tapped on the economy. the recession will be the real variable, whether or not that happens. >> don't fight the fed on the way up or on the way down. >> dom, thank you very much. thanks, everybody, for watching "power lunch" with the dow down 574 points. >> "closing bell" will take it across the finish line right now. thank you, tyler and kelly welcome, everyone. major averages falling once again in another choppy day of trading. welcome, everyone, to "closing bell." i'm sara eisen we stand at about session lows with the dow down 500 points, s&p 500 down 1.75% every sector is lower. it's being led down by technology a lot of those chip names especially mega cap stocks like apple falling hard today the nasdaq composite down 2% 1.8% adding to losses for the week and for the week now it is down a few percentage points, about

7.5% that's what the nasdaq 100 is down this week i want to point out the action in the meme stocks this is interesting, gamestop and amc outperforming. gamestop was halted multiple times seemingly on no news reminiscent of the frenzy last year perhaps some short covering is the explanation there. also we'll discuss the carnage in cryptocurrencies with the founder of crypto fund polychain capital as bitcoin sinks to its lowest level since 2020 plus american express falling after its rating was cut. we'll talk to the analyst behind the call. first up, though, we'll start with more pain for technology the nasdaq in the red, now down 8% this week, nearly 30% for the year apple joining the rest of the faang stocks in bear market territory giving up its crown as the world's most valuable company. it's now saudi aramco.

joining us is our senior markets commentator, mike santoli. mike, i have to start with you it was looking a little calmer today and yet we have another sort of late in the day spill, again, led by some of the mega caps like nvidia, apple and paypal. >> and microsoft and really this latest phase is actually the stuff that held up relatively well, people thought were havens giving way to some degree that sometimes happens as a deep pullback is running its course it feels as though the big picture is massive valuation adjustment when the nasdaq started to crack that people felt way too exposed to the same themes a lot of mass exit from those names and it's just fed on itself buyers, would be dip buyers have been chopped up over the course of six weeks of declines. >> they're still doing it. look at memes and ark innovation. >> that's the stuff that's already been blasted, destroyed, left for dead. and so if you're reducing

overall positions, you're selling your longs and maybe picking up your shorts and closing them out, this is the kind of activity you would see so i don't see that as basically hot money rushing in because they're emboldened it's much more about, well, maybe things have gone too far in the short term. >> david, you're more of a long-term value investor have you switched up your strategy given all this volatility in this new world of higher rates and a slowdown? >> no, we haven't. we've been slowly nibbling at our favorite tech stocks but i'd like to echo what michael said the psychology for the nasdaq stocks, it couldn't be worse behind the scenes here, even if you look at some morningstar data, it looks like maybe two-thirds of large cap growth managers are underperforming their benchmarks i think it's worse than that it's not that -- the nasdaq is down about 30% year to date or

from its recent highs in november but it's not like the average large cap manager is down 35, you know, 40%. they're down much more than that i think the redemptions are much, much more than maybe have been publicized. psychology couldn't be worse and there's a lot of opportunity in what was a very, very crowded trade is starting to unwind significantly. we think there's great opportunity here. >> like what >> we're holding our own barely, but we like what we see. >> what specifically do you like are you adding to apple? i think that was your biggest portfolio holding. and now it's sort of cratered along with some of the other parts of technology. it took a while, but it went there. >> it's getting close to a net it was one of our largest holdings we've been adding to meta, we've added to paypal a couple of times, we've added to taiwan semiconductor. and so we're taking this opportunity like we've always done in the past 30 years when

we have these -- when we have bear markets you know, at the margin, we're trying to improve the quality, the businesses, the weightings of our most favorite stocks. and in the full course of a bear market you have plenty of time to do that. >> how's your performance held up amid all the volatility >> not well. as we sit here today year to date, we are down about 27%. >> i was asking because i remember after -- you were a long-time berkshire hathaway fan. i saw your interview with my colleague, becky, recently at the meeting in omaha but you sold out of berkshire in 2019 and the stock since then is up like 45% do you regret that >> maybe over the last couple of months but the stocks that we bought, sara, from that very large position we had in berkshire, they have significantly outperformed what berkshire has

done since then to the tune of almost 3-1 so up until the last couple of months, berkshire has done wonderfully. but in the full course of that sale and subsequent reinvestment of those berkshire proceeds, it's been one of the best trades in our 30-year history >> fair enough what's your favorite -- you said you see a lot of opportunities in a bear market what's your favorite right now, now that you've got a lot of seemingly value picks to choose from >> the big mega cap faang. i know that sounds redundant everybody has loved those stocks for a long time. but it looks like a lot of people are heading for the hills because of redemptions and i think if you can stay the course in those names or if you've been underweight those names in the previous bull market, now is your time it probably feels like you're stepping in front of a freight train, but i think we'll look back here in a year or two when you combine these companies, huge cash flows,

buying back stock for mid-teens, four pes, maybe low 20s, you've got to start swinging at that stuff. >> david rolfe, thank you for joining us. after the break, bitcoin plummeting to its lowest level since december of 2020 it went down to 26,000 we'll talk to crypto fund manager olaf carlson-wee about the space. we'll be right back. hey businesses! you all deserve something epic! so we're giving every business, our best deals on every iphone - including the iphone 13 pro with 5g.

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check out applovin bank of america upgrading the stock citing valuations. shares are down 60% this year. take a look at bitcoin plunging below 26,000, giving up all of its gains from last year and touching its lowest level since 2020 this comes after the collapse of that stablecoin fueling fears in the crypto market. joining us is olaf carl lsoncare it's good to have you here welcome. >> thanks for having me back. >> a lot of people were looking at bitcoin as a potential safe haven, as an inflation hedge it's not doing any of that it's acting like an unprofitable tech company and starting to

break down how do you what's happening and why? >> crypto markets have always been volatile. i think they have been volatile for many years going into the future we've always seen these sort of drawdowns. it happens every year or two across the crypto landscape. i think the main thing is this the moment of peak opportunity for those that have conviction and willing to make a long-term bet. we're really entering the place that's going to be an amazing entry point over the next several years. >> in what because the stablecoins don't look that stable and especially if we continue to see higher rates, it may be harder to maintain the peg tether breaking below a dollar, raising some concerns. not the first time it doesn't inspire a lot of confidence. >> yeah. so there's lots of different stablecoin architectures projects are backed bias sets that are held offline in bank accounts and so the risk for those types of assets of very different than the blowup we saw with ust which

is not collateralized in the same way that assets like tether and usdc are. >> what does that mean do you think that they are investable is it in your hedge fund do you have stablecoins? >> so we're always invested fully in crypto assets so we don't usually hold any stablecoins because we always just like to be betting on the market and new technologies that are being developed by some of the smartest software engineers in the world we don't hold stablecoins because we always wanting to be invested in the market. >> how do you hedge yourself against a move like this in cryptos that we're seeing in the stocks and the currencies? >> so i've been in crypto for over ten years and i don't hedge. i believe in a long only approach, which empirically has been the best way to generate returns over the long term in the crypto landscape i do think that it comes with a lot of volatility and you just need to know that you're getting

into that ahead of time. but i've been through many drawdowns, bitcoin that were significantly worse than those we saw over the last few weeks. >> any in a rising rate environment or recessionary environment? we haven't had to deal with this in bitcoin's lifetime. >> i think that's accurate this is going to be a new environment for bitcoin. i also think it's a new environment for many growth tech stocks who have also tumbled over the last several months i think it's just an environment where we have high inflation, falling asset prices, an unstable real estate market. i do think once the dust settles, people will realize alternatives like bitcoin are exactly what they're looking for. >> if you're wrong, olaf, and there is a wider sort of crash and we've already seen a lot of carnage and investors losing billions of dollars on the spill in bitcoin and related assets, i think one question to figure out is how systemic that might be.

how do you view that beyond el salvador now whose bonds are getting smashed and there's a fear of default because they have it as legal tender. how broad do you think bitcoin reaches into the financial system at this point >> you know, i do think bitcoin and just a larger crypto landscape is increasingly a core and critical component of our sort of global financial reality. over time it's going to become an even more critical substsubstrait because i think the future of every global financial market will be based on blockchain substrate. it's more control corruption than the systems we have today i think the depend ens will only grow and i think the resiliency will be shown through market events like those of today and market events over the last ten years. >> olaf, thank you for joining us appreciate it. especially on a day like today for bitcoin. >> thank you

let's show you where we are in the broader market right now. the dow, lower by 525 points we've sort of been sitting at these levels in the final hour we took a leg lower just in the last hour or so. most dow stocks are trading weaker united health care is trading lower. s&p is down 1.5% so is the nasdaq which has come back a little bit. take a look at disney, despite a beat on disney plus subscribers. we'll talk to a media industry expert about the read-through for the rest of the streaming landscape. check out some of today's top tickers. no surprise 10-year yield back on top what's different is there's actually buying of treasuries and yields are coming down they have really stabilized and started to go lower. as you can see, we're below that 3% level where we were last week bitcoin up there, down 4%. it's come back as well apple down 4.5% in bear market tesla also giving back 3.4% and

there's the nasdaq composite the eye of the storm down 5%1. recovering a little bit but another down day for the nasdaq. we'll be right back. mount everest, the tallest mountain on the face of the earth. keep dreaming. ♪ “you can get it if you really want” by jimmy cliff ♪ ♪ ♪ [suitcase closing] [gusts of wind] [ding]

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stocks under heavy pressure again today, dragging the week-to-date returns, losses, further into the red mike santoli is back to look at the damage done, mike, and possible signs of support in today's dashboard. what levels are we looking at? >> some intermediate target levels to keep in mind coming into the week i talked about how a bunch of different approaches were gathering at the downside targets in the 3800 to 3900 area. down 5 to 8% from last week's closing level. didn't think we'd get there in four days. in fact closer to 3800 is somewhat of a key level in terms of how much of the rally off of the march 2020 low we would have been given back. but also it's around 16 times forward earnings on a

fundamental basis. it also takes you back right now we're back to march of last year so that's about a 14-month stretch back in 2018 we had a 20% drop in the s&p it took us back 18 and 19 months keep in mind here talk about 3500ish as that september high in 2020 and the pre-covid peak before we got that crash was around 3400, thereabouts, as the intraday high. now, financial conditions tightening take a look at high yields, corporate debt spreads this is what the fed wants is financial conditions to tighten but not too much so it causes any capital market stress. when this number is going up risk levels very high. people don't want to lend to risky companies. so you've curled up. not as high as we got to in 2018 and also 2016 was actually a huge credit shock.

but so far nothing that will turn the fed away. >> back in that spike, that's when they entered the market. >> absolutely. >> mike, we're just seeing a recovery here. the dow rallied 200 points real estate and health care turned green in the s&p. does it feel like this market wants to rally >> well, it's poised at any moment because the band has been pulled back so tight it just seems like a logical, plausible place for somebody to say let's not lean too hard on the market to the downside unless somebody is trapped and has to liquidate further if anything, the complaint has been that the selling is too orderly so we haven't gotten to extreme extremes that would sometimes indicate a climateic recovery. up next, ben silverman on whether concerns about disney's

streaming subscriber growth are being overblown. that stock off after earnings. we'll be right back. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing!

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welcome back here's a look at the dow heat map gaining a little lost ground most stocks are still red. united health is the biggest drag along with american express. apple, microsoft, united health,

those are some of the weights on the dow right now. on the flip side you've got home depot, 3m, amgen and merck disney is right in there, one of the bigger losers, trading here $100 a share that's a level we haven't seen before the depths of the pandemic and before that 2018. this comes after the media giant showed growth of 8 million subscribers to the disney plus platform eps and revenue both missed. joining us is ben. thank you, ben. >> thank you, sara. >> i guess it was a relief on the subs number after netflix's loss who's winning the streaming wars right now? where are we >> it seems like everyone is losing i'm kind of surprised, like you hit your numbers and the world doesn't reward you or you miss your numbers and the world doesn't reward you

overall the long-term trending of direct-to-consumer and the relationship these companies can have with their audience and consumer is an invaluable opportunity. and how they unlock it will be really interesting over the coming years, whether it's going to be the introduction of advertisers who have really been left out of the streaming ecosystem other than peacock or whether it's new ways to monetize the contest off those streaming platforms down the road but in general, i think what is clear is that library content still has massive value and the pulling of that content onto their owned and operated services, whether it's nbcu in the office or it's warner brothers and friends -- >> which is yours. >> yes i've got to mention it and is incredibly valuable but also the big tent studio investments made in ip, whether it's disney's investments in star wars, pixar or marvel have real value and can be unlocked

and drive subscriber. >> but at what price, ben? is there a sense that what we saw in terms of the big box for content is just going to be scaled back massively with these stocks, netflix' stock down 70% or so from its highs, 60%. and the discipline that the market is imposing on some of these streamers with the models changing, what that's going to mean for how much you and others get paid for content. >> well, they can't stop investing in content, right? that is the essential fuel for these platforms. but do they need 20,000 people to do it i think one of the interesting things about the shift that technology was supposed to unlock was about the amount of infrastructure and people you needed for that content to be made and then distributed and then the thought being that streaming would create a technological advantage. and it feels like they have only been hiring into the technology instead ofactually using the

technology to save on the cost side outside of the physical content. but i really believe in the value of content increasing and growing. and i think it's also just multiple forms of content. the broadcast platforms knew early on they needed one price point for daytime, one price point for the morning, one price point for late night, one price point for prime time, and i think that the streamers just went all heavy into the big prime time content and didn't spend the money across the slate in a wise enough way because a consumer doesn't differentiate between "dancing with the stars" and "game of thrones" with their pleasureship experience or viewership, but one is 10% of the cost than the other. >> i don't know, i'm much more "game of thrones" than "dancing with the stars." >> i get your point. but the big other thing about the disney piece and just in general is sports, right we're watching as amazon has

acquired sports, we're watching as apple has acquired sports we know nbc universal's platform is very sports dependent and the same with disney i think that sports value just continues to increase and the advertising halo that sports brings you when you're selling ads is big value so i think there's a lot to be looked at across the different elements of the content, not just the content budget in and of itself. >> well, to that point, ben, we're getting into this new wave of ad-supported content. disney is going to roll it out netflix looking at doing ad supported. i was fine watching ads when watching "yellow stone" on hulu. how do you think it impacts the viewer experience? it feels awfully similar to cable. >> 100% we're back where we started and the fact is the advertisers have been left out of the ecosystem and the tech

oligopoly treated they are poorly the meta company and others were not great friends to those advertisers. they took their money and didn't treat them well. and the broadcasters and the media giants have always treated their advertisers well because it's been a 50-year long relationship and i think there's a lot of revenue to be gained by reaching back out to those advertisers who are really left out of the culture conversation other than broadcast television and cable, they weren't connected to stranger things, they weren't connected to game of thrones to these high-profile culture creation vehicles. and i think there's going to be a ton of value unlocked. and i think they'll pay premiums to be in these walled environments as a consumer, one choice is $20, the other choice is $4. i'll sit through the ads. >> no kidding. and also boost the average revenue per user for these streamers, get them more profitable ben, thank you really interesting conversation. ben silverman. here's where we stand

heading into the close down 345 on the dow. so we've come back just a little bit in this final hour the s&p is down 0.8 of 1%. most sectors lower technology and financials, interestingly, at the bottom of the list today the banks are acting a little heavy. utilities and materials right there at the bottom as well. tapestry is one of the bigger winners. what those numbers mean straight ea ahd. you ever wonder why people are always on their phones?

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stock stories. today it's tap industry. that's the retailer behind coach, kate spade and wiseman. net sales at kate spade rose 19%. they were turn-around stories that hadn't been growers in the past on the conference call, executives cited standout performance in north america and expressed confidence that it continues. the ceo also said we've seen no consumer pushback on price increases and that reopening and back to work is driving purchases of hand bags and shoes. tapestry lowered its guidance because of china but the market is shrugging it off because the american growth was so strong. that underlying strength and reopening momentum may help insulate us from a hard landing or recession as interest rates rise certainly provides a good cushion. our next guest has a much more bearish outlook and says

investors should sell credit card stocks. as a result, they are all lower. he explains why straight ahead. plus a slew of analyst calls on autos and the technical take on apple when we take you straight inside the market zone. (vo) i guess i spoke too soon. visible. single-line, unlimited data as low as $25 a month. 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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531 at the lows. mike, i wanted to highlight the ark innovation fund. we've been talking about how brutal it is for that etf which is down 70% from the highs but you've got names like roblox, unity, roku, shopify, up double digits some of the hardest, risky parts of the market bouncing do we read anything into that? >> mostly it's people short covering and leaning in the other direction. all the stuff bouncing 5 or 10%, if you look at the long-term chart you can barely see that because it's such a small piece of the previous losses but it fits into a general sense of, look, even in bad years, when the market is having a rough time, it doesn't go straight time. we talked earlier about how there's this very mechanical sense out there that once we get right above the down 20% area in the s&p, it's just this trigger

that says let's not get incrementally negative here because the market in history has bounced a few times from there. i don't think it dictates from here except to say a lot of the work that has needed to be done in terms of valuation, mean reversion and all that stuff has gotten done and whether it's enough is a big question today's losses, apple, microsoft, nvidia the vast majority of it the apple stock is doing much better >> i wanted to ask you about bitcoin and the implications for the broader market because some people might be surprised it held above 30,000 before today we've rebounded a little bit from that. i do wonder if you sort of needed to see bitcoin crack, as the other speculative part of the market, along with the unprofitable tech stocks and everything else, to get more of this washout feeling >> perhaps it's down enough i would argue it's really been more of a coincident indicator along with faang and the nasdaq 100 and

things like that as opposed to being a secret leading or lagging tell it's part of the same story. people just felt as if they -- by the way, the nasdaq 100 is up 60%. it's still up big. people saying who's selling down here those are the winners for multiple years and giving back the premium. i don't know if bitcoin is a tell or just getting swept along the same wave as everything else. >> look at the auto stocks making big news following several analyst calls. wells fargo downgrading ford and gm to underweight from overweight on the concern they could reach peak profits wells cutting their price target on ford in half, to $12, slashing gm's to $33 from $74. trimming the price target on tesla from $900 to $960. morgan stanley reiterating its buy rating on rivian, following its smaller than expected quarterly lost

phil lebeau joining us phil, do analysts think ford and gm will hit their ev targets what happened to that excitement >> the excitement is still there if you believe they can hit that but let's be clear, many people are skeptical that ford and gm will, a, hit their volume targets for '23 and '24, and second of all, even if they do hit those, it's going to be much costlier for both companies. it's costlier for all automakers because raw material prices for ev batteries, all of that is going up the supply is not increasing what's that colin lingand the analyst at wells fargo was talking about. he basically said it's going to be more headwinds for the auto majors when it comes to evs in the future >> any signs of a cyclical slowdown they get hard hit by rising interest rates auto loans go up this backlog, everybody is on a

wait list for these cars is it going to be different this time as far as the cycle >> it's not a typical cycle where when it turns over, it turns over hard. what we are seeing is because there is so much demand out there, the automakers are able to maintain pricing at least for now and the consumers are willing to pay it at least for now. there's no indication that that is changing. >> right like some of the apparel makers like tapestry. tech has had a very tough ride as of late and alphabet is down 12% in the last month deirdre bosa spoke with the alphabet ceo in a pretty rare interview and joins us with highlights. >> we covered privacy to prespeech to cloud but we did start on the macro backdrop and the market volatility that as you said has affected big tech and eroded a fifth of alphabet's value.

his investment strategy, which includes 12,000 new jobs this year, billions on infrastructure and security, he says that does remain on track. have a listen. >> the good thing is we've been around as a company for a while. we've worked through past moments like this, be it 2008 or the early days of the pandemic and we take a long-term view obviously when you're serving up across the economy and a lot of the macroeconomic factors like gdp growth are what advertisers spend as well. but what you saw today is when we are investing in ai, the largest investors of r & d in the world. we take a long-term view and work hard to make our products better >> so he's really emphasizing consistency and responsible investment this comes as you said at the top here, alphabet, other big tech names that have held up relatively well amid the sell-off they continue to come under

pressure alphabet continues to underperform the broader markets, not taking part in that tech rebound that we are seeing in some of the more speculative areas. back to you. >> he sort of made it clear that their priorities and investments are still fully intact after spending some time with him, what do you think those are? diversifying away from ads wherecused in terms of taking google >> he talked about how their diversification so far has allowed this 'em to keep these investment strategies in place but advertising revenue still makes up the majority. he did talk about subscription revenue, devices which they announced, cloud, which is still unprofitable but they have been narrowing losses in this area. so that's where they're headed he is committed to it and it is interesting. in terms of very specific investments, $10 billion on infrastructure for hybrid work compare that to $10 million in meta investing in the metaverse.

so you're starting to see real differences in the tech giants, where they're putting money and thus what their longer term bets are. >> really interesting. deirdre bosa, thank you. sticking with tech, shares of apple continuing to fall. down more than 4% today. losing its crown -- now 3.5% but the company did lose its crown to saudi aramco. let's bring in jeff degraph with some chart analysis on apple for so long this was a port in the storm until very recently what was acting like a safe haven has started to break down. what's next? >> it's endemic of a bear market in bear markets there's nowhere to run and nowhere to hide when you start taking out leaders like this, it's usually a sign that they're starting to get to everybody importantly apple broke down through that 150 support level and that was an important support level because it really represented the potential for the completion of a double top

of t and so between 180 and 150 is this relatively large distribution zone and that counts downward about 120 on the charts certainly we could get a reprieve and rally it back up to the resistance level which is 150, but i think the trending is turning in apple and we have some downside to go. 120 is the crosshairs that we're looking at here. >> another $20 lower than right now. jeff, you said it's a pattern in the bear market when they start coming for everybody first it was speculative tech and then it goes into apple which has better balance sheet dynamics so does that typically happen toward the edgend of a bear mar, in the middle? does it signify where the broader market is happening? >> it typically happens closer to the edgednd than the beginni. unfortunately apple is tech, and tech is in the crosshairs of part of that cyclical trade that

tends to have some of the most volatile downside to it. so i think that's endemic that they're hitting a leadership within a weak group so that's something to keep in mind. it's when they start taking out utilities and some of the staple names and some of the things that you would expect to be really safe havens in even a bear market that you start to really triangulate that towards the ninth inning of the bear so i don't think that's where we are here, unfortunately. but certainly i think for tech when they start taking out the leadership in tech, that's a better sign that they're starting to take everything. >> all right well, what about the nasdaq overall? let's broaden it out 30% off the highs right now. it's been another awful week about 8% lower for the week. what's interesting, jeff, it's coming as there's buying of bonds with yields lower, which was the opposite dynamic it kept getting hit hard by higher yields. what do the charts show for the nasdaq >> they're still under this

liquidation phase. i don't think we're done yet in our view we probably have to retrace at least 50% of the gains that we saw from the extraordinary liquidity environment that we had post-covid both fiscal and monetarily so i still think there's downside there on the nasdaq what we're seeing today, just as an example, is volatility is working, short interest is working, really sort of a reprieve from what hasn't been working the last couple of weeks but certainly looks to be bounciest of anything else when you get these one-day single stock moves, that also is very endemic of what you'd expect to see in a bar market. they have these nasty, vicious rebounds that keep the shorts on us but that's usually the sign that you're in the teeth of it so i still think we have more to go on the downside unfortunately. >> coming back a little bit today, down only 0.2 of a percent. jeff, thank you. i just want to bring you

some headlines as we continue to monitor fed speak. getting some headlines from san francisco fed president mary daly saying no reason to alter course for 50 basis points at the next two meetings. she wants to reach a neutral rate of 2.5% by the end of the year and the debate between 50 basis points and 75 basis points is not a primary consideration. so really reiterating what chair powell said, but it is notable in light of what was another hot inflationary print that we got on wednesday with cpi moving up, core and services. so we mentioned the weird moves in the meme stocks earlier cnbc pro ran a screen of stocks with the highest to short interest focusing on names with market cap over a billion dollars and included in the s&p 1500 several of those meme names did show up on the list. kristina partsinevelos with the details. maybe those shorts getting covered today, kristina. >> maybe, that could be the case in general stocks with massive short interest means investors will have to scramble to buy

back borrowed stock. top of that list are potential rallies. video gaming company corsair stock is short at 13.99. gamestop has fallen the furthest, plunging 70% and today is history repeating itself with gamestop trading halted multiple times. you can see the share price is up 10% other meme ones, restoration hardware, american eagle also on the list all pandemic training gains were wiped out as of friday, may 6th last week. so maybe don't hold these too long i've got two health care names arc biosciences, sunpower is where 22% of its float is shorted. you could head to cnbc pro for the entire list. i'll end on one name making

moves today, carvana shares soared 30% and were halted many times. near 20% are available or sold short. so happy hunting, all. >> and the stock has been obliterated, right, this year? >> definitely. we've seen that with the earnings, yeah. >> used car prices ground to a halt kristina partsinevelos. shares of american express under pressure today, one of four credit card names getting a downgrade from wolf research wolf writing it sees an 80% probability of recession by 2024 which would hit the group. joining us is the analyst with the call interestingly, bill, these names have held up, amex, better than the rest of the market for the year so i don't think it's such a crazy call to say recession before 2024. but what we've gotten from the companies has been pure strength >> that is, i think, a fair

characterization to date when we downgraded the credit card stocks back in march it was really on the view that credit card issuers with outsized exposure to the low-end consumer would face pressure amid rising inflation and we were still more constructive and positive on american express and discover and effectively issuers with greater exposure to prime and super prime credits. at that time we were not contemplating a recession. with today's downgrade, we are contemplating a recession. against that backdrop, it's very difficult for credit card stocks to work. and so we moved everything down one notch and went to pure perform for american express, pure perform for discover and underperform for capital one and synchrony. as we look ahead, the fed has never effectively gone through a rate hiking cycle in an effort to temper inflation and done so successfully with the exception of a few soft landings in those soft landings, fed

funds was well above cpi that's not where we are today. when you layer in the ratio of job openings to unemployed workers at 1.9 and chart that out and that metric is up and to the right, the fed -- that's not going to cool down on its own. the fed is going to have to essentially stimulate a recession. >> bill, just quick question, sorry to cut you off doesn't it matter what kind of recession it is when we're talking about the hit to consumer stocks? do you look to the financial crisis it was very different when the consumer wasn't in great shape and leveraged going into this. how do you think about what type of hit consumer spending is coming as relates to the credit card >> so we model 15% decline in year-over-year growth in build business, percentage point decline. that is relatively mild compared to the 40, 30, 40 plus percent

declines during the global covid crisis or global financial crisis so we think we're modeling a relatively mild recession where unemployment goes from 3.5% to 5.5% credit card charge-off rates go to roughly 30% above 2019 levels so we don't think we're modeling a draconian recession at all the problem is in that scenario, returns get cut in half. so returns get cut to around 12%. so returns are coming down and the cost of equity for this group is rising. the cost of equity recovered around 10 to 12% pre-covid for the group spiked above 25% during covid, fell to 5% today it's been gradually rising and now stands at 16%. that's not coming down amid rising rates and growing recession. so 16% cost of equity, 12% returns, these stocks are not earning their cost of capital. they are still 25 to 60% outside the tangible book. >> bill, thanks for joining us

with the case. shares of affirm are surging as the company gets ready to report results kate rooney looking at what investors should expect. >> affirm getting a little relief ahead of earnings wall street is watching any details around credit quality and the effects of inflation and that amazon deal has added to merchant growth and payment volume will it boost revenue or help the outlook. the take rate or the yield fell due to lower peloton volumes payment volume and merchant growth still key and guidance, not close to erasing year-to-date gains, still down and one of the worst fintech performers. >> kate rooney, thank you. we've got 30 minutes left until the bell -- 30 seconds s&p continues its comeback it's now down less than 0.2 of a percent. energy, industrials, real estate, consumer discretionary and health care will go out with

a gain nasdaq 100 climbing from the depths of the sell-off earlier in the hour. it is only down about 0.2 of 1%. the nasdaq is positive into the close. quite a comeback there in that final hour of trade. that does it for me on "closing bell." see you tomorrow, everyone now into "overtime" with scott sara, thanks so much welcome to "overtime." i'm scott wapner you just heard the bells we're just getting started here at post 9 at the new york stock exchange coming up i'll speak to the man who says the market can't stabilize until a certain stock does nuveen's chief investment officer will be here with what they were telling clients. volatility continues to dominate the markets. we do begin with the talk of the tape another turn lower the start of a comeback at the end. what all of it means for where your money might go from here. let's ask step