sarat. >> i stick with my charter i talked about it before the show, and i think you want to hold this for a while. >> okay. carrie >> booking holding had a great quarter. it's green today >> yeah. one of the few bright spots and maybe not surprisingly from a travel thing pharma jim, i'm not going to put you on the spot with a final trade but i'm glad to have you as well. we'll see you soon i'll see you at 4:00 "the exchange" is now. thank you, scott hi, everybody and welcome to "the exchange. we have a major sell-off right now, wiping out all of that huge fed relief rally yesterday a 75 basis hike may be off the table but inflation is not p tech getting hammered financials falling even with rates on the rise we'll talk about the best ways to make money as we try to make sense of these markets and see whether the fed is making a historic mistake here. but first let's just get the numbers on this huge reversal. dom chu, over to you >> all right so 900-point gains yesterday

400 points for the nasdaq. all erased and more. what you're seeing on the corner of your screen over there is a dow that's only down 991 now, i say that because at the lows we were down over 1100 points there so yes, still toward the lows of the session. to kelly's point, look at the three underperforming sectors out there on the right it's discretionary technology and communication services aarguably the three most important sectors in the market because those three sectors house the biggest stocks out there. that's the key there you want to watch the big media stocks, big technology stocks and those big consumer discretionary ones like tesla, like amazon. so take a look at the numbers here as we show you what's happening now with the dow down 950 points if i show you a chart of the one-year performance of the nasdaq composite overall, what you are going to see is a certain amount of movement to the down side from the highs this is the etf, the qqq that

tracks the nasdaq 100. from the record highs that we saw late last year to where we are now the drawdown is roughly 24%. that's how big it's been as a fall from the record highs we've seen if you take a look and drill down a little further, what's the reason why interest rates are again part of that story a bit of a reprieve yesterday but now ten-year treasury note yields at almost 3.09% you've got to go all the way back to november of 2018 before you can kind of see some of those moves there. watch those 10-year note yields driving that down side and i mentioned the stocks, kelly, to focus on check this out look at these four in particular apple is down 5% microsoft down 4 1/2%. alphabet down 4 1/2% and 6 1/2% declines for amazon this is the so-called trillion-dollar club tesla's no longer in there but these four stocks, kelly, represent 10% of the s&p 500's overall weighting and nearly 40%

of the nasdaq 100. these stocks matter and they are down some of the most. they're the ones that are acting like the most weight, if you will, bringing that kind of gravity effect for the stock market overall that's the reason why. >> thank you very much, dom chu. what was it that set the bond market off this morning? it could have been the data. take a look at the figures behind me. they show productivity dropped 7.5% last quarter while compensation spiked. unit labor costs were up 11.5% and even that trailed the inflation rate so even n. real terms compensation year on year dropped. all of this shows why the fed can't afford to go easy on tight eri tightenning policy let's get to rick santelli in chicago with the latest. >> you know what year we started monitoring productivity? it was 1947. you know the last time we had a number bigger than minus 7.5% for productivity 1947

it's the second month it existed and it's the second worst number ever you now, there's a million aste asterisks, i understand, but it is what it is. we had minus 1.4% gdp that quarter. and labor costs as kelly pointed out 11.6 that is the highest labor unit cost since the first quarter of 2014 look at the two-year note yield. here we are at 2.71. it's up almost seven basis points now let's go down the curve for a two-day at 10s as it sits at 3.08 it's up 15, one five basis points. we could look at the data and say yields moving up doesn't really seem to mesh with the weak productivity, meshes with unit labor cost. there's a lot of logistics in the market and many of the trades today are reversing flattening trades. meaning they were short two-years, they were long tens, they are now reversing that. and as dom pointed out we're on pace for the highest yield close

in 10s since november of 2018. but maybe this chart is more you know, kelly, yesterday after fed time you asked me what to watch i said 2s to 10s some of my buddies e-mailed me, why that well, this is why that look at a one-month chart. it is zoomed from right around 19 to where it sits now at almost 37 just since fed minutes -- or excuse me, since the fed statement was read and there's a reason for that. because maybe the 75 is off the table but that doesn't mean inflation is off the table and finally the dollar index and the bund look at bund yields. they've done a big reversal today. they've closed above 1% for the first time since september of 2014 and the dollar index reversed it's on pace for a fresh 20-year high close back to you. >> rick, boil it down for me in a rick santelli haiku. why did we change postures so suddenly from last night to today and what's the broad market takeaway here >> you know, i think the reason

it dropped is productivity you know, productivity -- and i know that many economists say this is an anomaly, it's a one-off, don't pay ttention. but productivity is the special sauce of our economy and to see it the way it's progressed and to listen to the bank of england's nervousness about a recession, i think that oil traders made the right trade. i think that even though we have supply issues and even though europe has many more issues regarding energy, on the surface of it less demand means you need to pare back a bit and i think that's what the price may be reflecting >> productivity, five syllables. perfect for a haiku. rick, thank you. rec santelli and by the way, don't blame yourself for feeling a bit of whiplash in these markets. go back to last tuesday. we dropped 800 points. felt like a big thing at the time then we rallied 600 points on the dow last thursday. here's a look at the price action over the past week. then we reversed course and dropped more than 900 to close out april last friday. just this week we started with pretty muted gains to the up side before exploding up 932

yesterday and here we are down about 1100 points today. cnbc's senior markets commentator michael santoli is down at the nyse mike, what's the chatter >> first of all, short-term volatility like you described there, kelly, just feeds on itself for a while everything that's happened today from high to low has been contained by the range the last three days so all we've done is go back over areas in the s&p 500 and the nasdaq where we've already been this week or late last week all that to say you've got a very low conviction level because there's a wide range of potential outcomes and every single piece is subject to a lot of interpretation. i think the bigger picture too is you've got steep down trends in the biggest stocks and it's a wounded tape for that reason and therefore, people are quick on the sell. it's risk management mode. maybe yesterday at 4:00 it was easy to say we were going to give it all back i don't think it was easy to say

because it's very much kind of springloaded in both directions. today's activity starts seem a little indiscriminate, starts to seem like it's the constant trauted hedge fund stocks that are getting hurt the most. maybe there are some sort of liquidations going on. it doesn't mean it's not legitimate activity but it does tell you there are lots of kind of xloerd influences once you get a tape under this kind of stress for four months >> what would you add in terms of most important places, metrics, parts of the market to watch here >> well, it's interesting. i guess the levels matter to some degree. we're still as kind of brutal as it feels, you're still not really disproving the idea that this market has somehow found its footing in the 4100-ish range on the s&p and hasn't gone below it the volatility index is not near this week's highs because we've been at this level for a while nothing is really telling you this is over or to me the start of something either.

the credit markets are not panicking right now. you could take a look at the high yield etf that's not tegg a story. that's about treasury yields going up for the most part cash high yield bonds are not blowing out. so to me if this is what's going on in equities when credit is not necessarily under renewed pressure or at least people aren't worried about the solvency story and all of that, i think it's mostly just the same kind of corrective tape type action as opposed to some greater panic setting in >> mike santoli. what should investors do now where are the opportunities and what should we expect from the fed let's get more with barry knapp managing partner and director of research at ironsides macro economics. what's your main advice for investors right now? >> those are a couple of incredible segues from dom and rick santelli in particular to my thoughts on all this. i started to write out a little bit of a note and i described it

as a valuation comeuppance coming into the fed meeting, i thought that there was scope for a serious relief rally and equities in the front end of the treasury market, both of which i thought were reasonably appro appropriately priced for the projected fed path for the inflation outlook which i do think has peaked but within the equity market there are still seriously overvalued parts and dom spoke to that, which is tech and tech-related sectors as well as defensive sectors are still really rich and have not resolved this valuation problem. but the other parts of the market, though, that were going to participate in the relief rally, and i thought it would last a little bit longer was the long end of the treasury market. but again there it is ridiculously priced. the term premium on 10-year treasuries is still negative

10-year realrates are only marginally positive. this speaks to the colossal fed policy mistake right? people talk about the mistake of still easing last year it was the fact that they drove 10-year real rates so low and so far below the inflation expectations that that's misallocating capital, causing that overvaluation in other parts of the stock market. how do they fix it so bare sbair to you are why point we've had sort of a dot-kilometer era correction in a lot of tech stocks even back then we had a two quarter recession basically, nothing like we have today so what should the fed do right now? >> you and i were e-mailing about this a little bit yesterday. first of all they should not be so tentatively moving into quantitative tightening. this is really disconcerting that the vast majority of easing through the pandemic was not the 150 basis point rate cuts. it was unlimited purchases of treasuries and mortgages and

then 120 billion per month long after they should have been doing that that drove their holdings to a third of the agency mortgage-backed securities and treasury markets. then when they announced the taper process or the start of qt they're going into that very tentatively, that's what he this really should be doing is trying to unwind that and move those longer-term rates significantly higher to cool off housing, to cool off all this malinvestment. and yet instead they're going to jack short rates up. okay, they're not going to do a 75 big deal the real easing was in their q.e. purchases so they need to get on with q.t. and stop being so tentative about it >> that's exactly what dave zerbos and others have been saying at the time most investors are kicking themselves for being in equities, saying i should have done something else, i didn't know where to go, your advice is to reduce cash and add equities, that you can still be overweight equities am i right on all of that?

>> yes i think you should be putting money to work in cyclical stocks there's a lot of price action relative to sector performance that looks like it's late cycle behavior but it's also the cycle behavior you see when the fed starts normalizing policy. 1994 this looks very similar to. 2004 2010 11, 16 this is what happens these sectors are very reasonably prices and inflation has clearly peaked in goods prices house prices are next. and i can see that in the correlation of the various cities in the 20-city core logic index. it's come down hard. house prices are going to roll over this and enwage growth in the sectors that led the wage declines and this will be big tomorrow, meaning trade and transportation and manufacturing, those look like they've peaked as well participation's picking up to an extent and i think we're going to -- the fed is going to get their opportunity to slow the process later this fall. so if you've priced the front end appropriately and they're not going to drive us off an

economic cliff, which i don't believe they are, then the cyclical parts of the market look really attractive >> i appreciate it because a lot of people who share your sort of diagnosis or concerns are much more cautious and it's good to hear that this is still a place to be as this all gets fought out. barry, we'll leave it there for now and always appreciate it thanks for your time barry knapp with ironsides as we were just discussing that 75 basis-point hike may be off the table for now but inflation certainly is not look at oil. earlier in the session we hit $111 per barrel oil. that's higher than we were before president biden's mega spr release. now we've come back down in a weird way, brian, this rally has been almost stealth this time. consumers have breathed of relief like prices at the pump have peaked. how do we have to rethink that >> we have to rethink it i'm going to throw a little breaking news on you right now i apologize for popping on with this the senate judiciary committee

just passed what's called the no oil production and cartels act, called nopec the senate judiciary committee just passed this it goes now to president biden if he signs this into law, which he probably will, it will allow the u.s. government, not force but aallow the u.s. government to sue opec over alleged market manipulation i just got a call literally moments ago from a very high-level opec source, who said to me, ask yourself this question is this going to help the volatility price of oil? this is not going to do anything for the price of oil and is going to increase tension. i'm sort of summarizing our conversation literally two minutes ago off set. >> just to be sort of -- what's the word in markets? pragmatic. i mean, all we care about for the purpose of this discussion is what's it going to mean for the oil price and i don't see how this legislation would help it go lower. am i wrong >> you're not wrong at all the only thing that's going to cause oil to go lower is demand

disruption from higher prices, which is i apossibility but nothing has shown that yet in fact, oil demand, particularly in places like india, is going up china when they end this covid zero policy which at some point they will, oil demand is going to sore there and it's going to deplete their stockpiles here's the thing the president when he was a senator in 2000 urged president clinton to sue opec. so president biden does have a history of butting heads with opec. >> and we know he's not getting along that well with the saudis right now. >> no. the relationship at least cording to the journal recently suggested, and i can confirm this as well, that the relationship was starting to get a little bit better. if the president signs this into law -- and he may not. the judiciary committee just passed it. if he signs it into law, those relationship thaws would seem likely to then go away in other words, increase tension

with saudi arabia at a time when they and the uae are probably the only two opec members that have any spare capacity -- >> absolutely. in 2019 reportedly saudi arabia threatened to send oil in currencies other than the dollar if washington went ahead and passed this. there's implications for fx markets oil and all the rest of it there's also midterms coming this inflation is the top concern for nine out of ten americans depending what poll you consult. so if the president signs this bill because he feels like it's the right thing to do, should we expect on the other hand more maneuvering to try to lower the oil or gasoline price through whatever nameans -- >> the problem is we're running out of means to do that. let's get into it. the spr release, the sxhok awe that you referred to, kelly, that doesn't start until may 15th there's a smaller one under way now, 450,000 barrels a day according to someone i spoke with that would be in a position to know. that one starts may 15th so you might have more barrels coming onto the market but the reality is as i noted demand is rising now, things like covid could

turn that back down. but if china comes back online in a major way we're going to see it going back to inflation, natural gas very quickly, kelly, 8.50. we've been talking about electricity bills. i was in the uk in november. because i kind of use them as a canary in the coalmine >> sure. >> millions of people in the uk right now can't afford to heat or cool their homes. they're struggling not saying we're there yet -- >> well, texas we'll see. >> but at 8.50 for those of you on a fixed rate plan it will probably adjust higher for those who are not i'm sure you've already seen your power bills go up. it adds another layer. natural gas is used in the making of pretty much everything this desk. that computer monitor. this iphone. natural gas goes into everything so natural gas is a really big issue as well. just along with oil. >> i think the bottom line here is that we already know and this came up in the fed's press conference yesterday, this question of well, should the fed

really be trying to get the oil or even the natural gas price down, that's not their mandate but implicit in what they're saying -- >> is jay powell going to buy exxon? >> exactly >> what's he going to do >> this is not an isolated incident commodity prices of all kinds have been breaking out to new highs this year. there is huge global demand and there is not enough supply to meet it. i don't care which commodity you want to pick >> the biggest problem is people the ultimate intellectual commodity. right? talking to producers in the permian basis they're going on short shifts now because they don't have enough people to run 24/7 oil is a hard business it's hot it's super cold. it's dangerous you can get paid well. but if you can get paid just as much to work at a desk or a safer job, by the way, one that doesn't take you away from your family for weeks at a time, you might look at that better option shortage of labor and shortage of steel casing for tubing for oil pipes is a huge deal right now. >> great, great points there's the nat gas price around $8.70 per million btus

highest since '08. let's pile some final doom and gloom on top of this because the problem with all of these demand side issues outstripping supply is the diesel crisis we're potentially facing here especially in the northeast. are you hearing anything on that front in terms of resolving prices or resolving the supply >> who am i, the grim reaper up sneer folks, i apologize i like to be happy diesel fuel stockpiles in the northeast, not in california, not in texas, in the northeast here where we always seem to have problems with verything, are at a record low. 32-year low. but that's when they started tracking them. so it's an all-time low. is there a risk of running out of diesel? i don't want to go thar. prices your rates are that won't

go into th rate. so trucking costs overall are not coming down. they may actually go up. i feel terrible saying about this -- >> and it expands beyond energy markets. when you talk about the cost of moving everything around -- >> by the way, can i plug myself, 5:00 "fast money" i'm hosting tonight, we're going to talk a lot more about oil and gas. >> can't wait to see the close on a day like this brian, thank you very much dow's down 990 when you see this volatility what kind of strategy do you take with the markets? do you stay active do you stay passive when it feels like nothing is working? let's bring in bob pisani at the new york stock exchange and michael yushakami the founder and ceo of destination wealth management bob, first of all, this debate was kicked up again recently with elon musk and cathie wood but right now investors are just desperate for strategies and styles and what should they be

thinking about >> active managers often claim that they really perform better in a down market the historic evidence -- or volatile market. the historic evidence is that they generally don't right now it's pretty clear active or passive nothing much is working and i think brian hit upon the central theme. inflation has not gun away mr. powell may have repealed the idea of talking about a a75 basis point but he hasn't repealed inflation unit labor costs up big. that's inflation that's a problem for the markets. sustained inflation erodes profit margins brian was talking about oil 103 to 111 that's sustained inflation for a tax on the consumer essentially. so the question is how long are we going to have to deal with this just because the fed says we're not doing 75 basis points. these concerns don't necessarily go away. we can talk about the impact this may have on earnings kelly, which hasn't come down yet that's going to be another potential. we could talk about that as well >> michael, i don't want to have

you speak against your own book, yeah, just go passive, the s&p s&p will be fine in the long run, but at the same time the average person may not be comfortable being a stock picker, may say the only option they have in their 401(k) for instance is some kind of passive fund any advice here? >> well, first of all, let's be clear what the word passive means. passive means you basically put it -- you don't care about headlines, you don't care about news in 2008-2009 the s&p 500 went down, the supposed more conservative index relative to the nasdaq it went down over -- ready 50%. >> so are viewers comfortable with a portfolio strategy that could go down 50%? a lot of people aren't bob mentioned that i allot of active managers talk about they do better in down markets. that's only -- i think it's really important that if you're on an active strategy that you understand what bets you're making in the portfolio because

if you're in a passive strategy you're pretty much buying big tech, which is why the s&p -- >> i was just going to say, bob, we could even zoom it out i alittle more, not just kind of stock picking versus passive investing but stocks versus bonds. the 60-40 portfolio is down big this year, it's having one of its worst years in history >> 80-20 is the new 60-40. we had a big debate about this at the etf conference. the registered is independent advisers the rias who were there were really panicking because they are essentially active. they're using etf stramths, they have their clients 60-40 and the debate was do they abandon that strategy we heard a lot of people say be cash and commodities and a small amount of short-term treasury bonds with some stocks was the better strategy overall. but michael's bringing up this

whole thing basketive versus passive. you saw the numbers we put up there. the vast majority of active managers more than 85% underperform their benchmarks over a ten-year period that historically has been very, very well studied. and the reason they do is very, very simple. these active managers tend to trade too much, they charge too much for their fees, they're overconfident, there's a lot of competition out there. it's other smart active managers it's not dumb money at all and just generally market timing is really difficult to get right consistently because you have to be right going in and you have to be right going out and the historical evidence is you can't do that consistently year after year, it just doesn't work >> michael, what would you add to that and also, what is your own strategy right now what kind of stocks are you looking for? what are you avoiding? >> i think bob makes a good point about in and out is probably not the best way to invest not only from a tax perspective but it hasn't really been effective but imagine you're a passive

fixed income investor, that means you go out and buy 30-year bonds and you're passive, doesn'tmatter, doesn't bother you. i'll bet it bother you now so how are we positioning our portfolios we've been short duration in fixed income for months and months and months in anticipation of what we believed would be hotter numbers on the inflation side we're more dividend-oriented rather than simply passive in terms of investing whatever's in the index because we think dividend strategies are going to have less volatility some of the cyclical names will actually do well over the long term so i think it's really about making sure you're positioned in a way when you're basically swinging at the fat pitches that the market provides you. we know about -- we know it very well i was just talking to someone in china yesterday. are we heavily invested in china? have not been. have not been in emerging markets heavily for quite a long period of time because of our concern. so it's really a matter of how

far do you vary? i think when you get in trouble is you start to believe that what you think is right all the time that's dangerous so what you want to do is have sort of a core passive strategy and to sort of explore other opportunities and position your sector for what you think's going to happen with the economy and the market that's how i think you can successfully invest. >> all right gentlemen, michael yoshikami, bob pisani with some advice for this market. we really appreciate it. thank you. k ts get a quick checonhe markets right now. at the lows the dow was down more than 1200 points. 1232 was the low print we're down - what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq -- really just something --

just something today but nasdaq having its worst day since june 2020. it's actually given up $7 trillion just since november alone. take a look at some of these stats. we're seeing 20-ish new highs but over 350 new lows on the nasdaq just today. and often keep in mind we do see these large swings as investors digest the fed -- or any fed decision for that matter but today's trigger for high growth tech is the 10-year above 3% its highest level since 018 bookings booking holdings as well as charter communications the only two in the green for the nasdaq 100. the biggest laggards, though, chinese e-commerce platform pin duo duo. bay. match group. all of these companies down double digits with the exception of match the usual big tech you've got apple, microsoft, tesla, alphabet, meta. microsoft and apple actually giving up all of their gains from yesterday

and that's creating a problem for cathie wood and her infamous ark innovation, which is down over about 7%, now 8% today. and i want to focus on semiconductors the smh semiconductor etf down about 5% the last i checked but holding on to weekly gains some of the biggest chip movers qorvo. followed by nvidia, marvel technology and on semiconductors and with all that talk about inflation and the pinched consumer online retail taking a massive hit. you've got etsy down over 16% just today alone on pace for its worst day since november 2020. paypal down about 7% jd.com down 6% it appears markets are still in the early stages of deciding how much damage interest rates will do for economic and earnings growth, kelly. >> anything jump out at you, kristina i mean, given the scope and breadth of the declines that you've mentioned >> one of the topics i want to look into more is whether we're going to go forward and it's

going to be mid-cap tech that is going to sustain this market no longer big tech that we've relied on so heavily for the past decade. >> yeah, exactly kristina, thank you so much. we've actually heard a number of different investors saying, as we joked the other day, if you haven't heard of it it's a safer place to invest. still ahead the rising rates trade. a closer look at the stocks that should get a lift from higher interest rates are they, though we have the names next ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

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what's it like having xfinity internet? it's beyond gig-speed fast. and it can connect hundreds of devices at once. that's powerful. unbeatable internet from xfinity. made to do anything so you can do anything. the market sell-off accelerating this afternoon with the dow down 1,052 points. we've got all angles covered the nasdaq, by the way, just off session lows down almost 5%. and of course we're keeping a close eye on rights which have hit 3.104% on the 10-year. i'm going to have to run over there if it goes any higher. here with our trades and how to invest as rates rise is tiffany mcgee the ceo and cio of pivotal advisers and a cnbc contributor. and also here with a look at our technicals after this trade today jessica inskip is a director at options play all right. tiffany, let's start with you. and where are you looking amid

this wreckage? >> so a few places so first of all, i read your afternoon note and i think that you are spot on. i did. i actually read it every day so i think you're spot on that we really do have a demand issue. it's not that we're recovering from a pandemic. it's not the supply chain irz issues it's not the war in ukraine. those things don't help. but those are not the main issues we do have a demand issue and the fed is going to have to really, really act so here are the areas that i'm looking because investors are going to figure out how to navigate through this volatility so there are a couple of things i'm looking at number one, high dividend growth stocks and quality it's all about the quality so there's a name that i like, chubb. chubb is the largest publicly traded property and casualty insurer in the world they have consistent revenue growth globally, strong high credit ratings, strong revenue -- sorry, operating cash flow, year over year they did about 8.5 billion last year. and they've increased their

dividend for the past 28 years i also like supply chain hedges. a company called mosaic invests in -- excuse me, actually produce phosphate ash, which is a main ingredient in fertilizer, which we all need, and especially the food supply chain is really being stressed right now. i think the stock's up about 65% for the year and just really having investors thinking about opportunities to add to their existing positions. you know, amazon hit a 52-week low today and i can remember in 2020 amazon was flying high and me wanting to buy more amazon but thinking it was too expensive. so now is a good time to buy the quality names that investor really like and have conviction for long term. >> so all of these basically should benefit from a lot of the pain in the market, you know chubb is a name that i think at last check was up 8%, 9% year to date, so that's performer mosaic, amazon are there any names you look at right now and are tempted by but

for whatever reason want to skip or places where you have a high conviction that you don't want your capital anywhere near there? >> so i would just say general l. speculative stocks. the names that i mentioned, amazon, chubb, these are quality names. i don't think that any of us can really picture a time in the near future where amazon's going out of business. in fact, they're expanding even into shipping to compete against the fedexes and upss of the world. that's what i'm really focused on i think in contrast of the end of 2020 where it soeemed like every big or leftly large tech name with a bright idea was flying high, that's not how we stick stocks, how we should be picking stocks right now we should be looking at balance sheets and business models, that's like my theme for this year, and really thinking about the names that we think have business models that are going to be sustainable and they're going to have opportunities to grow long term because those are probably on sale as well >> absolutely. tiffany, thank you it's great to have you here

today. we appreciate it tiffany mcghee let's turn and talk some technicals now jessica inskip is ceo at options play the charts have kind of been leading. wouldn't you say in many cases flashing reld for a while. maybe now some confirmation of that what's the latest? let's start with something like the s&p. >> yeah, absolutely. i think it's very important to look at the bigger picture i like looking at the two-year chart of the s&p 500 and i see some really key support levels or support zone from 4146 to 4264. i think those charts are doing exactly what they're intended to do right now you can see even today and within the past couple of days that support zone is exactly where it's holding up. so that's a good indication. and know how support works it is old resistance at some point. at one point prior the s&p actually moved past that support zone it was resistance. so it became new support

so we're holding up actually on a consolidation period and looking for a trend upwards or downwards at this point. so it's a good thing holding out the support levels it's at right now. >> so it actually doesn't make you all that bearish you feel like there's a glimmer of hope here >> there could be. i also look at something called rsi. whenever the s&p 500 or another underlying security you're tracking from a technical perspective makes a lower low or a higher high you want rsi to do exactly the same thing if it does the opposite then that indicates a divergence of some sort and that's happening right now. if you look at the lows in the consale daigs period within the last month or so, rsi is actually making higher highs rather than lower lows which is an indication of bullish divergence which means maybe we are going to move past that support zone and there are other factors to consider outside of that like interest rates and things out of

our control. but overall, no, i'm not very bearish or seeing all the red. we had a huge rally yesterday. we're just essentially erasing that today the support zone is doing its job. and that to me is a great sign >> very interesting. i'm glad you noted that. let's talk a couple of specifics. for example, the xle, the energy etf. you're also watching the tech trade against the s&p. on each of knows what are you noting here? >> i thought it was interesting earlier today i was charting the various sectors versus the s&p 500 rather than a benchmark they'd be associated with and i n noticed that technology really follows almost in line with those support levels or any of those key indicators that i'm tracking with the s&p 500, which gives me great confirmation we just got out of a huge earnings week there have been support earnings in the tech sector, therefore that could allude to some really poor market performance. because remember the market's

forward-looking, as soon as we hear something it's priced into the market and that's how technical analysts view it therefore that same view with the technology etf is showing with the s&p 500 energy is outperforming. that's why i'm sending that one over, or flagging it, because it's something that is performing really well with that high interest rate environment or thinking about inflation. i think it's just an interesting perspective, not necessarily this is you should buy into this or sell that it's more from a technical perspective, technology has a bigger impact on the market than it used to all right. jessica, we'll leave it there. thank you. and nice to hear a little bit more optimistic note on what's been a pretty tough session. jessica inskip >> absolutely. it's a huge down by but actually this is the perfect segue. there are some green spots in the market let's run through some of them starting with booking holdings seema mody here. i saw these earnings last night i thout wow, great, awesome. the dow closed up 900 booking's fine not today. >> booking is holding up at least the last time i checked

defying graft at this moment i think what sets booking apart from other travel players is in addition to painting a very optimistic picture around the summer rebound everyone is expecting ceo glenn fogle was able to quantify what they're seeing in terms of full rebookings which other companies haven't really done. he said tracking 15% -- >> -- we don't care so much about year over year we know the first quarter of 2021 wasn't that strong for travel tell us how the demand right now compares to 2019 and right now they're saying it's going to be above pre-pandemic levels the international exposure also is a benefit for booking holdings they have a much larger exposure to europe and asia and glenn fogle was so far the only ceo to really talk about the green shoots are emerging not just in europe but in asia, which is actually better than q4 we tend to fixate on the china lockdown, how much it disrupted the asia story but he's saying x china you're seeing a sequential improvement. >> the stock is up almost 4% expedia down 5%.

airbnb down 8% why is booking coming out with such a different tone than what we've heard from other rivals? >> i think part of it is geographical exposure because they have a leg p in these international markets. wall street is saying this is a name that was positioned to profit from that whereas expedia good results but they also said costs were going up.the ceo joined us today on tech check but didn't really qualify by how much that becomes a question mark for wall street. expedia's also more of a domestic play. they're trying to go international but for right now if you're looking at where they have a pull booking is more international than expedia >> it's fascinating because i would have thought it would be a headwind >> depends when you're looking at, the onset of the war in february booking was down much lore than the others because of their footprint. right now it seems to be working. >> so it's also interesting is because at a time when we've heard a lot of investors say for instance we like reopening stocks or we like travel names we see the surveys we know it's going to be the summer of travel this still tells you that stock

selection within that approach is still so important. i don't know, maybe it's a one-day or a couple-week trend but it does seem like some pretty stark differentiation lately >> i think you're absolutely right. for the longest time these travel stocks moved in tandem. vaccination news all these stocks would move up but now with earnings the market is becoming much more discerning around which companies will profit and when wh in this environment. i think today's a great case in point with booking up but expedia trading down even though results from the major hotel operators had been spraet strong. year-to-date performance will also show you that the hotels are trading really close to their 52-week highs the online traveler operators are not so maybe there's a catch-up trade there. >> we saw this with the cruise lines i think it was last month similar kind of phenomenon we started to see norwegian breaking out to the up side, royal caribbean i think, carnival more lagging. again, different business models, as you noted different international exposures.

it sounds like in a weird way the globalization theme seems to be helping norwegian, seems to be helping booking i can't speek to whether booking has higher income clientele like norwegian. >> higher income tends to go to norwegian rather than carnival but today's results from royal adjusted for the first time since the pandemic, cash flow positive for april pretty significant results of course a tough tape so not releasing that in the price action today >> some bright spots or at least one. seema, thank you our seema mody let's turn to another bright spot, which is albemarle, the lithium name >> it's one of the few stocks in the green today and that follows a jump in their q1 sxrechb they a also raised their outlook. that follows a surge in lithium prices chinese spot prices have more than doubled this year after gaining more than 500% last year according benchmark.

and demand is expected to remain strong as ev makers will need even more lithium to fuel supply supply remains constrained albemarle said in the latest quarter their sales surged 97% the company also hiked its guidance saying it renegotiated variable price contracts in other words, they are taking advantage of the rapid price increase the stock is up 16% this wook. livent also surging on the week although both names still down from their november highs, kelly. >> and that's something, pippa, again, that speaks to people trying to look for trends that will work but so many of these more emerging parkts of the market the speculative parts have been the ones hardest hit i understand there's the opportunity, excitement and a element bit of investor caution right now. whenever we see a sell-off like this that's really broad-based the more speculative and growth areas of the market are going to take a hit but earlier this week we got another vote of skochbs from the biden administration when they outlined 3 billion for domestic

battery manufacturing and that follows invoking the defense production act earlier this spring for the actual mining side of things vance brown at jones wealth mmth told us today we have to remember today it takes many years for new mines to come on line, three to five years, so supply's not going to respond anytime soon and we have this demand from the ev side of things from large-scale energy storage. so while these stocks have come under some pressure the bulls say this is a longer-term multiyear story and that days like today is the day to get in on when they might have come under some pressure. >> all right pippa, thank you pippa stevens. let's talk about opportunity in this sell-off. let's bring in nancy tengler laffer tengler investments ceo and cio. nancy, give us some sage advice here what strategies, approaches, price levels, stocks where should people be looking right now? >> well, thanks, kelly you know, as a young portfolio manager i cut my teeth on black monday when the market was down

22.5% in one day and we had a client meeting that afternoon. we'd already prepared the materials. we had to tell them their $10 million portfolio was now 8, if you could just cross that out and make note of it. but what i learned from that is it's rarely a good idea to bet against the u.s. stock market and the u.s. economy for a long period of time if you have a long-term time horizon this is an interesting time to be looking for the kind of names that are going to thrive in a slowing economic environment. because make no mavg, we knew we were going to slow this year the first quarter gdp number was a bit of a surprise but it was also influenced by massive imports, which goes to demand. so i think investors need to -- and particularly your viewers need to be thinking about the fact if you're in your 401(k) you've got the perfect dollar cost averaging model because you're putting money to work every two weeks. this is not the time to get scared out of stocks we've already seen a pretty significant sell-off >> so on that note one of the things i've been mulling,

curious for your thoughts here, is the fed can be very aggressive in fighting inflation now and one way or the other it looks like near-term i don't know if we want to call it a recession -- it's a recession in real terms, whatever you want to call it. it's not great and obviously that's not great for capital but if they don't act aggressively then we risk having an inflation problem for many more years and we know that's not necessarily great for stock returns. or maybe it is so can you just kind of talk through this -- these two different outcomes and which path they may be choosing for us here >> yeah. well, i think sadly the policy mistake was already made and i was a little taken aback when the fed chair said yesterday they were acting so inflation wouldn't become entrenched i mean, it's here. and the sticky inflation number by the atlanta fed is 4.5% to 5% that's the portion of inflation that aches a long time to change so think rents, health care costs that get embedded in the

system i think the best thing they could do would be, a, to stop talking. that quiet period was when we saw the market rally b, front end load the increase -- the rate hikes i don't know why he took 75 base ips points off the table i've invested in periods when the fed razz waysing 75. sometimes bullish for stocks and it just depends on the underlying economic environment. and then i think if they back off some, and they can get washington to top spending money i do think this will work itself out. still healthy jobs market. i was astonished how good earnings were this last -- >> really? >> and guidance was raised yes. >> you were astonished how good they were? because it felt to us one trainwreck after another you want to offer on the way out a couple of names or sectors you think people could pick up >> in the tech space microsoft had an aoutstanding quarter. service now, both of whom are sort of part of the solution up

to inflation because of improvements in productivity they produce by using their pruvths. both of those companies did very well steel dynamics had an amazing quarter, raised the dividend 20%. public storage had an excellent quarter. they are now digitizin public storage are digitizetion 50% of their sign-ups. there's lots of good news underneath the market. it's the more speculative names that had a difficult time this quarter, but if you just go through and look at sort of some of the staples, coke had a great quarter, and i'm trying to think of others, but that's a pretty good list right there. >> that is a pretty good list right there and a reminder it hasn't all been bad news even in the housing, was there sherwin-williams and several little bright spots. nancy, thank you for joining us on a day like this especially. >> nancy tengler technology has been leading the

decline with the nasdaq sliding more than 5% at one point having its worst day of the year. we are just off that level right now. brent phil joins me and he is senior technology analyst at jefferies. last we spoke it was twitter and tesla. maybe you can blame elon musk for taking down the market, but maybe not today. >> no. i mean, this is a whole scale exit multiples and tech are high. we have clients that are basically going to energy, opening trades outside the house like travel, completely away from our sector, and i think what we've been advising clients is don't let it come through and they want to get on the tech guidances and they have to give up so we've had multiple correction and now we need effectively a fundamental correction and the only way we're going to get to climb back into these stocks is for the companies to acknowledge that the climate has changed and that

they've taken their pipelines down and that they've reset numbers. until they do that, there is a buyer's strike in tech and they won't come back. so right now it's actually so bearish it's almost bullish that we really don't see a lot of volume on our desk in terms of high touch as it relates to what clients want to do in tech it's turning more bullish. we had a more bearish stance relative to multiples, so i think ultimately it feels like we've got a little more pain to go, and a lot of this is -- we're closer to the bottom than the top, but i don't see it changing in the next summer months until the companies that have gotten below. >> this is so fascinating. if i'd had this sound bite from the future, last february when ark was trading at 160 and no energy portfolio manager could get any real money investor to call them back

clients were leaving you for energy and let's not understate the significance of that mentality shift. that's huge. silicon valley is acting like it's in the middle of a recession and frankly, they might be in one for a couple of years. >> it's wild to see the sentiment and i've been seeing clients for the last two weeks out and we have portfolio managers that have owned software names that own two and now own dollar store, walmart or more defensive stories believing that things are going to dim, and i think our house view, jefferies is that the economy becomes tougher in '23 and no one wants to be in the names that are interest rate sensitive. so at this point again, we think there's still room for multiples to come lower across many of the high growth software names there's some great long-term buys and certainly there will be

names for two or three years and we may end up going 10% to 20% lower before we hit bottom >> i'm sorry want a lot of great things to report, and most of the investors are in the grizzly bear camp. they're not friendly little bearses. they're grizzly bears. >> it feels like more than 20 years ago and a lot of interesting stuff happened when no one wanted anything to do with the space let's talk about the opportunities several of which microsoft, obviously, we heard that from nancy tengler and snowflake and that one screens well for you >> valuation is actually the worst. weigh we do not have a buy in snowflake. so if you put a trough multiple on that it's going a lot lower microsoft and intuit, you look at the intuit tax business 90% of the revenues of the

united states base and no european exposure and that's a story that has had consecutive decade plus of great returns so that's a name that we would say would be more defensive. if we shipped over to some of the travel names and the airbnbs and the booking.coms and we think that you're not going to be investing in your home and you're investing outside your home so you move away from the netflix and you move away from zoom and you move into hey, where am i going this summer and how am i getting out and engaging that theme is a powerful theme, as well. >> ultimately, we're seeing this across the board the whole thing is being taken down it doesn't matter inside the context of what we like in tech and there's been nowhere to hide not to pick on snowflake and just to give an example, when people say this segment of the market is still overvalued

what would it mean if it was for the multiple that clients it could. >> if you look at the list of stories and if you start to lower multiples and it's a $57 to $95 stock and snowflake and it's not a $160 stock ask it's 120 to 140 and this is based on stocks that is 15 to 20 times, does it go to 10 to 15 times those are still expensive multiples and these are fundamentally the best performing we have no argument. we adore the management team in snowflake and just the multiples are going lower and those names are most at risk so there are five categories we talked about isp, high multiple names that are interest rate sensitive and we can go through the list, but there's a handful of categories that do have a considerable amount of downside left >> brent, thanks for joining us for the candor, as well.

>> brent phil is senior technology analyst. as you might imagine, they're down about 3% and this is after seeing some upward momentum recently. let's get right over to frank holland with more for us >> hi there, kelly the s&p basically flat for the week even after the post-federally and transport stocks and i'll show you a few of them right now. they're rallying this week despite being down today we're talking about stocks like fedex being up fractionally right now, but for the week doing pretty well. also, hub group up after 13% in earnings and ark best, these companies benefiting for the need for a wide range ever services including free brokerage and white glove furniture moving and all of those stocks trading higher over the week that used to be a sign of a recession and they're down officially you're over year and still higher from early pandemic and pre-pandemic levels and also demand is up for these publicly

traded players that provide more than just talking which is the focus of smaller companies and here's why, supply chains are simply influx. container traffic at the port of l.a. long beach and it is down from the all-time high in just january. like the port of new york, new jersey, the second biggest port in the u.s., up 12% in the year over year. the port of houston and the port of virginia and both up 18% and the most recent month of data. rapid change and the need for companies that can help you get what you've got to get where you can get it even though the regular supply chain might be disrupted. >> come on over, mr. holland. >> can i walk over >> i was just you weren't supposed to walk over. >> you and i are eye to eye. >> it's nice the thing with transports is we always look to them as the bellwether, but in this case they do have to deal with fuel

costs and it might be an idiosyncratic issue, but maybe not and maybe it does encapsulate. >> one thing for deasiel cost, for a publicly traded company they have a fuel surcharge that they pass along to the customers. it is up year over year and in some cases, i want you to bear in mind, in some cases the publicly traded traders pass on that expense for the customers and they can make a little bit of money when these fuel prices go higher. >> that's a great point and when we hadn't considered, mr. holland, thank you, sir. >> let's get a quick check on markets as we head out for this hour we are pretty much near session lows and the dow is down 1,091, or 3.1%. and the dow is down, and look at the nasdaq, down 657 points. a quick check on rates gives you a sense of where the pressure is we've seen the ten-year, the 30-year and the long end where

most of the movement has been since this morning and those are pretty much near session highs and 3.1% we did hit for the ten-year treasury. that does it for the exchange, everybody, but stay right there because "power lunch" picks it up right now ♪ ♪ no. welcome to "power lunch "qwest i am courtney reagan in for tyler matheson the dow has been off 1200 points intraday and we are off that just slightly. the nasdaq down more than 5% the moves, dramatic. the route, deep, but there are places to hide and opportunities to buy select names on the pullback, from tech to retail to commodities our market experts will help make sense of the sell-off what a day to be here with you, kelly. >> welcome, courtney great to have you here hi, everybody. let's get's check of the markets where the dow is down 3% 3.6% drop for the s&p.