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 belgium,

poland, and lithuania, countries with u.s. troops are stationed or headed. john kirby acknowledging the russian foreign minister's saying this morning that moscow should pursue diplomacy, but he adds a grain of salt, based on what the use is seeing russian troops do on the ground. >> exercises are designed to make you ready that gets to my previous point he continues to do the things that you would expect one to do if one was planning on a major military action. >> in the meantime, secretary of state antony blinken issuing a statement confirming the u.s. is in the process of temporarily relocating the u.s.'s embassy operations in ukraine from the embassy in kyiv to a town called lviv due to the dramatic acceleration of forces it's located in western ukraine, about two hours from the polish border that would allow staff to reach the territory quickly if the position there becomes

threatened the state department is also working to dismantle communications and computer networks at the embassy in ukraine's capital. wilf and sara. >> kayla, of course, we're all looking for any solid and significant updates rather than just these rumors about possible days for a possible invasion how significant is moving of the u.s.'s diplomatic staff, because they're still in the country it's not like a full evacuation. >> yes, but the point of the proximity to poland of this town, i think, should be noted, wilf it also should be worth noting that over the weekend, the u.s. had been in a position of leaving a core critical staff at the embassy and keeping some of those communication, telecommunication networks operational so that they could continue at least keeping that building and that office functioning in that way for some point in the foreseeable future for them to return

but last week, we heard the national security adviser warning that communication lines could be severed, that there could be air raids, that there could be a rapid assault onthe city of kyiv, and the decision to move even that nuclear core critical staff out of the capital city certainly seems to suggest that the u.s. is expecting perhaps a worst case scenario, and then you have the ukrainian president, vladimir zelensky posting on facebook he's been told february 16th, this wednesday, is the day of the invasion >> kayla, thanks so much as you can see, the dow down 0.8% as we speak let's bring in matthew orr, eurasia analyst with rain, able to join us by phone. matthew, how likely in your eyes is a full invasion of ukraine by russia in the coming weeks and has that likelihood risen or fallen over the last few days? >> we think that a large scale russian military invasion of ukraine, while certainly

possible and russia's recent movements areclearly intended to make that threat more and more viable, we still think that it's not the most likely scenario we tend to think that other scenarios are more likely. we think it's more likely that russia does something to flare up the conflict in the donbar region that has been raging in eastern ukraine foryears now and that russia's more likely to stick to diplomatic measures and other military technical response measures to essentially keep tensions high while without resorting to a full-on invasion. >> so you guys talk to investors. what would that mean for oil prices, which tend to spike when we get these kind of headlines that's really where the global economy is going to feel the most pain. >> absolutely. and i think it's important to note that oil prices have already risen during this recent crisis back several months ago, they were much lower, and these high oil prices, you know, are great. they help russia's leverage and

russia will probably feel that maintaining these tensions will help maintain high oil prices, which are really helpful for the russian economy. it's not just oil, it's also natural gas, which are a large portion of russia's exports. and so we think that that also gives russia yet another piece of leverage to potentially reduce tensions eventually, showing this build-up has been economically beneficial. >> that said, matthew, what will be the long term benefit to russia of this, if they have never actually intended to seize huge amounts of territory? for example, because surely, it will just push europe to develop, albeit not immediately because these things take time, alternative sources of energy supply >> yeah, i think that's one of the things russia kind of risks with this build-up, but i think the russians feel that they can make their gas cheaper and more competitive in the long run, so they seem to hope that this won't have an effect

i think if it does have an effect, it could be that, that it could be a factor pushing eventually the european countries to seek to reduce their dependence on russian gas. so that's certainly -- and oil for that matter. i think that's certainly a risk that comes into mind here. i think the russians were thinking about this from a security angle and what they got here is they made it very clear that russia would respond to an attempt to bring ukraine into nato with strong force i think it's been clear to everybody that bringing ukraine into nato is now going to be more politically fraught than it was before this buildup, so russia has already forced the west to talk to russia about a number of elements of european security that it was not prepared to talk to russia about just a few years ago those factors are the ones putin is looking at and saying ukraine is not getting into nato anyway for the foreseeable future, so it would be such a high cost measure for us to invade just to prevent that from happening. >> so that gets at the question of diplomacy matthew, what is your read of

the current status of that, and what russia's getting out of it? >> yeah, so the current state seems that russia, as we found out today, russia's foreign minister said they had prepared a ten-page document that they are prepared to respond to the u.s. response to russia's initial demands with and it's still unclear what the next -- what the kremlin's next step on that are it appears that document, if approved by putin, will be sent to the united states and possibly to brussels and europeans as well, regarding kind of next diplomatic steps. so we think that russia is not totally prepared yet to give up on the diplomatic track, so i think we're going to see that slowly begin to develop here, but i think russia wants to peak this thing militarily, and it will only seriously offer a diplomatic kind of step after it feels ismilitary leverage has been peaked and it's committing to the diplomatic route. >> what implications are there,

matthew, from all of this for china and taiwan >> yeah, big implications for china and taiwan obviously, the chinese are watching the situation very closely because they're trying to get lessons and understand how the u.s. responds to kind of questioning of its security commitments. so i think that the chinese are looking at this and saying, huh, it looks like the u.s. has shown quite a bit of firmness. the u.s. has not shown a sign they're going to cave under pressure on their biggest demand so i think the chinese, they have a long-term view on what their stance toward taiwan is, so i don't think anything that happens in ukraine will necessarily change that in the short term, but inthe long term, it's something that will kind of weigh on chinese leaders' calculus for how they approach how the u.s. responds to questioning of its security commitments. >> something investors are watching closely matthew orr, we'll leave it there.

thank you for the analysis stocks were down, dow is down about 433 at the low, down less than 300 now. let's get back to mike santoli for more on the market reaction. also interesting to see the split in oil prices and energy stocks, mike >> yes, absolutely oil prices getting up to that level where it is maybe driven by a little more geopolitical issues as opposed to pure supply and demand also, energy stocks have had such a decent run to this point, you have to wonder if the market is saying energy at this level starts to threaten growth, at least a little bit the overall equity market, very wobbly, kind of uneasy shuttled down to some levels we haven't been at since about january 28 just a few days after the low was set for this construction. and really in no man's land. that initial bounce didn't really kind of prove anything. it's been pretty solid ceiling at that level. it's also near the 50-day average. and hard to see daylight in any direction. you have oil doing what it's doing, the joe opolitical noise, not really helping, and yields

are still near their highs, and no real letup to the hawkish fed rhetoric with the vix at 30. it keeps investors sidelines all that being said, the market is still in this nervous range look at the real estate sector this is a leadership group, a strong performer, this is commercial real estate for the moe part yields 2.5% to 3%, but it's on the verge of kind of giving way just a little bit. bulls would want to see it hold up there clorely higher bond yields do add a little pressure, but you want to see if this will kind of steer its way clear, a one-year basis, it's outperformed the s&p, although it has kind of broken down, down from its highs more than the s&p is rest of the world for the moment still outperforming the u.s. on a year to date basis year to date, six or seven weeks. not that much, but so far because it doesn't have perhaps all of those big growth stocks that have been weighing down the u.s. markets, the acwx, that's the all country world index,

excluding the u.s., is actually outperformed a little bit. >> what's also notable is the nasdaq is doing better today and you have some of these cross hair stocks like amazon, nvidia ahead of earnings, amd, tesla higher right now, despite the fact we're seeing another day where yields are surging, especially at the short end with the two-year note yield up there. >> the nasdaq 100 is up 15% from its highs. once you skim that away, it's no longer about the long term predictable cash flows discounting at a higher price. it's are they more oversold, they have gotten close to a level where the company's fundamentals are driving it, and we talked about it a bunch of times. i had been trying to push back against the idea there was really some kind of rock solid relationship because over time there hasn't been. >> but there has been lately >> to mike's earlier point, the one major indices up -- >> you're celebrating your return and all the stimulus that

will bring >> exactly, exactly what it's doing. >> straight ahead, much more on the escalations tensions between russia and ukraine when we talk to a top global strategist you're watching "closing bell. ♪ get a head start in investing with the new schwab starter kit™. new investors can open an account and get $50 to split across the top five stocks in the s&p 500®. you can also unlock short videos, step-by-step guides, and other easy-to-use tools designed for people just getting started. plus, investment professionals are on standby 24/7

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that's not the only story, david. you have also got all of the sensitivity around fed hiking, how fast, how soon, how big they're going to go. what do investors do with all that right now >> so i think it's important to take a step back and investors need to not as much focus on what is happening right here and now and rather think about the implications of the potential resolution to russia/ukraine, potential clarity on what the fed is going to do we really need to look forward at a time where i think a lot of people are very much caught up in the moment. and you know, what seems to be causing the market a bit of consternation and angst today is the idea we're dealing with higher energy prices, dealing with the fed which is going to become more hawkish. we have geopolitical risks bubbling in the background you're beginning to see concern build around the outlook for growth particularly in light of that consumer sentiment report last friday, but i want to get back to the fed meeting in january, where jay powell was very clear they were going to react as the

data came through the door, and so i think investors need to recognize that if growth does begin to slow, because of, say, higher energy prices, the fed isn't on a preset course here. they're going to adjust policy accordingly. there's no shortage of uncertainty, but i do think investors may be a little too pessimistic as they look ahead here >> in the short term, though, do you expect 50 basis points in march, and is that going to be something that will create more volatility as we get there or have expectations priced that in sufficiently already? >> so i think that actually i think the fed has the market right where it wants it. not only is it pricing in a 25-basis point hike but we're close to pricing in a full 50-basis point hike as well. i don't see the fed moving 50 basis points right off the bat in march i think if they do they feel a need to get rates higher and get rates hiker quickly. i actually think that would likely be followed up by another 50-basis point hike at the may

meeting to raise the absolute level of rates i think the fed is going to dive in here, 25 basis points in march. i don't think an intermeeting hike is going to materialize we do see room to hike sequentially in march, may, and june i think the fed will take a breath and see what the economic landscape looks like because there are a number of wild cards like higher energy prices that can affect the economy in the second half of the year. >> if you think the market is overreacting on the negative side, what looks most attractive to you what parts of the market >> of course so we're in a world where rates are rising we recognize that the way that rates pressure equities is vis-a-vis valuations we're very much in an environment where we're focused on price to earnings growth. we want the earnings to be there. we think the days of the story stocks and swinging for the fences are very much behind us we're also intrigued with companies that have large fixed

costs. that means s they'll have a loto operating leverage if the nominal growth plays out the way we're expecting. that makes us lean more into value, but we're not necessarily abandoning the growthier parts of the market. we continue to think that health care looks very interesting, particularly if the pandemic does in fact begin to fade and then everybody is talking in absolute terms about technology. we need to recognize that there is an enormous relative opportunity. the difference between the companies and the technology sector that earn money and the companies that do not is fairly significant. so again, we're very much using earnings to guide when it comes to investment strategy this year >> some of those tech names higher today, amazon, tesla, nvidia thank you for joining us to talk strategy we appreciate it >> we have just about 40 minutes to go before the closing bell. take a look at where we are in the market it dow fell as hard as down 433 at the lows. it's recovered a little from there, down 256. ukraine very much in focus as well as the fed. we are seeing yields rise again,

especially the two-year, but across the curve, the s&p down .6%. the nasdaq is coming back, it's actually outperformer on the strength of some of the tech names. needham's laura martin weighs in on the market and why the popular growth stocks may be falling out of favor and later, a top hedge fund manager tells the two areas of the market he likes now. and check out some of today's top searched tickers on cnbc.com ten-year yield takes the top spot, as usual bonds selling off, yields are higher tesla is in there as well. it's bouncing today, about 1%. the dow, which is lower, the s&p ted amd hopping 1.6 percent afr getting dragged into the selling last week. we'll be right back. hancock, you sign first.

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volatility laura, great to see you. if tech stocks and growth stocks you cover are pulling back at the moment, perhaps because of geopolitical tensions, is that a buy opportunity or is it just too much broad volatility out there for other reasons that that would be a false reason to buy? >> yeah, i would call it a false positive i would prefer investors focus on things like interest rate increases, the cpi at 7%, which creates labor inflation. those to me are more fundamental drivers of the stocks. the last thing i would really encourage people is sort of don't lose sight of the forest for the trees. this metaverse thing and the value it's going to put on content assets like ipo is going to be huge so lovely, i just wouldn't oversell or overbuy until you understand how web 3.0 affects these individual content owners. >> i actually wanted to ask you about netflix. i know you have not been a fan for a long time, and you often got grief for missing the huge

move higher. but now that netflix has really collapsed, about 30% off the highs since earnings, are you still not touching it? you think the game has changed here >> i do think the game has changed. i think fundamental value is below where the chart says the stock will be able to trade. so we're still sitting at our underperform rating. we put out a piece this morning called the bear case for netflix. and it sort of is just talking about slower subscriber growth, new valuation metrics, they need to be valued on pe, which gives them huge downside compared to historically on enterprise to value growth slowing, lower arpu, everything is not going netflix's way, because competition globally is getting stiffer, and boy, is disney doing good work on adding streaming subscribers. >> to what extent, if you're right, netflix's decline from here will be tothe benefit of some of their rivals, whether

traditional or streaming players going forward, or do you think the whole market has been a bit too overheated and there's a bit too much content out there, creating too much competition? >> yeah, so i definitely think that's the case. we have like ten large competitors, some like apple and amazon that never need to make money on streaming there's just way too much money chasing content. i expect over the next three years they could shake out in acquisitions or they're going to drive some of these companies out of business. we happen to think unless netflix adds an ad-driven tier or adds sports and news, which we think are really important, or does other things, it can't win the streaming wars it will be other companies like comcast or viacom or amazon. i think amazon prime to me is a clear winner here in the streaming war, simply because it never needs to make money from streaming and it can bundle with a lot of other services. i think it's tough, netflix strategic position right now is tough trommy point of view

>> laura martin, thanks so much for joining us good to see you. >> nice to see you >> still to come, tech investor dan niles will join us to weigh in on the volatility and if he sees any buying opportunities as we head to break, here's a check on bonds the ten-year yield around 1.98%. we'll be right back.

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welcome back let's is a quick look at the sector heat map for you.

two sectors in the red, and meaningfully so as well. consumer discretionary up 0.7% energy the worst performer, down 2.6% and you have a couple sectors there, health care and financials, down more than 1%. the nasdaq, though, is positive. so well off the lows that were touched an hour and a half ago or so. the nasdaq had been down 126 points now just positive. the dow, for example, had been down some 400 points at one point, but is only down 200 or so as we stand >> mike wilson, chief u.s. equity for morgan stanley said a war with ukraine would be a polar war for stocks, it could tip a lot of economies into recession. that's on the mind of a lot of investors today. let's check in on individual market movers because vaccine stocks are falling the move is likely due to the design in covid cases as well as the slowdown in the pace of booster shots. former fda commissioner dr. scott gottlieb telling cnbc

this morning he expects only 15% to 20% of parents will get their kids vaccinated. his comments coming after the fda said on friday it was delaying pfizer's vaccine for kids under 5 and under to gather more data. very frustrating moderna and pfizer both down moderna down almost 12%. shares of splunk are surging on a report cisco made a takeover offer for the company. it would be cisco's largest acquisition ever cisco only down 1.5% jim cramer talking about this deal today, you can still sign up, head over to cnbc.com/jointheclub or point your phone at the qr code on the screen >> i think we should make the qr code move now when we use this oh, you weren't watching >> oh, the ads no, but i saw it on twitter. >> it worked i clicked on it. it took me a while to realize what it was. i got it right at the end, so i was a bit slow on the uptake >> the qr code as an ad is a

sort of lazy approach. >> i liked it. it was coinbase, but anyway, if jim has moved around, it draws you, like got to get there before it goes >> i missed the ads. i saw it in person, which was amazing, except the bengals lost, sadly. >> up next, a top hedge fund strategist weighs in on the market later, technician jeff degraaf tells us the one sector you should be extremely careful with right now. recovery continues here. dow down 167 or so we'll be right back.

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welcome back let's get back to kayla tausche for the latest developments on the rising tensions between russia and ukraine kayla, what's new? what can you tell us >> well, we're getting more information from the administration spokesman for the state department and the pentagon this afternoon, saying they're aware of russia's suggestion it wants to re-engage diplomatically, but the military exercises on the ground suggest otherwise. pentagon's john kirby said lloyd austin will head to belgium tomorrow he declined to confirm the possibility of an invasion wepz or the suggestion russian forces may have moved into attack position only saying putin could move with little to no warning. ukraine's president has clarified a post he made seeming

to confirm reports of a february 16th attack, saying he was only citing what media were reporting. he has declared wednesday a national holiday and called on civil servants who have fled to come back. meanwhile, the u.s. embassy is being relocated from kyiv to lviv, a town selected for its geography. it would allow for a quick evacuation to poland if russian forces threatened the new tgz. ukraine's national guard would protect the embassy building in the capital in the meantime. in washington, national security adviser jake sullivan is beginning a briefing right now with top committee leaders and bipartisan leadership in the senate that briefing is classified. more as we know it sara and wilf. >> let us know if anything comes out of it. thank you, kayla >> for more on what this means for the market, let's bringen dan greenhouse dan, it's been a while

welcome bab. good to see you. >> hi, sara. sorry about the bengals. >> thank you it's all right i was just excited they made it that far and they'll be back next year. let's talk about the markets >> you're really a fan now >> now always a fan they're really good now. dan, seriously, on the markets, you have this situation escalating in ukraine, depending on what day it is and where the headlines are. the fed and interest rate hikes coming fast, and the high inflation environment. some people are wondering if this is the beginning of the end of the cycle what do you guys think >> yeah, i mean, listen, timing the cycle is always incredibly difficult, and i think the last couple months has, if nothing else, proven how little everybody really understands macro environment in a normal environment, it's incredibly difficult to forecast. in an inflationary environment, the types of which we haven't seen in decades, it's even more so i think it's pretty difficult to

make the case that we're going to have a recession this year, but i also think it's also not quite as easy as everyone makes it out the fed is going to hike seven times and withdraw all of the liquidity that it's injected, and on the other side of this, everything is going to be a-okay history is littered with mistakes the fed has made, and i think our working assumption is history is going to be exactly the same >> so what do you do as an investor in that type of environment? what sectors, for instance, should you be exposed to, and how much in the market >> yeah, well, listen, we're a long term -- we're a fund that invests over years and years and years. so we don't trade around headlines along the likes of what we're talking about, but from a sector standpoint, we have been exposed to energy, our thesis has fluctuated a bit in the last couple months and years, but in general, a pretty positive view on the sector for most of the post covid environment. and that's for a lot of things that are pretty well known at this point, greater free cash flow generation, the exceedingly

low level of inventory as demand has picked up and the esg restrictions that has meant a number of companies aren't going to allocate to the sector as much as before has created a perfect storm over the last 12 to 24 months that made funds such as ours find the sector more attractive, and that's bib true, and that remains true today, i should say. as for the market in general, i would just say i still don't think people appreciate what the federal reserve is about to do i don't think it's going to be quite as dramatic as everybody is making it out to be, ie, they're going to hike 25 times over the next two years, but i also think this idea, again, that they're able to thread the needle, an idea that pops up every sickle, it's almost surely going to be wrong again. >> what about some of the tech or media names that have pulled back a lot already on expectation those rates are going to go higher are there opportunities there? >> we don't go anywhere near the high flying tech names, the sb

splunks and crowdstrikes of the name that's not what we do, but i would say looking through the charts, it's not inaccurate to say what they have experienced is dissimilar to 2000. but where we do care is in the media space. i don't think the carnage there has been nearly as bad as what you have seen in the unprofitable tech companies, let's say, but we have been big in content for a decade or more and the same content is king is the saying because it's true, and i just think we're all home, everybody is consuming content in 100 diways from only about ten services and the speed at which people are burning through content is remark toobl a degree that i don't think we or anybody anticipated 12 or 24 months ago, so if you are a producer of that content, an owner of the intellectual property, you're going to have value that has staying power. i know the guest right before me was commenting perhaps one or two companies might not be the winner, and that's true, but

again, if you have got product that can be mined, you're going to have a value that going to hold and be a profitable trade and remain so. >> i think you're avoiding talking specific stocks. assume you're talking netflix, disney, viacom, the platform, the streamers that are also producing content to feed the beast? >> sure. and just to be clear for the viewers, i can't talk about specific companies that we own or not, but yes, that vein is what i'm talking about not just them, also the movie studios. and the theater companies. and the camera companies and there's all sorts of different ancillaryways to trade this or invest in this thesis other than just being long something like, let's say, netflix, and again, from our standpoint, that's something that remains attractive today. there aren't many companies left, independent companies that own product that can be mined like some of these stand-alone companies do and there's still a lot of value there

>> thank you so much good to see you. >> thank you for your time >> rising tensions between russia and ukraine creating volatility in the energy market. >> and don't forget, you can watch or listen to us live on the go on the cnbc app we'll be right back here on "csi bl.longel

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the one sector investors should be extremely cautious of, and thomas honing weighed in on the economy and if the fed needs to take action right now on inflation, and wells fargo investment institute scott wren will give us his take on the market volatility. we're now in the "closing bell" market zone. senior market commentator mike santoli here to break down the crucial moments of the heading day, and we have charlie as well, very good afternoon to you, charlie let's kick things off with the broader market stocks off their worst levels but volatile in today's session on rising tensions between ukraine and russia and mike, of course, we have been focused on yields of late, and what inflation projections are like, but today, the intraday moves more on russia/ukraine headlines than anything else. >> it seems like the very short term swing factor because always friday that was the case friday, the market was flat on the day. and on the week, until you did get those headlines coming out

of the biden administration about ukraine. i don't know that that tells you that that's really the make or break issue for this market at all, but it is that just yet another thing on top of a pile of other things that are restraining the market right now. it's not encouraging to see the market kind of wallow in the lower end of the range, but i also think it's interesting we're kind of hovering and not really a flight for the exits because there was a tremendous amount of selling that happened in late january. down 8 percent year to date. it's hard to know what is going to get you more negative >> the base case still for the market is that even if the fed has to tighten aggressively, even if we have these super high inflation numbers, we're still coming off such a strong growth base that economic growth and earnings should hold up relatively well. >> that has not been shaken yet. i agree with that. especially when you have the kind of couple of months of kind of reopening dynamic, so to speak, what jpmorgan was saying today. should be a beast. >> charlie, is that your view?

you called the inflation story you have been dead right on that aspect now the fed is going to have to get aggressive in fighting it. can the recovery and earnings momentum being protected >> webifurcation key can get different parts of the market acting differently. i do think it's going to be very

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>> worth 3.7 billion on december 31st however, if these managers held on to their stakes in the last six weeks and it's likely some of the shares were locked up, especially those that were invested privately, then they would have seen the value decline 40% this year, and that includes today's jump. guys >> leslie, thanks so much for that charlie, i was interested watching the super bowl last night, quite how many ev commercials there were, whether it was from the new players or the traditional auto names and just whether - >> which was the best? >> the chevy one was quite a good commercial. there was a ford one, also a lot of -- there was a new company, i didn't even know the brand >> comstar >> i hadn't even heard of that >> it's an upstart, but it's been around. >> my point is whether the demand in the space, if we're

reaching fever pitch and there's more downside in some of the overpriced names and some of the traditional names even though they have pulled back a fair amount already >> i think rivian's valuation got to, if i'm not mistaken, $120 billion, with virtually no revenues and no profits. this is just a classic what i'm talking about. that was possible because it was a very hot space, a very environmentally friendly space with low interest rates, lots of money pouring in and that valuation today, it's still over $60 billion and that's ford and gm are right at $60 billion the f-150, i'll take over the rivian whatever it is. so look, there's a lot of momentum in electric vehicles but there's no profits and it's not easy to make from the ground up car company there's a lot of capital required >> i can picture you cruising through chicago in an f-150, charlie. >> you cannot picture that you cannot >> not really a city car

ev commercials, crypto co commercials. sign of the time or sign of a bubble i want to mention some movers. this is a punishing market if you have missed earnings under armour saw a precipitous drop, now trading at lows we haven't seen since january 2021. meta continuing to fall. >> the average company that has missed this quarter going into friday, i think it was, was down 4 percent age points on the day of this is what happens when the earnings growth story becomes a lot more selective it's not all boats rising at once just in general, like, more restrictive flows. there's a lot of retail inflows into equities but there's a little bit of hesitancy to really buy dips aggressively doesn't seem like you have to hurry to do it, and also less capital in the risk bucket because bonds are going down as well i keep saying that, but on a

portfolio effect, that does matter tactically. >> mike, just over two minutes left in the session. what are the internals telling us >> they have been soft all day we're kind of rebounding in the indexes. retook 4400 on the s&p 500, but the internals in terms of the volume split, it's not quite 3-1 declining on the stock exchange. pretty sharply negative on that front, although the nasdaq is holding up slightly better it's little more 50/50 take a look at corporate credit. that's been really in focus recently we want to check off the box and say credit markets are not acting up. they started to act up more. the spreads have widened out this is the etfs, the prices of high yield and high grade corporate bonds. most is treasury yields going up, but they have underperformed therefore spreads widening out not critical but getting in the range of how that goes for risk assets the volatility index stubborn in

the 20s. that clearly means market is a little bit clinched up about what's going on in ukraine and also all the other moving parts we're talking about. a lot of fed speak this week, today, jim bullard did not back off his hawkish take from last week it therefore remains on edge we're getting stress tests for the fed story because where the two-year is trading, where the yield curve is, it's unclear whether we have more to go in that process of trying to absorb what the fed is about to do. >> not a great session, but well off the session ows. the nasdaq just positive the s&p only down 0.3% the dow only down .4%. we bottomed around 2:00 p.m., and though it's been bumpy, steadily improved over the last two hours of the trading session. two sectors in the green, consumer discretionary and communication services the other nine in the red with energy comfortably the worst performer down more than 2%. health care and financials both down more than 1%. though oil is higher, up 2%

itself as are commodities like cold, up 1.7% the ten-year ending at 2%, just crossing above it. higher by 0.3% as the bell goes, the nasdaq just dipping into the red, but essentially flat the s&p down 0.4%. >> thought we were going to get a positive close on the nasdaq rebound days for stocks. i'm sara eisen here with wilfred frost and mike santoli, as always coming up this hour, investor dan niles on where he sees buying opportunities, as the broader market falls again >> charlie from aerial investments is still with us, peter from weekly advisory group joins the conversation welcome to you, peter. peter, what's your assessment of the current risks right now in the market, the fed, ukraine,

and just how far along the stock market is toward pricing in some of these worst case scenarios. >> well, i think what we have seen so far is a valuation rethink that really started last year with all of the high flyers, that sort of metastasized in january. the question now is, to what extent do these rate increases start to slow economic activity. because we know the two things that drive stock prices being earnings and the multiple. well, the multiple has contracted but earnings estimates have not i have to believe that it will be hard to avoid an economic slowdown with higher interest rates, and that at some point those earnings estimates will begin to fall. >> peter, is gold finally going to catch a meaningful bid? i mean, it has done over the last few sessions, but it's still in a kind of relatively tight trading range that it's been in for almost a year now. >> i want to say quickly, the best to you, wilf, and you're going to be very much missed i hope so. >> you're too kind

>> i really hope so. just because i'm long myself in some for clients i think that what pressured gold and silver in 2021 was the belief either that inflation was transitory, which it was not, and if it was, the fed would be aggressive in stamping it out. i think what we realized, that even if the fed raises five, six, seven times, they're still going to have interest rates below the rate of inflation. therefore, real rates are going to remain deeply negative for a long period of time, which will then be bullish for gold and silver >> charlie, have you made any moves lately have you picked up any newfound value stocks meta, maybe netflix? i know you always hate these growth names, but they have taken quite a beating off earnings >> yeah, i mean, a couple of them, apple would be -- when it traded down, that was a name that we're looking at. we may have missed the bottom there. there are a couple new names boyd gaming. the reopening trade we talked so much about got out of favor and

names that operate casinos got very cheap so we bought boyd gaming for the first time, msge that we talk so much about with you, madison square garden, had its revenues drop as concerts got canceled, and we think the reopening story is really going to kick in here. there's a lot of pent-up demand for entertainment. people have been buying goods but they haven't been able to go to concerts. we think that's going to start playing out, so those are the names where we're seeing opportunities. >> let me tell you, at the sofi stadium, yes t was the super bowl, so it was very exciting, but packed 75,000 people. very few wearing a mask. and everyone was so happy to be back >> what was the rule on that because it's outdoor >> it's kind of indoor outdoor it's not really outdoors there are two beautiful open air parts, but it is pretty indoors. the only people i saw wearing masks were harry and eugenie, the prince and princess. i only saw that in the tabloids.

>> that's because they know they would get slated if they weren't. the pent-up demand you can totally see will be unleashed and fingers crossed the news continues to get better, certainly on the travel rules as well i wanted to ask about what credit has done, in the last week or so, as yields have taken this latest run up to cross 2% >> it's been an emerging worry point. today, actually, it was firmer if you looked at spreads, they came in a little bit it's taking place mostly in credit protection. basically people buying protection against default, the credit default swaps market is where you're seeing a more pronounced move. again, some of this was mirrored in 2015 when we led up to the first fed rate hike. obviously, 2018period, if you'r draw parallels, 2015 into 2016 had this compound section, a couple of lows, it culminated with the diamond bottom.

that was a lot of stress in the credit markets that took stocks down 15% this is nothing like that yet in terms of where junk that is and things like that, but that's why people have the alarms set for when spreads hit the trip wire >> peter, we'll pose that to you. with credit risk rising, does that mean we're closing to recession, does it mean it's harder for the fed to hike interest rates what does that tell you? >> well, that's sort of the feedback loop, is the interest rates go up, the fed tightens, and then we have worries about the economy and lower rated credits. the high yield index started the year yielding about 4.2% as of friday, that yeed is up to 5.7%, and the spread has widened about 80 basis points. as i said earlier, we're going to now see what the economic effects are of higher rates and monetary tightening. i think the high yield market is one of the most important markets to be watching for to see how that is, those fears

were or hopes are reflected, and i expect those spreads to continue to widen out. they're still below where we were precovid, so there's more weakness that i expect in high yields >> peter, always good to get your take. we'll leave it there we'll stick with treasury yields because they made a move higher again today. let's bring in pria from td securities first on the 2% level for the ten-year yield, how significant is that? >> it's a psychological level. we really haven't -- well, we crossed it very briefly last thursday we're expecting this to break. we're expecting the ten-year to continue to rise the fed is telling you they're about to hike. they're humble and nimble and they're going to do quantitative tightening it's the balance sheet run-off that's going to move the ten-year to 50, we think by year end, to 75 by next year, so i do expect the longer term end of the curve now to do a lot more of the work.

i think the front end is very well priced now for all of the hikes that are going tocome ou way. it's qt that is going to move the ten-year higher. >> charlie, should people be buying banks or is there a lot of risk attached if we see a bit of an economic slowdown. >> you have to be selective when you're buying banks. there are some people whose funding costs go up faster, the savings and loan industry went bankrupt when we had rising rates. there are lots of banks that will do better in a rising rate environment. the trust banks, northern trust, state street, will do very well, and there are certain banks that have good exposure to rising rates, but you have got to be selective. don't buy blanket all banks because they do not all do well in a rising rate environment >> rising rates, preea, and flattening of the yield curve, so what does that tell you about the bond market's expectations for where the fed and the economy goes >> great question, because it's very odd

before the first hike, the market is already pricing in rate cuts two years out. i think that tells you the market is really worried about a policy mistake, that the fed has little tolerance for inflation, they're going to take rates to restrictive territory, take rates up to above whatever neutral is, 2.5 or 2%, and therefore will be forced to cut rates. i think that's why the curve has been flattening. also, i think people haven't quite priced in quantitative tightening, so a combination of the two that is why the curve is this flat. i really think all eyes are on the fed here do they have tolerance for, you know, high inflation number at year end which could allow them to hike more gradually to see, to respond to if the economy starts to slow down, we have a lot of fiscal drag in the system as well if that starts to slow things down, can the fed respond to that and not -- there's all the talk of front loading hikes. i think that's making the market worried they may not be able to respond to slowing growth. that's why the yield curve has

been flattening. we're watching, not sure the minutes, but fed speak talks about a measure gradual pace of fed hikes or gradual quantitative tightening, i think then the longer dated rates can move i think you get a more normal steepening of the yield curve. as opposed to right now with the market worried about policy mistakes on both ends. the fed is too early or they go too far or they're behind the curve and because of that they're going to hike so much they're going to slow things down that's the tension behind fed policy shift and how the market thinks the economy is going to respond to it. >> thanks so much for joining us good to see you. >> thanks. >> charlie, before we let you go, we wanted you to zone in on your best trade idea what are you going for >> i think we're going to talk about mosaic, which is one of those names that will do well in an inflationary environment. it's got a great business. it's gotf fertalizer mines righ here in the united states, so it

isn't subject to the same transportation costs other people have. a world population that's getting richer consumes more food, consumes more calories, and the best way to produce that is through fertilizer, so very cheap stock, trading at about five times earnings. we love mosaic here. >> have the ag commodities not surged sufficiently already? or you think there's more to come in there? >> they just need to stay here or even cheaper. corn is over $6 a barrel and you still have farmers underapplying fertilizer so even at anything close to this environment, there's going to be great demand for fertilizer, but the long term strategy, wilf, is people in china and india are going to be consuming higher quality meals, more protein, which consumes more wheat and corn and soybeans and all of those things need more fertilizer. >> charlie, as ever, thanks so much for joining us. >> we will miss you, wilf.

>> i will miss our conversations. we'll just have to do them in a pub in london or chicago instead. >> outside the study >> exactly >> charlie, thank you. >> we are just getting started here on the second hour of "closing bell. up next, investor dan niles on the two sectors he sees opportunities in right now d spite all the recent market volatility plus, former kansas city fed president thomas hoenig. 'rba itwminutes.

lows after selling off on news the u.s. embassy is moving from kyiv to further west or within ukraine. energy coming in as the worst performing sector, fipging lower by 2%. let's bring in portfolio manager dan niles. great to see you thanks so much for joining us. >> my pleasure, wilfred. >> first question, just wanted to see where your cash balance was, as an indicator for your overall level of bullishness or

bearishness. is it towards the highs or lows of the range it's been in during the course of this year? >> yeah, it's still pretty high. it's above 10% of our portfolio right now. and you know, it's been a lot higher than that but we also have more shorts than we had longs in the portfolio again after we had covered a lot of them when the market was down 12% intraday, and i think you actually had me on that day talking about what we were doing. but in general, what we do is, you know, our big picture is we think the s&p is down 20% this year, driven by inflation and a more aggressive fed. we cover when, you know, a good portion of our 17 technical indicators are indicating oversold figuring you get a 70% to 80% bounceback of whatever you lost, and we put the shorts back on. that's the tactical as well as the long term and how we manage our cash and our short positions. >> in terms of oil, which you know, you joined us at the end of last year as one of your top

picks for the year ahead, where's your thinking on that given perhaps the geopolitical premium that might be built in at the moment? >> right now, we have trimmed our oil position we pretty much don't have a position in it right now because, you know, to your point, oil has run up a lot. some of it, a lot of thatament fundamental, with the pressure in ukraine, which i think could probably happen. the interesting thing is if you go back in time and lookat it, one of the times when they invaded, i think georgia in 2008, oil went down. each time is a little different, but at these levels, we were happy to take some of our profits. but at the same time, we also cranked up our shorts as well when the market had been ripping and sort of discounting, oh, inflation is fine, don't worry about it, russia is fine, don't worry about it, okay, fine, we're happy to short more stocks >> what have you done, dan, with your meta stake? that was one of your top picks,

i believe, tough quarter stock now more than 40% off the highs. >> yeah, we tweeted about that, you know, the day after they reported and said look, we got out. we had an nterview with, on cnbc, saying we took our beating at $250. got rid of it in the after market when we saw them mention competition. which for us, you know, tiktok has been around since 2017 in its current form when it because musicly, so when we saw the mention of competition, we're like, that's brand-new, don't want any part of this. we got out, and we're happy that we did because it's gone a lot lower since then >> what about some of the other mega cap tech names on the flipside, that reported rather strong quarters, whether we're talking apple, amazon, google. have you been drawn back into those at all >> i guess drawn back in is potentially the wrong word what we like is we like the

named like google that did well, which you know, it looks even better when compared to a facebook for example. and quite honestly, you saw a lot of other names report results that were pretty solid, especially given they're in the same space as facebook, like snapchat, for example. snapchat, theoretically, is affected more by tiktok than facebook should be, but they didn't have any problems so what we're drawn back more into is bigger picture investment themes, so telecom, data com, data centers, all three have investment cycles going on at the same time. we bought some momentum after they reported and the stock got hit for 14%, because they're going to provide chips into all of those sectors and that's a long multi-year theme that you should see playing out. cisco is another one we're looking at, we don't own it right now because we got rid of that name because we're concerned about supply chain issues if they have explain chain issues like a lot of other companies have seen and the stock gets hit, despite strong

demand, all of the companies that had supply chain problems have said demand is great, but we have these issues, the stocks have gotten slaughtered. this is not like last year when people said yeah, the future will be great. cisco is another one that we would be looking at. so those are the names we're being drawn back into. >> overall, dan, it's a pretty negative view of the world i know you have always expected high inflation, and you have expected the fed to have to do something about it, so you're in the mode, generally, for the market to sell the rallies s&p is already off like 9% from the highs. nasdaq more than that. you think we have much more to go >> yeah y mean, you had me on on december 28th. i said at that time we expected the sp&p down 20% for the year given high inflation and a more aggressive fed there's nothing that's happened that made me change that in fact, i feel more strongly convicted about it, so that's the game plan. so in general, the goal is always have more shorts than longs except, you know, short

term bottoms try to make sure you have got plenty of cash on hand and then try to buy stuff where you have multiyear investment themes at good valuations. valuation is one thing people just don't talk about that much. we always say, market cap divided by gdp issitting at 1. times. the 50-year average is 0.8, and in higherflation, it's lower than 0.8 you have absolutely no support from valuition, no support from the fed, and the economy may slow down going forward because you do have high inflation and things like oil, which don't interact well with economic growth when it sort of doubles year over year and gets above $100 >> on that happy note, dan, we'll have to leave it there for today. thanks as always good to see you. >> thank you, wilfred, and best of luck in england we'll miss you >> i appreciate. i'll miss the conversations.

dan niles, great to have you with us. >> you can follow him on twitter for his latest moves >> i will, and i'll logon to danniles.com >> or just watch "closing bell." >> we have a news alert on berkshire's filing >> yeah, this is berkshire's fourth quarter filing. their 13-f they revealed a stake in activision blizzard, worth nearly a billion dollars, at the end of the fourth quarter. this, of course, was before we knew that microsoft had agreed to acquire the company that was announced in january. they also had some pretty interesting thematic trades during the quarter the firm did pare back many of its pharma positions while built up its stake in chevron, which was announced about a year ago for the fourth quarter of 20 twen during this quarter, however, the firm sold 79% of its abbvie

stake. berkshire pared back 76% of its stake in bristol myers squib to hold $300 million of that stock at quarter end royalty pharma was scaled back by 34% to $345 million the firm also sold out of teva pharmaceuticals completely, which had been worth about $400 million during the third quarter. chevron, however, berkshire hathaway boosted that stock by 33% to hold $4.5 billion worth of chevron also, sold more than a million shares of visa, but berkshire hathaway still holds a sizable stake, worth almost $2 billion at quarter end as always, our caveat that these positions are as of the end of the fourth quarter, december 31st, in this case, they may have changed in the six weeks since then sara >> leslie, thank you for the update leslie packer. >> activision if you held on to it has had a pretty good year, up 22% on getting bought out by

microsoft. >> and presumably would have held on until the deal they don't usually trade in and out of those things quickly. you never know if it's buffett or the investment chiefs but it shows you activision blizzard came well into their valuation zone you had to hold your nose and say the franchise isn't kind of impaired by everything that's gone on with the company, and microsoft buying it for cash so it's not going to turn into a stake directly >> up next, chart expert jeff degraaf on whether investors are a little too bullish on the banks which continue to outperform the broader market. >> plus, former kansas city fed president thomas hoenig on whether he thinks the fed should in nt ntterest rates by 50 basis potsexmoh. power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools,

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welcome back financials outperforming the broader market so far this year, but should investors remain bullish on the sector? joining us, jeff degraaf great to see you thank yous for joining us. what is your take on the banks this year? they kind of had a great early surge. you could understand why based on the fundamental outlook, but have chopped up and down within a range since then >> they have, and look, they have a very high sensitivity to

ten-year yields. and frankly, short term rates as well as these rates have moved higher, they have been big beneficiaries of them or perceived in the marketplace, and historically it's been good news i think it's interesting the banks have taken on sort of a new dynamic since the financial crisis 13-plus years ago here. and that correlation has been a lot higher between banks and the ten-year yield i think that's really got a lot to do with it as the rates have moved up, it's been good for the banks. the relative performance would suggest right in line with energy that those two areas of the market are still strong. but we're fading the banks here a little bit more tactically because of what we're seeing in the bond market. >> what do you mean? what changes this pattern? >> well, it's certainly not a momentum call, not a trend call from us, but when we look at the sentiment that's developed in the bond market, and it's easy

to see, you know, frankly, we feel the same way, which is there aren't many good reasons to be bullish on bonds in other words, you would be expecting higher yields. that certainly feels like the right call, but you can't see the other side of the narrative, that to us is always a bit of a warping sign, and one of the ways we measure that is through a service called consensus inc. that measures how many bulls there are in various commodities. there's a relatively low level of bulls in the bond market, which means most people are expecting higher yields. and it's gotten to the point where we have looked at this historically sand said this is a area we want to be cautious around, being too bearish on bonds or looking too much for higher rates even though the charts would suggest that's the case, it's just it's a very crowded trade and if that ends up proving to be true, then obviously it's going to have ramifications for the banking sector we are, or we are expecting continued flattening of this curve. i think we're going to get into this late first quarter, second

half of the year, and it's going to be more troublesome for the banks to continue this trajectory they have had here over the last 18 months or so. >> jeff, what about the broader indices if we talk about the s&p 500, more likely to retest its 2022 highs or lows next? >> that's a great question, and it's almost a flip of a coin i actually think because of the circumstance that we're in in terms of the fiscal position, the monetary position, that is, and what we're seeing out of momentum, that we probably have at least a retest of the lows, if not a deeper decline. we had a very good oversold condition a couple weeks ago that prompted us to turn tactically bullish the problem is off the low, we really haven't seen anything that's impressed us. and so within that, that it says to us there's more work to do. i would say the good news about the overall market is the sentiment conditions are still fairly bearish they're not as bearish as they were around covid or even the

lows back in 2018, but they're elevate nfd. there's enough bears to suggest that it's probably not a vicious swoon. and frankly, i like to see these geopolitical events take place in the market be able to absorb them relatively well because it says there's something broader there. i think it's going to be tough sledding for the s&p and obviously it's going to be tougher sledding for the nasdaq as we have seen more of a top formation in distribution. so i think we have another shot at the lows to set that up and then probably a lengthy consolidation and then start to break out again after we get some shift in the monetary regime >> so you think it's going to be tougher sledding for the nasdaq, even though it's gotten hit harder, down 15% from the highs and it sounds like what you're saying is you may think rates are peaking out here because it's just a too crowded trade. wouldn't that help the nasdaq? >> well, you would think so. i think you have done enough damage to the nasdaq here that

it's going to be, there's an old saying, you never stand in the same river twice i think that's the same thing. even though rates might come down, some time in the second quarter, maybe the late first quarter here, i think there's been enough damage done that we're going to see this be a little too easy for things to just rotate back into the nasdaq so i'm still skeptical there i think we have put in a pretty significant top in terms of the amount of dollars that we're really attracted by these ultra low rates, and a lot of the capital has been destroyed, but i don't think all of it and there's still more weakness to come there you need to get to the apathy part and to the indifference part for the nasdaq, and i still think there's enough sort of intrigue with some of these names that unfortunately that needs to be extinguished before we make a low. >> jeff degraaf, thank you for joining us >> wilf, good look in your future endeavors >> thank you so much much appreciated >> it is time now for a cnbc

news update with shepard smith hey, shep. >> thanks. from the news on cnbc, here's what's happening national security adviser jake sullivan giving a classified briefing on ukraine this afternoon to top lawmakers on capitol hill and the secretary of defense, lloyd austin, heading to europe, eastern europe, tomorrow this as the pentagon insists russian forces could move on ukraine with little or no warning. john kirby says while russian forces continue their buildup, he would not confirm an invasion on wednesday that day get aglot of taengs after ukraine's president posted on facebook today that he had been informed an invasion would happen on wednesday. president zelensky's team then swiftly walked back that statement, saying he was only referring to that date as it's been widely reported in the media, but that there is nothing official having it both ways, they may. >> and in a televised meeting with vladimir putin, the russian president this morning, the russian foreign minister, sergey

lavrov, suggested a diplomatic solution was still possible. but the u.s. and other allies are not taking chances they have moved remaining embassy staff out of the capital city of kyiv the u.s. now operating out of the western city of lviv near the border with the nato ally poland. tonight, we'll talk strategy and tactics of a foengsal invasion with a former four-star general who commanded u.s. troops in europe on the news, right after the olympics coverage. news time, 7:00 eastern, cnbc. wilfred, good luck in your endeavors. >> thanks, shep. hopefully we'll see you twice more, though >> i hope so >> everyone has to say it. we're in the final count dd. >> i look forward to hearing it from shep three times. you're too kind. thank you. >> up next, former kansas city fed president thomas hoenig on whether the fed could put the economy at risk by hiking interest rates too much this year and later,wells fargo's scott wren on where investors can find safety in this market idam rising geopolitical tengss

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stocks closed lower for the third day in a row we were off session lows ukraine and russia certainly part of the mix, but the overarching theme that's weighed on stocks has been the fed and

fears the fed is going to hike interest rates more aggressively given the higher than expected inflation rates we have seen st. louis fed president jim bullard joining "squawk box" earlier this morning, shared his take on inflation. >> we have been surprised to the upside on inflation. this is a lot of inflation in the u.s. economy 7.5% on the headline cpi these are numbers that alan greenspan never saw. they haven't occurred in 40 years, so our credibility is on the line here. and we do have to react to data. however, i think we can do it in a way that's organized and not disruptive to markets. >> joining us now, former kansas city fed president thomas hoenig if you were on the fed right now, would you be out there in the media talking about how the fed's credibility is on the line given the higher inflation rates? >> i would i think the fed is behind the curve. the fed knows it's behind the

curve. so there's no surprise there i think the real challenge for the fed will be once it starts, and remember, still easing policy right now, so once it starts to tighten policy by either increasing rates or shrinking its balance sheet or both, sticking to their guns because their habit is to kind of reverse course whenever they encounter a resistance or a surprise in the markets. and that's where it real test will come. there's agreement they need to raise rates even among the fomc hike from what i'm reading, their test will be on systematically staying on the course through some bad news, unemployment rises, market turnback, that's when i worry about them turning around their policy >> you think they should stay the course, even if, say, yield curve inverts, credit risk continues to rise, like we start

to get some real recessionary signals from the market? even then? >> well, they better stay the course because this stop and go policy they have tried that in the bast, and it usually creates more uncertainty it also creates a more volatile environment. their credibility then becomes even more at risk, so you know, i'm not saying they should start raising rates 100 basis points that would only shock the market, but once they know they're behind the curve, and they are at 7.5%, once they know they have to raise rates at some pace, then they need to set that out for the public and stick to it if they start raising it and they get 75 basis points and the market starts to either -- the economy starts to slow, unemployment starts to rise, and they back off that, they may for temporary period kind of staunch the increase in unemployment,

but they still will have an inflationary problem they'll still have to start again, and it will confuse the market we have to get their policy in line and stick with it >> my question, which kind of was implicit in sara's first question is, how did we get here, to a point where a senior member of the team was forced to question the credibility of his own team and why didn't we therefore hike at the last couple meetings if that's the strength of opinion that exists? and i guess what i'm asking is, perhaps is there great division among the ranks and there's a chance that we still won't hike in march if those that have an opposing view to bullard win the day? >> i don't think there's all that much dissent based on the speeches i have read i think the real question, though, is the divide comes when the unemployment rate starts to rise the divide comes when the market gets unsettled because of the

rate increases that's when the real test will come to the fed reserve. now, why did they get so far behind because they have a strong bias, a strong bias against upsetting the market and a strong bias against slowing the economy. they want to make things good for everyone, which is a very nice thought, but the fact of the matter is, inflation was clearly on the rise, on a consistent basis, more than seven months ago or eight months ago even so their desire to not slow the economy down is why they hesitated. it's common. >> i think it's also fair to say that it was hard to tell how much of the inflation would stick. and would rise i think it surprised everyone how strong inflation has risen and how fast and how long this has gone on.

at first, it did look pretty transitory as far as some of the supply chain issues. clearly now there's a realization at the fed this is more problematic what's your forecast on where inflation goes as the fed does start to tighten policy? >> well, the first thing is, yes, they were concerned, they thought there might be transitory effects of inflation, but the fact of the matter was they were increasing their base money, their reserve purchases of government securities at $120 billion per month, well into the recovery so that the momentum was aulreay in place that's what i find difficult to explain on that part now, going forward, i think inflation has become much more embedded, so it's going to take a much extended period of time of higher rates, they're going to have to be concentrating on their balance sheets now, $9 trillion in 2008, it was $1 trillion. they have a big job ahead of

them they have to get their plan in place as to how they're going to deal with this and how they're going to do it in a systematic and persistent way so they're not doing stop and go policy through the next three to four to five years. that's what will be most harmful to the economy >> well, thank you for coming out and sharing your opinion thomas hoenig. we appreciate it stay close the former kansas city fed president. i will note a lot of the biden nominations for the fed are up for senate banking votes this week raskin, jefferson, cook, and powell and brainard. that could also shift the balance. if he gets all three of them through, that could push the fed maybe in a more dovish -- they're seen as progressive economists away from what thomas hoenig is suggesting, if they do want to fight to preserve the economy during a midterm election year >> their view is probably more significant when it comes to regulation >> they're all voters. >> but it's not like they're

uber doves in a way that there are hawks they're replacing. >> it's something to watch could shift the balance, the votes coming later this week >> wall street has seen a surge of ipos withdrawn this year. >> plus, wells fargo's scott wren joins us with how investors can digest these big market swings "closing bell" will be right back i'm mark and i live in vero beach, florida. my wife and i have three children. ruthann and i like to hike. we eat healthy. we exercise. i noticed i wasn't as sharp as i used to be. my wife introduced me to prevagen and so i said "yeah, i'll try it out." i noticed that i felt sharper,

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stocks closing lower for a third day in a row let's sent it back to mike santoli for a look at the performance of recent ipos it's been quiet on that front. >> yes, the actual deal flow has been quiet the performance of recent ipos has been pretty lousy. the ipo etf about one years ago exactly is when it peaked. this is a two-year chart there was a lot of enthusiasm, any new names, any kind of aggressive growth, high beta names. that was what the market wanted up to a year ago now it's rolled over, looks very much like the cloud software etf or like the ark innovation etf now take a look with this chart over multiple years of the number of ipos that have been filed but then withdrawn by the issuers. in other words, they cancelled the deals. this is a monthly total, up above 20, but in the past month, you have seen more than you have seen in any single month going back a long way. this is right near the bottom in early 2009 of the stock market here was right after the 2016

election there was a lot of policy uncertainty. but the net effect is it has slight contrarian implications in other words, issuers say market is not accommodating. they don't want our deal and not only do we let the filing sit there, but we withdraw it. you could put this in the column of a decent contrarian sign and maybe helpful for the supply/demand dynamic. we'll see if that will end up mattering. >> interesting as well, how low it was before that sudden surge. >> basically gets to zero in normal times >> mike, thanks so much. we have got further details of a 13-f, whichl leslie picker has for us >> this is for apaloosa revealing smalli ish stakes buti a whole host of mall based retailers. new positions in dick's, foot locker, and nordstrom. the biggest was nordstrom, worth about $30 million at the end of the fourth quarter apaloosa also boosting its

holding in kohl's by 10% to hold $81 million worth of stock as of december 31st. it also upped its stake in macy's by 44%,which is now one of its biggest holdings, worth more than $264 million at the end of the fourth quarter, so december 31st there. now, it's worth noting both kohl's and macy's have been subject to recent activist events, pushing for things like a spin-off and sales and things of that nature so it makes those two names perhaps stand out among the other retailers for potential future events on that front. also, worth noting as always, these positions are as of the end of the fourth quarter. they may have changed in the six weeks since then guys >> leslie, thanks so much. >> rising tensions between russia and ukraine weighing on the markets, stocks closing in the red, but well off the session lows up next, a strategist's take on how you can best trade the rtr tility and protect you pofolio. "closing bell" back in a couple.

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fargo investments. scott, great to have you with us what is your take on the last couple of days of volatility and whether it's a sign that the worst is still to come in terms of the lows for the year ahead >> well, i think that what our opinion is that this is part of the bottoming process. we broke through some technical levels the 200-day moving average most importantly. we've been back and forth through it a couple of times for us, there is support here between these recent low let's say at 4300 or a touch below anywhere up to the 200-day moving average we're in a buy zone right now. and that's what we've been talking to our clients about you have to have a positive forward outlook. you have to have some conviction about inflation and the fed not making a mistake and a couple of other things but this is a buy zone for us. >> and in particular, scott, i think you like growth and you have as well how do you do that, the buying

tech on the dip? now that we're starting to see real divergence, unprofitable tack and then the big earnings losers >> that's right. i think that the way we're looking at it is if we look at the s&p 500 tech sector, you can buy that as the basket we like communication services certainly they have more recently underperformed, this relative underperformance creates these opportunities. so that's our growth component but we've also liked financials and industrials. and they've done better over the course of the last couple of months as a whole. you need to have some cyclicals and growth in our opinion, this is an opportunity. >> scott wren, we've got to leave it there short and sweet and to the point. so thank you we appreciate that from wells fargo investment institute latest covid variant weighing on small businesses in a big way. potential help on the way? >> yeah, sarah so the pandemic continues to

have lasting impacts on main street our latest cnbc survey monkey finds that 30% of small business owners say that omicron and in particular related sick-outs have been a major problem for business, while 35% say that they've been a minor problem now in addition, 62% say that they support additional federal aid for small businesses dealing with the effects of covid, includingnearly 50% of republican-owned businesses. beyond the pandemic, confidence is holding fairly steady, it's at 44. but a reminder, this is just one point above the all-time low above 43 that we saw this quarter last year. those who think business conditions are good right now fell however, there is a bit of a sunnier outlook for regulations and potential tax changes. the other concerns are supply chain, of course, labor headwinds and inflation. nearly 3/4 of small businesses say they're experiencing higher costs for supplies and what's really the takeaway for me, nearly half are passing those on to customers which is a

really big shift and something we haven't seen in the past. guys >> kate rogers, thanks very much. >> thank you >> a good reminder that omicron while it's fading and the numbers look better is still wreaking havoc on small businesses in particular as they have, mike, for the entire covid crisis big businesses have fared better because of scale and they're now able to pay higher wages and deal with inflation in a better way too. >> it's a good case to be made that it's been net positive. and for the top competitors in almost every industry, whether that's a good thing or not, long-term for the economy that's certainly been the case. even within public companies, the supply chain commentary after the quarterly results, you had png saying one thing and smaller competitors saying they had a tougher time preserving margins. >> some things to watch in the week ahead, geopolitical tensions one thing but the credit spreads will they settle where they are stay above >> spreads absolutely are going to be one of those indicators of whether people are willing to

sort of make the bet that you can still get paid for taking some risk in this environment, making sure people aren't trapped in any of those stress trades right now the other thing is the ppi wholesale price report coming out tomorrow and the relationship between that and cpi actually has some kind of leading indicator possibilities for what ultimately consumer inflation does. >> we've also got some interesting earnings tomorrow you're going the hear from marriott, airbnb. a good test of the sentiment gauge on reopening wednesday hilton thursday walmart an interesting one as far as the growth trade you've seen such winners and losers. >> hotels have been really good charts. >> the hotels? >> really good performers. we'll see what they say look igahead. >> another on reopening, a couple of airline ceos so we'll hear from the ceo of delta airlines and the ceo of jetblue. both in the first hour of "closing bell" tomorrow.

you don't want to miss that. stocks in the red, but well off the lows of the session. and we'll see what tomorrow holds. but we're out of time here and for the next two hours, you can enjoy olympic curling followed by the news with shepard smith 7:00 p.m. eastern. see you then can he get it? yes, he can! five on the board for team usa the united states has won curling gold this structure 27 stories tall is the beijing olympic tower looking south with the bird's nest in the background and the always colorful national aquatic center the last we saw it on saturday under a fresh white blanket of snow, now in