record high in trading today if i had a telestrator, i'd draw that big gold star on it >> wow everybody wants a coke >> it's the weekend. >> have a good weekend thanks for being with us thank you for being with us. >> so great to be here >> "closing bell" starts right now. thank you. welcome to "closing bell." i'm sara eisen all the major averages are in the red, but melissa, well off the lows of the day p. i'm melissa lee. let's look at what is driving the action russia/ukraine tensions front and center again president biden will speak at 4:00 p.m. eastern. we'll take you there live when it happens john williams says he supports a rate hike in march but doesn't seed a need for a big step at that time. and it's another ugly day for growth stocks to soar during the

pandemic with some names getting hit hard after their earnings reports. existing home sales posting a big beat in january despite a record low supply. we'll discuss what's in store for the housing market with ivy zelman plus, president biden set to speak this afternoon about the conflict between russia and ukraine. rbc's helima croft who just got back from the middle east is here to weigh in on how the political tensions are impacting the energy sector. mike santoli is tracking the market action and monitoring developments between russia and ukraine. mike, we start with you. >> we obviously have this apprehensive market that hasn't changed today. the russia/ukraine standoff is just another excuse for buyers to stay a little hesitant. but it really has not been a hurried rush for the exit. this is two days in a row where there's weakness but within a range. actually even midday today, at the lows, we almost got back to the penny in the s&p 500 to the

closing low for january. not the intraday low who knows if that's going to qualify as some kind of a soft retest here. you do see it's kind of slouched lower in that direction. probably as a range that needs to be rebuilt even if you get firmness here. expiration today tuesday will probably givea better indication of two-way supply and demand. a lot of localized pain is in the high growth sectors. the areas of the greatest excitement and highest valuations a year ago, if you look at cloud software as well as broader software sector this is a three-year chart this gives you a picture of just this massive gap that opened up. this huge valuation premium, right, that opened up to the rest of the market you've lost it in a hurry. that tells you that's mainly been the result of the stock declines not so much been about fundamental disapontements but overexoouberance on the up side getting drained away also we're still well above levels that we saw at the

beginning of the pandemic. no way to say we've gotten there already in terms of how much more of an adjustment the valuations are required. now in contrast to these virtual software-type assets, take a look at what hard assets have been doing compared to the overall market this is the metals and mining sector of the s&p 500 stocks and this is the agriculture commodity exchange traded instruments. food and heavy stuff that you have to carry with a truck gold has had a breakout. is this going to be an enduring trend or have we finally made these adaptations enough to the fact we have valuations down in the growth stuff and value is pretty crowded based on that b of a global fund manager survey saying late cycle assets like energy, materials, financials have never been more overweighted by those investors. >> if anything we've learned the market is so sensitive to the

russia/ukraine headlines and the head fakes and false flags and clearly the risk of invasion and war is spooking the markets. can you just tease out what that risk is? is it in the commodities that russia produces like oil and palladium and wheat and shortages and what that could do to the global economy? how does it impact u.s. equity investors when you hear, here on the floor, nobody wants to be long going into a weekend when we don't know what's going to happen with russia and ukraine >> first of all, sara, those are the questions exactly what in a tangible way should matter or might matter if we do get an actual military conflict i would push back against the idea that the market is mostly being hypersensitive to the headlines. we're down 1% on the s&p week to date has anything changed yes, there's been intraday volatility but we have oil down on the week, treasury yields have come in there's a little risk aversion out there but it's difficult t draw the direct line do we think the european market

is -- the economy is going to slow down, the recovery is going to be off track? i think outside of oil, getting to a supply shot type of situation, it's unclear to me why it would necessarily have a huge bearing on our markets. in fact, historically, regional military conflict is not something that's a make or break issue, right or wrong for equity markets. >> thanks, mike. we'll bring in matthew orr here, eurasia analyst. there have been a number of headlines this afternoon president biden is going to speak at 4:00 this afternoon as well in terms of the news that civilians have been bussed out of the spraftist controlled region in ukraine back to russia, how do you fit that into this puzzle? >> i think today's news is kind of some of the most escalatory we've seen and it's very clearly intended to further inflame tensions to help russia's negotiating position

it seems this evacuation move was kind of agreed with moscow time stamps showed the separatist leaders who made this announcement recorded these messages several days before, kind of a prepared decision. really hinting at this possibility of increased conflict in the region i think it's important to point out here that these statements on their own are pretty absurd the idea that the ukrainians would launch an attack on these areas specifically at the time when russia has concentrated such an unprecedented number of forces on ukraine's borders is just flat ridiculous so for that reason, i think the statements most certainly capable of further inflaming the situation are really should be taken with a grain of salt but the trajectory is that things will continue to escalate in the coming days at least. >> what about the meeting between lavrov and blinken which we thought coming into today would provide some hope for the market that diplomacy was still on the table

we're going to hear from president biden in about an hour or so. what is the state of diplomacy, and what should investors be paying attention to next week? >> yeah, i think we're going to see a lot of escalation over the weekend up until that meeting. and then it's going to be at that meeting where both sides are going to come out of this weekend and say, okay, well, where are we is there any more movement from the u.s. side? russia has two tracks, diplomatic tracks it's looking at it could either get more concessions from the u.s., from the west, from nato or it could get more concessions from ukraine. so russia is going to keep escalating this week and in the coming days and get more concessions on either of those two paths. the real dangerous scenario is if russia feels it can't squeeze any more concessions out of either of those two tracks and then that's when it may start looking for potentially more esca escalatory options >> matthew orr, thank you for

joining us when we come back, redfin getting hammered after reporting weak guidance last night we'll talk about how supply chain challenges are impacting the housing market when we talk to the ceo of zelman and associates, ivy zelman down down 6.10 we were down more than 300 at the lows your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change. planning can't be that easy. actually, it can be, carl. look forward to planning with schwab. schwab! ♪♪

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shares of redfin sinking after reporting results. they expect a first quarter loss wider than estimates they were downgraded citing inventory challenges the stock is at a whopping 21% today. it's down about 77% from its 52-week high sara >> since may 2020, almost before the housing boom we saw coming out of the pandemic, existing

home sales, though, rising 6.6% in january but inventory is tight as melissa said the number of homes for sale at the end of january down more than 16% from a year earlier meantime, 30-year fixed mortgage rates are on the rise nearing 4% for more, and what to expect, let's bring in ivy zelman from zelman and associates. ivy, welcome back to the show. you've been warning for a few months of a turn in the housing market is this boom lasting longer than you expected >> actually, yes, sara, it is. i think part of it is really given the backdrop of the fundamentals being so strong we also have a significant acceleration in nonprimary buyers, investors. as you look at the existing home report today, the cash buyers were up 27%, while those getting a mortgage were down 13% and what the nar does is they sample realtors and say how many investors separately are buying? and that was up 22% year over

year up from the prior month of 17% and the prior month before that, 15%. so today it's very difficult for primary buyers to compete with cash buyers but yet we don't really know if affordability is challenged as much on those entry level buyers which are down year over year 20% because we can't really ascertain, given that the investors are scooping up all the homes faster than they are and just one other stat and then i'll let you go, sara, but luxury sales, above a million, are really strong up 39% so it's quite an interesting dynamic, but investors, we don't know what's going to slow down their interest in an inflationary environment it's a great place to hide >> i was going to ask what changes the dynamic? we are starting to get rising mortgage rates meaningfully higher levels i wonder at what point you start to see a turn in sales when that happens. we've seen it in the home builder stocks >> you certainly have with 6.5

million sales, down nearly 20% year over year to a new record low. the velocity of how fast the inventory is turning, hitting all-time record nearly 60%, which is triple the historic trend line so i don't know what's going to change the investors' appetite, but there's a lot -- there's a pipeline of new construction that's significant the backlogs of single family right now is at 2006 highs, up over nearly 40% year over year, but those homes just aren't getting completed, sara because of all the supply chain bottlenecks as fast as we would have expected which is really mitigating the downturn or correction that we feared. just lastly when you think about mortgage rates and today hovering close to 30-year fixed, about 70% of homeowners in the united states have a rate locked in below 4%. so what historically has happened, it disincentivizes them to move to give up that low

cost they've locked into we're not yet seeing the impact of the rising rates, and i think it's clouded by the investors in the market and certainly second home buyers included in there. so i guess only time with the supply coming will we start to see if that supply starts to impact overall pressure. but as of right now, we expect home prices in 2022 to rise, even though they were up nearly 20% in '21 >> ivy, you mentioned the role of the investor in the market put a floor under the market that seems to challenge mostly the first-time home buyers, the entry level because that seems to be where the investor money is flowing can you walk us through how that then trickles into the other parts of the market? or can we say luxury is strong and it shall stay strong like ab island >> i think luxury, homes priced above $1 million represents about 5% of the overall transactions so it's a relatively small piece, but, yes, it's very

strong i think the entry-level buyer right now is missing out they can't compete they need to get mortgage financing, fha, and affordability is being negatively impacted by rising home prices and rising mortgage rates. we estimate the monthly payment for an entry-level buyer is up about 25%. and i think that that buyer right now is seeing the same type of, if they are a renter today and they are renting an apartment, they are seeing rent inflation in the double digits on new move-in rents it's really challenging for that prospective buyer in the market. we have seen a moderation to more trend line in a number of renters converting to homeowners historically it's about 2.3 million renters become homeowners it shot up to almost 2.9 million and now hovering back around 2.4 million. so we have seen a bit of a mean reversion there. so i think they are the losers here is the primary entry-level buyer with the demand being so

excessive from the investors >> given all these dynamics, ivy, what stocks do you like in the housing world that fit this kind of changing environment with higher rates and paying for the lower income first-time buyers >> well, you know, i've been doing this a long time, sara, nearly 30 years. i think it's really hard to make money in housing stocks when the fed is on a tightening cycle fundamentally, we have to focus on the underlying foundation is that you have a housing stock that's aging we have a lot of people that have had tremendous home price appreciation benefiting their net worth and the equity in their homes has increased so much so. so repair and remodel will continue to be one of the favorable parts of our ecosystem. and we do have names that we like in that space we continue to recommend fortune brands, sherwin williams and a few others that are tied more specifically to the home improvement market but it's tough slaying out there in a rising rate environment for

any housing equity and i think this is an environment where, you know, we hear that the fed will tighten four to six times. people like to ask questions later and go away in the near term >> look at the reaction to redfine guidance today ivy, thanks for joining us a little over 40 minutes until the bell rings the dow and s&p 500 both well off session lows it's expiration today so that could be putting a positive bias on the markets the dow off by one-third of a% s&p is down 0.4% the fed making big changes to its trading policy. we'll break down the details next later, richard bernstein weighs in on the market volatility and the fed can finesse inflation. check out some of today's top searched tickers on cnbc.com roku followed by the ten-year yield, draftkings, nvidia and tesla.

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the fed making some big changes to its policy on trading. let's get to cnbc's senior economics reporter steve liesman with the details steve? >> the fed formally adopting new trading rules passed in the wake of a trading controversy that claimed the jobs two of bank presidents and involved the current and former chairman. the rules -- vice chairman the rules were more stringent than those outlined in the fall. the fed previously announced it would ban stock ownership by top officials of individual stocks, bonds, forge-backed securities, agency and derivatives but said today it added bans on owning cryptocurrency, foreign currencies, margin commodities and sector funds the fed also widened the officials who were subject to new trading prohibitions includes governors, bank presidents, first vice presidents, research directors at fomc staff officers it required officials to give 45

days' notice before purchasing assets and disclosing asset purchases within 30 days separately, on the policy front, new york fed president john williams clearly signaling today that he favors a 25 basis point move as the first hike in march saying he, quote, does not see any compelling reason to take a big step at the beginning. i think that's an important voice in the issue of whether or not they'll do 25 or 50, guys. >> buller seems to be more and more like he's a lone voice in the 50 camp. back to the trading policy because i was speaking to congressman josh gottheimer right after the trading rules were announced and basically, these trading rules sound much more stringent than any of the bans being proposed by congress and i am wondering, under this trading ban, are blind trusts allowed? is this only direct ownership in a direct account >> there is some language on trust, melissa

i'm afraid i'm not familiar with the details there. it did talk about trust. there was talk about whether or not it should be included. i'm not sure what it says but there had been some opposition to including it, but i'm going to defer on that question and get back to you on that. >> steve, we're under four weeks before the big march fed meeting. there's been so much fed talk. i know you're at the -- >> who is counting >> right every minute every comment counts so where do you think the market, given all the commentary you've been absorbing over the past few days, do you think the market is appropriately priced for the rate outlook for the year >> yeah, i think for purposes of answering this question, if they could in the production room put up the two-year note which is the 25, 50, 25, 50, the market is going back and forth. between the concern about ukraine and russia and concern about the fed being more aggressive and it goes back and forth. and i think that the percentage probability of a 25-basis point

rate hike or 50-point rate hike has gone down quite a bit. and i think it is where i am gauging the center of the committee to be. i'm sure you follow the comments yesterday by loretta messner who basically is using that code which really the language from the minutes which says we want to be faster than 2015, but we want to hold the ability to go faster later in midyear. what that means is 25 at the outset and hold on to 50 so you have another gear in case inflation does not come down as expected >> here's where i think the wild card is which is also moving right now and impacts this whole debate, city of, which is, if you saw the atlanta fed gdp forecast it was downgraded yesterday to gdp for the first quarter of 2022 from 1.5% so if the economy continues to lose momentum here and there's a big debate on whether that happens, i think that will be the tell of how accurately the market is priced and what the fed is able to do in the back half of the year, right?

>> sara, we were just having a conversation about it in the hall with a bunch of economists who you know let's say one thing. the idea of a first quarter slowdown is sort of stipulated i think that's been out there. a big debate in the market is it 1%, 2% that's not the key the key is, as you suggest, does that weakness continue there are several reasons why the consumer may be challenged they lost the child tax credit fiscal stimulus running off. wages are running below inflation. there's all sorts of things going on out there and their savings have come down that could mean slower consumer spending and slower economy in the months ahead and that's one of the things zzwe have to watch carefully and could help in the battle of inflation. >> sounds like a good one. a juicy conversation steve, thank you for joining us. >> should have been here, sara >> next time >> glad you are. still to come -- draftkings

dropping sharply after results what they are saying and a check on bonds ten-year yield hovering right below the 2% level 1.92%. with all the concern around russia/ukraine we've seen buying of safe haven treasuries and that's pushed yields a little bit lower on the week and certainly on the day we'll be right back. ♪ ♪ nice suits, you guys blend right in. the world needs you back. i'm retired greg, you know this. people are taking financial advice from memes. [baby spits out milk] i'll get my onesies®. ♪ “baby one more time” by britney spears ♪ e*trade now from morgan stanley.

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just about 30 minutes left of trading moving south on the market

down about 240 or so let's check in on individual market movers. shares of bloomin brands surging after reporting an earnings and revenue beat the restaurant company seeing an increase in same-store sales at its outback steakhouse also higher digital engagement up more than 7%. take a look at shares of roku plunging after reporting a revenue miss the company issuing weaker guidance noting supply chain pressures. here's what anthony wood told us yesterday right after those numbers were released. >> it was some softness in the quarter in certain ad verticals impacted by supply chain issues and a little bit of that will continue but in this quarter in q1. if you look at the big picture, in 2021, you know, we have doubled the number of monetized impressions on the platform. the number doubled >> roku getting smoked today down 24% jim cramer talking about roku in

his investing club newsletter today. you can still sign up. head to cnbc.com/join the club or point your phone at the qr code on the screen i came away from the interview thinking this is still a growth mode company almost a disconnect with the fact the stock is almost 80% lower from its highs $440 stock, now just above $100. not really -- wood was not really acknowledging some of the weakness they've seen. >> i think that's the problem. i think that you want a ceo to acknowledge the problems that lay ahead in order to fix them and that's the impression i got from the interview yesterday time for a news update with tyler mathisen >> thank you very much here's what's happening. the national archives has confirmed it retrieved classified documents among trump presidential records stored at the former president's florida home the national archives says it is in communication with the

justice department about the matter, but that agency and the fbi have not yet said what, if anything, they will do about those classified documents major league baseball has canceled spring training games through march 4th because of the lockout. the ongoing lockout. the work stoppage in its 79th day. little movement now towards a deal talks yesterday between management and the players association ended after just 15 minutes. can barely finish a starbucks in that time. traffic backed up for miles on some highways in indiana and illinois a storm packing heavy winds and snow believed to have caused a semi crash near lowell, indiana, in central illinois. 17-mile stretch of interstate is closed for a second day following a pile-up that involved about 100 cars. i can't, melissa, think of any worse place to be almost >> me either tyler, thank you a 27 minutes before the bell

rings. here's where we stand. we are going back down toward session lows dow is now down 333 points this is session lows, actually s&p 500 down by almost a percent. nasdaq down 1.5. richard bernstein tells us the one sector that now has a higher growth rate than technology later, shares of ford moving on a report it could spin off one of its divisions we've got the details coming up on "closing bell." alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much? am i ready? i can't tell you everything. but if you want to make history, you gotta call your own shots. we going to the league! at vanguard, you're more than just an investor,

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great to see you, rich wondering what your take is on -- we're being buffeted by, you know, concerns about geopolitical and inflation for you, what's the bigger concern in the market here >> so, melissa, great to be with you. i think, look, i'm not an expert on geopolitics you have people on in the past hour that know an awful lot more than i do on that front. if you put everything together that's going on right now, whether it's geopolitics, whether it's the labor market, whether it's supply disruptions, no matter what you look at, everything is pointing to inflation being front and center and i think that is the most important theme that investors should be focusing on right now is, what is secular inflation going to be going forward? and i think everything points to that right now >> rich, it's sara you've been on the show in the past few weeks warning about bubbles in the market. crypto, spacs, ipos.

a lot, if they were bubbles, a lot of them have popped. we've seen some dramatic selling, especially in the high growth ends and it keeps coming. how far are we in this process >> it's funny you asked that question my colleague dan suzuki came out today with a little comment that pointed out in the tech bubble, tech and telecom reached all the way up to 41% of the s&p 500 and it fell from 41% all the way to 16 this time it's gone from 40 to 38 so that would argue for anything close to where we were in post-2000, we're in the very early stages of this bear market and i think that when you have major leadership that people are really in love with and it starts to underperform, everybody starts trying to pick the bottom we all try to catch falling knives not to be overly glib but the time to catch the falling knife is when nobody is talking about

it anymore and nobody cares and that's clearly not the story yet. >> you say investors are underweight inflation, that they're positioned for an environment that's more like prepandemic. so what is underweight here in investor portfolios? is it materials? is it energy what >> yeah, so melissa, it's a broad range of what i like to call pro-inflation assets. in the equity market, that would be energy. that would be materials. that would be industrials. it would be some financials. high yield bonds it's harder to go bankrupt when you have inflation commodities. commodity related emerging markets. gold real assets. you talk about real estate, you have to be careful because some of that is overbuilt if you take all those together and put them together you'd find pensions, endowments, foundations, family offices, everybody is under weight pro inflation assets in total. >> so is your view then that those can work because they are cyclical so you don't think we're going into recession or anything like

that you just think we're going to be dealing with higher inflation and tightening fed >> right so sara, you know the lesson that we were all taught by paul volcker was that the only way, and i emphasize only, the only way that the fed can stymie inflation is via recession and he crushed the economy and then when inflation came back, he crushed it again. the only double-dip recession the united states has had is from paul volcker. i just don't think that this fed has the spine to put the economy into recession now they may do it they may do it inadvertently, but i don't think they have the spine to crush the economy to stymie demand to get rid of inflation because that's really what it would take right now so i think you want to take the over on nflation for the time being. >> the assumption there, though, rich, is that the fed has the ability to control where inflation is headed and could actually step in to prevent it i wonder because recently we've been getting comments from

various bank ceos, the credit suisse financial services forum in florida the bank of america ceo said they are stress testing a portfolio in the event that inflation gets out of control and becomes a headwind to economic growth. do you take that scenario off the table or, i mean, is that a possibility in your view >> it certainly is a possibility. of course, melissa eventually you know inflation gets so high nobody can afford anything unless wages keep up. so i would say two things. we are in the early stages, it appears, the data seems to be showing that we're in the early stages of wage and price spiral. right? i think if you think about amazon the other day where they announced they were doubling the wages of initial workers and at the same time increasing the price of prime by 17%. wages/prices, there you go amazon in a wage/price spiral. we have to be careful saying we're going to automatically choke off growth second is if by our reckoning,

some of the critical components like gasoline. gasoline is always like a central bank tightening when prices go up last, our analysis was, a couple of weeks ago, gasoline prices as a percent of wages weren't even back to the long-term average. so that would argue there's more room to go before we start choking off demand but, yes, of course, one always has to look at that. and i think, look, if you want to play along at home. the home version of "hollywood squares," you watch the slope of the yield curve. now a flat yield curve isn't terrible news. an inverted yield curve is really bad news because that shuts down lending in the economy. and so if we see an inverted curve, if the fed inadvertently inverts the curve, that's a really bad sign. and then i think you want to back off some of the cyclical trades we're talking about now >> got a lot of your thinking in there. thanks for joining us. >> sure, thanks for the invitation we're covering a little bit right now.

staples, financials and materials in the s&p have all turned green s&p down only 0.5% up next, new comments from the ceo of draftkings about that quarter. ugly day for the stock what was said at intel's investor day that has that stock dropping as well the market zone coming up. plus, awaiting an update from president biden about the situation between russia and ukraine. we'll take you there live as soon as that begins. we've got just about 16 minutes left of trade. dow down 187 s you an award-winning mobile app with powerful, easy-to-use tools, and interactive charts to give you an edge, 24/7 support when you need it the most. plus, zero-dollar commissions for online u.s. listed stocks. [ding] get e*trade and start trading today. never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers, plus some of the lowest options in futures contracts prices around. [ding] get e*trade and start trading today.

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white house briefing ahead of president biden's speech kayla, what did we learn >> two deputy national security advisers leading workflows for cybersecurity, as well as international economics just briefed the press on the continued threat of a russian invasion and some of the activity that's being seen on the cyber and economic front i asked specifically deputy nsa singh what he makes of the fact that president putin appears to be inching closer to an invasion despite the spector of sanctions that the administration has called a powerful deterrent and would be swift and severe. and he launched into a searing indictment of the russian economy as it stands right now an inflation rate of 8.7%, a central bank that has interest rates at 9.5% and the ruble being the first performer of any emerging market currency he pointed to what happened in 2014 with an even weaker sanctions package. and said that at that time there were record capital outflows the ruble fell by 50% and the economy went almost immediately

into a recession he said he is sure that president putin is not playing with a winning hand in this situation. as for that sanctions package, he did make a little bit of news and said that the removal of russia from the swift system, the global payment system, would not be in the initial sanctions package. certainly that is a new development because it had been something that the u.s. negotiators have been pushing for nato allies had balked at that proposal. finally, the deputy nsa for cyber and newberger said there is no credible or specific cyberthreat against the u.s. homeland but that private sector companies should lock their digital doors because one could come if there's an invasion. sara and melissa >> kayla tausche, thank you for the update we await the president hoping around the top of the hour just over ten minutes to go in the trading day we're going straight into the closing bell market zone mike santoli here to break down the crucial moments of the trading day. also tasty trade head of global

strategy, victor jones back as well welcome. kick it off with the broader market another volatile final hour of trade. stocks coming back after the dow hit session lows major averages still on track to close lower, mike, for the second week in a row interestingly, energy is the worst performing sector on the week that was dominate rattling from the u.s. on ukraine and russia and the whole escalation fears. >> yeah. it is a little bit countertrend. when your leadership sector, energy, the clear upside outperformer, just gets a little bit overbought, crude took a break, we're not really responding to directing anything to going on, russia, ukraine, that created a weight of its own. in general, especially today, you're seeing this market kind of ping-pong between these, you know, supposedly relevant levels based on expirations, the index is doing that. the lows today as i mentioned, pretty much where the closing lows were for january. it went below the minus 10%

level, that's the correction threshold we went to in january, even as we priced in more fed rate hikes that's not to be polly annaish, the charts look bad, they don't look trustworthy right now there is constant relentless dismantling going on now and who knows when that ends the point being, though, there is two sides to this market, even if it is a bad year, they don't go straight down and we went straight down to 10% to start 2022 >> is this a technical trade that is going on in the broader markets, victor? what is your view? >> i think there is a little bit of everything. sure, do we have a major expiration, yes. a long weekend and probably some traders that don't want excess risk going into a long weekend given the geopolitical concerns, yes. i do think that while russia is dominating the headlines this week, i think the larger umbrella story is at play here, that, you know, we're still in a marketplace where you're seeing

the removal of liquidity and individual stock stories don't matter as much the lines on the charts, the technicals may not matter as much when you're in a marketplace that is removing liquidity. the stock stories didn't matter on the way up. stocks that had no business recovering or moving out of bankruptcy because of the liquidity and marketplace were safe on the way down, strong stock stories, sending faang stocks back in a body bag so, you know, roku just another story of high data execution this week. and i think, you know, you -- we're keeping our eyes on credit markets. hyg and jnk i think the positive narrative here is you're seeing a little bit of basing there, but at the same time, implied volatility, volatility remains elevated in those individual names. so i think, you know, the risk signals, traditional risk signals are back in the marketplaces you've been speaking to this, but for a long period of time, the idea that people were buying

the ten-year or people were buying long duration somehow was a signal to buy growth well, that is no longer the case your traditional risk signals, long bonds or people going long bonds for some safety security, you're seeing elevated dollar here, little bit of strength, commitment of traders not overly bullish in the dollar, but still seeing some people take solace there, gold outperforming bit bitcoin. i don't know, you know that you're going to see even on de-escalations of russia, you still got to backdrop that is fairly difficult that with the removal of liquidity from the marketplace. >> shares of draft kings getting demolished after reporting its earnings contessa brewer has the details. >> yeah, melissa the street remaining skeptical here about the path to profitability. the costs of customer acquisition and the guidance from draft kings that increased revenue expectations and the expectation of losses in 2022.

i asked ceo jason robins about ratcheting down promotional costs. >> we do ramp down promotional spend, but that's really just a function of natural maturity of the market most of the promotional spend goes to new users. as a market matures, there is less -- there is a portion of total users, toss going to naturally come down. same thing with marketing spend through the first couple of years of really strong customer acquisition. >> the draft kings also reports improved player retention and cross selling, a 32% jump in monthly unique payers, and, of course, it is hoping to get ballot initiative this fall on sports gambling in california. which would be the biggest entrant yet in the u.s. market, it could cost them a lot of money to launch there, the upside is significant. sarah? >> thank you that stock sinking today intel shares lower they're hitting a 52-week low following an investor meeting yesterday.

the company says it sees growth margins in the 51 to 53% range and expects that to pick up by some 2025. some analysts aren't impressed bmo capital markets cutting the price target by $2 to $50 a share. bank of america and web bush reiterating their underperform ratings on the stock. doesn't help that semiconductors are having a rough day, rough week and rough month but intel has been an outlier on the negative side of that trade. >> it really underscores how hard it is to be a value investor in technology and semiconductors it has been cheap for a long time look at a longer term chart, it is scraping the lows that it even hit around the march 2020 sell-off and before that so you see this has been the bottom of this range going back into 2019. maybe of significance there. it is a turn around. i think people can say he's doing the right things directionally, but a multiyear process. we'll see if in fact we get to some level of -- some harder

tangible value, perceived value here with the stock at 13 times earnings. >> shares of ford rallying today on a report that the company is considering a spin-off of the electric vehicle business. other ev names getting crushed today. victor, you own ford if it were able to separate its ice business from its ev business, could that ev business get a valuation even close to tesla? >> i don't know in this marketplace that they would get a valuation closer to tesla. you've seen rumors, gm reportedly considered this a few years ago before they did the nikola deal to unlock value. and while you're seeing rolling corrections, there is no real part of this market other than arguably energies and staples that have been safe from this correction you're seeing a repricing through evs. the demand there for that -- for ev companies, i don't think that's really gone anywhere. you're seeing a repricingof risk in those individual names

i think people would be excited about it there has been investor pressure in gm and they said they have no interest in doing that i think ford has come out -- if i'm not mistaken, refuted the idea they're going to roll out the unit individually, may do internal restructure but i do think there is -- there would be investor appetite for directing or investing directly in an ev unit controlled by ford or gm to be quite honest. >> and consumer staples now, the only sector that is positive, victor the best performing stock of the s&p is kraft heinz they have decent earnings, but that's a troubling sign. it is a group that nobody usually likes. should investors be increasing exposure to a group like consumer staples with economic riskstensintensifying? >> i think the next generation of investors are getting in absolute crash course in investing. they have seen everything from

yield curve inversions, recessions, no inflation to low inflation to now high inflation, qe to now qt i think we have seen everything and in between except maybe in emergency rate hike. but there is more time on the clock. to your point, when you start to see staples, on the three month basis is up 5.5%, that's not a great sign and inflation is real, and the problem here is you have erosion of purchasing power. it is very difficult, you have faang stocks when you start to have volatility in index heavyweights, people have treated these things as almost quasi bonds that when there was -- nervous about where to go in the marketplace, you rotate into these individual areas, and when you start to see that breaking down, you go to your traditional areas of safety. and staples are outperforming. do i think that could continue i do i do think it could continue to see staples outperform discretionary as we move toward the middle of this year, it is a

highly uncertain environment and you have those individual staples companies exercising their pricing power right now. >> we have got just under two minutes to go in the trading day. what do you see in the internals? >> negative, but not as much of a washout as you might expect. some two-way action. look at the new york stock exchange volume split, more than 2-1 declining versus advancing, overall volumes elevated by the expirations. the equal weighted s&p, it has been an outperformer it has been the top heavy s&p with the big nasdaq names have been a big weight on there you see 2.5% performance spread from the equal weight to market cap weight so far in february alone. volatility index is down a little bit we have been in this range before we have been at these levels not that long ago, plus, three-day weekend coming up, already up at 28 on the vix, with three-day weekend. three days of no index movement. sometimes a little bit of a drop there. >> that's respite for investors

and volatile markets consumer staples, looking and trying to finish the day in the green, financials also specifically the regionals netflix up 1% in today's session. one of the few in the green here in the faang stocks. nasdaq -- s&p down 1.6% as we ring in the bell here. 9.75% away from the highs for the s&p 500. welcome back, everyone to "closing bell." coming up, rbc capital markets helene croft on the outlook for oil now as tensions continue to rise between russia and ukraine. a lot of energy at stake and president biden is set to speak about that potential geopolitical crisis any moment now. we'll bring you that live. to the white house, as soon as he begins. on the close, victor jones from

tasty trades is with us. we're joined by lindsay bell from allied invest i'm eager to talk with you with your finger on the pulse of earnings about how we're doing it feels like a really rocky ride this earnings season, especially if you're not putting up profitability, and key metrics like that. what are you getting as far as the health of corporate america and the outlook going forward? >> yeah, no, i mean, on an individual security basis, it certainly has been rocky and volatile you look at the market overall, the s&p 500 from an earnings and sales perspective, it was a really, really good quarter. the beat rate still very impressive not quite as significant as the last six quarters, which we had double digit beat rates. but it was a great showing what was most important was that we saw sales come in better than expected and margins, ebit margins have been able to hold steady and for the outlook, we don't get a lot of s&p 500 companies giving us outlook or guidance

anymore. most of the time when they do give guidance, it is negative. but we have gotten a couple of positive, but when i look at the consensus, we have seen the consensus estimates for sales move very slightly higher. and, again, importantly, margins, standing pat at near all time highs at 17% on an ebit margin basis earnings per share have come down a bit for 2022 expectations but all in, the corporate profitability, the corporate earnings picture, the corporate sales picture looks pretty decent >> victor, you mentioned some of these megacaps being -- big cap tech stocks carried out in a body bag all the faang stocks are not doing well except for apple. netflix up, relative outperformer compared to the peers in faang i'm wondering if that tells you anything or if any of faang stocks look interesting. >>. >> we might see a little capital rotation, scared investors from roku may have run over to

netflix. i think volatility likely here is the winner. and it is really difficult, i think, in this particular environment to try to pick a bottom or to try to make heroes calls. i think you can take what the market is giving you and right now the market is giving investors high volatility and that's not just a gauge on, you know, the fear of the overall marketplace. there are ways that savvy investors can utilize that increased fear and volatility that is being priced in, and you can use it to your advantage whether or not you're selling calls against your existing position or selling upside, sell something upside to take advantage of high implied volatility or nervous about downside, whether facebook or netflix or some of the high beta instruments, draft kings at 15, the 15 puts are trading like 1.20 on april. there are ways to utilize this increased volatility and it is sort of utilizing it to your advantage for cheaper entry prices, because the thing is, in this environment, it is

easy to look at a chart and think that price is mean reverting because three months ago i saw a price of this, then i should see in the next three months a price return that doesn't have to happen, but volatility is mean reverting, so utilizing it when it is high is a higher probability and i think a lot of investors are putting that into practice right now >> nobody wants to catch a falling knife, which is become an overused thing. we're not quite in correction mode for the s&p >> first of all, i don't -- don't worry about where we are relative to the 10%. we're in a correction. we have been in a correction for a while. the nasdaq is down 16%, 17%. the market is -- if anything in a stealth market if you look at half of all nasdaq xcomposite stocks are dow by half, so, look, this is obviously a very defensive market and bifurcated market too. a handful of things working,

things tethered to the real economy are still okay banks and all the rest of the stuff that everyone seems to have tried to crowd into at the beginning of this year, they are relative outperformers i do think that you have to be careful about feeling like, okay, this is the mode, the direction of travel is straight down from here because it always is a little bit jagged along the way there is nothing unusual about a 12% drawdown in the middle of a year and when the market is not in recession, feeling like this further downside from down 12% is not the greatest bet. at least to be that bold about it. >> i'm wondering in your corner of the universe, investors, a lot of investors, first timers to the markets, individual traders were on the growth ride that has been basically a downward ride, since last february and i'm wondering from your stand point if you're seeing them pulling in the reins, or if they're just reallocating their resources, you know, from let's say a draft kings or name another growth stock that is down 70% from their highs to

something else. >> i think, you know, traders that tend to be part of the tasty community might trade a little bit differently than the mainstream retail trader in the fact that they're generally going to run higher cash levels, generally going to be running short volatility premium but to answer your question directly, melissa, you know, i think there was an impulse, a buy the dip impulse that a lot of investors, especially if new to the marketplace, you can avoid, categorize everything as fud, fear uncertainty is doubt it is the impact of a new monetary policy regime, a new monetary policy stance and you can't categorize that as fud, you can't categorize repricing or people moving down the risk

curve as fear, uncertainty and doubt. you talked about the draft kings announcement, and he had a comment during the call, he's confident that once the market settles down and rationality kicks back in, the metrics we're putting out there will start to resonate i would argue that rationality is returning to this market. that risk is returning to this market, that for a while we had a period of irrationality. and the fact that people are starting to price risk back into the market, the cost of capital is going up, the fact that people are moving down the risk curve as treasury yields move higher, that is rational behavior it is not irrational behavior, especially in an environment, you know i hear -- even myself, come nothing this year, we were sort of -- the implied market price was between 3% and 4%. i thought that was high. i still do but, you know, some banks coming out with 6 to 7 interest rate

hikes for the next year, i think this point is sort of a fool's errand to guess the number of interest rate hikes in 2022. it is going to be data led i don't think the fed will try to front run the data, so as we get data that proved to be disinflationary, which is not just going to be one, you know, you can't wage an all clear flag, it is going to take time to work through this, until we get to this point, the fed has confidence they have taken care of inflation, you have to respect what they're telling you and making a believer out of the markets when, you know, just a few months ago i think we all were on the other side that while the fed was saying they were going to do things, nobody believed them and very quickly the market is falling in line to the rhetoric >> it is a really good interesting point about what is rational and irrational as far as pricing how are you -- it is similar to what we heard from cathie wood, what she continues to say, the market is just completely being irrational on these innovation stocks and undervaluing them how do you think about what the right valuations are for some of these companies that were such

high flyers during a period of super low interest rates and tons of liquidity. >> yeah, i mean, it is a good question on the way up, these were the high flyers, they were starting to warrant much higher valuation s as it became reality, the fed is going to raise interest rates and the spigot for stimulus is being turned off, whether it is fiscal or monetary stimulus. we're in a position now where we need to re-evaluate if the valuations are truly warranted i think there has been a swift correction in a lot of those areas of the market that we have seen over the last several months, if you look back at some of the tech space, the software space was trading at 35 times this summer. now down to 29 times and by some people, it might have further to go but if you look at the fundamentals for some of these individual securities and some of the sectors, they have held

in there pretty well if you think about the tech sector overall, one of the sectors with the best margins out of the s&p 500 and they held up very well, looking out into 2022, the tech sector not necessarily expected to have the best earnings growth, but i do think that we're getting to a point within the tech sphere, within the high growth sphere, that these -- some of the quality names have gotten up -- beaten up pretty good there could be an opportunity, a nibble here or pay attention to the stocks in the near term. because while we might have volatility, over the next several months, and perhaps all the way into the midterm elections, it is always good to be looking for opportunity >> can i say something about that interview, sarah? >> last call, victor. >> i just want to say, i have tremendous amount of respect for cathie wood and arc funds and everything that they have done to really transform the investment space i would say i watched an interview yesterday and came away, you know, with a sort of

unsatisfied feeling that if we're not willing to acknowledge that liquidity played a role into these high beta names and the style factor preferences during this period if we're not willing to acknowledge that, then it is clear we're not willing to acknowledge that the lack of liquidity or removal of liquidity is also playing a role into the valuation of these underlying securities. i think if we're unwilling to acknowledge that, new investors are going to miss the fact that the macro economic backdrop, liquidity in the system is incredibly important to understanding how to value individual instruments and where people are up and down the risk curve. i think it is one thing to say to see through that and see the three to five year picture and i do understand that but for anybody that is a new market participant over the last year, couple of years, it is incredibly important to understand that as a backdrop as well and it really cannot be ignored. i thought josh brown brought up a great point yesterday, and, you know, i wish we could get to the point where we could

acknowledge the role liquidity played on the upside and downside. >> good point. victor, lindsey, thanks to you the end of a crazy week. we're just getting started here on the second hour of "closing bell. energy the worst performing sector this week up next, helima croft and where oil prices could head from here. and we'll be joined by a strategist who says we should be taking profits from tech and reallocate them to another sector back in two minutes. we're still awaiting an update from president biden on the tensions between russia and ukraine. we'll go it that live and bring you the analysis ck wl rhtell"ilbeig ba

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terms of oil supplies and in case an invasion happens >> yes, we had president biden make the call to the king, making the request for energy security we don't think necessarily because there are big delegation from the u.s. government in saudi arabia this week that they made the specific ask of the kingdom at this point. this is more about a reset but certainly the white house would be looking for saudi arabia to increase production if we were to have some type of conflict russia, ukraine, because oil prices move significantly higher if you have russian troops cross that border. >> you know, oil, wti, finished up 90 and change brent at 94 or so. what is the oil market telling you in terms of assessing the risk of an actual invasion >> i think the oil market this week was focused on the iran story. we had the softening of prices as people start to think about

potentially getting some barrels back on to the market. we could be looking at 500,000 barrels, additional iran supplies anytime in the next six months going out to a million extra barrels by the end of the year if we have this russian invasion of ukraine, russia is such a large energy producer, i do think that would really push prices $10 to $20 higher from here yes there is some political risk premium in this market, but this is a tight market, this is a market where opec producers are struggling to reach their monthly production quotas, we have demand continuing to pick up with the covid reopening story. this is not the moment you want to have a major geopolitical situation involving one of the world's largest energy producers. >> what about u.s. producers, helima, which are being asked to help pick up the slack how much more can they drill right now and produce to help fill the void for europe >> even if we have -- u.s.

production will grow this year especially in the price environment. but, again, if we're getting an additional million barrels of u.s. production, a lot of that may come in the back half of the year the u.s. is not the country that sits on spare capacity if we get to a situation where russia were to withhold energy supplies, or threaten to withhold energy supplies, you really have to look to a country like saudi arabia. it is a central banker of oil. they are the one country that can put significant quantities of oil on the market hence why you have u.s. officials visiting saudi arabia, trying to reset this relationship with the kingdom because they may have to make that oil ask pretty soon. >> the role of china seems like a thorny addition to this whole situation. recently russia announced new deals to sell more oil and gas to china i'm wondering how you view where china stands in relationship to russia, with its limitless

friendship and this invasion >> certainly when he president putin visiting the beijing olympics, two leaders whose relationship has grown closer. i certainly think that, you know, russia is looking to the chinese market, as future source of demand, but i don't think the chinese are going to become actively involved in this conflict i do think what the chinese will be watching is what is the u.s. willingness to defend ukraine. some have said they'll be looking for a signal, how far the u.s. goes to defend taiwan this conflict does have implications potentially for the situation with taiwan. >> kayla was bringing us details last half hour, and u.s. officials were going through how painful this would be for russia to get these new sanctions to its banking system and to the country, sanctions led by our allies what is the state? sure the ruble has been in free fall and we know that would be very painful, but oil prices are

high and because russia is such an oil producer, can sell to china and all these places what exactly are we looking at as far as the damage for russia and the potential leverage >> this is a great question, sarah, we are sitting in a situation where we have very, very high commodity prices and russia has been building its foreign exchange, its sovereign wealth fund war chest. they have made some fiscal reforms, raising the retirement age, that may give us to be able to endure some pretty tough sanctions coming from the west that said, though, experts have said that if the united states and other western allies were to black list the three big banks, particularly spur banks, that could cause a major run on the ruble. you have to have the treasury bail out that bank that could be quite painful for the kremlin. the other thing to watch is will they be removed from the swift payment system i do think we are looking at very significant sanctions on russia the question is have they been

building up their reserves and can they withstand them? if they were to restrict the supply of all forms of commodities, not just oil and gas, wheat, key products, ammonium nitrate, used for fertilizer, could they inflict enough pain on the west that we back off >> palladium, they are a big producer of a lot of commodities that are used. so helima, you told us about the spare capacity in saudi arabia and the news there about them upping production. what was the general feeling you got from your trip that you're just returned from in the middle east about this dicey political situation, what is happening potentially now with iran and just where everything is going >> certainly in this type of price environment, the middle eastern producers are looking at a very good fiscal outlook but they are concerned i think that area is concerned about the iranian nuclear deal they're concerned about having a country like iran, potentially

newly emboldened, newly enriched by this agreement and they want the united states to provide significant security guarantees for the kingdom. there are ongoing attacks from the houthis, not just in saudi arabia, but uae as well. they're looking for the united states to prove its partnership credentials. i don't think they want to get crossed with russia who is their opec plus partner unless the united states is willing to show that they're willing to be there in terms of security partnership with the kingdom >> helima croft, thank you for joining us >> thank you for having me as we await president biden, joining us with some of the stock market impact of this, gabriela santos, want to get to your latest strategy thinking. first, as we await the president here, as we're talking about some of the geopolitical concerns and the spillover effect to energy, how concern should u.s. equity investors be

about the unfolding scenario what are you telling your clients? >> what we're telling our clients at the moment is this may be one of the geopolitical examples that have a very fleeting impact in the market. that's our biggest case. unless we see an escalation that merits harsh economic sanction which could result in cuts in energy supply by russia to europe in that case, we would see an energy price shock and we would see growth concerns. we don't think that's being priced in at the moment. it is a possibility. we don't think the volatility is related to growth concerns, because otherwise wouldn't have financials outperforming the index by 900 basis points and emerging markets by 800 basis points we remind our investors that's why we have hedges in place, just in case, but for now let's focus on the main risk for the market, which is the surge in

real yields and the implications for valuations and positioning. >> so let's talk about that positioning, gabriela. you're making some interesting recommendations in terms of reallocating within the tech sector and out of the tech sector how do you think about both those things >> we're really saying listen to what central banks are saying. they see a much stronger growth, much more inflation upside, this is going to be a much quicker withdrawal than last time. rates are going to continue to move higher and valuations are going to matter. look at the portfolio, don't let the market rebalance it for you. do so now. and to do so, it is really think about using the value factor think about the price you're paying for companies, and for example, within tech, taking profit from more expensive areas like software, semiconductors, also think about the value factor within the equity market. from tech, into financials

and within regions so take some profit in the u.s. and think about europe and emerging markets otherwise you won't get the returns we expect over the next decade and project only 4.3% annualized that's just not going to cut it. >> those moves have already been the case that's what's worked semis over software, financials over technology. you expect these trends to continue and the volatility to stay >> absolutely. we're not going to get any clarity, anytime soon in terms of the new central bank blueprint. they're trying to figure it out themselves in real time out loud we'll see volatility on the curve. we don't think long end yields are high enough for the kind of quantity and tightening we'll see on the balance sheet so this is still very much a theme. and think about the starting point. we had suchdistorted valuation in the market, that the corrections that we have seen so

far have still not corrected those distortions. so really important, not to panic, but to take some thoughtful action here for the decade ahead. >> for instance, the software etf, the igv is down 27% you're saying that that pain is still in its infancy, there is more room here >> exactly that applies within the tech sector, so we're still not -- with software. it also applies for sectors, we're still not there for the tech sector more broadly we're still not there for the u.s. equity market valuations have gotten so distorted, especially since 2018, a lot of ground to cover and a month and a half hasn't done it quite yet. >> does look like you're also taking some profit in the u.s. and rebalancing to eurozone which is interesting at a time where there are heightened concerns now about global growth and the spillover effect from russia are and ukraine going

more toward europe and the emerging world than the u.s. >> so indeed if we did have the low probability, but possibility of an escalation in the geopolitical tensions between russia and ukraine, then indeed we could see the curtailment of energy supplies to europe by russia, which would impact natural gas prices in europe, and hurt european economic growth that's why we wouldn't allocate exclusively to europe. that's not our base case and we see plenty of valuation opportunity in europe, we're seeing much stronger growth this time around. and think about one region that really benefits from higher rates, which is happening in europe as well that is the kind of companies that are actually traded in europe, it is a lot of financials, and you finally have that trade work. >> i thought we were going to bring in mike. mike santoli

>> always here, like a rock. steady as she goes so, mike, in terms of the markets, gabriela brings up an interesting point in terms of v valuations being so out of whack. it has to do with the composition of the european markets. >> that's a big part of it, absolutely very much a value index. they don't have the kind of tech stocks that traded to such a premium in the u.s financials have been acting very well as yields have gone positive in europe and they do have a little more of a choommodity base. there is also a case to be made that europe's earlier in whatever recovery process opening tech dynamic than we have here. hopefully that per spsists. >> the other problem with the financials call, which worked, is we had this yield curve flattening at a time where everybody is getting worried about higher interest rates. and the potential to yield curve

invasion what do you do with banks then >> we have to be very careful with the signal of the yield curve. in general, we don't think it is a crystal ball we have to be particularly careful there. there are two unanswered questions about central banks going forward that have a very heavy impact on the long end of the yield curve. number one, what is the terminal rate for interest rates this cycle. so how much higher are rates going to go up next year and beyond the market is saying not much more than 1.8% we think twill be higher than last time, 2.5%. this is a stronger economy and number two, what is the pace of quantitative tightening, bringing down the balance sheet with the fed moving out of the market and private investors stepping in and taking ownership of pricing yields once again so ultimately we think actually the curve is going to steepen a little bit from here, which would be good for financials and the other thing helpful for

financials would be create growth so far consumption has not been driven by credit growth with the exception of mortgages and the housing market a pickup in credit volume this year would also be helpful for financial earnings. >> it sounds like you think there is more wood to chop in terms of getting down to fair valuation for the market so how do you think about that, what is a fair valuation for the market at this point and what is that backdrop? are we going to be in economic growth, facing a slowdown? >> so we think we will see a normal natural slowdown this year for the u.s. economy, especially, which is really transitioning from pandemic recovery to post pandemic expansion. so there is no way that we can keep sustaining 7%, 5% economic growth we do expect to move down to more normal levels which we would consider 2% for the u.s.

economy. that's not the end of the cycle, that is not a recession. it is just a later part of the cycle where returns are a bit more muted and there is a lot dispersion beneath the surface this is the cycle of the dawn of alpha. there is a lot of wood to chop beneath the surface. we have the widest valuation dispersion with the least expensive companies we have ever had. so it is much harder than just looking at the index level the next decade. >> the dawn of alpha i like that. thanks gabriela santos. let's get to kayla who joins us from the white house as we await president biden. >> we are awaiting the president here in the roosevelt room he was scheduled to begin about 30 minutes ago he often runs late and previously his remarks of this nature have been about 15 minutes long no word from the white house on exactly what shaped this speech will take. but the president owes the

american people an update on where the situation stands, especially because every headline has suggested that war in europe is potentially very near, with an invasion imminent according to several administration officials from several different agencies on up to the president himself and also because american consumers have begun bearing a cost of this, geopolitical uncertainty driving up energy prices, and consumers are feeling that when seeing the bills for heating their homes this winter and issue the administration has been grappling with for months. we expect to hear the president provide some updates on intelligence and perhaps an update on where things stand with relation to diplomatic efforts with russia. russia delivered to the u.s. embassy in moscow a responsein writing to arms control proposals that the u.s. had made the white house has not said anything about what is in that written proposal, and whether in fact it provides any next steps for how the relationship could evolve we know the russian foreign minister has committed to talks next week. u.s. said those talks could

happen and potentially be a precursor to a leader summit, but that would only happen if russia does not invade or escalate on a military basis the kremlin so far has not been willing to say that it will not invade the kremlin has said it will continue doing nuclear drills that it has every right to do that we will wait and see what the president says but to add, melissa and sarah, to your conversation earlier, discussing the relationship between russia and china, and the burgeoning alliance that we have seen between those two countries, earlier today the deputy national security adviser was asked about that and whether that closeness is becoming a risk for the united states and specifically in its competition with china and he said let's be real, the russian economy is a fraction of the size of the eu, a fraction of the size of the u.s. economy, and this is a direct quote, china may want russia as the junior partner for cheap gas or oil, let's not pretend it is anything else.

sarah and melissa. >> putting that down, put russia down there thank you very much. we will come back to you shortly. please stay close as we await president biden. let's bring in doug redicker, from brookings, managing partner of international capital strategies, expert here on this situation. what do we expect from president biden, from president putin at this point >> well, we know what we're going to expect from president biden is a lot more predictable than we're going to expect from president putin. let's get to the point here, nobody knows what president putin is going to do what president biden is going to do is double down on what he said earlier this week on what secretary of state tony blinken said, on what his deputy national security adviser said earlier today, to basically say we are prepared with our allies to put together a joint approach to whatever is coming down the pike and president putin ought to be aware of that. when i'm not expecting anything new this administration, they

have done a great job of flagging intelligence, and telling everyone here's what we know and here what's coming and be prepared. it is more of the above. >> to kayla's point, how do you see the role of china here and the alliance between china and russia, who has the upper hand in what china might do in all of this >> who has the upper hand is easy china has the upper hand i do take a slightly different view than many people did from the president xi, president putin meeting last week. i think there is a great alignment between china and russia and they want to stick their finger in the eye of the u.s. and the western european allies and the liberal rules-based world order we have seen for the last 50, 70 years but i think the dichotomy between views longer term is pretty stark president putin went into that meeting with president xi hoping to get a much more robust set of commitments to support russia if we and the western europeans

impose sanctions he didn't get any overt message to that effect less wanted to get a much more serious commitment for a pipeline that was not just what they announced which was relatively small, but one that would lou russia to be able to go europe or china and turn the taps on one way or the other china didn't do that either. that's not to suggest the russia/china alliance isn't real and something worrying but i don't think that those who see russia and china as allies for the foreseeable future are getting the bigger picture there is a lot more in china's interest, a lot more risk to russia becoming beholden to china than the other way around. >> so how do you assess the economic risks we have in front of us here >> three different buckets the actions, that means what happens if there is an invasion, the reactions, meaning the sanctions and other messages that we would send, and then the reacts to those reactions. so the potential risks of the

cyberattacks, that, again, the white house was highlighting earlier today. on the former, the actions, that really depends on what actually putin does there is agricultural risks, gas risks, there is a lot of obviously humanitarian and migration casualties there is market risks. i don't think the markets have ever contemplated in the last ten, 20 years a land war in europe as something they have to actually think about there is some unthinkable things that are back on the table the second bucket, the sankthe sanctions. they talked about technology-based export sanctions that would hurt russia talked about financial sector sanctions that would really hurt russia trying to do their best to mitigate the damage to europeans and to americans there will somebody spillover, but you heard the white house today say they're not going to go down the route of swift, not going to go down the route of oil and gas sanctions that could

raise gas prices, raise oil prices for us and our european allies you'll try to hurt russia more and hurt ourselves less. and the third of the counterattacks, that president putin might engage in, we just don't know the white house was very explicit today, in saying be prepared, if a cyberattack comes, got to strengthen our cyberdefenses, whether it is banks or private companies or utilities. i think we all got to be aware of that. i would look at it in those three buckets. >> a cyberattack, we have traditionally not defined that necessarily as an act of war, and i'm wondering how you think about how the united states should think about what a cyberattack is in the scheme of an attack, a physical attack, et cetera, and that is the commensurate retaliation for that >> that's a great question nato has been discussing for years whether the article five commitment to defend a nato member applies to a cyberattack.

and even though this has been out there for a decade plus, they haven't really come up with a response i would say the same thing is true in the u.s. certainly don't want to get into a cyber for cyber attack battle with russia if you can avoid it. that is because our economy, in the u.s. and europe, particularly in the u.s. is much more dependent on electronics and vulnerability if there were a tit for tat cyberattack. we could commensurate -- we could retaliate against russia on the cyber basis but the more that escalates, the more risk it is than it hurts us more than it hurts them. we are not suggesting that you retaliate to a cyberattack with military attack, that's something that we would hope would stay off the table so it is a dilemma for this white house and this administration, if putin does attack us, and the cyberbasis as retaliation for our sanctions, what do we do to escalate -- let's hope there is a point in

which this thing calms down, it might not be until there is massive disruption in casualties, but the escalation meets escalation scenario is a bad one for everybody. that includes cyber. >> what do you think putin is after here, besides sovereignty of ukraine what else is he up to here >> well, so this is the question that everybody is trying to figure out i would say there is the limited ukraine scenario, meaning he doesn't believe you crane deserves to have its own sovereignty, it should be part of the russian sphere of influence. and that it is limited to ukraine. and then there is the broader upsetting of the global and particularly the european security architecture, which when you look at what russia put on the table in december, they put two draft treaties on the table, those included a much more ambitious set of reforms. that goes to this what world do

we live in mindset right now diplomatic treaties and agreements are supposed to hold some weight and you go back to some of the earlier pronouncements made in the presoviet days or postsoviet days and they basically said borders are sacred and won't see invasions, we'll try i to settle things diplomatically. putin is trying to up end that you've seen that in the case of crimea and now looking at a vladimir putin who in many ways is saying i like going back to that sphere of influence world might makes right. the u.s. may be powerful, but this is my neighborhood. so let me just play around with my vassell states in my neighborhood and you just go away and that's putin's mindset is it discreet to ukraine or a broader desire to up end the diplomatic stability that a lot of us have taken for granted for the last 50 for 75 years i would have to say putin is

kind of unhappy with the status quo, so just how much disruption he wants to cause, i don't want to say it is unlimited, we should be ambitious in what we think he's trying to achieve here. >> doug, thank you for your time and thoughts appreciate it. >> thank you very much. we're looking at that live shot of the podium and the roosevelt room we're awaiting president biden to make remarks. we're going to take a quick break. on the other se, wllide' talk to dan nathan, get his take on the markets. wealth is breaking ground on your biggest project yet. worth is giving the people who build it a solid foundation. wealth is shutting down the office

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biden's remarks. you see the podium major averages sinking to the close and what has been a volatile week for stocks joining us is dan nathan from risk reversal advisers good to see you. >> great to be with you. >> staples, the only winning sector on the week up a percent. we were talking to brian kelly yesterday, he said he was buying philip morris which seemed nuts to me. what is your take on the markets here >> don't smoke, stay in school, kids i'm not with beaks on that one here this is an interesting week for me if you look at the macro assets you thought might have been moving around because of the uncertainty with russia and ukraine, i think it is interesting we end the week with the dollar basically flat, with rates a little lower than where they were a couple of days ago, that ten-year u.s. treasury yield was wall above 2%, now 1.92 or so the vix was down today crude oil was down it didn't look like we were

risking things other than high valuation tech stocks. they continue to get bludgeoned here last week when i was on with you and sarah, i said it is not over it is not going to be over for these names. listening to cathie wood yesterday, i thought it was interesting, she madea lot of great points except one in my opinion. when you see such a large part of the market, where so much positive sentiment was encapsulated in and they crash and that's what's happened, they crashed, a lot of these tech names, they're not coming back anytime soon >> we're talking to victor jones earlier also, i thought he made an interesting point in terms of his take on cathie wood. he said you have to acknowledge the role of liquidity and all the excess liquidity and what that had on some of the areas like arc innovation. you have to also acknowledge on the way out, liquidity is coming out, this trade may not get back, but for traders, it doesn't need to get back to those levels if you're in now, you can see a

50% bounce >> no doubt about it plenty of bounces like that of names down 50, 60, 70% you can pick a bottom. i'll say this, i think victor makes a great point. everything that she had to say is divorced of the reality that with the rising rate environment, investors pay less for that decelerating growth that a lot of companies are seeing the most important thing that i saw happen in the stock market this week was nvidia reported a really good quarter, gave a great guidance, and investors sold it. it has been 10% in the last two trading days because they didn' like flat margin os on a company that guided up revenues. the company had north of 20 time sales multiple a few days ago. to me, the reaction to that result is really important, keep tracking that. if we lose some of these

sentiment winners that are still relatively holding up that apple tesla, nvidia, a few others, we're in for some problems. >> so, dan, where are you exposed then it sounds like you're not touching tech. where are you? >> i will tell you this, i think the nasdaq 100, we know six stocks in that index of 100 stocks make up 45% of the weight and, again, if we have microsoft, apple, already lost facebook, if you have alphabet, tesla, come in, then the qqq, the nasdaq 100 will be the single best trade. forget the arc innovation etf. buy the qqq, you get massive companies that have corrected 20%, 30%, and they're the leaders on the way out to mel's point, you get the dozens of stocks that are innovative, but valuations got way out of whack over the last two years, and you'll get the benefit of them rallying 50% over a year or two never get back to the prior highs, but really nice rallies

that's how i think about legging in to tech stocks and innovation over the next three to six months, the market tries to bottom. >> which innovative stocks are you keeping a eye on. >> i think zoom is really interesting to me. it is below ten times sales now. that was a company trading north of $100 billion market cap, over 30 times sales i don't care what you think the work environment, the hybrid environment is going forward, that is a feature that a lot of people will be using from here on out, a lot of the competition from some of the major competitors, the big platform companies, really haven't made it a dent. it was a valuation issue dealing with decelerating growth that will be interesting to me i also think that nvidia, i would love to see that stock, it is down 33% from is highs in november, you get that thing back down below $200, that's where you want to be in the semiconductor space there. i think the legging into the qqq makes a lot of sense as we

continue to see a downdraft. that is down about 15%, 16% from the all time highs in november you want to see that 20%, 25% from the highs >> mike santoli, i thought dan made a good point about the macro backdrop it wasn't like anything really was screaming fear or recession or anything, the dollar was flat this week, treasuries did not make a huge move, oil prices, the commodity names have worked lately i was looking at alcoa, it went up another 2.25% today and some of the names, the ag names are largely -- which does not tell us there is a massive growth scare right now. what does it tell us >> the bull case is just general shortage, it is a supply demand imbalance. it doesn't say slow down, i know this becoming cliche to talk about boom inflation i'm not sure it is about u.s. domestic consumption boom, but

there is a boom in demand for stuff. it is not -- it is not a familiar growth scare that the market undergoing. it is much more about the transition from, you know, everything working in favor, you have 20 plus percent earnings growth, along with a fiscal push, along with a very predictable fed. i don't think it is about zero fed.fed. i don't even think it's about zero fed i think it's about the range of possibilities for where rates go is so wide, relative to what we got used to. and that's what the market is trying to come to terms with at this point and again, overlaying all of that is a massive just valuation adjustment and that was going to happen almost no matter what. it was just kind of, manias get unwound one way or another it's a matter of, ow do you define the mania was it in the arcverse, or spread from that to things like f.a.a.n.g. >> nvidia or spacs dan, i'm wondering what your

thoughts are on chemoth when i saw that he was stepping down and traded space really, really well, selling his own personal stakes at $30 per share or $20 per share and the stock is below its spec price of $10. >> he had been selling it on the way up i think he made it very clear that he was selling a lot of names. he had registered that ipo, "a" through "z," because he wanted to take that many companies public and he had to trade out of some of these names no get into the next one i would like to take him at face value above the line there a little bit, that that's exactly what haasing and you know, listen, it's going to be debated for a very long time whether the spac vehicle was the right vehicle to bring so many companies to the public markets over the last few years pip suspect that it's going to be one that sticks around a little bit i think it would probably be irritated on and it will get a little tighter, if you will. but as it relates to virginia galactic, that's a great stock

that stock was up 35% when they started taking reservation for people to go to spay for 35 minutes. there will be lots of fits and starts if you are inclined to trade this market. you better tune in on tuesday to "fast money," because we are trading back to trade them, mel. >> nice plug >> i was just going to say, virginia glalactic is down 80%. despite that bounce, 80% from its 2019 debut they didn't say anything about him being widely criticized for saying, nobody cares about the ethnic suppression in china. >> and draft kings and roku are also both down 75 to 80% and nothing has really changed that much about the business. it was about a willingness and this pool of aggressive money that was happy to say, i'm based on a total adjustable market, based an some kind of aggressive assumptions, i'm willing to pay

20 to 20 times sales and now you're down below 10 it's not so much that people thought they were going to be one thing and people thought it was another. it was the willingness to pay and ride the momentum and now it's busted. >> dan, what are your quick thoughts on draft kings or roku, take your pick >> i think mike just made a really good point. this was not the wall street machine. i mean, investors lost their god damned minds here. look at a company like shopify, which is considered a very innovative company that stock is down 1,100 points in three months. and i'm using the words points because it's trading at $650 you can do the math there. that was not on the company, that was not on wall street analysts that was on investors looking to pay whatever the heck they wanted to pay for what they thought was growth at any price. and so to me, i think the lesson of this crash and the market, despite the fact that the s&p is down less than 10% from its all-time high is investor greed.

it's not about the wall street machine this time. i don't mind to sound like a wall street apologist, i'm just telling you. we've been flagging this for the last month and it had little to do with the analysts pumping the table. to me, this is investors >> does crypto fit into there, too, dan it sold off, but held together a bit better than ipos, spacs, nfts >> yeah, let's talk about what's going on with nfts i think there's some graeat projects there but do eight pictures deserve to be trading at $3 million of course not. and it's just, we've just hit a period of unusual speculation. i've been in the business for 25 years. i've never seen anything like the last year. what's happened over the last few months is not surprising to me whatsoever. >> mike santelli, looking out to

next week -- >> hey, melissa, sorry to cut you off. president biden now at the white house. let's go there >> today, i made two vital calls, as i've been making for some months now. two vital calls that -- on the situation in russia and ukraine. the first was to a bipartisan group of members of congress who were representing the united states as well as to vice president harris at the munich security conference. the second was the latest in a series of calls over the past many months with the heads of state of our nato allies and the european union, bringing them up to date on what the united states thinks is the current state of affairs and what's likely to happen in ukraine in the coming days to ensure that we continue to remain in lockstep

that is the european union and nato i have confirmed that has not stepped. the overwhelming message of both -- on both calls was one of unity, determination, and resolve. i shared with all of those on the calls what we know about a rapidly ly escalating crisis i ukraine. over the last few days, we've seen reports of a major uptick in violations of the cease-fire by russian-backed firefighters attempting to promote ukraine in the donbas for example, a shelling of a ukrainian kindergarten yesterday, which russia has falsely asserted was carried out by ukraine we also continue to see more and more disinformation being pushed out to the russian public, including russian-backed separatists, claiming that ukraine is planning to launch a massive offensive attack in the donbas well, look, there is simply no

evidence of these assertions and it defies basic logic to believe the ukrainians would choose this moment with well over 150,000 troops raid on its borders to escalate a year-long conflict. russia state media also continues to make phony allegations of a genocide taking place in the donbas and push fabricated claims warning about ukraine's attack on russia, without any evidence that's just what i'm sure ukraine is thinking of doing, attacking russia all of these are consistent with the playbook that the russians have used before to set up a false justification to act against ukraine this is also in line with the pretext scenarios that the united states and our partners have been warning about for weeks. throughout these tense moments, the ukrainian forces have shown great judgment, and i might add, restraint. they refused to allow the russians to bait them into war but the fact remains, russian

troops currently have ukraine surrounded from belarus, along the russian border and with ukraine to the black sea in the south and all of its border. and, you know, look, we have reason to believe the russian forces are planning to and intend to attack ukraine in the coming week, in the coming days. we believe that they will target ukraine's capital kyiv, a city of 2.8 million innocent people we're calling out russia's plans loudly and repeatedly, not because we want to conflict, but because we're doing everything in our power to remove any reason that russia may give to justify invading ukraine and prevent them from moving make no mistake, if russia pursues these plans, it will be responsible for a catastrophic and needless war of choice the united states and our allies are prepared to defend every inch of nato territory from any threat to our collective security, as well.

we also will not send troops in to fight in ukraine, but we will continue to support the ukrainian people this past year, the united states provided a record amount of security assistance to the ukraine to bolster its defensive, $650 million from jaffevelin missiles to ammunitin we also previously provide $500 million in humanitarian aid and economic support >> with apologies to the president and to all of you, we're required to break away for olympics coverage on cnbc this afternoon. the president's speech will be streaming live on cnbc.com and of course, at our sister network, msnbc i will say, the president described this as a rapidly escalating crisis, saying that he has reason to believe that the russians will attack in the ka ukraine in the next several days and as a matter of fact, he said, they have reason to believe that the russians will target kyiv. he said that he has spoken with a european allies and they have expressed unity, determination, and resolve.

"mad money" and "fast money" are back as scheduled next week after the olympics go away we'll be back with you tonight, 7:00 eastern newstime on cnbc, for all the day's highlights, including coverage from inside ukraine as the drums of war continue to be beating continuing updates throughout the weekend as warranted for now, i'm shepard smith, cnbc, at our global headquarters powers that are part of the china world trade center known globally where china meets the world. it starts glowing at night the closing ceremony will be held at the stunning venue and the national aquatic center. exterior is composed of 4,000 plastic, not