caveat, those could be the biggest. >> we average their price targets and take their current price. >> take the mean and look at the current price. >> hopefully they're not as off base as the inflation forecasters have been. >> forecasting is a tough game these days >> for the past year or so dom, thank you >> thanks for watching "power lunch. >> "closing bell" starts right now. >> welcome to "closing bell. i'm melissa lee along with mike santoli. sara and wilfred have the day off. hawkish comments from jim bullard sending the market lower. we're sitting close to the lows of the session let's look at what's driving the action, mike >> yeah, as you mentioned there, st. louis fed president jim bullard said he now favors a full percentage point of rate increases by july 1st. the fastest pace of inflation since 1982 treasury yields spiked higher on that news with the ten-year yield moving above 2% for the

first time since 2019 and we're seeing more big single stock moves. disney, data dog, and twilio are popping, while pepsi and affirm pull back. 59 minutes to go in the session. the s&p 500 at the lows for the day just about >> coming up in today's show, we'll get the white house response to the inflation print when we're joined by brian deese. plus, uber reverses the stock giving up itspost earnings pop during today's investor day presentation we'll hear from the ceo and meantime, let's focus on the big stories we're watching steve liesman has more on the bullard comments about rate hikes that sent a shiver through the markets. mike was tracking the action in the markets and joining us is mohaod mohammed alarian. >> the best way to describe what james bullard did around 12:45 the this, with the market teetering on concern with the

reaction to high inflation, bullard gave it a shove. the odds of a 50-basis point rate hike, something the fed has not done since 2000, ramping up to 63% on the wake of comments fromboards that he would like to see 100 basis points of tightening in the bag before july they had been around 50% before he talked. bullard telling bloomberg, as a general principle, i see no reason why you can't remove accommodation as fast as you added accommodation. especially when you have the highestflation in 40 years markets have proved forward their projections for rate hikes pretty substantially a 97% chance there will be three rate hikes by june 52% probability of six rate hikes by november. the greater than 50% probability had been all the way out in february now it's pulled forward. have to listen to other fed speak in the coming days to hear how much support there is for that 50.

sometimes, bullard likes to lead the way, but sometimes he can lead you astray. i can't say it's not possible. but certainly, more tightening looks likely >> important to keep in mind he's a voting member versus some of the other comments we have gotten recently from non-voting members. >> yeah, i mean, that is true to a point. i like to listen to everybody. the question is, does the fed want to do 50 out of the box does it want to send a message, get where it's going more quickly and wait and see i think there were some who talked against 50, but now maybe there's more support for it. >> mike, you're looking at how the market reacted to the fed and the print comments >> the quickest way to describe what's going on in the stock market is we took away yesterday's rally and then a little bit beyond that we took it away twice. just at the open, we had the downside shock, and of course, we recovered toward the flat line and then bullard's comments

brought us down again. we closed the week last week at 4500 on the button we're slightly up from there on the s&p 500. but you see here, the market didn't quite prove it was ready to go above the bounce level, about half the losses we suffered from the high to low in january. it's still below its 50-day average. a lot of people say maybe that's going to be a struggle to get above that, but again, almost flat for the week. so even though it seems very dramatic so far, it's not completely broken down inflation, let's look at some of the components of that we were talking all last year about how durable goods inflation was the driver and it was. this is the two-year annualized change in these different categories durable goods versus services. durable goods you can see, to the sky, but everyone expects that to be easing back the issue here is, services inflation has started to accelerate, if you look at a shorter term version, as we reopened that something that could stick around you have housing rent in there,

things like that, and especially if you include energy. it's going up. that's why it has the fed's attention, even though the absolute level is not particularly alarming in the 3% zone corporate bond yields, that's something where the rubber hits the road when it comes to fed intentions, what it's going to cost companies to finance themselves a very dramatic shot up to about 3% this is the b of a corporate index bond yield a collection of all different corporate bonds, different maturities and quality types, but it's around the bottom of this range that we saw in the decade or so before the covid crisis, so absolute basis, it's not very challenging, but it's happening relatively rapidly, and the fed certainly doesn't want to see financial conditions tighten in a disorderly way from here >> it's interesting because yesterday we were talking about the market's position into the cpi print in a neutral to hopeful way. the cpi prohibit came and went 40-year highs, no big deals. markets were coasting along, and then bullard comments came out it shows you what a hair trigger

sort of reaction the markets have to faster than expected pace of tightening >> right you have so many things we haven't seen in such a long time super rapid nominal growth massive inflation we haven't seen in 40 years and a fed seeming like they have to chase inflation higher here. obviously, it's not the hugest difference 25 or 50 basis points in faive weeks, but if you get to 50 and a sense of urgency out there that the fed feels behind the curve sknrx i do agree with steve. other fed speakers are most likely going to have to come out here and tip the hand one way or the other. they don't want the market going 92 the meeting really in a 50/50 type proposition they want to have the message out there before we get there. >> let's bring in mohamed el-erian great to get your perspective on a day like today if the fed did go ahead with what bullard is prescribing, the 50-basis point hike by july or so, that would seem like an admission by the fed of a policy error that it has made

>> it would be the second admission of a policy error. the first one was on november 30th when they finally retired transitory, having miscalled inflation for so long. and now, this policy error would be starting to slam on the brakes because they didn't take their foot off the accelerator early enough it's really fascinating the way the market reacted today we came back strongly and impressively from the inflation print because we have confidence in corporate earnings and the behavior condition then came the comments which suggest a policy mistake that would lower economic growth and hurt earnings. and that's why we have come down again. and you can see that clearly in what's happening in fixed income so the market is pricing in a higher probability of a fed policy mistake >> you are pointing out i think on twitter, the huge spike that we're seeing in the two-year yield specifically and i'm wondering what you're

most concerned about in the next few weeks as we're going to get more fed speak, and as mike mentioned, they will be asked specifically or they'll be sort of forced to comment on whether or not 50 basis points in march is a possibility >> look, they have to do two things they have to regain inflation credibility. they are way behind in their understanding of inflation and two, they have to control the policy narrative it is amazing to me that the marketplace now expects 150 basis points of hikes this year. and is starting to front load, as steve said, the hiking cycle. that is serious. so they have to do two things quickly. the trouble, melissa, is they're so late that i can't think of an easy way to do this. and this is the one thing we all wanted them to avoid we didn't want them to be in a lose-lose situation and increasingly they're being forced into a corner of just

lose-lose. >> just to get a little more specific on what bullard is putting out there, he wants one percentage point of hikes by july 1st that would be, you know, 100 basis points in three meetings, therefore, 50 in one, 25 in two others, as opposed to by the end of july, when there's another meeting and you might be able to get to your 100 basis points four weeks later is that really the difference between the fed having this methodical start to a tightening cycle that the markets can handle and a fed policy error? >> so what he wants, and we should all want, is regaining control of the policy narrative and of policy credibility. so his way of doing it, and it's not only his way others are proposing this. is move quickly, show that you're serious, and contain inflation expectations inflation expectations are starting to move not only to compensate for past inflation but also to anticipate

future inflation so his idea is move quickly, restore your credibility, and then wait. see how the data evolves and that is a more orderly way of doing it. the trouble is, if they don't get it just right, they risk having to hike again and then you worry about the economy and you worry about the typical mistake which is when you slam on the breaks, you increase the probability of a significant slowdown and you hurt corporate earnings >> so i totally get mike's point about the difference is basically 25 basis points, which in the grand scheme of things is really nothing, but we're talking about the notion that maybe the fed has lost control of the problem, which is a much bigger thing the fed seems like it would be stuck between a rock and a hard place because it wants to control the policy narrative, so maybe it goes more aggressive, but at the same time, it doesn't want to spook the markets. it doesn't want to send that shockwave through the system

it's going to lose either way. >> i agree, that's why where say it's a lose/lose situation that's why have been warning since last may about take inflation seriously and be careful. ease your foot off the accelerator. melissa, they are still buying bonds. they're still injecting liquidity. they should have stopped doing that last year they could have stopped it in december, atthe last policy meeting. they're still injecting liquidity into the system. so yes, the risk is this lose/lose. there's still a small window for a soft landing, but it's really small. >> it comes as global central banks, many of them, anyway, are very much hustling to get into tightening mode as well. how does that play into the outlook for whether it's tilting things to the greater side or the lesser side in terms of what the fed might bein doing here, might have to do >> i don't think they will be

influenced by other central banks are doing other than take note it's the other way around. it's other central banks that will be impacted in a major way by what the fed does the consequences of a policy mistake by the fed are not limited to the u.s the fed is the world's most powerful central bank and there are significant spillovers so believe me, others are looking carefully at what the fed is doing and how they regain credibility. >> thank you very much appreciate your coming on to run through it with us today >> thanks for having me. >> all right, after the break, what's the white house's plan to combat rising inflation? we'll ask national economic council director brian deese about this next. you're watching "closing bell" on cnbc with the dow down 453.

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the s&p 500 just about 15 points off session lows. take a look at the s&p's sector heat map worst performer sectors include utilities and information technology no surprise the inflation reliant sectors, materials and energy, doing the best in today's session. in fact, if you dig down into materials specifically, u.s. steel is up 2% f f freeport rounding out gains of 15%. doing well in today's session. >> thank you yes, inflation coming in at its highest reading since 1982, with the consumer price index surging by 7.5% in january

areas seeing the biggest year over year increases include used cars and trucks up 40.5%, and energy higher by 27% let's brynn in white house national economicadviser brian deese. thanks a lot for joining us today. i wonder as you sit here, i mean, the administration, the federal reserve, most economists, have not been correct in terms of expecting inflation to ease to this point. the stubbornness of these high readings is out there. what is there, if anything in terms of tools, for the administration to look toward at this point you have already released, you know, oil from the strategic petroleum reserve. you tried to loosen things up at the ports. and yet here we sit. is it up to the federal reserve at this point? >> well, a big piece of this sits with the fed, and as you know, the best thing we can do is give them the independence to operate, so i won't engage in the type of speculation that you were just talking about with mohammed on that front on our side, we have a couple

very clear things we can focus on first, anything we can do on the supply side here to help ease bottlenecks and increase labor supply you saw on the chart you showed, cars big, big impact on overall headline inflation over the course of the past year. we know the problem. we don't have enough semi-conductors to build enough cars here in the united states to meet demand so we're working with congress we're working with industry players to try to boost semi-conductor production and in particular do that in the united states the second thing we can do is to provide some direct relief to families on the prices and the costs they're facing, and do that in a way that doesn't adinflationary pressure because we fully pay for it and reduce the deficit in the meantime. the president is in virginia today talking about priescriptin drugs in one example and also, cap out of pocket costs provide direct relief to consumers. those are the kinds of steps we

could take right now to help to provide relief to families without adding price pressure. that's the kind of thing we're focused on now >> in the past when we discussed this, and you know, the elements of the build back better plan were sort of on the table in a more direct way, there was a sense that longer term it might restrain inflation, but are there measures you even think you could propose to congress to ease things up, whether it be in terms of directly targeting prices or just expand consumers' ability to withstand these price increases, whether on the child tax credit front or somewhere else >> well, that's exactly what we're talking about. lowering prescription drug prices would ease some of the consumers' burdens lowering the cost of child care would do both. it would reduce the monthly cost that a lot of families are facing many times into the thousands of dollars, and it would also help get more people to work, more parents to work, particularly women who have been out of the labor force because of child care responsibilities. so these are the kinds of things we could do that are practical,

that could operate right now we had the ceos of the largest utilities in america here yesterday. and they were underscoring that passing a package of clean energy tax credits would allow them to move toward renewable energy while passing direct savings on to the consumer, lowering utility cost, the second in the chart you showed we have a practical step to reduce utility costs while accelerating to renewable energy many of these proposals would address the issues at hand again, if we pay for them, we're not adding to inflationary pressure, and the president has been encourageing for some time we could do this in huawei that would reduce deficits. >> lowering prescription drug costs, while they would be welcomed, seem to be band-aid solutions. what can you tell people about what the trajectory is of inflation, especially since most

economists have gotten 8 of the past 11 readings on cpi wrong. they have underestimated the monthly change they didn't see it coming in this hot what can you tell the american people about that trajectory >> well, three things. the first is the overall tr trajectory of the economy is historically strong. we have historically strong economic growth and historically strong labor market which is providing a lot of benefits to american families. the second point is that the things we're talking about here are not band-aids to typical families if you think of a typical family's budget on a monthly basis, 60% of the budget is in health care, child care, prescription drugs, and transportation so the proposals we're talking about about here would provide practical cost savings in the bulk of a typical family's budget third is we still need to focus on the fact the pandemic has affected supply chains and the supply side of this economy. we have to keep working on moving more goods, more services through this economy with more

fluidity, we have made a lot of progress on that front, but we have to keep at it if we do those three things, typical families will see stronger dproeth in the benefits of that, a stronger labor market, and also some practical relief in their pocketbooks. >> i understand you respect the unless of the fed, brian, but just from an economic backdrop, does this scenario make sense where we have 7.5% inflation, we have 0% rates, and the fed buying bonds does this make sense does that overall picture make sense here >> well, i appreciate the question, and you'll appreciate that when we say independence, we mean it the fed is recalibrating its position that's certainly necessary and appropriate. beyond that, i'm going to leave it to them to make those types of calibration decisions but look, it is the case that we have a historically strong economic growth and a strong labor market recovery.

a historically strong recovery >> wages are not keeping up with inflation. that is a problem. so in your view, is that relief coming, because it seems like the administration is doing their part and we're still waiting on the fed >> well, look, wages, we need to keep the pace of wage growth we have seen and we need to bring price increases down i would note in january, we saw, for example, real wages were up because even with the inflation print that came in, real wages over the month were .7%. that's just one month. that's what we want city across time, we want to see wage growth continuing with moderation on the price increase side. what we can do here is really work on the supply side. get more people to work and unstick these bottlenecks while providing some practical relief to consumers both of those things are things we can really work on right now. we have some movement in congress, but we have to keep that going >> brian, thanks for your time >> thank you >> brian deese >> all right, we have about 37 minutes until the bell rings on

wall street. we're sitting close to session lows the dow is down by 1.4%. s&p 500 down by 1.7% the nasdaq is showing a loss of 1.9% right now >> still ahead, evercore's mark mahaney weighs in. and up next, uber giving up its post earnings pop when the company presented at its investor day we'll hear from the ceo next and check out shares of affirm as we head to break, getting rocked after the company accidentally tweeted its earnings ahead of schedule then released them, showing a much bigger anth expected loss for the quarter. those shares down 22%. stay tuned

uber giving up a sizable post earnings pop as the company laid out its strategy at today's investor day it's sitting near session lows andrew ross sorkin caught up with uber's ceo and joins us with the highlight hi, andrew >> hey there i'm in midtown manhattan

just spoke with uber's ceo, dara cosroshaw hae. they reveal they expect to be cash flow positive by the end of the year and forecasting about $5 billion of adjusted ebitda by 2024 and i asked dara when uber will reach, quote, true profitability. >> we targeted free cash flow profitability this year. right. and i think true profitability, gap profitability, is probably the year after you know, we were gap profitable this quarter if you want to be technical about it, but ultimately, we want to be free cash flow profitable and gap profitable for the foreseeable future i think with the road map we have laid out with targets in 2024, it's an absolute it's going to happen >> we also got into a pretty interesting discussion about cpi data and inflation, and

therefore, the pricing power that uber is going to have in the future or not. >> we have seen significant pricing power within the platform now, we're a marketplace, so it goes both ways, which is pricing to the consumer and also cost to our earners. the unfortunate part of the cpi data is cars are costing more, fuel is costing more and as a result, when you look at our pricing while our pricing has gone up, on average on a year on year basis, gross bookings grew faster than trips, earnings for earners are increasing faster than gross bookings >> this next comment is going to get a lot of attention in silicon valley we got into a dialogue about digital advertising, what channels they use to advertise and bring more customers onto the platform we talked about using google versus facebook. listen to what he has to say >> we absolutely saw our spend

on facebook come down on let's say a quarter on quarter basis as a result of the changes that happened >> we're going to have a lot more of that interview on "squawk box" tomorrow morning. we got into a whole dialogue about the super bowl ads that uber has with gwyneth paltrow. you'll see those this weekend. we also talked about the ftc looking into the drizly guiel, gopuff, whether those businesses are sustainable in the long term pretty interesting comments from dara >> i'm curious, he said spending went down on facebook. did it go up on other platforms? that's the next part of the question >> right we did get into detail about whether else he put his money. i think he thinks there will be more money allocated to facebook in the future. clearly, the privacy policies and the shifts with the ios that apple put in place changed the dynamic in terms of how

effective facebook has been for uber, and just another example of the challenges that facebook has been confronted with >> andrew, another -- i mean, a smaller business for uber, but how about its own advertising revenue? that's gotten some attention recently as well on their app. so it's sort of kind of a fascinating turn where almost anybody who has a consumer app in a sense becomes a bit of a media company or e-commerce advertising platform >> and we actually got into that issue because one of the most fascinating things is he's now talking about uber as a super app. super app is sort of this concept where you can do everything from the app, and the cost of customer acquisition, if you will, the number of people now using uber eats off of the app and that how they're learning about it for the first time is remarkable and brings their cost down. you're starting to see them use it for their own services and for others as well >> it will be interesting to track that for now, there market is a

little impatient about that path to real profitability, but we look forward to the full interview tomorrow, andrew thank you very much. >> take a look at the dow heat map. the overall dow is down about 527 points and we're actually only three stocks are positive on the dow right now. that would be disney on those earnings boeing, and coca-cola, where amgen, microsoft, home depot, and salesforce are the underperformers today. >> let's get a check on more individual market movers share of canada goose dropping after posting mixed results cut its aniest forecasting, omicron restrictions is impacting the demand for luxury parkas the stock is down 16%. credit suisse falling, saying it took a hit from investment bank legal costs and a slowdown in the wealth management business that stock is down almost 9% >> time for a news update with rahel solomon. >> hi, mike. here's what's happening at this

hour nevada and its casinos have lifted their mask mandates the governor says face coverings will no longer be required in most public places effective immediately. he says nevadans may still be asked to wear a mask in some places including hospitals, planes, and buses. >> toyota halting production in plants in kentucky and ottawa due to supply problems with the trucking protests. justin trudeau said the protests are hurting the economy. >> in texas, abortions fell by 60% in the first month that the new restrictions were in effect. a new report says fewer than 2200 abortions were performed in september. that's down from over 5400 the month before >> and a judge has restored federal protections for gray wolfs across must of the country. the protections had been removed in the final days of the trump administration the judge found that gray wolf populations could not be sustained in the midwest and parts of the west without

assistance under the ndangered species act. back to you. >> tech stocks on pace to close sharply in the red as the ten-year yield reached 2%. for more on the tech sell-off, let's bring in mark mahaney. great to have you with us. >> hey, melissa. >> this has to be a running theme amongst investors who call into you that is 2% yield on the ten-year, does that mean tech, your coverage universe, is dead money for now? >> i think that's right. it probably is, until you get certainty over the path of interest rate rises. so as an internet analyst, i become an interest rate analyst. it's hard, especially for the high multiple price sales stocks the stocks here, you have to go with the highest quality consumer tech, in my mind, google, amazon, and facebook or have real recovery plays, the travel names and even the ride sharing names, although we had

disappointments today from uber. that was the case of the market wanting more upside than the company provided >> even with the drubbing facebook has endured over the past week or so, mark, it hasn't reached valuations where there's a floor under the stock, even with a rising interest rate environment? it hasn't reached those value levels yet >> i think it absolutely has this thing is trading 14 times, 15 times earnings. this is the lowest facebook has traded at. this is below the 2018 controversy, and you'll remember that well, in the wake of cambridge analytica. cambridge gate, so these are trough levels. for an asset i think is going to prove it, but i think can recover to 20%, recover to 30% earnings growth, if i'm right, i don't think this stock is go to trade at 13, 14, 15 times earnings nine months from now. i get it, for fundamental reasons, not for interest rate reasons. it's dead money for the next three to six months. >> yeah, i mean, mark, remind us

where you are on uber here talk about something that's been dead money for a longer stretch of time than that, and a little bit of an adverse reaction to the investor day today >> i think investors and analysts including myself had expected them to be more bullish in terms of their long term margin guides. essentially, they provided midterm guidance and confirmed street numbers so street numbers aren't going to change based on today, and there's a little bit of expectation they would i think there were a lot of interesting data points. and the valuation on uber is going to become increasingly compelling they're essentially trading at around 14 times ebitda on 2024 for an asset i think can grow ebitda, not 10% or 20%, but 30%, 40%, 50% over thenext several years because they're starting from a small base. they're going to quintuple their ebitda from 2022 to 2024 so that's what's so interesting about uber you still need that recovery,

and as interest rates are going to be a wedwind, but i like uber as one of my top picks for the year along with amazon and facebook >> when people start talking about a 50 basis point cut, i know you probably think back to the last time that happened. that was sort of the final stake through the heart of the nasdaq bubble is that -- do you worry that will happen to your coverage universe, particularly the high multiple ones, or have we corrected in advance to some degree >> i'm not sure that we have fully corrected. i guess as i have thought about it, this correction that we have seen in the nasdaq, what are we doing here about midteens correction i have lived through 11 of these corrections over the last 20-plus years. the average duration leaving aside the really big fall-offs like covid crisis, like the great housing crisis, you know, the typical fallouts have been 15% and lasted for three, four, five months. we're still only about a month, two into this, so i wouldn't be surprised to see this correction continue, maybe not much greater

severity, but in terms of duration for a while keep in mind, that last crunch we had in nasdaq at the end of 2018 gave you a chance to step in on names like amazon, google, and facebook, and even netflix back then, and gave you great returns over the next twefrbl months the question is finding that bottom my guess is you have to wait a few more months but it's going to be in there >> mark, if it's just a protracted valuation compression, which it has seemed to be so far, i think that's one category of correction but we talk about you and i living through the big bust back in 2000. there was a bit of an adverse feedback loop that took hold you had all the ipo money and start-ups, today would be the cloud software programs, and then this ecosystem that was on the defensive because those companies were somebody else's customers. do we see anything happening like that in terms of spend, in terms of the fundamentals of these sectors? >> i haven't seen that yet

it's possible that will happen you're right, we lived through that, and i remember we had some dramatic corrections in the ad and commerce leaders of the day. but the we're going back 20-something years today, what did we learn from our google and amazon prints google's growth rate didn't change amazon's growth rate accelerated. like the leading highest quality names, their fundamentals are extremely well intact. that why you want to stick with those names, the most defensive names in the space where cover in a time where you need to be defensive are google, amazon, i know facebook is a controversial fundamentally evaluation, and i'm still going to look for recovery plays because i think we're going to get out of this, i hope we get out of the omicron crisis and start to see the real reopening and there's great ways to play that uber is definitely one of those. >> mark, it must be hard to come out and tell your clients that your space is basically dead money for a few months when was the last time you had to do that

>> well, you make a good point what's implied in your point is we haven't had a healthy rerating in interest rate, a rising, aggressively rising rate environment in five years or arguably in ten years. that's how long it's been since you had the really for a substantial period of time, really avoid the high multiple names and play defensive and stick with the highest quality names. it's been a long time, no question about it. >> all right, mark, thanks a lot. we appreciate the time today see how it plays from here >> for more on this market sell-off, let's bring in peter chukaine good to speak with you today on some level, you know, this is roughly what a lot of folks might have expected or should have expected coming into this year big questions about fed title shift, whether in fact it's going to be greeting an economy that's a slightly in deceleration mode. what do you make of the market reaction so far?

do you think january's low is still something that should hold or are we in for something worse? >> i think the key word that you used was should have expected. and you know y think the key was the fed pivot where it rejected the characterization of inflation as being transitory. i think that changed the tenor of markets or at least should have. soas you know, where have been expecting this for a little while, and last time i was on, i think i called a local low, not because i was generally constructive on the markets. i still think it's a sell the rally market, but the fact of the matter is, the fed is going to have to act if you look at the taylor rule, the fed is way behind on hikes i think that's why mr. bullard came out today and said he favors 1% by july, keeping in mind he's been in the hawkish lead for some time he was the first person to suggest 50 basis point i think the fed is going to have

to act, and the only thing that will stop the fed from acting, mike, is if the equity markets and other risk asset markets do some of the tightening for it. >> you know, it may well be true, and clearly, the fed has plenty of work ahead of it in terms of normalizing, catching up, withdrawing stimulus and all the rest, but do the markets are that much farther to go? when you have the two-year note yield, 1.55. it added a full hike today in particular, implied into its yield. yet the equity market has been in this apprehensive way correcting but not breaking down do we take anything from that, or do stocks not get it. >> interestingly enough, the small cap stocks have actually corrected quite a bit. at that low, we're down something like 25% and they have been underperforming since may of last year, as i have been pointing out on a regular basis on this show the s&p really isn't down all

that much from its all-time high i do think the ten-year could get to 2.25 to 2.50. if you recall when the two-year got to 3.25, that's when the market in 2018 took the next leg down it's a very similar market to 2018, relative to the tightening that's going on vis-a-vis the fed. but i think the biggest difference here is, and it's something that none of us have seen in a while, is this inflation is here. and that's another big differentiator between the peer yod i'd you were talking about when the tightening occurred in the late 90s and early 2000s, it wasn't a company behind inflation. >> peter, we were talking to our most recent guest, mark mahaney, an internet analyst. typically a bullish one, yet he's saying that his coverage universe is not investable for the next three, six months or so i'm wondering if you share the same view, if in this market environment it is really a

losing game to be in tech, particularly the high multiple tech, when you have got rising inflation and rising rates >> yeah, i think that's a really important consideration. and my caution really again started with small caps for a while because i thought they would have trouble passing through costs customers bah they have less pricing power than large caps and than tech i think really, that's the repricing that needs to happen if i look at the s&p 500, even after the recent correction, you know, price as a multiple of revenues is something like three times. that is well above what it was in 2000. i'm not sure the markets and the equity markets and in particular tech has priced in the highest rate environment, especially considering there are, as people like to say, longer valuation where the terminal values determine much more of their value perhaps than cyclical manufacturing companies, for example. >> slow just to underscore that

point, you're saying there's more downside in tech. tech has not come to grips with a higher rate environment? >> not yet, i don't think it has. >> peter, great to get your thoughts thank you. >> we have just got about 15 minutes left in the trading day. we're in the market zone here to break down the crucial moments of the trading day, high tower chief investment strategist stephanie link here, and let's kick things off with the broader market stocks selling off into the close. the dow on track for its worst day of 2022. steph, what do you make of this all? >> well, i mean, it's about the things you're talking about, inflation, interest rates, and the unknown. we know that there's inflation out there. we have been talking about this for quarters on end. the problem today was that it's broadening out rents and services inflation is almost up 4% year over year. and of course, we know that services inflation is 60% of cpi, and rent inflation is 30 pest of cpi.

so inflation is here to stay, absolutely if you want to add on wages on top of that, that's above pre-covid levels so that also is pretty sticky. so we knowthat we have flashz. we know the fed has to go. the confusing part is, you had bullard who is always hawkish, quite frankly, so i'm not surprised he said what he said, and you have powell much more measured and more data dependent, so i'm not sure where it's all going to shake out, but it's the unknown of how much and when and they're still buying as you mentioned a couple times, they're still buying bonds the same amount they're buying from april 2020. it's so confusing, and they could just stop buying bonds tomorrow, and that would send a signal, right? but who knows if they will bottom line is i know we have inflation. i know it's kind of scare awith the unknowns, but the economy can handle 100 basis points, even if it was between now and july, because the economy is still strong

looking at all kinds of data points we talk about all the time pmi, ism, new ords new orders are off the charts. that's a leading indicator for future earnings and capx cycles. the consumer is fine, wages are up, jobs are plentiful there's a lot to look forward to i don't think we should be afraid of 100 basis points after the 100 basis points, then we become data dependent we see if we have made any progress with regards to inflation. i tent to think not, but let's just wait. >> you know, steph, obviously during this earnings season, it's been a parade of ceos kind of boasting to some degree about their ability to put forward price increases and have them stick. i wonder how that plays into this on the macro side of things not the political side, but just in terms of that psychology that's going to be working through in terms of management as opposed to ceos looking to scrimp and preserve margins through cost cuts and things like that. >> yeah, it's a really good

question and that's is definitely a common theme throughout earnings that companies are raising prices the number this week that was astounding to me is cisco seeing product cost inflation, 14.7%. that's a price increase. that was astounding to me. but we're hearing it across the board. look what pepsi and coke said today, pricing in the 7% range you do have to worry about down the road, what does it do to demand clearly, that's another data point we have to watch for in the meantime, the other themthem s within earnings, free cash flow is off the charts there's still actually raising dividends and buying back stocks so they're still being shareholder friendly at a time when many companies had to restructure just to survive. so a lot of companies, their business models are very, very lean that's why i say pay attention to the economic data helping them on the revenue side

what we have to watch on the inflation point, and that's why you're seeing a cell off i'm long only. your strategy is to try to find sectors just to be in kind of the relative winners that's really reflation pricing power stories and reopen >> yeah, and they are outperforming today as the s&p does hit new lows for the day and is slightly lower now for the week we have a news alert on sen desk >> hey, thanks, mike shares of zen desk topping in what is the latest twist in deal news for this company. the journal reporting that toma bravo and other private equity firms have made takeover approaches to zen desk they cite people familiar with the manner this comes amid a lot of activist activity at this company. seeking to scuttle an aczishz

t zishz they have signed with the parent of survey monkey. that has been signed by partners, janice henderson has come out in opposition of this deal there's a shareholder vote set to take place in a few week's time for zen desk to acquire momentum so you're starting oo see more action on that front the journal is also reporting johnny is preparing to nominate four directors to zen desk's board. that's also citing people familiar with the matter as the pressure essentially mounts to disintegrate that deal to acquire momeantive they have a value of $12 billion. >> i was going to say, up to about $14 billion at this poim point. seems like from all sides, toma bravo is a private equity firm that buys a lot of software and tech service type companies. is there a sense there's

coordination between the activists and potential bidders? >> i don't know from direct knowledge. i know that's become a much more popular activist technique these days surprisingly in 2021, the number of deals thought to be scuttled by activists outnumbered those that activists were pushing to consummate they were looking to break up more deals they they were to emernl private equity has been an increasingly large player in here but the idea would be to have private equity come in and buy zen desk before there is any sort of approval in merging with momentum thatted, private equity typically doesn't do hospital takeovers. it would have to be if zen desk was open to the idea as well >> leslie, thank you very much

appreciate that. we're making new lows. the s&p 500 down more than 2% right now. down about 10 points on the week chip stocks are some of the pust performers today qualcomm, amd, and marvell all down micron is bucking the down trend today. that stock is up 3% on potential new shortens of it microchips. how does this play in? is it either an opportunity in the general chip sector or we have to worry here about what the supply demand is looking like in 2022 >> i think you absolutely have to look at the supply demand story. i just don't think supplies are going to get that much better until at least the second half othe year. probably more likely if you listen to intel's ceo, he said 2023 we have to watch that, but there are pockets in semis i like.

especially if you look at micron for short, and number two, tsmc. they talked about january year over year revenues up 36%. that's going to benefit some of their customers. that is amd, nvidia. the one i known is broadcom. it's down 10% year to date but it held in better. i think you want to pick your spots. you know i am underweight technology, and i have been. tech and com services are 38% of the market it's normal to see these fall when you see these sectors fall. you want it find some opportunities in the carn blg, especially when the valuations become much more reasonable, which in semiconductor land, they kind of all >> not all tech stocks are sinking amedtoday's sell-off withal some software stocks jumping in protection. the best performer in the nasdaq

100 today, up beat guidance as well twilio reporting a revenue beat after the bell yesterday the stock is up by 2%. steph, you mentioned n weight in technology what is the all year to go to market weight? >> the all clear would really be macro and that we slow down substantially, and you see a rotation away from more value, more cyclical parts of the market and into more growth. i don't think yourl rr going to see that unless the fed gets out of control i think you'll see above trend growth this year and as a result, you want to find in tech some opportunities, right, and so i just mentioned broad comlam res research nxpi, like that as well in terms of auto exposure i don't own a lot of software

and i don't own a lot of faang of course, i do own facebook it can find pockets but it's more of a macro call in my opinion versus certain kind of company specific data places >> you can't own the earners or the high fliers. not right now. >> we can talk about some of the nonearners and one high flier. affirm's stock plunging after accidentally reporting earnings earlier than expected. >> hi, mike. affirm with a mixed quarter, but dividance seems to be what's driving the stock down ahead of the close. the amazon deal also disappointing some investors they showed a witer than expected loss. it was 23 cents below estimate affirm's outlook for the second half of the year was lower than expected part of that lower revenue

outlook, gross merchandise volume for the quarter, 115% year over year gmv is looking strong, and that is likely thanks to amazon, but it's not translate nothing to higher revenue that's the disappointment for analysts one just said amazon had the leverage in the deal the take rate isnot a good, th margins aren't as good if you work with amazon, they probably didn't get the best deal, is what one analyst just told me, and the active consumers grew some of the strong consumer growth not translating into that outlook. we also did get a peak at some of the numbers earlier than expected the company accidentally tweeting some of the highlights out there, affirm confirming that and saying that was the case they called it human error and say that's the reason for the early release. back to you. >> kate, somewhat fascinating in the sense that the machines and people, most likely, to read that tweet from affirm, which was just giving their own kind of highlights of the quarter,

the stock rated by jumping 10%, 11% initially, and then it came in it kind of shows you that just that little dollop from the company of their spin on the quarter was thought to be positive and in reality, i think, you know, we had to see it was taken as somewhat not the greatest outlook >> the computers picked that up right away the stock was up as much as 11% at the time. like you said, sort of a highlight reel from the company saying tune in for more an 2:00 p.m. pacific the growth numbers were positive but it didn't paint the entire picture. stock down more than 21% at this point. >> kate, thanks so much. steph, this is a group that's already taken a beaten, especially after paypal's results, and here it is, down once fwen. a lot of hair on the story, in terms of a, regulatory overhang, and b, these are companies that have never lived through a cycle where things might go pear

shaped >> that's right. and it trades up 13 times price to sales this is a market that doesn't want anything to do with price to sales, melissa, as you very well know. they want earnings and visibility and it is interesting, an interesting story given the amazon partnership, the shopify partnership and diversifying away from peloton. they have to grow into a multiple of sorts, and it's not going to be 13 times price to sales. on the flipside, their traditional card companies had amazing quarters visa, mastercard beat and raised american express was a thing of beauty and a huge card growth from millennials and gen z so really important. they're doing everything right they have real valuations. i think you want to gravitate towards the more mature companies with proven business models at this juncture. >> about a minute and a half to the close.

take a look at the internals the breadth started out strong but it has given way as we have the second wave of a sell-off following comments by fed president jim bullard. more than 2 to 1 declining not a wash out but to the weaker side as the day moved on the equal weighted s&p 500 relative to the regular top heavy one, has still outperformed the equal weighted cnbc is down 1%, just about flat for the regular benchmark index. now it's picked up a little bit, up about 4%, right around 24 not to the high 20s which was -- and into the 30s where we got to in january, but showing some concern based on this intraday volatility the s&p 500 itself has come off its lows just a little bit still looking at a 1.75% decline at the moment.

up about .5% from the lows it's also barely up for the week it's not necessarily completely giving way, but the small cap russell 2000 down 1.5% after being green first thing this morning. >> welcome to "closing bell." i'm melissa lee along with mike santoli. we have another huge hour of earnings ahead they are just moments away plus, the ceo of aurora joins us for an exclusive interview to break down his company's results ahead of the conference call with analyst stephanie link is still with us, eric johnston is joining us. should the markets be this afraid of 50 basis points in march, because it sure looked

that way at the close? >> i think we should and i think we'll see more sell-off in the coming days. this was a problematic report from the fed's perspective this is on top of the pay roll report from friday if you look at the internals of this report today, those aspects that were more transitory, like for example, auto sales, or auto prices, are flat month over month. the real problems were much broader and stickier parts of the cpi. this is an indication the fed is going to be much more aggressive in their policy. if you look back a week, the market was thinking 25 bips. but this has now changed with the employment report on friday and today's cpi record they're going to have to be much more aggressive this is going to pull forward the balance sheet reduction and cd create a situation where they make sales this is showing up in the rates

market they're at a year and a half high, over 100 bips off the bottom, and two-year yields up to 1.57 percent. and equity multiples are not reflecting in my view this policy >> that's the key question here, to me, eric, is everything you have said, the bond market is nodding right along with you since we got it, that's completely built into the current stance in fixed income where as the equity market, you see obviously that correction. most stops were down much more than the s&p 500 was, yet it seems as if we have a decent earnings flow, pretty good k corporate and consumer balance sheet. so can stocks withstand even that scenario you lay out. >> so i think one of their -- a couple things that have helped

equities court earnings have been fantastic. estimates have rising 25% over the last year, year and a half and so all of that has been very positive if you look at where earnings margins are. the high over the last four years was 14%. they're getting a bump from a lot of the pull forward during covid and pricing power. we don't think that is sustainable. ultimately, this market has been held up by the flows and inflows from individual investors. in january, they were the buyer. they put over th$100 billion in the equity market. the question is does the individual investor get shaken and does the individual investor look at some of these yields and say these are getting more interesting. ali there's a lot of risk in the

equity markets i'm doing to move to bonds we haven't seen that yet, but as the market moves slightly lower and people start to get shaken and i think that is going to come to fruishz. >> retail was a buyer in 2021. maybe that's a story of 2021 so with 2% yields and more attractive rates at this point, does that factor into your view of the markets in terms of being some sort of a pressure on the overall insissies. >> i think you have to be very selective, and i think in terms of sectors and parpticipation, you have to buy carefully. why i recommend more of the cyclical areas and the more reopen names and more reflation names is because the valuations are not expensive whatsoever take dow chemical, trading at nine times earnings. wells fargo, 1.2 times book.

so i think you can focus on some of those kinds of companies that aren't at the mercy of higher interest rates and will hang in more, and then you look at opportunities on the technology side, fwen, the companies with earnings that full substasubstantiall i own them in full dish closer, but i would be buying them again. good multiples, good dividend yields, good businesses for now. >> eric, just to lay out maybe some of this game theory here, you might be able to look at bullard's comments today, trying to talk about front loading the tightening action by the fed, and say that that's basically the hawkish edge of where the fed sits at the moment can we at least, even if you were negative on the market, would you say look, we might get softening of this outlook. we'll have another cpi report before the march meeting do you think the committee is really going to be talking about no matter what comes next, going toward bullard's view?

>> you know, i think they are. clearly, bullard is going to be on the more hawkish end, more aggressive, but i do think that as you move forward, that people talk about inflation peaking you know, i think it in general satowards the upper end and probably towards the top the issue is, it's going to come down very sloerwly. as you fast forward three or four months, i think a lot of things that are driving higher inflation, including wages, including rent, are going to have a very hard time subsiding by the time even we go to 50 bips in march, if you look at where we are in june, i think you're still going to have the same issues. even though they're being more proactive early on, because they're delayed in addressing this, it's going to take some time before this comes down.

so that one thing that would certainly help their issue is a lower equity market. net worth has certainly been a big driver for being able to pay these higher prices. to the extent we do see a 50% sell off in markets, hp their out loot and allow them, but as long as we're at these prices, i think this is going to be a persistent issue looking out three to six months. >> we're going to let you go thank you, eric. we have an earnings alert on expedia. let's get to kate rogers >> hey, melissa. pretty strong q4 for expedia, even in the face on the ongoing pandemic eps at $1.60 adjusted, a big beat to 69 cents adjusted. revenues basically right in line at $2.2 billion. the company's ceo saying in a statement, quote, while we

experienced yet another significant travel disruption from covid this quarter, we were pleased to see the impact was less severe. notably, the traveling industry and traveling public proves more rezsilient and we expect a soli recovery barring a trajectory of the virus. the stock hit a new 52-week high today. up higher by about 4%. that conference call is at 4:30. >> kate, thanks. let's get more on expedia's results with jed kelly the contents of the report is a 6.5% increase in share price ahead of the results and we're we are after hours with the stock. >> if you look at their 4q ebitda, it fits the management narrative. they cut a lot of overhead costs, $700 million, and turned verbo into more of a traffic

traffic estimate you look at a high ebitda, it sets the narrative they're going to have structural higher margins when travel returns in 2022 >> and is the vrbo kind of transformation, if that's really what it is, the one that's going to be the driver from here on out, or are we going to be much more talking about traditional potells as they come back? >> that's going to be predicated a lot on global travel mobility. if it's easier for me and you to go to paris or go to europe where we don't have all these testing requirements, you could see some of the vrbo markets like the outer banks or destin, florida, they could last so if urban comes back, it's going to be dreven more by hotels however, if another variant comes up and it's more dieflt travel internationally, i would

expect vrbo to be strong that being said, vrbo has become expedia's gem of an asset and they have done a good job of getting nice inventory in places where people want to go. our checks indicate that adrs for summer travel and some of the vacation rental destinations are up nicely, despite the tough comps. >> good news for expedia, not for people looking for a vacation thanks very much zillow results are also out. dianea olick has those numbers. >> reported a smaller than expected loss of 42 cents a share. analysts had it $1.07 loss the street was looking for $2.98. i want today start with the street program that zillow announced it was ending last quarter. the revenue well xeeted the company's outlook because resale

prices were higher than they thought. zillow is currently under contract to sell or in agreement with terms with more than 88% of the homes they planned to share in the wind down process the wind down process is running smoothly and efishaboutly and we expect it to generate positive cash flow. we feel more confidence exiting i-bottom and eliminating risk to our company and our shareholders was the right decision it reported record profits in internet, media, and technology. an increase of 14% year over year as for guyed, $1.3 billion to $1.4 billion was right along expectations and the stock is moving higher. >> thank you a little relief for zillow which has had a rough time down about 76% steph, your feelings going into tomorrow on this broad market?

it did seem as if we really did front load a lot of the fed anxiety. on the other hand, we're going to have seven live meetings and you're already having people talk about an intrameeting rate hike >> i think we're going to be sideways for the next couple weeks. we get ppi next week, another cpi before the fed meeting, and we have to get through those and more conversations and chatter from the fed group so i think we're going to be watching the data and see where rates setting in at. maybe we get some of the retailers in the next couple weeks so that will be interesting, too, but we are pretty much over we have 80 persh of companies reported we won't get a lot from companies specifically, unfortunately, so we're host tooj tag to the macro and you have to be diversified. i still lean towards the areas i have been, which is reflashz and

really reopen names. expedia was a very good number you'll get the bookings number and that will be positive, hopefully. >> we'll wait for that thanks very much talk to you soon >> we're just getting started on the second hour of "closing bell." shares of affirm plunging on a bottom line miss after the company reported its results early, and up next, we'll talk to an analyst who upgraded the stock to a buy plus, the ceo of aurora cannabis breaks down his company's results moments after they're released back in two minutes. feel stuck with your finances? ♪ ♪ move your money to sofi. you could earn up to $2,230 when you download the app,

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. affirm shares closing lower by 21% after reaching -- releasing isearnings earlier than expected. giving lower than expected guidance and the company's twitter account accidentally put out a since deleted tweet earlier this afternoon featuring highlights from the report. that was before they finally released the official numbers early.

let's bring in chris from da davidson to talk about the quarter and the stock. chris, how do you size this up in terms of just the reaction to the numbers? it's brought the stock back not too far above where you recently, i giuess, had upgraded it, but it doesn't seem like the guidance was well received >> you're right, mike. a little bit of a head fake. we thought the numbers looked good in the tweet. the details, the devil in the details, higher than expected expenses and the guidance. they hit the numbers out of the park in the fourth quarter, but the first half of '22, the second half of their fiscal year guidance implies pretty much in line with where they were before this company is notoriously conservative when it comes to guidance the past quarter, they beat quite handily, but the key issue was the guidance before didn't include amazon, and now it does. so i think people are looking for more including myself >> well, and the fact that now

includes amazon and it seems a little bit more muted, isn't that not a concern given the fact that relationship was considered to be a big plus? >> oh, yeah. i think that's really why the stock has pulled back so much. i think it's the guide not being more of a blowout like the quarter was. again, it will be interesting to see what they have to say on the conference call at 5:00. they tend to be pretty detailed when they answer questions also tend to be conservative, so we'll look for tea leaves in there. i do think amazon is a massive opportunity. still looking for shopify details as well. they're ramping quite quickly with shopify all of the numbers in the quarter look great it's just the guidance that probably is reducing the enthusiasm >> in terms of looking out to the future, how do you view a company that's never operated in a bad economic environment because now we're on the cusp of declining credit quality we're on the cusp of increasing delinquencies and how do you view affirm's ability to navigate that? >> that's why i was on the

sidelines for so long as i watched the stock run post amazon last fall i couldn't get comfortable with the credit risk that wasn't quite in the multiple. now it's a lot more reasonably valued which is why i decided to get back on board, but you're right. credit can only get worse from here it did include good details on the credit quality by vintage year on this supplemental earnings release the provisions came in lower than estimates, so the current markers look good, and then the key will be affirm's ability to navigate the waters going forward. i think the company has an advantage. their pool, there's credit data, the data they collect from consumers, they'll be ahead of the conserve, but the overall environment will affect them >> i guess, longer term, chris, just in terms of the business model, how many years out are we looking at before it really turns profitable, until they get some kind of a scale all along, other players coming into this general part of the

market including the big processors it's just hard to know exactly what they have as a special sauce or a head start. >> i tell you, mike, that is a great question that's one of the reasons behind my upgrade a couple weeks ago was at the top like accelerates, there's a lot of operating leverage a lot of their costs that's caused them to be unprofitable should be fixed. this quarter, however, big increases in technology cost, big increases in g & a, so that needs to slow down for them to become profitable and that's an area of focus on the conference call it's also about how big can they become if they can really accelerate with amazon and shopify, that top line expands, they could become profitable much more quickly. i'm not as concerned with the competition. affirm has a differentiated model given their ability to lend to the consumer and i think that has shined through with their examples of amazon and target and walmart and probably more to come. so i don't think it's really

competition that's weighing on the outlook. i think it's hopefully just a conservative guide at this point. >> chris, great to speak with you. thanks >> all eyes on the fed after the hottest inflation reading in four decades up next, a look at the increasing odds the fed will hike interest rates by 50 basis points next month. check out shares of aurora cannabis moving higher after reporting a revenue beat stock up 4.5%. we'll be joined by the ceo next. longel will be right back

the january consumer price index soaring 7.5% on a year over year basis. that's the largest increase since february 1982. steve liesman joins us for a look at whether that will force the fed to be even more aggressive to fight inflation. steve. >> yeah, what a day in the markets, melissa, especially in the fixed income market. hotter than expected consumer

price index causing markets to expect more aggressive fed price hikes this year. the chance of a 50 basis point rate hike depends on how you measure it 64%, up from 30% before the number for the march contract. the fed has not hiked by 50 since june 2000. however, the chance of a 50 is near 90% if you base it on the april contract which some in the market are doing all of this reaction to what melissa told you, yearly inflation in january hitting a 40-year high the core rate i think has the fed's attention, up to 6% now. both up 0.6% in the month. not much suggesting prices could be peaking any time soon just some downturn in hotel prices and maybe some relief on new cars but used car prices were up strongly best way to describe what james bullard did around 12:45 this afternoon is this, markets were kind of teetering on the edge of serious concern about the fed's reaction to high inflation

bullard came along, gave it a shove. telling bloomberg he wanted to see 100 basis points of tightening by july, even considering an intermeeting move i was just looking when you talked to me, when you introduce mead this 25-basis point move in the two-year, i cannot find another move like it since, you guessed it, june of 2009 the great financial crisis you just don't see 25 basis points, and of course, the 210 spread getting crushed now, it was 44 basis points just a few moments ago. >> yeah, the bond market is doing a lot of the work for the fed at this point. i'm interested in what you tweeted out earlier, the fed steps in, you know, when there are emergencies to cut rates why not in an emergency situation on the inflation side going up, would the fed not step in in your view, does that warrant it at this point >> you know, here's what -- the fed would have to teach the market a new lesson here

i don't know that chair powell wants to do that at this point i have maintained this since 2000, 2001, when fed chairman greenspan, you remember, passed after 9/11, came in and did a couple 75, 50 basis point cuts in response to 9/11. it turned out the economy was not hurt that badly by it. i felt like he should have taken it away then when the fed giveth in an emergency, i think it ought to taketh away. i don't think that's in the cards right now. look, the fed is still buying assets, which has made several people raise both eyebrows as far up in their forehead as they could, and it's said it's not going to increase rates while it's still buying assets it would have to do an emergency stop to that and then bring it along. i don't think powell wants to surprise the market with intermeeting hikes right now >> yeah, steve, especially given the fact nobody really thought january was going to be when inflation settled down

granted, it's hotter than expected as you keel pointing out, longer term yields don't say the market is in for run away inplation the market thinks it can restrain it. >> we're going the other way on that, interestingly enough you could make an argument when you look at the 2/10 spread, which is the difference between the two year and ten year and it's down 44 basis points with the idea, two things, one is what you just said, mike, the market thinks inflation will be under control, but there's also the idea that the long end thinks the fed is making a mistake here you're right, though i am very surprised at how the market reacted to an upside surprise my feeling wasthat it would only get concerned if it was sort of plus 8 i was in the camp of thinking it could be 7.5, 7.3, 7.7 i think what bullard said came along and gave the market a shove to thinking about the fed going faster is really what upset equity markets >> absolutely. yeah, before that, we kind of

recovered those equity losses. steve, thank you very much we'll talk to you soon >> thanks. up next, aurora cannabis ceo miguel martin on the company's revenue beat and the outlook for marijuana reform legislation in washington >> and later, an analyst with a buy rater on zillow reacts to that company's beat and tells us what he wants to hear on the conference cl ickis f t top of the hour

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time for a cnbc news update with shepard smith >> hi, mike. from the news on cnbc, here's what's happening a milestone for the me too movement congress just approved legislation that guarantees people who experience sexual harassment in the work place can take the case to court it bans employment contracts that force people to settle assault and harassment cases through arbitration. president biden is expected to sign it. >> the bomb threats that shut down eight mostly black schools in d.c. yesterday now police have a suspect a 16-year-old boy arrested and charged with making terroristic threats. one of the schools had been targeted the day before as well during a visit from the vice president's husband, doug emhoff and new details just out on the death of actor and comedian bob

saget. the result shows multiple scalp fractures and bleeding and contusions on the brain. most probable, he fell backwards hitting his head in an accident. no drugs or alcohol involved >> tonight, the spreading trucker protest that began in canada, now the calls to organize something similar at the super bowl real or just talk? on the news right after team usa olympic curling. news time 7:00 p.m. astern, cnbc good we'll see you then. >> shares of aurora in the green in the after hours session the company reporting earnings just now, beating revenue expectations joining us now in an exclusive interview, aurora ceo miguel martin great to have you with us. >> thanks for having us. >> you also reaffirmed your goal of abita profitability by the first half of 2023 and your cost savings schedule was moved up. can you talk to us about the various segments of the business that gives you the confidence

about meeting that adjusted profitability target in the first half of 2023 in terms of the medical market, which seems like it's growing, and your main driver of growth, and the consumer market, which seems like a very, very competitive market >> ayeah, first and foremost, we had a great quarter. our transformation plan is absolutely on track. you mentioned some of the highlights our efficiency initiative came in on the high end we announced 60 to 80 and we'll be there in terms of revenue, it really is the medical business. the number one medical business in canada, number one in canadian internationally, and there's plenty of profitability internationally. we have the largest shipment ever to israel number one in flower in germany. it's the same playbook country after country. great products and it's portable which gives us optimism in the point in time when the u.s. gets

there. the canadian business hasn't bottomed out yet we're seeing higher level inventory, and we got there about a year ago in recognizing you had to have a real focus on the core areas where you can make money i think it's going to be another nine to ten months until the rec market stabilizes. today, there's twice as many as a year ago right pricing and then at that point we'll be in a strong position and you're definitely going to see a movement of medical towards rec, and those companies that succeed at medical will have the upper hand with rec >> how does the rec market bottom out is it just a rationalization of the number of lps operating? so that the pricing pressure isn't as great you cited pricing pressure as the main reason why the revenues overall on the total basis were down in the consumer market. >> yeah, i think you have really sort of three drivers. right now, there's no barriers

to entry, you have 250 lps, 125 a year ago secondly, there's excessive amount of inventory so people are wiving to give it away, even at a loss, and you know, when you combine all of that together with folks that are just willing to sort of get there and sort of fight with it, it's not rational we have right sized our focus and really gotten down to the core, focusing on premium categories where you can make money, can clearly that's the best way to handle it, but the medical business is the exact opposite steady margins, you're seeing growth, only seeing ahandful of companies that can successfully navigate it, so none of those pressures which is why we're pleased to be the number one medical company and why canadian medical is the bright spot of cannabis globally. >> miguel, thanks for your thoughts appreciate it. stock up 5.6%. >> thank you so much up next, fast money trader dan nathan on today's market sell-off and whether he's finding buying opportunities amid the carnage plus, more than 30 million

americans are expected to wager on sunday's super bowl as more states give the green light to online betting we'll ask the ceo of draftkings why the big interest in betting isn't yet translating to gains for his stock. >> as we head to the break, here's a check on after hours earnings movers. you see expedia up 4%, zillow bouncing 16%, aurora cannabis up 6% "closing bell" will be right back

stocks sold off on the back of a jump in treasury yields the fen-year crossing above 2% for the first time since 2019. joining us is dan nathan dan, good to see you >> hi, mel i'm so confused. i don't even know what hour is it >> it should be 5:something. our friend tweeted out a chart saying that the ten-year yield could peter out at 2.15% possibly could that be, you know, the solution to tech's woes? >> not exactly i mean, really, there's a number of things at play here we have been talking about it a lot for months here. we have seen high valuation names correcting for months and months, if not quarters, for the last year. you think back to the q1 of 2021, about a year ago, when rates started marching higher, and they were doing so on the anticipation of these vaccines working and us being basically past the pandemic at this point. so right now, with the ten-year above 2%, i think it's doing it

for all the wrong reasons. if you go back to q1 of 2021 also, tech stocks were having a hard time, even the mega cap ones that aren't even perceived to be that sort of expensive to me, i don't think the ten-year going sideways up at this 2% fixes a whole heck of a lot for the problems in technology the last thing i'll say is if today is the first day in almost two years we had a two handle on the ten-year yield, you know, what did they do off the bat today? they came for microsoft, came for apple, for alphabet. those are the last three, they saved the market a week and a half ago you better hope they can hang on here because the way google has acted or alphabet since it reported the better than expetted result filling in the whole gap, that's really problem attic to me. >> i was going to mention because it only has 1% left of the huge pop after earnings. you think all these tech leaders, obviously, they fall, the market falls, but as you take a look, is there hope

at least on a technical basis, could you find some support here >> well, microsoft better hold 300 in the near term or it's going back to 280. why we're focused on these names is these three stocks make up $6, $7 trillion in market cap and they held up well relative to many other parts of the market they are their own market, if you will nicide the s&p 500, and the nasdaq 100, so listen, i just think we're kind of one step forward, two steps back sort of environment here and until we get more clarity about just how quickly the fed is going to be raising rates because now there's talk of surprise hikes let me tell you something, going back in my career, when you have surprise hikes, that's usually a problem. that does not mean you're mitigating things you're hoping to fix with one fell swoop i think the market, at least equity investors, would be very surprised by that. they wouldn't take kindly, and the s&p and nasdaq would be testing their recent lows from january if that were the case.

>> on the ten-year, for the wrong reasons. obviously, nobody wants inflation to be where it is or having the fed having to hustle after it this way. but we do have, you know, 4% unemployment, record job openings, corporate earnings are holding up okay, balance sheets across the economy look decent so it's not as if we're kind of teetering on the edge in every respect. >> right, but what if we're hiking right into a recession? we had this artificially inflated economy for the last couple years the fed has thrown trillions of dollars of monetary stimulus to it the fiscal stimulus is obviously just kind of ending up a little bit, so to me, i don't think with the foundation for this economy is nearly as strong as people think right now, and if we were hiking too quickly and inflation were to abate quicker than people think, then all of a sudden we have a situation where we could be staring down the face of stagflation. that's something i think actual evaluations would not take too kindly

okay, record this, record that, okay as far as i'm concerned, you know, we're probably likely to see fewer buybacks and that's obviously been supportive of the equity market too. so i don't know, i think there's a greater potential that the fed got really turned around when they were a bit, i guess they should been focused more on inflation, and then when they took the transitory thing off and got hawkish, i think they might have done that exact top >> dan, nice to see you. see you on the 22nd of february, dan nathan >> see you then. >> all right, we have an update on the zen desk story that we brought you last hour. let's get back to leslie picker on that. >> hey, mike yeah, last hour we talked about the "wall street journal" reporting that toma bravo and otherprievet equity firms have made an offer for the company. zen desk saying they have confirmed their board of directors, thoroughly reviewed and rejected what they call an

unsolicited binding proposal of a consortium of firms to buy zen desk shares and an all-cash va value, the $132 represents about a 30% premium to yesterday's closing price before that news trickled into the market today you can see after hours, shares are up more than 3%. the company also reporting earnings revenue coming in at $375 million for the fourth quarter, a 32% increase year on year that beat estimates of $370 million. on the bottom line, though, nongap diluted, they reported 16 cents per share, which was a 2 cent miss. still, the board concluded the proposal from that consortium significantly undervalued the company and is not in the best interest they also say it's not conditioned on the termination of that acquisition of momentum, the parent company, guys >> interesting rejecting a takeover offer at a

premium. probably not the last we'll hear about that thank you, very much >> shares of zillow soaring after reporting a beat across the board. just a few minutes ago up next, we'll break down that move with an analyst who is bullh ison the stock "closing bell" will be right back

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shares of zillow group rallying after hours after posting better than expected results. stock up more than 18% after hours. joining us to break down the numbers is dan from the benchmark company. dan, clearly, some relief here obviously, zillow has had a very tough run in terms of the stock. what did you see in these numbers that might either justify it or not? >> rich barton is back and doing it again, mike i mean, it's not so much the results. it's really what he's saying that, you know, by the end of 2025 we expect to have $5 billion annual revenue and a 45% ebitda margin so the savior who came back in in 2019, who righted the ship, obviously took a reputational hit once we went through the whole i-buyer mess that's starting to get cleaned up they technically missed on premier both on the quarter and in the outlook, but they slashed the 45.5% ebitda margin, and

their imc, their internet, media, and tech segments proving they can have sustainable profitability. if you want to talk about the housing superapp that's now coming, their limited market share currently, and the huge tam they're addressing, i think those are the things that are probably guiding the stock and frankly, we never thought the stock should have traded as low as it did. clearly, they were overly punished for their missteps. now, the stock is trading at some ten times cash flow there are not a lot of businesses that can grow double digit top line with 40% plus margins that have that kind of a discount to the market i think that's starting to be rectified at least a little bit. >> how do you think about total addressable market they said in 2021, they estimate a quarter of all buyers in the u.s. reached out to zillow, but they only generated revenue from 3% of those people do we think about it as closing that gap, as touching all of the quarter of all u.s. home buyers?

>> you know, rich doesn't aim small, so ithink that's probably what they want you to buy into you know, they're talking about 5% buy side share, 3% total transaction share. and look, this has always been a game of numbers with them. they have massive audience they have had unique larger than the entire housing market by a long stretch, and the concept here is just about engagement. how can they engage with those users, get monetization conversion of these users. so they talked for a long time about accessing even the seller side of the market, i think that's the interesting thing here, them exiting the i-buyer market gives them access perhaps more aggressively to go after the seller side because it was perceived by the agents that they were competing directly with the i-buyer side. so if they can unlock that and that audience engagement and monetization, which is something they talked about for years.

that has to be the path. >> dan, thanks appreciate it. >> only a ato days away from football's biggest night the draftkings ceo joins us on the rise of sports gambling and how much cash could be on the line in this weekend's super bowl and throughout february, we're celebrating black history and featuring some of our cnbc contributors here's isaiah mckinnon with what inspired him to become the man he is today. >> i experienced hatred because of the color of my skin, but i use that to enact change i have met six presidents and countless other leaders. but the one who truly taught me the meaning of building wealth was nelson mandela he inspired me to believe that true wealth is built on education, commitment, fortitude, love, hard work, and sacrifice. that's why i stand tall as i do today.

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(upbeat music) - [narrator] next term starts soon. visit snhu.edu . from who will win to what color gatorade will be poured on the winning coach, the american gaming association estimates 31 million people will bet $7.6 billion on the super bowl. a 78% increase over last year. joining us now in a first on

cnbc interview, jason robins, draft kings ceo. so the super bowl is your super bowl, i assume in your year what can you tell us about the level of activity, there's two weeks, of course, leading up to this game, when we know what teams are in there, we know the odds what are you seeing in terms of download, in terms of already betting activity that can give us a sense of the scale going on this year versus last year >> well, this is definitely going to be the biggest super bowl we have ever had. you just flashed up the stat, 31 million americans, $7.6 billion bet. the reality is that the vast majority of that is actually still bet in the illegal market. so really still a lot of opportunity, i think, to continue to growthe legal regulated market we're excited to be a part of it >> thinking about the super bowl during the super bowl for you, jason. you have a lot of promos out so do the competitors. you have bet five to win $280 in

free bets. you have a 20% deposit match the incentivess are staggering here how should we think about hout you make money when you're giving it away >> well, promotions are really designed ed to attract new customers and sometimes we do them around big events like the super bowl i think the goal for is to get as many people engaged on the platform right now obviously, promotions are a big part of that it gives people an incentive to try and it gives them a taste of betting on a big event can be like most people once they experience the product and enjoy it are going to stick around. >> part of the story has also been more states allowing legal sports betting and you have been riding that wave to some degree, but then once a state opens up, it does mean a lot of ninitial promotional spending just to follow up melissa's point, when do you get off that treadmill? it's not as if there's much of a

barrier to entry for new players in here. >> i think there actually is quite a big barrier to entry there's a limited number of licenses in each state the scale required to operate, the complexity of the product is not easy i think that's why you're seeing in most states the top three or four players are taking the vast majority of the market share it's consistent state to state so i don't think that it is really easy to enter that said, this is the golden cohort, as they call it, of customers in any new state and it's a bit different, i think, than a lot of other industries where we're not creating the market. the market has existed for a long time, it's just been pushed to the illegal market. there are a lot of people who are hungry to bet and do it in a safe and regulated space that generates tax revenue. it's very different where there's this huge built-in audience and going after them in the early days of a new state launch the other interesting thing is it's state by state. so it's not like it suddenly opens up to the whole u.s.

what we have consistently said as we look to invest in a new state as it opens and we typically believe we'll reach profitability in a two to three-year timeframeon a state by state basis that's been consistently what we have been seeing since we went public and we continue to believe that to be the case. >> i had the privilege of seeing the sort of control room in boston where you see the bets come in. i'm curious, as the super bowl goes on and you're watching the bets come in minute by minute, when is typically peak betting time during the game >> it's funny, it really kind of runs right up until kickoff. there's a ton of betting, then during the game, a lotof opportunities to live bet, too we're going to have more live bets available than ever this year so i'm really excited about that each year, our product gets better and better on the live betting front. really, the peak is going right up until game time, that last hour or so is when a large percent age of bets come in. >> jason, thank you. >> thanks for having me.

>> mike, what a day. the cpi print came out x i thought immediately it would be negative markets and then they were sort of okay with it, and then bullard comes out. >> yeah. i mean, obviously, the market had been kind of slowly creeping up to this idea we might get that half-point increase in march. and then he just sort of comes out and says it. it ramps the odds or the probabilities of what we might get in march i really do think as everyone has said, fed officials are going to be out there, either talking that prospect up or down, and trying to steer expectations going into that fed meeting. meantime, we have tried to absorb all the earnings along the way, too it has been a pretty noisy week. really to a flat performance for the s&p 500 so far >> and the two-year did a lot of the work, as you pointed out earlier, for the fed as we mentioned, it was certainly an ugly day on wall street stocks sinking after a red hot inflation report and the comments from voting member james bullard. that does it for us here on "closing bell. for the next two hours enjoy

olympic curling followed by the news with shepard smith at 7:00 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 ♪ a predawn glimpse of beijing, which sits at almost the same latitude at salt lake city, the host of 2002 winter olympic games. salt lake is nathan chen's hometown he put his own signature on the games yesterday. looking down at the national aquatic sender we welcome you i