to be any, any suggestion about when they may reduce their balance sheet and move from quantitative easing to quantitative tightening. we shall see what wednesday holds. >> really looking forward to that in the meantime, we're watching the markets cautiously the dow trying to fight back to positive territory thanks for watching "power lunch. >> "closing bell," the new "closing bell" starts right now. >> the major averages all in the red, with the nasdaq getting crushed. the most important hour of trading starts now i'm sara eisen, and i'm thrilled to welcome you all to a brand-new vision of "closing bell." our goal is simple, to deliver you sharp analysis of the stories that matter most, timely conversations with the biggest news makers and everything you need to know for trading as we count you down to the close each day. so let's jump right in here are my top takeaways on today's biggest stories. a new headache for multinationals covid concerns and lockdowns in china. school in shanghai is remote

17.5 million people in shenzhen on home. yum china saying sales suffered as omicron surged. investors have to keep an eye on china ix poseur. nike, starbucks, wynn falling to 52-week lows the vaccine stocks were largely abandoned after covid cases plummeted and data indicated boosters aren't that impactful with the china surge, those stocks are surging too china's own vaccines areabouts considered as effective as the american mrna vaccines and finally, home builders getting wrecked right now. why? treasury yields are jumping to multi-year highs and that means higher mortgage rates and a potential slowdown in home buying those stocks are now 30% off their highs. the fed hasn't raised rates yet and the housing market already is bracing for a big slowdown. could get worse if the fed signals more rate increases faster this week let's dive into the news of the

day. chinese stocks getting smoked. check out las vegas sands take a look at the kweb that tracks chinese internet names. it's down more than 11%. joining us to discuss, cnbc's beijing bureau chief, eunice yoon, andy rothman, and mike santoli, of course andy, chinese population, 1.5 billion people second biggest economy in the world. and yet, these stocks are proving over and over to be uninvestable is there anywhere safe to invest in china >> hi, sara. thanks for having me on your revamped show. congratulations on that. >> thank you >> i don't think uninvestable is the right word this is clearly a very tough macro environment for china right now. and sentiment is really taking a beating. i think let's put the covid story in perspective

there is a significant rise in cases but there's only about 8,000 people in chinese hospitals with covid right now we have about 20,000 here in the united states, and of course, our population is about a quarter of the size of china so you could argue that their vaccines are actually doing a pretty good job of keeping people from getting sick, keeping people from dying. as we have seen over the last year, the government there is putting public health over economic growth as a priorities. while they continue to lock down, this is going to continue to dampen consumer spending as well as manufacturing and construction activity, but this doesn't make china uninvestable. it just means there's going to be a rough few months. >> are you saying you would buy some of these beaten down tech stocks on a dip like today this is not their first, eeithe. they had a number of dives on regulatory issues and china slowdown fears >> as you know, my expertise focus is on the chinese economy, not on the stocks. so i never give investment advice, but what i would say is

that i expect in the second half of the year the macro environment for investing in china is going to be significantly better than it is now. i think covid is likely to be more under control by then and also, from the economic side, while we're talking about tightening here, the chinese government has signaled a clear easing approach. they have already been cutting rates, and i think more rate cuts are coming. they made credit more available to companies and to households we're looking at a really big fiscal stimulus taking place this year. an increase in government spending of about 16% compared to last year when it was flat. we're seeing loosening of regulations on the property market, and we'll see a choppy but less tough environment on the regulatory side for those tech companies that you talked about. so i'm pretty optimistic about the macro environment for investing in the second half of the year >> younes, there covid numbers might not be quite as high as the ones we have seen in the u.s., but the reaction is much tougher. the zero covid policy.

talk about what it's like there and how long you expect the lockdowns to last. >> well, it's really anyone's guess as to how long the lockdowns are going to last, but they definitely are severe and it's interesting, your conversation so far, just that people here aren't necessarily worried about catching covid of course, they are, but they're also worried about being locked down in buildings randomly so that creates quite a bit of disruption on a personal level and also from a business level so 51 million people have been locked down or are in partial lockdown, including in the tech hub of shenzhen. that's a big manufacturing as well as i.t. base for several different companies including huawei, tencent, and those businesses have all been told to suspend all of their operations for a week the authorities there are going to feel it out, see how things go fox con as well as unimicron,

which are apple suppliers have both said they're looking for ways to try to mitigate the imbact, but it's definitely having an impact on the manufacturing side and also on the consumption side that was something we heard here from several economists. and just people in the street, people are worried about going out. they don't want to be caught in a store and then find out there was a case in that store or nearby and then be traced back and have to deal with mass testing as well as potential lockdown >> mike, jpmorgan disagrees with our guest, andy. called the stocks uninvestable, which a lot of people see as a late call. the jp.com, i don't know if you read that report, that stock has held up better it's double downgrade today down to $35, and they say it doesn't look like there's going to be any value plays anytime soon >> obviously, the call is chasing the stocks lower we have to be clear about that they're way off their highs.

i would have to agree it's not really about the corporate fundamentals for the most part if you look at alibaba, baidu, they look cheap if you believe the earnings numbers the analysts have been very slow to give up on these. each one of those stocks i mentioned has 85% or 90% buy ratings. when we talk about uninvestable, i think even if it's a low probability that there's some kind of sanction/delisting risk out there for china, it's not zero and it's probably higher than it was a while ago. that nee is the fix, plus, there's hedge fund liquidation going on in this area. we have seen it hit other parts of the market, combined with all of tech it having this huge valuation reckoning and they're caught up in that. essentially every strand of this downtrend in the market is visible in the chinese internet stocks >> they're just feeling it the hardest. thank you all for joining me it's good to have you here >> we have got just less than 50 minutes to go before the closing bell take a look at the market. lower across the board

dow trying to rally, just turning positive at the highs today, up 451 nasdaq getting hit the hardest s&p down .7% strength in names like the financials which are doing better today on the back of rising yields. after the break, censorship, propaganda, violence europe's top tech cop on social media's role during the war in ukraine, and later, guggenheim's scott minerd on the surge in yields we're seeing to multiyear highs ahead of a crucial fed meeting this week. you're watching "closing bell" on cnbc.

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positive, up 14 points it was in the red, got as low as down 126, was also as high as 451 earlier in the session what's leaving us higher right now, american express, visa, coca-cola, and travelers what's weighing on the dow, nike with all that china exposure, chevron, and intel european officials are currently discussing additional russian sanctions. that's what margaret told me, and in fact, just this afternoon, the eu did add more sanctions on oligarchs she's the top european tech regulator. we spoke at south by southwest this weekend and ysi asked abou some of the challenges of the war in the digital ge. listen >> well, cybersecurity is an overwhelming thing because when you have a war, and it is, of course, hybrid, but unfortunately also extremely violent on the ground, we have people losing their loved ones

we have people having to flee. you know, in unprecedented numbers, saying good-bye to half their family so of course, we have all of the attacks on ground, the bombings, the shelling, all of that. and at the same time, we see the cyber marching in and all of the propaganda all of the manipulation with your mind as to what is actually ongoing on the ground. so as part of the sanctioning russia today, sputnik, big tech coming onboard to help out and this has nothing to do with freedom of speech. this is a mechanism of war that propaganda is being pulled on you so that you don't see what is actually ongoing. >> you're talking about what the russians are doing, banning facebook, instagram. they're also, the white house says, paying tiktok influencers to put out their version of the story. is there anything to do about

this >> well, i think the most important thing is that every citizen sort of feels a coalition with their government, with their democracy right now that from a systemic point of view we do what we can to make sure that you know what you're seeing if it's something to be trusted or something that you should be really careful with. but also that everyone uses their sort of critical sense to say, no, this is not the truth that i'm being told right here >> it also raises the question about whether social media ultimately is good because it promotes this kind of dissent and public space for truth or not good because it also promotes a lot of disinformation and propaganda and hate and things that are even worse than that >> but we see both, and we have done that for a very long time you know, the spring was fueled by people being able to organize, to come together, to

say oh, i'm not alone, i'm part of a community who wants change. we z seen that over and over and over again that social media allows people to organize, to be part of a community, to figure out what to do, how they will think about things they have in common, and at the same time, we see the manipulation, the hate speech, we see now of course it's extreme version. but you know, we have seen women being discouraged from being part of public life. there's a lot of so that the democratic task we have ahead of us is of course to get in control on what we would think of as illegal in the offline world, while of course paving the way for a lively dynamic and sometimes of course also hurtful debate but not illegal >> should the government regulate what should be on facebook to make sure that that kind of

hate and all of the bad stuff is not allowed? or is that something they can self-regulate? >> well, the tricky thing here is of course there is a gray zone i think it is for government to recognize and say what we have decided was illegal offline is also considered illegal online and we have discussed that and we have a continuing discussion about what is illegal. and that discussion should continue now, in most european countries, hate speech has been deemed illegal over the last ten years or so. and that must be the same offline and online but there's still a gray zone. there's still a zone where they say, well, this is not harmony this is not nice it was not well meant when it was put out there, but actually t is legal and it is part of what society also shows and i think that's the tricky thing here, that there will still be something for any

social media to consider, do we think that this is what we want to be, while at the same time of course having to do what they are obliged to, to make sure they take down things that are illegal. >> as for regulation, more is coming, of course. she's in the final stages of the digital markets and services acts in europe which would further crack down on american tech companies on privacy and competition and disclosures so she expects those bills to pass early next year. we have just about 43 minutes left of trading here before the bell dow now firmly positive. nasdaq is the loser today along with the small caps which are down almost 2% nasdaq down 1.6% off the lows but it is technology that's getting hardest hit. s&p down half of a percent we're recover aglittle bit after the break, two parts of the market that aren't usually talked about in the same breath. the price of oil and cathie o wood's ark innovation fund the s .

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cathie wood's ark innovation fund falling 5% today. oil is down as well, more than 7% that hasn't been the pattern mike santoli here with the dashboard looking at the relationship here. what is the story? >> long term, here's a five-year look at the ark innovation fund against crude oil. it's really good picture of a regime shift we remember early last year when essentially everyone wanted to crowd into ark innovation which represents disinflation, innovation we're not talking about real assets, talking about digital saft assets. in here, crude oil traded negative and it was the world stampeding away from it. >> a good time for ark >> exactly it doesn't mean we're necessarily at some kind of inflection point again in this relationship usually, we don't get reversions to the mean. we get overshoots. i do think it's interesting we have had this full comeback of the ultimate real inflationary asset of energy, oil, compared to this disinflationary play

>> so the question is, where does it go oil is actually facing a pretty big slide and was lower for last week does that mean it hasn't been ark's time to shine. >> it's down 60%, and crude oil is up 60% in a year. clearly there's room for both of them to go the other way, for ark to bounce and energy to have a pullback, but i do think it's worth tracking the relationship to see what kind of movie is unfolding here >> also inflation expectations if you think it's higher, energy lower, high growth techs >> if it's the '70s, energy. >> we're getting breaking news from the white house kayla tausche with the details >> the national security adviser jake sullivan met with china's top diplomat in rome today in a meeting that a senior administration official just described as intense and candid, lasting seven hours. a meeting that where the conversation reflected in this official's words, the gravity of

the moment in that conversation, this official said that the national security adviser conveyed deep concerns about china's alignment with russia, although this official did not go on to say exactly whether the u.s. still believes that china is contributing either financially or militarily to russia's effort in ukraine or whether china plans to this official said that the u.s. and china discussed severe consequences for china if it does get involved, but declined to say what those consequences would be, although foreign policy experts have suggested that possible countersanctions could come into the conversation if china does become involved. the conversation also touched on north korea and what the official described as an escalating situation there, as the kim regime tests a new intercontinental ballistic missile system, but certainly, all of the eyes are going to be on the u.s./china relationship as the u.s. tries to provide

both a carrot and a stick to china to make sure that it does not provide russia in jake sullivan's words yesterday, a bail-out in this situation sara >> kayla tausche, thank you for the update >> up next, bond yields are hitting multi-year highs as investors look ahead to the first expected rate hike since 2018 coming this week. that's sending financials higher, technology tumbling. scott minerd will join us with his take on what he expects from the fed and what it means for investors. (jane) we really expanded our family...

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treasury yields hitting multi-year highs today as investors zero in on higher inflation and higher interest rates from the fed take a look at then-year now well above 2%, hitting the highest level since july 2019. joining us now in a segment we're calling the closer, guggenheim chief investment officer scott minerd it's appropriate you're the first closer because bill gross, the old bond king, just crowned you the new bond king in his new book not sure if you're aware congrats on the title. >> a real honor coming from bill i don't know that i will ever have the impact that bill had. he did an incredible job

building an industry >> right no pressure. good to have you as i showed, multiyear highs now for the ten-year yield well above 2%. where are we headed? >> well, this is the neighborhood of which i have always said that we should expect to peak out you know, somewhere in the 2% to 2.25% range. when you look at, sara, the technicals, you're starting to see the divergences that you would expect that would tell you you're approaching a top in rates. the other thing is if you look at how flat the yield curve is, the seven-year note actually was yielding more than the ten-year note that was before i came on. who knows what's happened since i have come on the air but typically, when you see these flattenings in the yield curve like we're having now, it's telling you you're getting close to the end our work suggests that the

ultimate level for the fed funds rate, the overnight rate, would be somewhere in the neighborhood of 2% before you would induce a recession. so this seems to be the pricing that the market was going to get to, to reflect the upcoming tightening of the fed. >> so just to be clear, you see yields topping out here. >> i think so. i mean - >> what about inflation? it's going from bad to worse so as we readjust, and just the latest is that now shenzhen has locked down, home to factories that supply all sorts of consumer electronics that's not going to make the supply chain easier and not going to make prices come down >> no, and it's interesting, sara, people are sort of misinterpreting a lot of this inflationary data. i mean, certainly, it's serious. but every time we see prices rise, whether it's gasoline prices or food prices or

whatever else, all we're doing is taking away purchasing power from the real economy. so real growth is suffering. and if you look at, like, gdp now, it's released by the federal reserve, we're in striking distance of having an economic contraction in the first quarter. i think if there were a negative print to gdp for q1, people are going to start to speculate that we have actually already entered a recession. i don't think so but certainly the market psychology is starting to price for recession. >> you said back in october that you thought that stocks were going to have a good year. i think you predicted 10% to 20% gains. s&p is down about 12.5% so far this year. so do you think that reverses or are you changing the call? >> no, i'm not changing the call i think it will reverse. historically, 100% of the time,

after the fed starts to raise rates, which ultimately leads to a recession, stocks are higher a year later so i think that as the fed starts to tighten, that stocks will start to rebound. i think a lot of what we're living with right now is just a combination of two things. one is fear in relationship to whether the fed will be serious about addressing inflation and the other one is the uncertainties linked to the war and to the supply chains, which even when you look at that historically, wars are typically good for stocks. you can look at the iraq war, the afghanistan war, any number of conflicts historically, and stocks tend to rally after the initial shock of an invasion >> so you're pretty bullish, it sounds like, on the market where would you be looking to

buy? are you looking at rate sensitive sectors that have gotten beaten up i mentioned housing which is down sharply today on the higher rates. >> right i think actually, i'm looking more at some of the beaten up tech stocks. when you consider, you know, that stocks like paypal, square, you know, these are profitable companies which stocks are down 60% and 70%. full disclosure, i'm personally long both of those, but you know, when you look at -- when i start tof forage through a lot f the tech industry, i see a lot of companies that have been beaten up. the proverbial throwing the baby out with the bath water. but one thing i think people, i always make this point, you have probably heard me say it before. you know, you have to decide whether you're a trader or an investor you know, i used to be a bond trader that was a long time ago

i did it for 15 years. you know, i constantly have to fight myself to say, you know, the difference is am i looking for something that's good value that will pay off in three to five years or am i looking for something i'm going to make money on tomorrow? and trying to call the bottom in this decline i think is foolhardy, but at the same time, the valuations are becoming so compelling that for investors that have a three to five-year horizon, i think there's a lot of money to be made. >> and in tech knonology i guess the risk to your view is that we do go into recession, and the fed is hiking into a very strong inflationary environment, which is only getting worse. and that it does end up hurting demand because the fed is now really serious and wants to be aggressive in fighting it. >> well, you know, sara, i have been looking at a lot of periods in post-war periods of inflation. and i say post-war because

remember, a year or two ago, we were comparing the pandemic to a war. right? we needed to run huge deficits and print a lot of money laike e did in the first world war, the second world war you see in the wake of a war typically there is a big inflationary spike both of those instances, the federal reserve was able to rein in inflation by just stopping the increase in its balance sheet. so i have been arguing the fedfed should just do what it did in the 1940s. inflation got to 20% the fed stopped increasing its balance sheet. inflation slowly declined. and we had a mild recession. the war ended in '45 we had a mild recession in '49 and then we went into a long bull market. and so i think that the formula here is to stop printing money

and let the short-term rate find its own level, but stop manipulating short-term rates and long-term rates. and i think we'll do just fine in terms of bringing inflation under control and all of that would be very bullish for stocks >> a lot of calls out there to hold you to. scott minerd, thank you for joining us especially on such an important week >> great to be on. >> from guggenheim >> the g.o.a.t. is back. tom brady is unretiring, and his decision is already helping to rake in big bucks. that story next. >> and you can listen to "closing bell" on the go by following the "closing bell" podcast on your favorite podcast app. we have under 30 minutes of trading. dow has gone negative again, down 57. we'll be right back. workers' comp was about 20% of my total expenses. when we got the quote back from pie, it was a sigh of relief. we saved about 30% when we switched to pie. ask your agent, or get a quote at easyaspie.com.

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. with 16 minutes left in it trading day, we're now in the "closing bell" market zone mike santoli here to break down these crucial moments of the trading day, plus, chris and jill carey hall. mike, let's start with what we heard from scott minerd, bullish on stocks. thinks yields are topping out here, and as the fed starts raising interest rates, we will start to see a recovery for

stocks and bond yields go down what do you think? >> interesting a likely recession scare, he seemed to be handicapping, also pointing out the nature of the inflation we have now is acting as a constraint on consumer activity, consumer energy. maybe that creates its own kind of self-correcting effects down the road i do think it's interesting from a longer term perspective when you see the fact, down 13% in the s&p 500, nothing too extraordinary about that there always is this apprehension ahead of a fed rate hike, an initial one i think the market is sort of sitting here with such a wide range of potential outcomes from things like geopolitics and this potential blowoff move in commodities, but i have to respect his conviction, especially on yields topping >> lee also says war has typically been bullish for stocks he likes tech. our next guest says a sustainable market bottom is

nowhere in sight let's bring in chris seniac. why do you see more downside for the market here? >> first, the market is still very expensive the inflation problems over the last few weeks have gotten worse. not better and long term interest rates are rising, suggesting that the market is viewing the fed is even further behind the curve than what we thought even a few months ago >> so what do you like in terms of defense the treasuries are not proving to be particularly safe havens like they normally are where should we go >> we still like energy stocks we would be loading up on energy stocks we ran a deep value screen for a note today, and a lot of oil and other big enp names were on the list we like health care, in particular, pharma and we like the defense stocks themselves, down a little bit today. we would be adding to position in defense stocks because we see a rerating of stocks as defense budgets worldwide grow over the coming years >> yeah, lockheed moving on a

report of a german purchase of f-35s today. thank you for joining us with your call today. take a look at the kweb basket of chinese internet stocks falling 9%, now down about 40% this year. jpmorgan downgrading several of those names to underweight including jd.com and alibaba the analyst behind that note calling chinese internet stocks uninvestable on a 6 to 12-month basis because of china's geopolitical risk. let's bring in deirdre bosa for more on how the street is viewing those names. kind of a catch-up call, but it does highlight all of the uncertainty around these names >> it feels like a catch-up call and it feels belated, but when you take a look at where the street is on all three of these names, pinduoduo, jd.com, and alibaba, you'll see that jpmorgan is certainly on the lower side take a look at the price targets, the mean price targets on wall street right now, and they are way higher than not just jpmorgan's call but where the stocks are trading right

now. so you know, either these stocks have more room to go or these analysts still have it wrong i mean, what was interesting about the jpmorgan note is that there was different reasons. for alibaba, it says the fundamentals have changed, but for jd.com, it says the sentiment is overwhelmingly negative and fundamentals are still good but it's going to get dragged down like everything else >> it comes down to the fundamentals i know jd recently reported and the numbers were strong, but the outlook i think was weaker, and if china continues these rolling shutdowns, deirdre, it would appear their earnings are going to be affected >> yeah, and i think that's true, and also, you think about the bull case for chinese stocks in the first place, and it's always been that there is the middle class population of almost 350 million people, so you have to think that if the fundamentals come back, if the economy comes back, there is still that strength that is going to make these platforms

valuable even if beijing ends its own crackdown. something we were looking at a few months ago is this idea of soft technology versus hard technology soft technology being the platforms like jd.com, alibaba, but hard tech like semi-conductors have been taken down as well so perhaps an indication that beijing may soften its stance to get the whole market sort of rejuvenated. again, it's so hard to call a bottom here. there's so many uncertainties. you saw charlie munger doubled down at the end of last year on alibaba. that stock has continued to fall, some 35% since then. >> yeah, good point. and so hard to see the visibility into chinese rule making as well, both on covid and regulation and china is battling the biggest outbreak from covid since early 2020 it's hitting the tech stocks along with rising rates. apple suppliers fox con and union micron announced they're suspending operations in shenzhen after they imposed new measures to curb the spread of

covid-19 foxconn saying due to our diversified production sites, we have adjusted the production line to minimize the potential impact joins for more is steve kovac. how big of a deal are these plans for these companies? >> they're a big deal in the long term. right now, the shutdown is only going to be for a week, and analysts are saying, including katie huberty of morgan stanley, we don't need to worry about this right now they can shift production to other cities that aren't shut down and only about a fifth of iphones and other gadgets are made in this facility. unless the shutdown extends to other cities then we have to worry. >> mike, there's also some chatter that maybe some of these factories could shift to places like saudi arabia, for instance, when it comes to making consumer electronics. obviously a long term issue. in the near term, implications for tech stocks. what do you think? >> as a general rule, i think over the several years, let's say back in the entire iphone

era, it's generally paid not to get too negative on apple when you hear about these production snags or disruptions and what's going on in china. not to say they're notgoing to matter and the stock shouldn't be down today. but it seems never to be the thing that really upsets one of these upgrade cycles i would also point out, there stock is at this very critical spot, just crossed under the 200-day average. it usually doesn't spend a whole lot of time underneath that with the exception of the covid crash. worth watching those levels. >> steve, thank you on apple >> take a look at the small caps underperforming today. they have underperformed the market this entire year. russell getting hit hard again pank of america says now is the time to buy small caps let's bring in jill carey hall, bank of america head of small cap and midcap strategy. i feel like you have been saying they're cheap for a while now. why now? >> thanks for having me.

congrats on the new show >> thank you >> you know, we have seen volatility in both large and small capps. we expect volatility to remain elevated this year we wrote a note back in late january that we thought a lot of the worst was likely behind us in terms of the small cap sell-off, so we have seen volatility since then, but we have stayed above kind of those lows that we saw, and when you look at the relative performance since late february, which was around when the russian/ukraine headlines began, we have seen small caps outperforming obviously, down today, but we have seen that size segment start to do well relative to large. when you look at what's happening, covid cases have been improving. something that's been very correlated with small versus large relative performance that's more positive for small caps which are not only domestically oriented and could hold up better in a period of

geopolitical risk, but also benefit from more from services spending than goods spending, where large caps are more exposed. >> also domestically focused as well, given everything happening in now china, europe, russia, ukraine. jill carey hall, thank you for joining us with the call look at oil dipping below $100 a barrel earlier today now well off its high that we saw earlier this month let's bring in raymond james energy and clean tech analyst. pavel, has oil peaked? >> if the war ends as we hope it will, then oil prices will subside. absolutely look, between -- >> it's not ending though. >> between the first day of the war and the highs of last week, oil was up 40% of course, that's not sustainable. and any cease-fire, not to mention a more durable peace agreement, would lead to more

manageable prices. but let's remember, even before the fighting began, oil was close to $90 a barrel, which was still an eight-year high >> we just had a call from a wolf research analyst saying some of the oil stocks he says still represent deep value what's happened to valuations since the spike in oil prices and the stocks have been the best performing sector of the year, up 33% >> that's right. but this is the important point. so spot oil prices is what we see in our screen. when we say oil is up 40% since the war began, that's the spot price. the futures curve is nowhere near as high if we look 12 months out, oil is less than $90 a barrel if you look two years out, it's barely $80 a barrel. so the commodity market is telling us prices will subside, and indeed, they will.

it's only a question of timing so the valuation of the stocks are not discounting today's war inflated commodity price they're trading off of the futures curve, so valuations have not run up nearly as much as you might think by looking at the spot market. >> and as far as your call that if the war ends, which by the way, there's no indicate that's happening, is it just your assumption that the russian oil exports can resume to places like the united states and europe will just keep buying is that why you're saying oil prices have peaked >> well, oil, to be clear, europe is still buying russian crude. and china, and other -- turkey, et cetera, they're all buying russian crude. the u.s. embargo effects 600,000 barrels a day, which seems like a lot, but that's only 8% of

russia's exports, and because oil, as we like to say, is fungible within the context of a global market, those 600,000 barrels will find a home it may be at a lower price than what the kremlin would prefer, but those barrels are still going to get exported. it's just a question of where specifically >> pavel, thank you for joining us big slide in oil prices today. we appreciate it >> looking at the broader market, nasdaq down 2% feels like the dow has been trying to rally this hour. it's kind of flattish, s&p is down you have got sort of strange dynamic, financials leading, which is higher interest rates, but then you also have health care, staples, and industrials a mix of sort of defensive and cyclical >> yeah. >> what do you see >> well, just one bottom line aspect to what's going on is the s&p yet again took another trip down to this low end of this range it's been in for a while most of the downward pressure

still coming from the mega cap stocks the equal weighted s&p is down far less than the market cap weighted one still the same story, value draining out of the big caps yields up at a time when also oil is down and stocks are down on balance shows you kind of people are elselling everything they're selling bonds, selling oil, and selling equities. it could be we're in the zone of exhausting some of this selling pressure, theres rr some seasonable issues that might start to become favorable in march, and of course, financials tracking with yields that's the thing that's not counterintuitive >> is that positioning ahead of the fed? we have this fed meeting on wednesday, expecting the first interest rate hike since covid, and yields continue to rise, which is interesting because a lot of it has been priced in, four hikes this year >> absolutely, the market has become even more aggressive in pricing in hikes the two-year note yield is at 1.86%. this was pricing in several, probably seven or so, so that

shows you that yes, whether it's correct or not, whether it's a reliable signal of what the fed is going to do, the market is bracing for something like that, probably as most investors hope that once the fed raises rates by an expected quarter point, they also express some kind of flexibility that it's not going to be auto pilot from here and they are going to be responsive to financial conditions and economic numbers >> apple biggest weight on the qqqs s&p 500 down about .75%. what do you see in the market internals as we go into the close? >> pretty weak on balance. if you just look at the volume split on the new york stock exchange, really again, the nasdaq effect is leading the downside, but you do have just about 3 to 1 declining to advancing volume also on the new york stock exchange. wanted to spotlight semi-conductors. if you look at a one-year chard, they surrendered the leadership position they had for a while.

only up 2% to 3%, underperforming the s&p. when we were on the way up and whenever the market got overbought, you say it's okay if semis are outperforming. that's not in the positive column the volatility index is now up a point and a half, above 32 there's a lot of noise in vix land that basically says we're just elevated at these levels ahead of the fed because the market has been so jumpy and also some of the vix exchange traded instruments, you saw some noise there where barclays started creating new shares, and so i do think that's a little bit of a stressed market as well >> under one minute to go before the closing bell the dow is just barely positive. it's sort of been the outperformer all day long. continues to be so american express is the biggest contributor to dow gains travelers, coca-cola, 3m, some of the winner on the dow some of the losers include nike, intel, chevron s&p 500 off the lows of the session, but still down about .75% energy is the biggest loser in

the s&p. financials are the best performer. it looks like we're going to go out with a decline for the nasdaq of 2% that does it for "closing bell." we'll see you tomorrow for the most important hour of trading now, let's send it over into overtime with skacott wapner. >> thanks so much. welcome to overtime. i'm scott wapner it's great to have you with us you just heard the bells we are just getting started, though, as news breaks in overtime, you'll know about it. we have a big and actionable hour just ahead. in just a few moments, i'm speak with brad guestner he called the destruction in tech last fall, and we'll find out what he thinks now we begin, though, with our daily top story, what we're calling our talk of the tape today, unquestionably the nasdaq's continued struggles inindex lagging yet again, feeling especially unstable. take a look at what's moving after hours. apple,