aerojet. shares are lower down about 6% today. >> morgan, thank you so much this has been a tough environment to get deals done. we watch stocks head to session lows on the concern. we'll pick it up with "power lunch" right now ♪ welcome to "power lunch. i'm dominic chu in for tyler today. putin's power play as the u.s. warns of an eminent attack global energy supplies hang in the balance and focusing attention on the under the raw car lng. buy this and sell that a veteran trade we are a list of stocks to own and those to ditch. and no price like home

inflation is hitting every part of the home buy process. the series starts today with a look at mortgage rates and the impact on lenders and stock prices, of course. >> thank you here's where we shall in the markets. headed back to session lows. dow down 450 nasdaq given up the gains and down 83. could see the reason "the wall street journal" is reporting the u.s. is closing the kyiv embassy relocating operations to western ukraine. that has investors squarely focused on risk which they were starting to take in stride on the 10-year yield as you can see now is back below very similar picture to friday afternoon when the headlines of a russian invasion hit walgreens, ibm and schevron down crude prices rising to $95 a

barrel we have jumped back above that level. 2% increase. last week on the sector the stocks not having a strong session. prices up 6.5% on natural gas. there could be sanctions to disrupt exports. let's get to pippa stefvens wit a look. >> a lot at stake for global energy markets russia is one of the largest producers and exporters. any disruption in supply could push prices higher a third of europe's natural gas in a co-dependent relationship the sanctions come as europe sees an energy crunch. biden administration pledged to redetective lng cargos from asia

to europe. the u.s. has produced at capacity so new supply can't just be added. a lot remains unknown included the fate of the $11 billion nord stream 2 pipeline to bypass ukraine. the late approval is a key part of the equation and maybe the original domino that set everything in motion sanctions would be key and if they don't target the energy complex directly there's a chance that putin will weaponize energy by turning off the taps. >> thank you very much. next guest says any escalation of the situation in ukraine could create $100 per barrel oil but for how long joining me now is dan yurgen

oil expert we turned to for insights the reports are escalations in ukraine. just how much of a spike could oil see and how long does out last >> i think that what we're seeing, of course, today putin tempered things down a lot showing how he controls the clock but looking at the forces there the message is that they're going to do something. what it would do, prices is a panic in the market. prices are as you -- not far from $100 a barrel right now and if you have the world's two of the three leading oil producers at lugauger heads with each oth then you see tension. >> we have of the course of say

five, ten years seen conflicts targeting oil rich areas we used to look at africa, iran, iraq i remember oil spikes higher and think it stays higher but fades a little bit more. how do you liken this particular scenario, the catalyst by russia and ukraine versus the assassination of soleimani how does this rank >> the difference we can compare to 2019 when missiles and drones attacked the world's largest oil processing facility in saudi arabia and the market hardly moved. what's different is that the market is tight going in and even if we didn't have the crisis going on this would be a tight market if iran comes back init would modify it somewhat you are quite right.

seen oil to 100 or $137. it doesn't last because of what it does to demand, to fuel switching and so forth what makes this more crisis prone situation is that the market is so tight in tells of spare capacity. >> dan, to that point, what's the likelihood that russia would not continue exporting to the world post invasion? >> i think that it would be very unwise of russia to cease all exports to europe because i think it would destroy the market for them for a very long time but i think what you could see is simply if there's conflict there will be disruption if supplies to ukraine are disrupted in a situation now u.s. lng making up the difference and giving europe

flexibility it didn't have in the crisis this situation would be worse on europe would be looking at turning out the lights. >> u.s. policy to natural gas. it's my understanding we import russian oil. >> if there's conflict there will be disruption in all trade flows will happen. particularly, kelly, what happens with the massive sanctions to borrow a term from the nuclear age, massive retaliation of sanctions will affect payment systems and i think banks will be overcome pliant i think you will see that's a factor to disrupt supplies with a conflict and ultimately that -- where that is decided is in the mind of vladimir putin. >> that is the place to leave

this great to have you here today thank you. >> thank you. >> next guest, joining us now is shawn morgan from evercore isi i think you are building on the point that the crucial nature is isolating us and you think it could supply other nations if need be? >> you cut 0 a little bit. the spikes are proceeding the winter to storage levels where it's the lowest level of many years, probably six years. and then russia began to reduce the ukrainian supplies of natural gas and doing that to basically show the world that they can cut supplies to europe and that also is important for

them economically to reduce the trade price they have to pay ukraine. >> shawn, it is dominic here let's talk about that transit fee aspect it seems to be near the center of the conflict here this idea that transportation costs of natural gas is at play here the shipping of liquefied gas to europe from the u.s. how much are the economics different between a pipeline operation through ukraine or transporting it by tanker to places in europe >> so pipeline is cheaper. it's imported. the terms of economics for russia, when they transport natural gas by pipeline that

goes from russia under the sea to germany and exclude the western neighbors from the transit fees but russia is working for years to sort of find different routes around ukraine. following the crimea invasion in 2014 they scrapped a pipeline and then built a secondary pipeline through turkey that then routes up to the balkans. russia is trying to move away from really the longstanding transit partner to the west that has been in place since kennedy. >> yeah. we're showing markets at fresh session lows and the stocks that you think are beneficiary of the u.s. lng industry. we have breaking news on the

russia-ukraine border crisis kayla? >> reporter: despite the openness on russia to pursue new talks the u.s. is not taking chances moving forward with a full embassy closure of the u.s. operations in kyiv the state department began to relocate the majority of personnel to a smaller town than kyiv a statement from secretary of state blinken noted that there would be a full temporary closure of the entire embassy meaning no longer a core nucleus of critical staff that will remain at the kyiv embassy a move is a move of a direction of a potential invasion by russia ukraine's president zelensky posting on facebook in

confirmation of u.s. intelligence reports circulating over the weekend we are told february 16th the day of attack and the country is declaring wednesday a national holiday and also issuing a call for all civil servants in ukraine that have fled to stand with those waiting. even as what we are hearing top russian officials say on camera this morning they want to continue talks diplomatically all statements on behalf of the west appear to prepare for the worst-case scenario. >> it's dom. is there any indication that you've heard through the reporting how effective the u.s. can be in shutting don an embassy operate? we have seen stuff in hollywood

movies how long will it take to shut down an embassy operation in a place like kyiv? it is the 14th, valentine's day. they cite the 16th that's just two days. >> reporter: that's a reason, dom, why the relocation and the evacuation partially, began several days ago and only a cri critical core of the mission remain in kyiv that certainly would tell you that they are expediting the efforts to do that and the administration said over and over again there will not be a military evacuation or anything like we saw in afghanistan happening in ukraine i if russia moves forward. the national security adviser is expected to give a classified briefing to top senators of both

parties, expected to happen this afternoon and expecting briefings from the state department, the pentagon and the white house. we have to believe anything more to learn could come in short order from those. >> kayla tausche, showing crude oil market a lot of that putt on the headlines. thank you very much, kayla coming up, we'll talk and continue to track developments out of ukraine and russia. st. louis federal reserve bach president bullard said they need to front load interest rate hikes. a veteran market watcher has a playbook of industrial and health care names. later on, bitcoin prices are rallying but missing the hallmark characteristic of the big bull run othf e past we'll tell you after this break.

welcome back we want to call your attention to crude oil prices. u.s. benchmark west texas intermediate, $95.29 that is crude oil's highest level since 2014 up 26% this year you can see in the right-hand side of the chart right before 2:00 p.m. eastern time when the

leg higher happened on the heels of the headlines that the u.s. is going to shut down the embassy in kyiv, ukraine, at least temporarily given theesque la escalating tensions. the markets are doing it in realtime. >> probably went up this afternoon versus this morning. the pentagon will have a briefing in 12 minute's time and bring you the headlines. higher oil is not helping inflation. james bullard saying this morning the central bank needs to react to inflation with front loaded tightening. listen >> we have been surprised to the upside on inflation. this is a lot of inflation the u.s. economy, 7.5% on the headline cpi. these are numbers that allen greenspan never saw. haven't occurred in 40 years our credibility is on the line

here, and we do have to react to data but do in it a way that's organized and not disruptive to markets. >> next guest is looking at the market and some ways that you should position if we want to call it that he is managing part anyner and c contributor. it is great to have you here this is a difficult market environment. industrials. a couple of names that -- a name you like and don't like. uber is right to own right now >> so i think when you look at it what does uber have that other companies don't have pricing. what they have right now are a couple of products with mobility and delivery 46% of the customers use both and in freight and other businesses like advertising and i think the technology operating

leverage is what you want. pricing power, operating leverage what will you do drive the car? cars are getting more expensive. looking at the alternative higher margins for uber. >> i want to maybe save a debate for trax love to hear why this is a no-go. >> if you look at the chart and what they have done for two years it is a pull forward of demand for the decks and railings it's compose sit material. pre-covid traded in the mid-20s. multiple at 21 mid level before

you have four or five competitors with similar products and pricing will come down and then you had to it if we're at the tail end of covid the demand for goods will come down and services increase and comes together saying do i want a company with pricing that pretty much pulled forward peak earnings and be in this area versus where i get pricing on? >> if you look at the industrial type names i can understand how you look at the valuation side of things and take a look at the product portfolios that's key coming to health care companies like pharmaceuticals bio technology and those particular industries. all relative underperformers are there places to buy or sell because of the valuations and product pipelines?

>> so a couple of those things are very important valuation and product pipeline are very important look at bristol. merged they have about $2 billion of costs to take out. over 3% dividend share pipeline is not just focused on one drug and it is so cheap because it's a portfolio of dru drugs that if they come out there's leverage and they did not perform and if you have good drugs in the pipeline and trade at a third of the market multiple. >> what about biogen it's underperformed. >> it has and if you look at it they just had an alzheimer's drug approved and controversy

over the drug. will it do what it said it will do and will the cms give it the pricing they need? so the stock's trading at almost 14 times earnings. also most of the pipeline is very new drugs so they're very lerlly stage i want to capital to companies almost there and the market is not giving you credit. bristol and uber are show-me stocks but the ones to own going into an inflationary period where product is important. >> buy uber and bristol. sell trex. thank you. crypto missing the mark. bitcoin at the 42,000 mark is it lacking a clear indicator? no price like home

taking a look at the inflationary impact of each step of the home buying process keep an eye on that. heading the break it is brack history month and some contributors are weighing in tiffany mcgee on why representation matters. >> i think one thing that we can all do to change the financial future of the black community is to support black owned businesses representation matters it goes a long way to let people know and o cmutyo uromni tknow they can do the exact same thing. cody! hi!! hi! how are you? i'm good! i'm crocheting. i see that. started off as a hobby. kind of snowballed from there. and alex, i don't want to stop. well, i don't see why you should have to.

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welcome back to "power lunch. keeping a close eye on crypto. all day today bitcoin was back above 42,000 all of risk is selling off but the rally in bitcoin is missing. one hallmark indicator of a bull run. kate rooney is here with more. kate >> bitcoin is missing new buyers that's a barrier to a sustained rally and there's the new addition to bitcoin wallets. a rise of people opening accounts coincides with a bull

run. you can see on the right side here of that chart lacking there's been a slight uptick in the 7-day average. i spoke to fundstart saying getting new accounts is core to the price target of bitcoin. new interest fetends to follow price action january was a tough month for bitcoin and coming to u.s. based buyers lee said they tend to be younger, risk on, with savings and an interest in tech. many through platforms like robinhood and says that it looks to have peaked last year and tom lee said there's not as much juice in buying crypto right now. for a big step function higher in prices he says older generations that control the

majority of wealth in the u.s. needs to allocate to bitcoin there's seller fatigue, lower liquidity and more price action in crypto derivatives. >> thank you let's get to frank holland with the news update. >> a former goldman sachs banker is going on trial being blamed for what they call corporate wide failures that allowed the fraud. in kst cans democrats are suing the state over newly drawn congressional districts and say there's -- republicans are rejecting criticism as racial

jerry meandering. alex rodriguez is trying to buy the trump international hotel in d.c.. trump slammed him as a joke unworthy of being a yankee the deal could close within a few weeks. back to you. >> thank you still ahead on "power lunch," the russian-ukraine situation worsening. we'll speak with fred kempe next it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya.

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welcome back we have 90 minutes left in the trading day and want to get you caught up on the markets for stocks, bonds, commodities and the latest on tensions between russia and ukraine a pentagon briefing on what's happening in ukraine between them and russia is starting just now. bringing you headlines if they warrant. stocks off the session lows. on word the u.s. embassy in ukraine is relocated out of kyiv the dow, the s&p 500 and nasdaq, you can kind of see here moved lower down 350 points for the dow. s&p's down 39. and the nasdaq down about .5%.

outperforming the nasdaq all day. now to the bond market where the yield on the 10-year treasury note is falling. rick santelli is tracking the action rick >> yes dom, there's a lot on the treasury plate whether it's the thursday when we had the bullard pop or friday, the headlines. looking at a two-week chart and 2-year the maturity to pay attention to you can see how it jumped on thursday and the new established range is intact. look to the two-week chart sliding a bit as the red is deeper in the equity complex and if we consider what's been going on with 10s to 2s, it is hovering under 40 basis points on track for 22 flat as you see

on the chart and if you want to pay attention to the fed and the fact that they have made a bit of a blunder, all central banks that overstimulated, look no further than the yield curves. short maturities high against the long end and looking to japan here's a chart starting early 2016 because the last time of .25%. the bank of japan is now offering to buy anything when the yields get above .25%. our own central bank thought about that and finally the dollar index getting a lot of air play as a safe harbor currency and still under pre-covid levels back to you. >> thank you very much

oil prices closing for the day now above $95. pippa stevens has that >> oil prices jumping following the headlines. at the highest level since september of 2014 and now within striking distance of that key $100 level any disruption wti at $95 brent crude up 1.7%. again this is the highest level in more than seven years and contributing to inflationary pressures in the market. something to watch back to you. >> thank you we have a move here on overall with the headlines of the geopolitical side. the picture's changed. the embassy is temporarily

relocated out of kyiv the capital city there let's bring in fred kempe. this maybe wasn't unanticipated. we have been hearing rumors with regard to a possible evacuation of the personnel take us through what's changed in your mind in the last 24 hours that has seemingly escalated the timeline for a possible invasion of the ukraine. >> i have been engaged in conversations with ambassadors, diplomats and officials in europe and the level of uncertainty is unlike anything i have seen in my lifetime this is either the most convincing bit of diplomacy since moscow blockaded berlin in 1948 and broke us to the brink of war or it's the beginning of

war. the intelligence and the in intercepts are clear that putin could do anything. a partial incursion, a full invasion they don't tell you what putin will do. with the embassy pulling out because everything is there for him to do what he wants to do any day you have the soviet foreign min sister same time tht the talks that the diplomatic path is far from exhausted and the german kchancellor in kyiv t talking to the ukraine president. there's a lot of uncertainty and action and i think the next 48 hours are going to be tense times for europe. >> maybe what encapsulates this

so welt is same ukrainian president reported on the wires saying wednesday was going to be this invasion now we have several news sources claiming an iconic comment about the world's attention on the wednesday date and not meant to be taken seriously and markets off the lows and putting that comment aside what's the significance to you of the u.s. temporarily evacuated the embassy happening around the same time if someone said ignore what the ukrainian president said what does the u.s. move tell you? >> i talked to biden administration officials who are not alarmists in nature but they are right now and the intelligence just shows real trouble and potentially for kyiv where they might try to cut off the head of the existing president zelensky government

and have to take the measures and you see the germans are doing the same with the embassy. the british with their embassy and western part of the country is a safer place to be and precautionary. the difficulty is one person is going to make the decision and that is vladimir putin and he is an authoritarian leader and so far he hasn't shown his hand and a lot of writing is taking place now about the state of mind. he's been in isolation had problems with covid. but about to turn 70 sees this as a moment of history. you have to get into his mind to know what's going to happen in the next 48, 72 hours and we are not mind readers we can intercept intelligence. >> fred, to that point, there's a lot made to not knowing what

president vladimir putin is thinking or wanting to do besides vladimir putin himself but many speck lated that this is a very high stakes chess game where vladimir putin is looking to extract certain concessions from the west. maybe with regard to the nord stream 2 pipeline or with regard to policies of nato and expansion, possibly eastern towards russia what exactly then does a negotiation look like? is there a moral hazard if president putin can do this, amass troops, get concessions and do it again down the line when he wants something different or new >> i think you hit on the point. i think that's a smart observation because we have been looking at this piecemeal. first a cyber attack on estonia and then an attack on georgia. and then crimea. we look at this as piecemeal but what putin is trying to do is

re-establish the soviet sphere of influence and for ukraine particularly wants the structural dependent on russia and not on the west and saw that ukraine was escaping him going to the west. two things i looked at one is there's a novel written by a closest allies called "almost zero." and it argues about how russia can deal with chaos much better than we can. and so i think he's counting on that and that we just won't stay with it as long as he will and he actually has the maximum leverage at this moment and if he backs off now he's tested us, seen the way we'll respond and can come back at this another time i don't think this is a week long or a month long drama and

will go on for as long as putin is in power. >> all right fred kempe, thank you. >> thank you. keeping an eye on the markets off session lows sifting but the headlines and the developments pentagon is holding a briefing right now. the spokesman saying they don't believe putin made a final decision and possible he could move at little to now warning. ckn mont at fidelity, your dedicated advisor will help you create a comprehensive wealth plan for your full financial picture. with the right balance of risk and reward. so you can enjoy more of...this. this is the planning effect.

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and get the best deals on every smart phone. all right. so what you are seeing right there is the dow industrials and it's down 285 to 300 points. moving down closer to 280 on the range. the reason why we want to show you that is because you can see by the chart that we have moved off the session lows session lows that were marginally worse than we saw earlier this morning and all of this is on some duelling headlines with regard to the seriousness in nature of the

comments of ukraine with a possible russian invasion. still to come on the show, how's inflation impacting mortgage lending we'll take an in depth look at the new series when pro"power lunch" returns after this.

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inflation is hitting all parts of the economy we know this including housing. this week we are looking at the impact on different parts of the home buying process as we kick things off with mortgage can se, no price like home screen collapsing there they have been climbing fast, those margage rates, especially in the last week, and far higher than industry predictions over the course of the past year or so so that's having an effect, an outsized one out nan just home buyers but the mortgage business itself diana olick joins us with some of the numbers behind the crunch happening for rates. >> yeah, dom it seems like the average rate on the 30-year fixed has nowhere to go but up it's nearly 20 basis points higher and nearly 100 from a year ago all of this on the cusp of the

all-important spring housing hunt and home prices are up 18.5% from a year ago. so with all of those gains accelerating again, no surprise mortgage companies are getting hit hard after huge demand in the first part of the pandemic, they are now seeing it plummet. applications to refinance are down by more than half from a year ago, and the last reading on mortgage demand to buy a home, which was from the week before, the latest rate surge was down 12% year over year. so while mortgage companies were on a major hiring spree just a year ago, they're now looking at layoffs and a big drop in business the only bright spot may be home equity lines and cash-out refinances, because homeowners have a record amount of equity right now. >> thank you as rates rise, shares of mork a mortgage lenders are getting

burned regional banks mortgage reitz also exposed, but some can handle rising rates better than other. let's bring in kevin heel who covers a lot of these names. where do you think people should be shopping right now? >> hi, kelly hi, dom. thanks for having me on today. you know, looking at the mortgage market as a whole and the companies i do cover, looking at the largest two, you know, both rocket and the wholesale channel, the uwmc, their stocks have gotten beat up pretty bad over the last year since they have become public. rocket's earnings are coming out on february 24th definitely will be -- important will be guidance on the origination pipeline for 2022. expectations are for mortgage orig origination to be pretty much half of what it was during the record 2021. rocket itself is wanting to become more of a fintech company

rather than just as a mortgage originator you know, the mortgage originator space right now is trading around a four to five times multiple of earnings and fintechs are able to earn a higher multiple, say 12% to 13%. you saw that with expanding of the platform into auto and other lenders and purchases such as true bill. >> you think rocket could be an $18 company, we're around $12.50 right now. united wholesale is another one you like you say some of the regional banks could be beneficiaries as well, and maybe people feel more comfortable dipping their toes there. >> looking at uwmc, that stock along with market had gotten memed pie the wall street reddit traders. also the amount of float in shares that are available have shied away some institutions, and the overall market cap of the companies. you know, uwmc focused solely on

the wholesale broker market, and it also right now currently pays a 9% dividend, which we believe is going to be safe for the foreseeable future and a number of these mortgage companies have, and the regional banks such as citizens financial, have begun to increase their servicing book. as rates rise, the value of the servicing becomes more and more valuable and acts as a buffer against raising rates and lower production >> so kevin, it's dominic here one of the observations that a lot of laypeople out there like myself included, think about when we see higher rates is how much the refinance business can actually benefit if rates keep going higher at what point does the refinance business start to become a headwind for some companies and who is most at risk if refinancing volume starts to go away >> yeah, i think definitely i think amongst the smaller

lenders, you know, the technology advancements that have been made at the larger mortgage companies have made it easier and easier for them to process mortgages in a faster way. and i think going forward, kind of rates where they are, you know, everyone can pretty much come up with the same kind of rate unless someone is running a special or wants to capture more market share i think it's more on the delivery side of the larger nonbank mortgage originators taking the average time to close from 40 to 60 days down to, you know, right now below 20 days on average where they can close those mortgages. you know, on the refinance side, as mentioned earlier by diana, you're going to see more cash-out re-fis, but the servicing platforms these companies have will be a huge

buffer going forward >> okay. the refinance business is key for a lot of folks out there kevin, thank you very much for joining us >> still to come on the show, we have heard wall street talk about the impact of inflation, but what about main street we'll bring you the results of a brand-new survey coming up after the break. (ted) after talking and texting for years, we got married... for the family plan. (jane) and then we really expanded our family... for the wireless savings. (ted) it seemed like the responsible thing to do. (jane) and then, just yesterday, my sister told me about visible.

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so you can address supply chain issues in real time, before they impact your bottom line. predicting and managing operational issues that's why so many businesses work with ibm. welcome back a now cnbc survey monkey survey shows inflation is hitting small business and those costs are getting passed along kate rogers has the results of

that survey. kate >> hey, dom. things are getting pricier on main street, according to our latest cnbc survey monkey small business survey. overall, 74% of small business owners say they're experiencing a rise in cost when is in line with q4's numbers, but the big shift is how they're handling the costs. nearly half of owner said they had to raise their own prices. that's up from 39% in q4 this is weighing on operations about a third say inflation is their top risk to business right now. 82% say that inflation is likely to continue to be an issue six months from now. beyond inflation, confidence is holding fairly steady at 44, but a reminder, this is just one point above the all-time low of 43 that we saw this quarter last year those who think business conditions are good right now fell however, there's a bit of a sunnier outlook for business revenue, regulations and tx changes. aside from inflation, other big changes are nothing new, supply chain, and the ongoing pandemic's impact on business.

>> thank you very much dom, that's going to be the yare craw to watch, what small businesses think, the one-year consumer expectations. they don't want a wage price spiral >> it's which part of the income spectrum is feeling it the most as well. >> absolutely. absolutely >> all right >> quite an hour here. >> yes >> in the market it's been great having you here. thank you for watching "power lunch. welcome to "closing bell." i'm wilfred frost at the new york stock exchange. new developments in the last hour or so on tensions between russia and the ukraine, with news the u.s. embassy in kyiv is being moved. >> welcome, everyone we have stocks falling, and oil surging. those stocks are off the lows. and energy stocks are the worst were formers we have all of the angles covered with kayla tausche in washington, mike santoli tracking the market action kayla, first to you on what we know this hour >> well, sara, we just learned defense secretary-general lloyd austin is traveling to