, and that is key. tesla holds crypto as what is known as an intangible asset tesla says if bitcoin's price falls below the carry cost or where they bought it, at any time after they bought it, an impairment cost is recognized. on the flipside, tesla can't mark up the value of that bitcoin, that is until a sale. for tesla, last year it saw a little bit of both the impairment charges added up to $101 million. but it also sold some bitcoin, too. it made $128 million after selling part of its holdings last march all said and done, tesla made about $27 million on those crypto transactions but still recorded it as a loss under restructuring and other expenses guys >> kind of complicated but sounds like tesla is still a good bitcoin trader. thank you. kate rooney. >> still to come, ben emons says there's still a real risk of a correction of 15% or more for

the market he'll join us with the parts of this market he likes to ride out the storm. as we head to break, a check on bonds. yields are a little lower, but do remain near the highs of the year remember, we saw yields go up last friday on the back of a stronger jobs report ten-year holding just about at that 1.9% level. i am here because they revolutionized immunotherapy. i am here because they saw how cancer adapts to different oxygen levels and starved it. i am here because they switched off egfr gene mutation

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near session highs on the major

averages let's check in on individual market movers. tyson food with a earnings and revenue beat noted the average price of beef rose by nearly 32% in the quarter leading to $5 billion in sales. that stock is up more than 12% shares of snowflake also surblging today. mogen stanley citing momentum across new expansion opportunities and free cash flow generation that stock up 6.9% melissa, the tyson quarter, talk about inflation. the fact they're able to raise beef prices by a third, chicken prices by 20%. the consumer is not pushing back but boy, we're feeling it. >> i can't believe consumers aren't pushing back on that. i mean, imagine going to the grocery store and spending 33% more on beef or chicken. it's amazing hopefully this passes. >> time now for a cnbc news update with kristina partsinevelos. >> theres what's happening at this hour. the cdc is advising americans against traveling to japan due

to covid japan is one of six countries added to the agency's highest category of covid risk more than 130 countries are now on that list >> the internal revenue service is giving up on plans to use facial recognition to allow access to tax records online the plan had faced opposition due to privacy concerns from some democrats and republicans in congress. the irs says it's now working on a new authentification process, and a coproducer of the latest matrix movie is suing warner brothers for releasing the film simultaneously on hbo max and in theaters village road show entertainment is accusing warner brothers of breach of contract it says the streaming release of matrix resurrections decimated the box office revenues and the profits on the movie i know i try today watch it on hbo but missed that small window back over to you >> i guess it was small. that makes sense thank you. >> we have less than 30 minutes before the bell. here's where we stand. we were at session highs just a

few moments ago. we lost a bit of steam the dow is up about 132. nasdaq is negative in the s&p 500, tech and communications services are negative everybody else is higher energy is up 2%. small caps having a strong day, up 1%. up next, we'll look at today's market moves with ben emons, why he says we could see a rotation out of energy and into the leisure space. >> and later, adam parker outlines why now is the time to focus on old tech. we'll name names the stock he likes, later on "closing bell.

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24 minutes left of trading mixed session as we head to the lose technology underperforming today. the dow up triple digits but the nasdaq and s&p 500 are trading right around the flat line energy is the top performing sector again rallying by 2% for what he's watching, let's bring in ben remmens of global macro strategy at medley global advisers always good to see you you say there might be a rotation soon out of energy and into leisure stocks and small caps which is interesting, especially small caps, because of the underperformance what would cause this? what do you see? >> hi, sara. i think what this is is that, as you mentioned, energy has really outperformed so you're seeing the valuation of energy companies going to a higher percentile this becomes at some point with oils topping closer to $100 a

barrel, you have this realization if there is a value opportunity to the other side of the market, which is leisure and hospitality, that should be a revival. omicron is fading really quickly, so that sector continues to have the reopening play behind it the small cap sector in itself will benefit, too. it may be slow, but the next quarter, it should see a significant bounce that's how you want to play this rotate out of the higher value energy into the small caps and leisure. >> you also say there's a risk of a larger correction, a 15% with the focus on the fed and the new rate hike cycle. so how do you square those two ideas? what would happen to small caps in that environment? we have seen they have been pretty sensitive to talk of fed tightening >> that's for sure and i do acknowledge that if we get into that phase with the accelerated rate hikes really come through, the small caps likely will not perform as well.

you keep that. i think this correction idea is really based upon that if you look at the jobs report from friday, we have not only a major strong economy, but we were probably at full if not maximum employment last quarter. the fed likely is going to start in march that puts them at least a quarter behind where they should have started and that's likely going to be more upward pressure, including the inflation numbers in march this is risk you're going to have to tighten faster that i think can push the market back to that correction phase after this bounce we're going through now in february and may last into march. >> how do you factor in, ben, the idea that the market has come around to that idea it seems like it's more and more consensus that there will be five rate hikes and possibly a sixth with a greater than 50% chance for a rate hike in february of 2023 and that could sort of take the foot off the gas pedal for that call for a correction.

>> i won't disagree, but i think that the issue is that indeed we have priced in that much, and in a way, the market has given the fed a run rate it could match all those expectations at the end of the day, it's still tightening you still have to remove all those accommodations to be successful to bring inflation down i think that's the uncertainty that's still hanging there i hope so that these rate hikes will be effective so therefore what's priced in now will be sufficient and yield cover has been flattening and break evens have been in a narrow range may suggest it could be sufficient, but i think the risk is the uncertainty about inflation is quite high, so i'm leaning towards this risk of correction as a risk scenario for this year coming around before was suggested. >> how do you read the moves in corporate bonds? we're starting to see credit risk rise. it was always calm, all clear on that front and things have changed lately

what do you see happening there? >> yeah, i think there are several things happening number one, we had an incredible amount of issuance the last few years in anticipation of the reopening story. this year, the issuance in corporate bonds has fallen relative to the last two years, in part because of reaction to the weak equity market we're currently still in secondly, rising rates do put pressure on corporate bonds. the interest sensitive bonds have record highs around nine years or so duration they're very sensitive to what happens in rates and risk premiums are still historically quite tight they have come off, but they're very tight i think this is what makes people weary of that, so we have equity weakness showing some spillover to the credit markets. i do think credit markets could start to trail off you can see the big benchmark etf, yes, they are catching up, and i think that's the trend

we're seeing >> ben, i want to get back to your short term call on that 50% international and airlines, and then also your call on energy. is that a pairs trade to go long short term on airlines and short energy >> i think, melissa, if i take it all together, because it's one side of this idea of portfolios like you have an offensive side, which is related to global reopening that should benefit the airlines in addition, emerging markets, where i think particularly it has been far ahead of the fed and take latin america as an example. that's an interesting opportunity. those markets, by the way, are up year to date against this defensive side of the portfolio of staples and materials and durable goods to try to balance it out, because let's face it, we're in a rising rate, higher inflation and higher energy environment. coming from both angles, even with a 15% correction in our minds. >> ben, thanks for your

thoughts appreciate it. ben emons. >> up next, a big deal in the airline space, and what to expect when take two reports the stories and much more next in the market zone, and don't forget, you can watch or listen to us live on the go with the cnbc app we'll be right back. if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.

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welcome back we have a big lineup coming your way in the second hour of "closing bell." we'll get earnings results from take-two, fresh off their deal to by zynga. we'll talk to adam parker

between the divergence between old and new tech a top analyst will discuss the airlines deal and spirit's new frontier, and look ahead to tomorrow's earnings reports from peloton. first, we have got less than 14 minutes here to go in the trading day. we are now in the closing bell market zone. mike santoli here to break down these crucial moments of the trading day, and today, we have ally chief markets and money strategist lindsey bell as well, also melissa lee's first time inside the market zone so let's make it a good one stocks are losing steam into the close. in fact, the dow has just gone negative i was going to ask you about greek and italian debt selling off, which is happening and never a good sign. >> it's happening. getting people's attention >> what's the turn here? we were up more than 200 on the dow. tech has underperformed? >> it's dragged a little bit still the big nasdaq stocks,

microsoft is down $3 or $4 in the last hour. that pretty much accounts for what we're seeing in the dow and s&p 500. still, the equal weighted s&p is up it's the weakness in meta, in the big growth names it's not been the rule, it's gone back and forth along that line you do still have consumer discretionary, the reopening travel type stocks are still firmly, so i think the big takeaway is it's not been one of those wild swinging days inthru day. it has been wildly muted and it's probably welcome at this time >> first time in the market zone a longtime observer, though, and admire your work it's good to be in the zone. mike, what struck me about meta in particular was how many days consecutively we have not seen any sort of a bounce something struck me about what brent was saying, a lot of his clients are rethinking where they are in the name if you had bought at the lows, recent lows in july of last year, you would be break even,

basically. anybody who bought afterwards is under water, so to think that one of these most popular hedge fund names, widely held names, is now getting a big rethink is kind of scary for the perspective of the impact on the markets. >> it is i mean, you obviously have some people who after that huge gap lower last thursday probably figured it's going to bounce i can sell into a bounce so even if you want to reduce your exposure, you didn't get it i think there's a lot of that tactical psychology around this name right now it's probably value investors who certainly will get there if they're not already in maybe don't feel like there's any hurry. >> so we're what, a few percentage points above the january 26 low in the market, lindsey. do you expect stocks to continue to recover from that or are you warning your clients of more volatility and more pressure >> well, given the fast fall that we had at the start of this year, we saw the s&p go into correction territory the nasdaq down almost 18%

crypto getting killed, small caps getting killed. a lot of damage being done under the surface. it's not unusual to see a bit of a bounce after a move like that. that being said, i'm not so sure we're completely out of the water yet. i think the market is recalibrating, recalibrating valuation, what growth is going to look like, and how the fed's impact is going to be on all of that i think we're still in this uncertain phase, but i think investors are taking a bit of a breather here, taking things in stride, and realizing maybe the risk off tone occurred a little too quickly and it's time to pause for a minute >> let's get to a stock that is under pressure, under a lot of pressure today, in addition to meta that would be alibaba. deirdre bosa has the story deirdre. >> softbank may be getting ready to unload part of its massive stake. the japanese conglomerate currently owned about 25% of lik

about big declines like this, even if it's not specifically alibaba, in terms of portfolios, big technology portfolios feeling pressure from the most recent downdrop, having to be forced to sell some of their holdings >> yeah, i mean, it's why we, to our retail investors, we're constantly pounding the idea of diversification. if you have a big stock like this, a big component of your portfolio, you're going to get hurt it's not going to feel very good so diversification is key. what i do find interesting some of these bigger tech names that have had reliable earnings and reliable margin strength over the course of the past several years and the pandemic kind of changed their growth trajectory

are -- their valuations are coming in. i think in some ways you can look at some of these stocks and consider nibbling at some of them i wouldn't put all of your money in them, but i do think as there could be further to grow while the market still contends with what the fed is doing with interest rates, but i do think some of these names are starting to look interesting where they're at >> what about baba this is a big move, but the stock is still down. it's had a big move, 50% or so in the last 12 months. i guess, softbank wanting to tell might be a marker that things are not going to get better . it's interesting because the stock hasn't been benefitting from some kind of halo effect that softbank is going to be the perpetual anchor investor in the stock. obviously, a shadow of overhang. it's not a great day in general for the big chinese tech bellwethers. alibaba is one of those names for a while like with meta right now, people have been able to say it looks really cheap if you believe the numbers. the earnings numbers, it looks

cheap, but it hasn't helped much here i think investors would want to see clarity one way or the other, either they blow out of the stock to some degree or say we're not selling rather than have this overhang >> turning now to the deal news of the day spirit airlines and frontier announcing a merger to create the fifth largest u.s. airline phil lebeau spoke with the key executives in the deal, joins us now with the highlights. phil >> this is a deal where they came together, well, they have been talking for about the last year and finally said it's time to put these two airlines together, as you mentioned it will be the fifth largest airline once the merger is complete the names in terms of whether it will be spirit or frontier, the headquarters, the ceo, will be determined over the next few months frontier will control 51.5% of the merges airline spirit will control the remaining 48.5%. here's the ceo of spirit this morning on "squawk box." >> we get asked that question or will be asked that question, why now, and the answer i like to

give is why not? this is a really fantastic combination, as barry just said. we think it's extremely complementary. there's going to be a lot of value to deliver to the consumers. this is not a regular airline merger this is a completely different thing where you have two low-cost leaders getting together to figure out ways to drive more growth. >> by the way, this offer for this deal, price of spirit shares at a 19% premium which is why the stock got a nice pop today. rising 18% so pretty close to what they expected to go through with, and also take a look at shareoffs jetblue and alaska why are we showing you this? because these guys are now the number six and seven airlines in terms of size if this deal gets approved and increasingly, you will hear people ask the question, is there a deal in the future for jetblue and alaska? don't be surprised if we hear that question more and more over the next couple of years guys, back to you. >> we'll ask an analyst. how about that next hour. phil lebeau, thank you

lindsey, do you think there's more consolidation in the airline space, and more broadly in general, m&a? >> yeah, you know, i think it's an interesting question because the biden administration is taking this really aggressive approach with anti-trust issues. and especially within the airline space. they have gone out and really committed to this idea of increasing competition within the airline industry so i'm not so sure you're going to see more consolidation at least while biden is in control of the administration. but the last yield we saw was in 2016, so it's an interesting space to watch these guys have been beaten up over the course of the pandemic. they really haven't been able to get back to pre-pandemic levels. these two, of course, are your betting on the leisure traveler, the consumer continuing to want to travel and fly more frequently from here their sales have returned to almost pre-pandemic levels

you're betting that strength is going to continue and that the business traveler is still going to remain behind in their endeavors to get back to travel again. that's what i'm seeing here. >> business travel to remain behind, and perhaps international travel as well mike, at least for the time being. bank of america has weekly airline traffic readings that they put out every week, and it shows basically that the peak of omicron impact was at the beginning of january so maybe we're past that airlines have actually outperformed the market, the broader market, over the past month. interesting that the change in narrative that's happened fairly quickly. >> we like to price in reopenings there's another one happening right now. airlines are all up today. clearly, the market isn't saying this is going to be more kind of predatory pricing in the market. in other words, they feel like it's probably going to firm up competition. i also think the leadership isn't determined, the headquarters aren't determined are they going to take one of the qter symbols

that's what they have to choose between in these two merger partners >> doing the work for them >> ulcc is sort of a mouthful. >> take two interactive headlining another busy hour of earnings after the bell. julia has a preview. julia. >> well, what's in focus for take two isn't results this quarter with revenue projected to grow over 7% sxurnings per share expected to fall 2%, but what's important is the insight about what's next. investors are looking for some insight into the pending zynga deal with its 45-day go shop period ending on february 24th web bush speculating the combined company could be a good takeover target. and after take two shares rallied friday on its rock star games division development of a new grand theft auto installment, we'll have to see how that news impacted the

company's financial guidance back over to you >> julia, thank you. where is the market on the take two deal >> it recoups the losses take two took when it announced that deal so as julia says, this idea that, yeah, the combination might make sense, but even together, if there's a further consolidation around, they would be a beneficiary of it eventually >> there's the two-minute mark two minutes to go in the trading day. mike, what do you see in the market internals as we're negative in the close. >> they solidified over the course of the day. started out about 50/50 up/down value. it's basically 4-3, advantage to upside value nothing overwhelming light volumes in general kind of a let's wait and see type of day. we talked about tyson and the pricing on the commodities look at the dba, basically all agricultural commodities in an

exchange traded instrument it's gone straight up, especiallyover the last year, and even now that clearly is a source of commodity based inflation along with energy, and the volatility index has mostly been waffling around around $23 or so even though inindexes have been calm. a lot of intraday volatility recently and the cpi number coming on thursday which is going to keep a little bit of a bid in there every day last week, the s&p was at least in a 1% range i think we were narrower today >> just about a minute to go until the closing bell we mentioned meta as a big mover today, but the other big cap tech stock that is also worth watching, netflix, the other one that missed big time that's also putting a ceiling on the nasdaq trade it looks like we will close where the nasdaq down just off session lows, but still down by about .7%. the ten-year treasury yield at 1.91 some strength in regional banks, it looks like it's going to eke

out a gain of just under a percent, and also tremendous strength in the bio techs, this is a sector which has had a five-year loss it's up today by more than 2%. there we have the closing bell on wall street, sara >> dow just going positive there at the close just barely. welcome back to "closing bell. i'm sara eisen here with melissa lee who is in for wilfred frost and mike santoli as always, cnbc senior markets commentator another huge hour of earnings coming up. we'll bring you results from take two interactive, amgen, chegg, simon property, just moments away lindsey bell from ally investment is still with us, victoria green from g squared private wealth joins the victori think your value over growth strategy, that was the day we

had today. energy did well, financials did well, technology underperformed. why are you sticking with this idea >> how could not not want value in an inflationary environment commodities are the best place to beat offset inflation right now, there's nothing stopping them. so that's where i want my clients positioned i don't want them taking hits on multiples. i want them to benefit from the environment we're and in the energy sector, while it's had a great run, i'm not sure what about to knock it off. >> does it concern you, victoria, that the energy trade has been so far so fast? a lot of people are just saying it's gone too far too fast so you have to ease up on this one. >> i mean, price action almost never killed off a bull market there's got to be a catalyst of why energy prices would start rolling over a lot of names we like, they have these great acreages of permian. break even is about $30. they're flush with cash and giving it back to their

shareholders with their fixed and variable dividends, buybacks, and i don't honestly see the gravy train stopping, even if energy pulls back from $90 to $70, which we would like to see too much pressure at the pump starts to drag on consumers. when we think these companies are profitable in the $60s and $70s if we get $80s and $90s, that's cherry on the top. >> what is value these days? is meta value? it dropped another 5%. it's in the mid-teens. netflix as well, coming down is there new definition of value for you? >> that's a bit of an existential question these days. what have value, what is growth? value means your multiples and what you're paying for a dollar of earnings and growth is reasonable as you pointed out, they're trading lower, but i think the stocks could be a little expensive and they're very at-risk for slowing subscribers as you saw with both of them, that was the fatal nail in the coffin, was the subscriber

growth slowing, and so i look at that and see those still more as growth engines even if they're trading to growthier value, but definitely not what i would consider a straight value stock. >> what is so interesting about today's session is we have seen a real sort of close look at the big earnings misses. so if you take a look at netflix, for instance, it had a big miss got a little lift on the acumen news, and here we are, it was not a great quarter, not a good guide, and then you have meta. so you have investors really looking at what is doing well in terms of apple, that held up today. versus the big cap tech that didn't >> right, and in those instances when we're talking about meta and netflix, there's along with it a reassessment of exactly how much they kind of overearned or thrived during the pandemic. and whether they have reached a level of maturity in the business model they have to be revalued that's happening in the context where everything is having some

valuation compression going on, pretty much everything, anyway, so it's not just, i said microsoft down today there's no news there. it's just one of the other premium valued big predictable growth stocks that are basically getting trimmed back and you know, it's not an unhealthy process, but this was happening on a day when treasury yields were calm and yeah, people came into monday kind of pointing and wondering what was going on in europe with yields going vertical that didn't really seem to disturb things it's much more about kind of trimming back on the past winners. >> should we be paying closer attention to what's going on in the european bond market i mentioned greek and italian yields and the u.s. corporate market, some yellow flashing lights. >> you see a little bit of stress there, but such a level of easy conditions that you wonder when it's time to worry, really if i look at the italian yield, they're back to where they were in 2019. late 2019. we weren't worried about the level of yields in 2019 in the

prefereral >> we just had a minorly hawkish pivot from lagarde on her characterization of inflation. really was not that much >> and the lid came off. no doubt about it. so that's why i do think you have to be a little bit flexible in your thinking that things can move fast, and when things move fast in fixed income markets, accidents can happen that's what it's more about as opposed to the cost of money going up it's the fast trading dynamics and the fact that leverage players in there can get clipped. that's the problem >> i mentioned buyer tech is a mover to the upside as a sector. we have amgen earnings out looks like an eps beat and a revenue miss that stock has turned negative, although the knee jerk reaction was up 3%, which was an interesting one. lindsey, do you find value in biotech? it's a sector that has been beaten down so badly you have to wonder if in this environment, is there value or still viewed as sort of very

risky, high valuation, it's a little more of a speculative trade. >> yeah, i mean,ilities are a little bit more of a volatile sector and has weighed on the health care sector overall it's been beaten down pretty good here. i think it's interesting, you look at biotech and the good niem times, a good, exciting growth sector. in the bad times, it's bad and risky and everything you described it as. i think what we need to appreciate is how it's evolved over the last several years. this is a sector that used to be negative from an earnings perspective and have negative cash flows and they have become much more financially stable then you have also seen some of the bigger players kind of dive into this area as well so i think for some of the stocks, if you're studying them, and the valuations have come in, and health care, we have an aging population it's an interesting place to look when valuations come in, too, especially in a fast and furious way like we have seen.

>> amgen is really moving around, now up 1%. let's get to meg for more color on the quarter meg. >> hey, melissa. it seems like it must be the earnings beat that is moving amgen higher in the after hours because the revenue beat really wasn't really a beat, essentially a match, and it was driven by essentially other revenue that the company got from a collaboration with eli lilly in manufacturing the covid antibody drug. if you actually look at the other drugs that amgen makes, its own products, essentially it had a beat on prolia, but most of the other medicines it missed estimates. there were a few small beats in there, but the product sales really declining through the quarter, and perhaps not helping them really meet those revenue estimates. now you're seeing amgen really unchanged in the after hours because this was kind of a mixed picture, and we're not seeing guidance from the company right now. that is going to come tomorrow in a business review that the company is doing tomorrow morning. so we'll be looking for a lot more guidance for the year ahead and longer term guidance from

the company as well. guys, back over to you >> after all that, thank you unchanged. ibb, the biotech down 20% over y that's good for the momentum going into a rate hiking cycle >> for sure, that's part of the story. people had more confidence you can reaccelerate quickly off that base given what happened with jobs and also given things like mask mandates coming down, seeing bookings going back up for travel i think the idea that we had this soft patch that might be clearing is in there capx estimates keep going up for the year, for just across the

industry, across the economy so that's also something that i think in the more kind of industrial parts of the s&p is a tailwind >> victoria, i want to bring you in here. we're about 56% of the way through s&p 500 earnings so i'm just curious, are you feeling more comfortable with where the market is right now in terms of how much volatility we have seen in the valuation adjustment we have seen versus a week ago, let's say? >> yeah, i mean, you look at 2020, 2021, it was rising tide lifted all boats earnings didn't matter as much almost everything did well and now earnings really do matter you have to have the companies that are growing earnings and justifying their multiples those are the companies doing well we like companies like this. we like when it matters what you own. i do think there's going to continue to be dispersion. you're seeing a solid 70% beat you had noticeable misses and massive loss to market share

that you saw in netflix and facebook but i think that's not a problem. you should be rewarded when your company does well. if you have a strong ceo and a board and you have been able to gam plan through explain chain and labor issues better than other companies, you should be rewarded in the market i think this year, the results are going to matter more so than ever because i don't think people are going to excuse a bad quarter anymore. everybody is dealing with supply chain, everybody has labor inflation. you know, you're not the only person dealing with it obviously, some companies are dealing with it better than others if you look at the ford tesla divide, ford saying we have to slow down. we don't have enough chips, but somehow, tesla is managing to put out a record number of cars. you look across the street, and i like that it matters who does well and who doesn't >> just want to bring in some numbers from chegg, the online education company that has been volatile over the last year. it looks like a beat on the bottom line, 38 cents per share. so that was above. also, revenues coming in better

than expected. $207 million instead of $195 million, which is better than expected some comments from the ceo, they saw 20% services revenue increase during the full year. and it looks like they're forecasting revenues for the first quarter in 200 to 205 million. a little better than expected. overall, a big reaction. this one always moves so much on earnings smaller company, up 15%, but slashed from its highs when there was that whole rethink, when there were questions about demand for homework help at higher education coming out of covid. >> yes so yeah, the stock is bouncing hard here. back to where it was kind of in november did have that big drop yeah, basically, the idea being that there was less homework being assigned and basically there was not as much rigor in terms of evaluation so that hurt in the near term i think it moves a lot because a lot of the value is based on

exactly how much we can project ahead from the fast growth they had at the pandemic. that has been the story with a lot of these companies and it did peak above $100 a share. >> yeah, down 73% in a year. we have take two earnings occupant let's get to julia on the west coast. julia. >> sara, take two revenues missing expectations the company reporting $866 million in quarterly revenues versus $875 million expected the company, you see the stock is now down about 2.5% and that appears to be largely based on the guidance that's coming in less than expected fiscal fourth quarter adjusted bookings, expected between $808 and $858 million analysts had been looking for $924 million in terms of earnings per share, $1.24 in gap earnings per share, and it's unclear if that is comparable to expectations we see the stock down over 4.5%. back over to you >> down over 5% now. julia, thank you

mike, what stands out to you this one has been buffeted around so much by deals. good by deals and also after the deal was announced by the idea that was there's something not so great going on in their own operations that maybe they were looking for something. i don't know that that's evidence here, but i think the street was leaning in the direction of perhaps a guidance raise. web bush last week basically saying they thought it was going to be a bump of $100 million in terms of revenue guidance. and for earnings as well so some questions around a new release for grand theft auto and whether that's going to come on time and all the rest of it. a lot of that stuff along with obviously the pending deal with zynga is kind of kicking the stock around a bit >> we have some news on meta that we want to bring to you changes in the board peter thiel is not going to stand for re-election to the board. peter thiel had been a member, a director on the board since 2005 will continue to serve as a director until the date of the annual meeting at which time he will step aside.

let's get to julia who has more color on the story >> yes, i was saying that this is very interesting, but perhaps not a surprise among those who have watched peter thiel in terms of his political involvement. thiel, a big supporter of president trump, and as facebook became more and more in the cross hairs from both sides of the aisle, particularly around issues surrounding the 2016 election and cambridge analytica, i think there had been called for thiel to step down from the board of the company before now so i would say in many ways this is likely a long time in coming. he's been on the board of meta since april of 2005. so since the very, very early days of this company and i would say that there are a lot of people who have called for this company, which is very much controlled by mark zuckerberg in terms of the voting shares, to have a more diverse and independent board and thiel, i would say, because of his very close and long time

ties to zuckerberg was not considered an independent board member also a long time investor in the company. >> i'm curious, is there any indication thiel could back another social media platform, which may not have any sort of perceived political leanings julia. >> could he? i don't know if there's any reason he would not, but thiel's founders fund has backed some of the biggest companies. he's made some very smart strategic bets but i feel like based especially on this comment we have from mark zuckerberg here, calling thiel a truly an original thinker who you can bring your hardest problems and get unique suggestions, saying he's grateful he served on the board for as long as he has. it sounds like zuckerberg is showering him with praise as he steps down from the board. and if you look at the different board members and people such as drew howsen, ceo of dropbox who

is a longtime friend of zuckerberg's, also sheryl sandberg on the board, and other board members such as tony shu, you have to wonder who will be replacing thiel and if there will have a more independent perspective. >> maybe somebody with metaverse expertise. julia, thank you julia boorstin we want to thank as well lindsey and victoria for being with us today. >> president biden just wrapping up a news conference with the chancellor of germany at the white house. tayla tausche has the details. >> two long time allies sought to remove some daylight between their positions in standing up to russia, which has built up capacity to potentially launch an invasion of ukraine in a matter of days, according to u.s. intelligence. president biden saying that he would urge american civilians to leave ukraine if they're still in the country, while suggesting diplomats would stay put also suggesting that he still did not know whether president

vladimir putin had made up his mind as to whether he would in fact be launching an invasion. put president biden did put some detail on to what exact type of invasion would warrant these swift and severe actions that would potentially include the shutdown on a major future source of russian natural gas to europe listen >> if russia invades, that means tanks or troops crossing the border of ukraine again, then there will be -- there will be no longer a norm stream 2. we will bring an end to it >> that pipeline comes on shore in germany, financed largely by german and european companies. so how will the two countries exactly be putting an end to it? president biden didn't specify that, only saying that if there is an invasion, that there will not be a pipeline going forward. chancellor schultz did not put

as much specificity behind it. he did not address nord stream 2 at all in his comments, only saying the two countries were united, nato was united in how to address the situation going forward and germany is working to reduce its dependence on russian gas going forward. we will see how this situation plays out. of course, there is diplomacy under way. the white house says it's a multi-layered diplomatic approach, a complicated one with a little bit of news today back to you. >> kayla, thank you. kayla tausche at the white house. we're just getting started on the second hour of "closing bell." up next, adam parker on the tech stocks he thinks are cheap right now. >> plus, an airline analyst discusses whether we could see more consolidation of the airline industryolwihe flong t merger of spirit and frontier. we'll be back in two

more earnings this hour. simon property group out with numbers. courtney raegen with the numbers. >> yeah, the results for simon properties fourth quarter is

earnings of $1.53. this is not comparable to estimates on revenues of $1.22 billion from leasing operations. and they are giving a full year guidance for this upcoming year. a range of $5.90 for earnings per share to $6.10 compared to $6.10 for the analyst estimates. so that is a little shy. you can see shares bouncing around here after hours, but still below where we closed. so down about 2% after hours always interesting numbers when you look at the occupancy rate that's 93.4% as mall properties sara and mel, back over to you >> thank you >> it has been a rough start to

the year for tech stocks the tech heavy nasdaq 100 is down more than 10% so far this year underperm foring once again today. let's bring in adam parker, for his take on how to trade the tech sector. you have a broad underweight on the tech sector, but you like the higher quality names the last time i talked to you, we were sort of halfway through the faang names and now we're all the way through the faang names. i wonder what you make of them and the impact on the broader market you said clearly that the broader markets won't do well if tech, if these names don't do well >> yeah, so about ten days ago, a week ago friday, we upgraded tech, thinking the bulk of the painful part of the tech trade was probably behind us it was all based on looking at prior downturns, prior tech corrections. this one got pretty extreme of the ones we could name, covid or financial crisis, european crisis we thought the risk was probably worth it our guess was we were 80% through it our thought was there were

opportunities to buy some things and get closer to market weight. i do think the markets are really working, tech will have to participate and do well >> you still like biotech? that sector is still taking a drubbing >> yeah, i like biotech a lot. we pair things to try to beat the market if we're overweight biotech, we'll be underweight profitless software to me, biotech is a real opportunity. relative price to sales is at a ten-year low and the innovation pipeline looks the same the forecasted sales are the same as prior. one thing that's interesting is people feel like when interest rates rise, all these businesses that have a lot of value far out in the future will do poorly, but did you know only 15% of biotech companies ever generate positive cumulative free cash flow, and the ones that do, it's five years to do it on average so the whole term of value argument, we'll be on the next interest rate cycle by the time it matters for most of them. our judgment is there's probably a good risk/reward there

sure, if we get dovish sentiment, they're all going to go up, but i think the innovation is pretty cheap for biotech and i like that idea >> just to dive into the tech call, adam, old tech versus new tech, how are you distinguishing old tech is it based on valuations or just how long they have been in business >> actually, there's a correlation between those two, sara that's a good question i tend to look at, you know, as a factual thing or systematic thing. we have a model, we assign a level and the top third of growth or the bottom or value. so it's pretty clear when you look at thing like dividend and growth rates and valuation how to parse them out. personally, i like old tech. i like a name like -- dell, you know, it seems to act fairly well on a relative basis when the nasdaq really gets clobbered. maybe they can earn $8, $9, $10, so i think it's pretty cleep and dell owns a lot.

old techy stuff like that that may be better than people think, maybe a slightly better pc market than people think as well dell is a good old tech idea >> really quick, last year, you went really negative on peloton. it's up a lot today. i wonder if you would say it's a short at this point. you short these gains. >> well, melissa, i'm glad you mentioned it in our year end outlook, we pitched a lot of these names the beginning of last year as short ideas, we call them low quality work from home names we pitched it short of earnings when the stock imploded on earnings eve wn the deal speculation, it's back up to about where it was before earnings. i don't really mess with deal stocks once you get a name that has speculation, my view is you get out of the way because only the true experts should really understand that. i like the idea of being negative on names that, you know, are lower quality, meaning they don't have good stable revenues and cash flows and that

have a high correlation to our work from home basket. as the world continues to reopen, they'll do well. on today's take, you were talking about this weird rotation with cyclicals. what led was american airlines and carnival and the cruises so that's a big of a reopening pitch. i think that makes more sense broadly than owning work from home names >> wides words, i don't mess with deal stocks >> once it's in play, how are you going to make money? >> exactly thanks, adam parker. >> melissa, sara, good to see you. >> take two shares, they reported earnings. we're watching the stock right now. revenue miss, weaker than expected guidance. now down about 2%. up next, an analyst tells us what he wants to hear on the company's conference call set to kick off in just a few plus, steve grasso on whether trti as starting to look atacvefter a huge post earnings sell off.

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take two shares are falling after hours, though they pared some of their losses down 1.5% after reporting earning. forecasting weaker than expected bookings joining us is brandon ross they did raise their outlook on bookings guess it wasn't enough for the

street what do you think is causing the reaction >> the stock is down just a little bit they guide very conservatively you saw that in the most recent quarter, where consensus was way, way ahead of the guidance they missed it very o, so slightly, and then on the guidance, they're guiding below, but i don't really think much of it i also don't think that these two quarters are that important in the scheme of take two. >> the context of the move, brandon, is also that they had big news on friday with rock star games and some availability gt on various consoles i wonder what you want to hear most of all from the conference calls. >> you brought up gta 6, every analyst on the call is going to try to figure out when gta 6 is coming out if you look at the guidance that they gave alongside the zynga release when they bought zynga, they said that they were going to compound at about 14% which

biggest games deal ever at the time but now, microsoft just bought activision, and there's speculation out there that take-two can be the next kind of big chip, with some wondering whether it makes sense for sony to buy take-two. i'm sure they'll be asked about strategic transaction as this industry consolidates. we don't think that makes much sense because it would be massively diluted for sony to take these take-two games and headache them exclusive number one, and number two, you have to get rock star's cooperation, who makes grand theft auto, and that

may be something that's difficult to achieve >> brandon, thanks for your thoughts appreciate it. >> take care >> time for a cnbc news update >> thanks. from the news on cnbc, here's what's happening the pentagon says russia continues to add sizable forces along the border with ukraine and belarus. john kirby has russia has well north of 100,000 troops in the area but no plans as of now to ready u.s. troops. >> we know the name of the navy s.e.a.l. candidate who died just weeks after finishing hell week. he is 24-year-old kyle mullein of new jersey. during hell week, sael hopefuls go through grueling training exercises with little sleep. another s.e.a.l. candidate in his class was also hospitalized, according to the navy. mullein was not actively training at the time of his death and an investigation into cause of death is under way. >> and the new orleans saints star running back alvin kamara

arrested in las vegas yesterday. he's charged with battery for an alleged snincident at a nightcl. kamara expected to appear in court this hour. bail was set at $5,000 >> tonight, news you can use if you bought crypto or got it as a gift what you need to know for your taxes, right after olympic curling, 7:00 eastern, cnbc. back to you. >> that's going to be tough to follow always exciting to watch curling. thank you. spirit and frontier announcing a merger today. that will create the nation's fifth largest airline. up next, find out whether more airline consolidation could be on the horizon >> plus, peloton a big winner amid takeover rumors we'll discuss whether tomorrow's earnings report could build on that momenm. 'lbeig bk.tu

shares of spirit airlines closed up 17% after the company agreed to merge with frontier airlines in a deal valued at

$6.6 billion the merger of the two biggest discount carriers would create number five largest airline in the u.s. if the deal goes through. pending regulatory approval. joining us is conor cunningham, executive director at mkm partners i'll start with the question phil lebeau posed last hour, number six and seven, jetblue and alaska air, does there need to be a deal there for them to now effectively compete? >> thanks for having me. i wouldn't say so in the near term you know, you can't say never, but airline mergers have been going on for quite some time you know, there is likely no appetite for the -- from the doj for american, delta, united, or southwest to get much larger in the domestic market on an m&a puspective that doesn't mean that jetblue and alaska could not happen. i wouldn't expect that to happen right now.

there's probably more m&a to happen on the low end, on the smaller side of the scale. but that's not in the near future i don't think this is like triggering event for a wave of m&a to happen within the space airlines are still digesting a lot of what's going on with covid, trying to get out of the depths of the pandemic as we get to a new normal on the other side of all this, maybe. but in the near term, we're not expecting that >> who has the most -- which airline has the most route overlap with the combined frontier and spirit, when we think about who is going to be hurt the most by a combination like this? >> so traditionally, the most competition comes from the network carriers, the uniteds of the world, americans, southwest historically i mean, generally speaking, clearly on a combined perspective at 7.5% of to normal

everyone is waiting on demand to inflect in the spring and summer so we'll see when we get closer to a deal close at the year end, where things stand on that front. >> related question for me, conor, what does it mean, the combination for consumers, what we pay, routes, do we notice it? >> so on average, the fares at spirit and frontier are significantly lower than the larger competitors you know, this merger isn't about synergies. it's about growth and scale. going forward, these airlines are going to grow, you know, the fleet is supposed to grow by 12

pe12 over the next five years they're not going to shrink. this isn't a merger about getting smaller. it's about getting larger. more scale matters i wouldn't expect fares to come under significant pressure as a result of this right now, spirit and frontier will keep things low like they always have, and they'll drive their top line growth mostly through ancillary fares. >> conor, thanks we appreciate it >> thank you up next, mike santelli takes a closer look at how the bond market is positioning ahead of the fed's first rate hike, and later, fast money trader steve grasso reacts to peter thiel stepping down from meta's board.

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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. stocks today sold off into the close. s&p closed down about .% let's go back to mike santoli for a look at how the bond market is pricing in rate hikes. key question, what do you see? >> you were talking before about how the fixed income markets potentially a source of pressure this is from black rock. it shows market expectations for where short term rates will be, in a year's time huge moves, bank of england and the fed along the same track that's been repricing since september. european central bank is the interesting one last week it went from almost nothing to now we're going to get some hikes this year, and bank of japan, nothing much to see there. this has basically been the tide

as it has shifted in a relatively profound way. black rock making the case that it's a possibility the market is getting slightly ahead of likely reality, but we don't know that just yet on corporate credit, this was another piece you were pointing to earlier here is the way that investment grade corporate credit, cbs, basically credit protection against high grade corporate bonds is being priced. it's had a decent upturn in the last couple weeks. it's still coming off of super depressed levels, in other words, very, very flush levels where nobody thought there was much credit risk and now it's starting to lift a little bit again, this is where you really get the flare-ups where you have market panics and stress we're not there yet in terms of levels but it's moved quickly in a short period of time we put this in the category of we have to watch it. >> will do thanks >> up next, facebook's big fall. that stock still feeling major pain after last week's earnings disappointment fast money trader steve grasso joins us with his take on meta and the rest of the top tech

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board until meta's 2022 annual shareholders meeting let's brynn in fast money trader, steve grasso good to see you. >> good to see you >> weird to be talking to you in this different time slot you think it's a good thing peter thiel is stepping aside since he's an early investor >> well, you know, it's definitely something where if the company has a vision where they want to take metaverse, i don't think peter had probably the same messaging that they wanted to have the company is really pivoting so if they're trying to show they're pivoting, they need to take a different direction in their advisers if that's the case, but i can't help but think the immediate headlines that we're all watching with the backdrop of politics and approaching the midterm elections, i can't help believe that that's probably the main reason. but if we wanted to spin it, they're both speaking very nicely, it sounds like a love

fest, so they're ending off pretty nicely with each other. and on a shareholder front, if you want this company to pivot, it's pivoting. >> melissa, you brought up the issue of whether thiel would go to another social media company. one thing, he did invest in a rival company last year, in rumble, which is kind of social media, it's video. sort of youtube like, very popular among conservatives. also backed by jd vance, running for senate in ohio, but what's interesting is that it was actually in the news today for a separate reason, it's spaccing, and its spac shot up today the timor symbol is cfvi and it's because they apparently offered joe rogan $100 million to leave spotify and go. it was notable because you brought up the point about thiel going to another potential social media there were questions when he made this investment and now ultimately was still on the board of facebook when he did that >> it crossed my mind perhaps rumble is going to be

increasingly a competitor or could increasingly be a competitor to facebook or a meta and so the cleanest way for peter thiel to do that, to fully back that would be to step away from facebook. but that was pure -- i want to be clear, that was pure speculation on that front. >> there was money there >> yeah, definitely. you see a lot of people on twitter saying i'm going to leave twitter or i'm going to also be on rumble.

going into the pandemic march low. >> unless it's in the rear view mirror if they're investing large scales of money that are going to make investors queasy and user growth is slowing, that adds up to a nonvalue proposition. we're too far away from metaverse actually moving the needle, so when you look at valuation of the company, can it have that blowout valuation? no it's never going to get there because the core is always going to be the titanic for facebook, which was always the benefit to owning facebook. so i think they carved themselves out into a corner to mix metaphors.

to me, if you're an investor, you have to be pretty afraid that the $218 prepandemic level on a technical basis doesn't hold that's what i would be worried about. >> $218 is the magic number. steve, thanks. >> up next, your wall street look ahead paul atonto report earnings after the bell as the stock jumps on takeover rumors we'll discuss the key things to watch from the results when "closing bell" comes right back.

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>> right i mean, i think when you step back, it's so easy to pick these names. you hear apple thrown in the mix, google, disney, netflix really when you look at peloton's business and there have been a flurry of analyst notes out today really walking through the red flags. and just how hard completing a transaction would ultimately be. i think key to this discussion, right, is that jon foley and other insiders have about 80% control of voting power. and it's unclear if foley or other members of his team would really be onboard with something like this. then, you know, if it's a big tech player, there's kind of been this chill in washington against big tech m&a, so the likelihood of amazon or google

coming in to the picture, i think, seems less likely when you think through that yeah, so certainly, you know, it might be when you look at peloton and how shares have sold off, it's easy to say there's blood in the water, sharks are circling but again, you know, it's being floated ahead of earnings. the timing of that, maybe it's coinc coincidental, i don't know, but the stock is up on that news today. we'll see. we'll see if jon foley and his team address this tomorrow >> all right, lauren, thank you. >> and for more of lauren's reporting, head over to cnbc.com obviously, peloton is going to be a big one in terms of just market direction, mike, facebook and whether it could pick itself off the mat is going to be key >> for sure. facebook, and also, you know, alphabet and microsoft were kind of taken down just as a general heaviness in some of those names. clearly people rethinking just how much exposure they want in the big winners of faang that we saw for a while. apple held up well

so it doesn't seem as if it's being treated all as one group, but all of that matters now. also overnight, let's look at what goes on in europe that's kind of been a little bit of the story as we pass the baton to the rates market. >> no, that's the pain point, and it gets back to the idea that central banks are still the focus here for investors when you say that the bond market is pricing in, what, four or five hikes. >> or more >> should we take it the stock market is too? >> it's unclear if wecan say specifically they are. i don't think you can say with confidence if we get five and succession, the stock market is going to just shrug. first of all, the economic conditions have to be decent enough i think there's a path to the market being okay with that, but seven live meetings is a lot of suspense along the way mr. a lot of fun for us here on "closing bell. we also have chipotle earnings out tomorrow don't miss our interview with the ceo of chipotle at 4:00 p.m.

eastern time another exciting day in the market with the nasdaq the underperformer for the next two hours, you can enjoy olympic curling followed by the news with shepard smith at 7:00 p.m. eastern time. we'll see you then can he get it? he can five on the board for team usa >> the united states has won curling gold >> the beautiful serenity of early morning in china there is a blizzard of olympic competition in today's forecast, from the mountains our attention will be on the national