turnaround, if i had to bet. i don't know where the point is where you get in but it feels like a longer term. >> $300 billion at the market cap peak under $100 now >> dom, good to see you. thank you all for watching "power lunch." >> and "closing bell" starts right now. >> stocks losing early morning gains as fed chair jay powell says a 50 basis point hike could come next month. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen here in washington, d.c. more on my conversation with the fed chair and others at the imf debate and what it all means for the markets coming up on the show here's where we stand right now in the markets near session lows. dow failing to hold on to some early gains. we're down more than 200 points right now. s&p 500 losing steam, down 1.3%. only one sector is positive, consumer staples everybody is else in the red technology hurt today, nasdaq down 1.75%

and small caps down the most, 2.3% check out the energy sector. it is the worst performing sector right now in the market names like baker hughes, devon energy are under pressure despite oil prices being higher. coming up, more black eyes for streaming today with cnn plus shutting down and netflix shares falling again after yesterday's stock meltdown kevin mayor, former head of direct to consumer at disney, former tiktok ceo, will join us live he predicted last month that netflix would be offering ads. that was a good call we'll get his take on the streaming landscape from here. first up, the comments from fed chair jay powell during the imf debate on the global economy this afternoon i did ask fed chair powell whether the three big 50 basis point hikes expected in the markets right now are reasonable here's what he had to say. >> inflation is much higher now, and our policy rate is still more accommodative than it was then so it is appropriate in my view to be moving more quickly, and i

also think there's something in the idea of front end loading whatever accommodation one things is appropriate. >> close to a yes. >> points in the direction of 50 basis points being on the table. certainly, we make these decisions at the meeting, but i would say 50 basis points will be on the table for the may meeting. >> i think he cemented it. joining us, david zervos and alicia levine. good to see you both david, he basically endorsed the 50 basis point hike and did not take the bait when i asked if the economy slows down, would you stop hiking? it was a pretty hawkish view, i would say, from chair powell what do you think? >> absolutely, sara. and i think he's continued down this path pretty steadfast, really, in almost all of his commentary, whether it was in the testimony he has given on his renomination, whether at the press conferences. jay has presented a particularly hawkish view that has continued to stay there, and if not, grow

even more hawkish as time has gone on through most of this year and i think that markets have kind of tried to shrug it off here and there, but it's coming. and it's probably going to hurt a little bit >> it's coming, and it's still moving markets, alicia, the ten-year note yield jumping past 2.90, and stocks are under pressure the nasdaq is getting hit again. so as long as the fed is in this mode of very strongly fighting inflation, tightening policy, and talking up their moves, can the markets find a bottom? >> so thanks, sara i thought you did a great job this afternoon on that interview. really interesting a couple things. you want to think about this cycle really with three main points the first is that the fed is using 1994 as sort of their road map to tighten quickly with a soft landing in the real economy if not markets second is i think they're protecting institutional credibility here and the third is really to try

to keep inflation expectations anchored and all that means faster tightening on the front end. so it's entirely consistent. the interesting thing is that there has been more volatility in the bond market than there's been in the equity market. i think to some extent equity investors have not believed it and thought the fed was going to back off pla particularly today with mary daly's comments, the curve got repriced and in the end, it was long duration stocks, the speculative names, the tech names, and the small caps going to feel it when the curve gets repriced like this >> we're seeing session lows and ticking lower as we speak, down 314 on the dow david, when it comes to the fed, chair powell reiterated his goal of a soft landing. sounds confident in the idea they can achieve the soft landing, the jobs market is strong, the economy is quite strong, the consumer is quite strong it seems for the markets that's

a key question, whether they're going to be able to achieve it what do you think? >> look, i think this idea that you were just talking about, this 1994 idea that jim bullard is pointing to and a few others are pointing to is a good narrative and is how we get into the fed's head, which is what we need to do to understand where they're going this year. if you go back to that year, actually it wasn't a year with a lot of equity volatility it was a year where i think equities might have been down about 7% for the year. it wasn't a terrible equity year it was a terrible bond year. one of the worst bond years in modern history and we have a lot of blowups in the mortgage market with david haskin we had significant losses in major investment banks we saw international bonds, corporate bonds, emerging market bonds under extreme pressure, and a lot of losses in fixed income so i think this year is really actually kind of shaping up very much with that '94 narrative in

mind, and if that's the case, there may be some glimmers of hope that the equity market doesn't have to go through some major repricing, say down 20 or down 25, and we can kind of cross our fingers on that. the fed did make a mistake in '94 and went too far, by the way, and we did start easing in '95 at least three times, 75 basis points in 1995, when the inflation never showed up. i think the big difference is actually in 1994, there was no inflation. they were tightening against the expectation of inflation today, there is inflation. and that's important and that's why they could be even stronger. that's really where the equity market needs to watch out, is they have a real problem it's in their cross hairs. and that's very different than any other cycle i think since the 1989-'90s cycle. >> the template and the risks, what do you do as an investor? the nasdaq is down another 2% right now, bringing the year to date decline to about 16%. where do you hide in this kind

of environment >> look, it's really a great question i agree with david, the path to a soft landing is very narrow here in part because of the difference with '94. in '94, it was preventing inflation from going higher. now the fed has to really kill it and come down hard, with also noting that the supply chain alone will not bring down inflation, as we thought maybe six to nine months ago so improvements there really won't do it. where do you hide? look, it's very clear what's working. health care is working reits are working. staples are working. today, commodities are not working, but that's really where people are hiding. i'll say this, i think we have a few more months of extreme volatility here as we see the path of the fed and what they're actually going to do i think at some point there will be a great opportunity in growth stocks because that is what works when the economy slows down it's little too early now. >> yeah. you think the -- where do you think the nasdaq ends the year

>> well, we don't put a number on nasdaq, but i will say that i think -- >> down? >> i think we will go lower once we stabilize the second half of the year right now i believe what the fed is saying which is they're going to tighten fast and quickly, those three things, '94, institutional credibility, and keeping inflation expectations anchored and that requires them to do that >> and that's the message we got today. alicia, david, thank you both for joining me with about 51 minutes left of trading and a more than 330% decline on the dow, tomorrow, much more discussion on the global economy, on tech check. i'm be interviewing janet yellen and the ecb president christine lagarde together a rare opportunity for an exclusive opportunity with two of the most important policy leaders in the world 11:00 a.m. eastern on cnbc after the break, the netflix nightmare continues. shares taking another leg lower

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4500 and then broke below, down 1.5% as far as what's weighing on the dow, salesforce is the biggest weight along with chevron, disney, goldman sachs. there are some winners dow, the chemical company, set to close at a record high after reporting earnings inflation is not hurting demand for chemicals. in fact, they're increasing margins. ibm is follow-through to yesterday's big gains after earnings keep an eye on the nasdaq, down more than 2% as we head into the close. here's a stealth mover for you today. equifax. shareoffs the credit scoring agency is down sharply after the slashed its profit and margin expectations on expectations the mortgage market will fall 27%i the remainder of 2022. major announcements in the streeling world. cnn plus shutting down after just one month after its launch. it's been a brittle week for streaming overall. netflix investors after reporting a subscriber loss in the first quarter, shares

falling again today. bill ackman, billionaire investor, selling his hedge fund's entire stake in netflix just a few months since taking the position netflix plans to stem subscriber losses in part by offering an ad-tier, something kevin mayer predicted at the south by southwest conference kevin joins me now it was an interesting call at the time it didn't get enough attention explain why you were so sure that netflix was going to move to an ad subscriber model. it's interesting it happened so quickly. >> well, nice to be here thank you for having me. look, i have seen that model work when i was at disney, hulu was part of my portfolio i managed and they had two flavors you could have an ad-supported flavor and it was about $5 cheaper than the no-ads flavor and as i recall back then, something like 35% or 40% would take the ad-supported. most people would pay extra to not have the ads, but the

monthly revenue from ads was so great that the arpu, the average revenue per user for the ad supported people paying $5 a month was higher, and materially higher than the arpu for those who were taking the no-ad version. the reason for that is advertisers really enjoy having their brand messages in a context with high quality video. and these over the top services or the streaming services like hulu and now peacock and now it looks like netflix, offer that high quality environment but also a degree of targeting, and these apps are delivered on interactive platforms and those platforms you can actually dynamically reinsort advertisements based on targeting criteria the best of both worlds for advertisers. as linear channels are shrinking their audiences quite substantially, these streaming services are an outlet that is very much in demand by advertisers. and it gives consumers more choice a lower price point if they want to put up with ads and i know

the netflix team and reed are quite focused on serving consumers and giving them the right options. to me, the confluence of the tailwinds of the advertising business coupled with giving consumers more choice seems like an obvious one to me >> and everything you're saying makes sense, except for the fact it's coming at a pretty vulnerable time for netflix with the surprise subscribe loss. it does appear a move of desperation, a total 180 from everything netflix has been telling shareholders and consumers for the past few years. >> well, i don't know if it's desperation. i think their growth is challenging. and that's an artifact of being as successful as netflix is. it's so well penetrated in key markets. growth is hard to come by. it shouldn't be shocking to anyone that some point you reach a penetration rate that indicates that, you know, growing by leaps and bounds would be almost impossible this is another tool in the tool kit. it's one they're pulling out when it's needed i don't think it's desperate i think it's smart >> clearly, netflix's model has

to change a bit, and the billions of dollars that they have been spending on content is going to come down i wonder how that's going to impact your world and all of hollywood, where basically netflix and some of these other big streamers have been dictating these very high valuations for the price of content. you paid billions of dollars for the reese witherspoon media company. do you think that's going to change here? >> i really don't. i think that the degree of demand for high quality content, kids, stories for women like hello sunshine creates, high quality content is what these streaming services deliver and the growth rates in demand for hours of content have been astronomical will that flatten to some degree of course, and that would be natural anyway without the precipitous decline in netflix's stock price that we just saw i think the model of aggregating the highest quality content you can get your hands on and delivering that to consumers is what streaming services do and

what the entertainment industry has done for decades this is just the newest manifestation of that. so the demand for content is not going to decline, i don't think. and certainly if you have the goods, if you have the content that really drives customer agsition and retention like we have, i think we're still sitting in a great position. >> with the netflix decline in subs and then the cnn plus news today, i wonder if there is a rethink about just how much growth there can be in streaming. as all of these major companies have pivoted to focus on it. >> well, look, the pivot is a natural evolution of where this industry has to go we have to serve curonsumers we have to learn about their habits and affinities and you have to have an interactive platform that's a two-way platform serving consumers, this is the evolution of doing that. i think when you have the multiplicity of revenue streams, when you have consumer subscription fees, you have

advertising, if you have the right franchises, you can do licensing and merchandisimercha success, there are multiple revenue streams and netflix is going after games and going to leverage the audience they have in video and promote their game service to them, i'm sure. it is where this industry has to go it's inexorable and inevitable and i think the model will work out just fine. i think there's a very substantial profitability built into these streaming services when they start to stop investing in growth and start harvesting the profits and i think that these models do work and i think it's also just, again, an evolution that has to happen to serve consumers the right way. >> wanted to ask you about disney in particular, which is down more than 2%. it's gotten hit on some of these concerns around streaming growth, and also on this fight with the state of florida and going after their special status in the tax status. as a former executive in this company, how big of a deal, how big of a problem do you think his is for disney and for its

ceo, bob chapek? >> where have a lot of faith in bob chapek he's and his team are very smart. i think they'll figure out a way out of this, out of the morass that has been created here it's unfortunate disney was my home for many years. i want to see disney succeed i think this is probably more a temporary setback than anything else, and i think that management team has a lot of talent and there's a lot of good people there, and i do believe they're going to find their way out of this. >> do you think the netflix quarter raises questions about what disney is doing what you started at disney and the direct to consumer business on streaming >> you know, not really. i think there's valuation issues around all of this netflix was valued as a very substantial growth multiple. as growth hits a plateau, those multiples have to come down. i think disney has that portion of this business and i think again, it's something that serving consumers in a direct to consumer fashion is what these media companies must do. not a lot of choice there.

but disney has these brands and franchises that are by their nature very multiplatform. so disney makes money in theme parks. disney makes money in consumer products and licensing they may still make money in linear television around the world. they have hulu, they have espn plus, and they have disney plus. these are big businesses, and they're not unique, not just one. there's a multiple business platforms that their ip can be monetized throughout, and that puts them in a pretty good place, i think >> good to get your perspective on all of it thanks for the time. >> always a pleasure >> kevin mayer, candle media now, former disney and tiktok. let's give you a check on the markets, where we stand. we have a sell-off, dow down about 1% right now s&p down 1.4%. sort of hovering at the lows of the session. every sector down except for consumer staples right now energy is getting hit the hardest. the nasdaq, though, down another 2% right now

we have communication services is the worst performing group. more weakness in some of the media stocks on some of the streaming concerns match group, meta, warner brothers discovery taking the group lower. >> coming up, snap is falling hard ahead of earnings after the bell it's been a roller coaster ride for shareholders over the last year climbing to all-time highs and plummeting back down to earth. mike santoli breaks down the charts in his dashboard next

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welcome back dow down 315 nasdaq falling hard again today. near session lows. and the social media stocks are getting slammed. twitter shares are actually up slightly amid all of it. elon musk just tweeting, if our twitter bid succeeds, our, he says, we will defeat the spam bots or die trying mike santoli, not a spam bot, is here taking a closer look at the social stocks in today's dashboard. and mike, will he or won't he buy twitter? >> well, he has at least more detail on how he might finance this bid he also said he would

authenticate real human beings on twitter i have been authenticated there so i'm in the clear. what we see over the past few years is the way that the fortunes of the big or at least the sort of sub-facebook level social media stocks have risen and fallen i focus on this point about 18 months ago where snap, twitter, and pinterest each had about a $40 billion market cap snap had this massive run into that whole disruptive tech bubble into early last year. has lost most of it. twitter obviously being supported by the elon musk bid, which now at least has a little more credence. he may try a tender offer, and pinterest getting a band a lot of it is aftershocks not just from netflix because a lot of the same people own the same digital media companies but also from facebook and this general idea if you owned these kind of wide mote digital businesses, that they had some certain level of stability they were going to offer you, that they did have more predictability than they have shown and that's getting a sell-first response today.

very interesting here, in aggregate, the market caps of these companies are now down from where they were 18 months ago. >> wow been a big drop. mike, thanks we'll see you in the market zone >> up next, muhaummad elarian reacts to jay powell and whether they can pull off a soft landing. flexshares are carefully constructed. to go beyond ordinary etfs. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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coming off session lows right now. dow down about 275 or so s&p down 1.9%, and the nasdaq still hit the hardest, down 1.8% taking a turn midday following an imf panel i posted this afternoon. inflation was a key topic in the discussion here's what jay powell said when i asked whether he thought inflation has peaked in the u.s. >> it may be that the actual peak was in march, but we don't know that. so we're not going to count on it we're also no longer going to count on help from supply side healing. we're going to -- if we get that, that would be grade and that would be enormously helpful in having a soft landing but we're really going to be raising rates and getting expeditiously to levels that are more neutral >> fed chair powell also cementing the idea of a 50 basis point hike at the may meeting. says it is on the table. joining us is muhammad alarian.

they're all talking about expeditiously getting to neutral. that means we're doing to see a lot of fed rate hikes. should the market be surprised by this? >> no, the market has been leading the fed, and it is the fed that has been slow to recognize the inflation problem. and to signal strong action. if you think about it, when inflation was 4% to 5%, chair powell was repeating, it is transitory, it is transitory, it is transitory. at 8.5%, he's not sure whether it's the peak. now, we talk about 50 basis point hike when we were talking about the half mark getting one hike in the whole of this year this is a massive move in the fed but one that is late relative to developments on the ground and relative to where the market has been. >> so what does that mean? now do you think they have got it, and the market is pricing in i think 12 25-basis point hikes

in the next year you think that's about right >> i think at least i understand much better and they have been humble, is interesting and concerning that break evens went up today ten-year break evens are above 3% at record levels. so that's not a good thing to see on a day when fed chair powell says what he says look, they're going to need three things skill, time, and luck to get to a soft landing i'm particularly worried about the time because a lot of time has been lost in not recognizing the true nature of inflation and not in taking action it's only a month since we stopped injecting liquidity into this economy so we have a long way to go to tighten financial conditions >> so what if the market is right and we get three 50 basis point hikes, three double hikes basically, may, june, july what does that do to the economy and what does it do to

inflation? >> i think i am among those who are worried that now having to hit the brakes hard as opposed to easing off the accelerator last year, that we may have a high risk of not just a slowing economy, but we can be tipped into recession you have heard many people tell you history is not comforting. history suggests that when the fed is this late, the probability of a recession is uncomfortably high let's hope they can avoid it, and let's hope they have the skill, the time, and the luck to do so. >> but if you think the odds are increasing of a recession or a mistake or increasing slowdown, then would you be buying bonds here because they keep selling off. and the ten-year yield is almost at 3%. >> no, because of where we started from we started from very repressed levels and we are adjusting to a new paradigm look, sara, it's going to take

the market time to realize this is a completely different liquidity paradigm i think the bond market has understood it more than the equity market, having said that, the bond market hasn't fully finished its adjustments the good news for long-term investors with cash is that value is being restored in many segments of the market that's the good news the bad news is the journey to this point and in the next few weeks and months, is still going to be pretty bumpy >> so what would you tell investors to do? sell the rallies continue taking money off the table and going to cash? >> i would be telling them what i have been telling them for the last four or five weeks on your network. be careful if you're heavily invested, this is a time to take some chips off the table. we are adjusting liquidity paradigms and be careful of volatility look at the last three days in the ten-year nominal bond. from bottom to top to bottom to

top, 40 basis points journey on very little news all that was before chair powell spoke. we also have a liquidity issue it's not just interest rate risk we have to be worried about. keep an eye also on credit risk and on liquidity risk. because we are changing paradigms. >> 2.9% there on the ten-year. always good to get your take thank you very much for helping us make sense of it all. >> tomorrow on techczech, don't miss the interview with janet yellen and ecb president christine lagarde in conversation together. rare and exclusive conversation there with two of the most important policy leaders in the world. also, don't miss an exclusive interview tomorrow on this show with loretta mester, 3:00 p.m. on "closing bell." we have all these key topics covered for you. here's where we stand in the markets. the dow is down 400 points we have taken another leg lower. mohamed el-erian not sounding bullish there. s&p down b1.6%

nasdaq down 2.2% sales of recreational cannabis begin today in new jersey. wall street is buzzing about it. we'll look at whether that will lead to smoking sales for the pot stocks when we come back on "closing bell.

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another up and down day for stocks that has given way to lower prices right now we're falling to session lows in every sector has gone red, including consumer staples, which was holding up the best. energy is down at the bottom of the list, technology is getting slammed right now. started off earlier strong on the s&p, above the 4500 level. we're now below 4400 started falling pretty intensely in the afternoon and in this final hour of trade.

chair powell, the fed chair, earlier today saying the 50 basis point hike is on the table for may. pretty much cementing that idea and sounding hawkish about fighting inflation and doing what is necessary. pot stocks are underperforming the broader market, even though new jersey began sales of recreational cannabis today. frank holland is at a dispensary in elizabeth, new jersey, with a look at how this market, how big this market could be, frank. >> yeah, absolutely. it's going to be $31 billion in the u.s. this year, but today, the etfs that represent u.s. and canada operators are down 2%, even with all this excitement behind me and at other stores in new jersey legalizing recreational cannabis sales. hundreds of people lined up at the first stores many expect the u.s. operators, the only ones with licenses to sell in the u.s., to get a boost from retail investors exciting about the market that would have 7 million people over the age of 21 by 2025

the state also embracing cannabis tourism cannabis stocks often trade as a basket with canadian stocks moving along with u.s. stocks on good news. today, that certainly did not happen all these stocks down today. also important to note that the trading volume of the u.s. and canadian stocks, the top four of each, both significantly below the 30-day average with the exception of aurora. today and yesterday on 4 clesh 20 day, a lot of people wondering what is it going to take to get the pot stocks to rally. >> what is it going to take? frank, thank you >> tesla holding on to gains but well off the highs of the day. our next guest says he thinks the stock's rally is just getting started. that story, plus airline stocks which are also bucking the down trend today, soaring and snap's results after the bell we'll count you down all that in the market zone, next

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stocks are falling hard in this final hour. we're now in the "closing bell" market zone. cnbc senior markets commentator mike santoli here to break down the crucial moments of the trading day, plus, jed dorsch eimer, and chris sen yk. check out the overall market stocks have been losing steam, taking a big leg lower in the last hour and a half or so the dow had been up as much as 331 points at session highs. nasdaq and small caps now getting hit the hardest. we have also taken most of the week to date gains for the major averages as well is this just how it's going to be a bumpy period as long as rates are moving higher and the fed is speaking hawkishly, because fed chair powell pretty much gave that message today

>> it's a decent assumption, sara, that the market is a bit trapped in here. not just because of what the fed is doing, but the somewhat independent breakdown of the huge cap stocks. one by one, kind of losing sponsorship, and obviously, rates have a little bit to do with that and the fed outlook does as well, but you're obviously also seeing this bleeding out of valuation excesses and premiums that got pushed in there. i think all that is true that being said, this is an ugly reversal to the downside today, but we're just bumping along last week's lows we kind of rallied up right to the 200-day average. it's very regimented range bound action at least at this point as opposed to some new reason people are fleeing >> energy, internet, semis, software, china tech all weighing on the nasdaq right now. check out tesla, though. it is bucking the trend. that stock holding some gains but it's well off the highs of the session. the company reporting pretty strong earnings last night, including record auto margins.

this was key, of 32.9% joining us now is analyst jed dorscheimer. i guess there were a number of surprises including what they said about china some worries going in about the shutdown of the shanghai facility what else surprised you in a good way >> flat is good when you have a facility shut down for three weeks. so i think that came as a surprise and i think the margins also, x credits, much better than expected so when you just kind of look at this in -- and i think this is where a lot of people get this stock wrong. when you look at it through the eyes of a traditional legacy oem, bmw i think is the most profitable oem out there, and they're at half the margins of that of -- operating margins, too, of tesla. i think that's what keeps surprising people. and i think they're getting surprised because they're looking at it quite frankly the

wrong way. >> so what does this do for valuation? especially with the margins like this and the profitability surprising in a good way >> there's no question that the macro is going to be under pressure, and so relatively speaking, we're going to see what mike was just talking about in terms of these fits and starts with the market i think when you look at it from a category killer perspective, and this we have to bring in a little history if we go back to 1908, we look at ford. 9.8% market share. by 1914, they had 50% market share. so the question then becomes, when you look at an apple, you look at amazon, what do you pay for a category killer in this, and that becomes less of a science and more of an art right now, we have a 35 times ebitda by any means, that's going to be argued that's expensive. when you look at what they're posting and how they're really changing this category, it's hard to argue that traditional

valuation metrics on that comp group are what you should -- how you should value tesla >> well, the auto stocks are going the other way today. jed, we'll leave it there. thank you on tesla i want to hit the airline stocks because they're outperforming after a pair of earnings american reporting a smaller than expected loss sales beat united actually missed wall street's profit and revenue estimates but both carriers announcing they do expect a return to profitability this quarter. here's american's ceo speaking with our phil lebeau about what's driving the bullish forecast >> demand is going to continue we have had three years where airlines have been with no growth whatsoever. while the economy has actually increased considerably we have to make that up, and actually more. so i view demand as being robust far into the future. >> they are also bullish, phil lebeau why are they so convinced this rebound will last beyond just a couple quarters, as we catch up here on the pent-up demand

theme? >> yeah, sara. a couple things they believe are going in their favor one, obviously people want to get out and want to start traveling more beyond the leisure side of things corporate travel is coming back and coming back stronger than many expected as you move to the summer months. the other aspect to remember is there is a limited supply of seats. we don't have all of the aircraft we had just a couple years ago. many have been retired we don't have boeing and airbus cranking up their production of new aircraft as they were a few years ago. that is a tighter market, so as a result, the airlines are looking at their profit perseat. that's really what matters profit per seat, and they're seeing just sensational numbers, and people willing to pay up to fly. >> and phil, what about business travel in particular i feel like some of the comments we have been hearing are maybe a little better than expected on that front business and international, those were the missing links, right? >> right and on international, remember, you have to wipe out china and

asia pacific, because who knows when that's going to come back tr trans-atlantic, strong demand. in terms of corporate travel, it is coming back faster than many expected just a couple months ago. >> got it, phil lebeau, thank you. airlines, one of the best s&p subsectors right now, and year to date up 14% snap is set to report its latest quarterly earnings after the bell the stock is sinking, down about 5% julia has a look at the key numbers to watch in snap's results, which we always get a big move from snap one way or the other, julia >> we have gotten big moves in the past now, the key thing to watch here is growth. both users and revenue the company is expected to add 11 million daily active users in the quarter for a total of 330 million. that would be the top end of the company's own guidance range revenue is projected to grow 39% to $1.07 billion snap's results could be seen as a bellwether of the state of the ad industry and ad spending in light of inflation and also

supply chain issues. and also from a user perspective, we could learn whether there's a growing popularity in tiktok and the waning pandemic is hurting user engagement >> julia, we'll look for all of it thank you. >> stocks are sliding into the close. the tech heavy nasdaq is seeing the biggest losses down about 2%, so we're just off session lows let's bring in chris from wolf research alicia levine said something interesting at the top of the hour she said there will be a point at which you want to be buying growth stocks if the economy slows down how do we know when we're at that point >> we think the economy is going to slow down in the course of the year when the fed has historically hiked rates more than 200 basis points which is what the forecast is and then some for this year, there economy has really slowed down, you're starting to see that with ism decelerating you saw the philly fed report this morning which was also weaker and throw on higher interest rates which take time to digest itself through the economy, and we see the economy

really slowing we would take the opposite side of that trade. we would be long value stocks over growth. i don't think you want to own growth stocks. those generally the higher multiple stocks. if interest rates continue to rise, the long duration assets are going to continue to underperform the market. >> what type of value stocks what sectors >> value in health care. we like pharma in particular we like tobacco stocks, more defensive areas. if you have to own tech stocks, wait until they report earnings. wle we lean into value in tech >> what is a message we're getting from earnings overall? you know, some of these companies have pretty strong pricing power. i'm looking at dow, which is set to close at a record high right now. what are you hearing as it relates to the overall market, and is the market paying attention? >> market is paying attention in the sense that there's been a bit of on the net basis relief on the results if you looked at the average stock reaction to earnings, it's

actually slightly positive the massive blowups like netflix are going to obscure some of that, but company by company, stocks were down enough, i think, that the bar was somewhat lower. overall, estimates are holding up for the year. i think it's fair to argue that the back half of the year, you might have some vulnerability to those forecasts, and it is lumpy. energy is doing a lot of the work in terms of keeping the overall forecasts supported. but i don't think that what the market is mostly going through right now is a panic about corporate results. the corporate sector seems pretty sturdy. it's all about what you pay for the earnings, what the trajectory is, and the interest rate you're going to have to compete against as a hurdle rate >> what do you think we're going through, mike, then? just a valuation reset as the fed increasingly, expeditiously is the word, looks to raise interest rates and front load the interest hikes >> i will not deny the market is

telling you we have rushed into some version of a late cycle environment. that's what the sector leadership tells you it's what it tells you when the fed is in a hurry to try to restrain inflation it doesn't mean late is on a clock. it could stay in late for a long time you could also mean -- the leading economic indicators today at a new high. on average, it's been like almost a year after those peak before you get a recession so it's not as if there's only a few grains of sand left in the hourglass here >> i also want to point out, chris, the dollar which is strengthening. another byproduct of all this fed hiking up another .25%. hitting multiyear highs against currencies like the chinese currency, the japanese yen, more than 20-year high, the euro even have investors factors that into the earnings outlook >> that's not in earnings estimates yet. that hits some of the multinational companies. certainly some of the relative strength in the u.s. market has been attributable to foreign inflows. you know, trying to get benefits from the currency. but estimates don't yet reflect

that weaker currency so some multinationals may have some more conservative guidance this earnings season as a result of that. >> when you say you like value, and i know you said health care was one of your picks and staples, sort of the defensive groups, and to wait on earnings for technology, do you see any value at this point in technology maybe in some of nega cap names which are getting beat up again today. >> the short answer is not yet because we think investors after the netflix news are starting to question sustainability of tech spending so they extrapolate, okay, just streaming, just stay at home, and now is cloud spending going to come under pressure is this like the late '90s when we were assuming spending was going to continue to grow at an unachievable rate. we need more clarity on software names, i think, before we want to dabble in there we would be leading toward safety ware post eps if we see good results and get confidence cloud spending isn't going to

fall off cliff >> ibm, not seeing a slow down in spending. not seeing it yet, doesn't see it coming, even in a shallow recessionary environment there does appear to be a disconnect between what we're getting from companies overall and what the markets are telling us in terms of the cyclical groups breaking down and the defensive groups working so well >> yeah, look, i don't think that the vendors are going to be the ones to see it coming from a long distance off. but you could also say companies have enough to go around there's enough cash flow and debt capacity and everything else to do some r&d, to buy back stock and keep buying software i don't know that's that's really the kind of slowdown or downturn we're on alert for. it seems more about can the consumer really weather this or wages going to keep up and how aggressive the fed is going to have to get. >> well, chris, thank you very much for joining us. just looking at some of the sector performances, mike, as we go to the close. gold is lower, some of the fertilizers are giving up recent gains. oil companies as well.

semi-conductors are much lower a lot of scyclical areas of the market are weaker except for airlines which are continuing to do well. >> it's been pretty weak and eroded through the day we have been going down since 10:00. you see about 5 to 1 declining to advancing volume. that's pretty severe we talked about defensive leadership late cycle. look at the dividend etf this week relative to the s&p, massive outperformance on the year to date performance, outperforming 15 basis points. financials are overweighted there, and the volatility index, it's perked up but we're still under 23 it takes a lot at this point because we have been in this range at these levels so many times to get the vix in a stressed level >> we're down 1.5% on the s&p into the close which is just off session lows you have every sector now lower in the market. in the s&p energy is the biggest decliner down more than 3%. communication services though right down at the bottom of the

pack as well with some of the weakness we have seen in some of the media names. at&t, verizon, and twitter bucking the trend. all with separate stories there. the nasdaq down 2% again heavy selling in the big cap tech names like amazon and meta. the russell 2000 down the most, more than 2% that does it for me on "closing bell." have a good evening. i'll send it into "overtime" with scott wapner. >> all right, sara, thanks so much welcome to "overtime." you just heard the bells we here at post 9 are just getting started. snap earnings breaking any moment we'll have those numbers the analysis, and of course, the instant stock eaction. it's key report given it's the first social media company to give its earnings this quarter we're also going to speak today exclusively with chris toomey of morgan stanley private wealth on the state of the markets we do begin with our talk of the tape and it is just that, the state of stocks after the netflix blow-up, the jump in interest rates, whether snap adds to that