utilities and energy >> my man right here, former jim >> defense spending is not going down anytime soon. >> thank you as well take a look. dow's down s&p still barely hanging on to 3900 and the nasdaq is downm i'll see you in a few hours. "the exchange" is now. thank you, scott, hi, everybody. i'm kelly evans and a hot reading on inflation plus the tanking in consumer sentiment and increase in expectation. the dow is down 805 points and down 5.5% this week for the worst week since january and down for the 10th time in 11 weeks, which hasn't happened sings the grade depression and currently the nasdaq down

400 points amazon is the third one on your chart. off 10% just this week the consumer sentiment reading is hitting the discretionary stocks names -- bob and rick sare standing by with more. bob. >> so much for the peek inflation narrative. what's happening is there's a lot of round trips and that's what the s&p look-s like here. ee had a brief 10% rally on hopes. and now we're back to the key level, that 3900 level was-main low we had a lot of sectors have gone round trip

transports, for example, at another 52-week low. sit situation. and intel's at a new low 137.35 we're just barely above that down about 5% on the day travel and leisure, you heard from kelly, that consumer sentiment number didn't help we may have peek travel but bookings all down. visa also hurting the dow at this point another group interested in down is asset managers. you may get less trading as well we're having a big day in games like that. where are we

s all a lot of nose out there and now there's noes essentially a. are we at peek inflation some doesn't seem that way. a lot of people would say no at this point how about abroad that china lockdown is a big thing. we had new lockdowns occurring and the russia/ukraine war with no yes on that a lot of noes here -problem is-main narrative is the opposite of what we're hoping for a week or so ago. and possibly have to throw the economy into recession >> why it's had such a big impact today

-the rebound in stock looks to be over. it's now back above 3 sfwaen rick has the latest on what bob just said and where rates can gefrom here. >> we saw very cold michigan and 1 to 10-year inflation it's another it mention of what's going on. the vix is up 270 points the highs of the day were a whisper shy of 30.

>> we have inclosed over 30 in the vix since may 18th as we've seen in the chart there was bottom fishing going on and some future date in time and a future price that's what's pushing volatility up is the race to use the puts or sell calls, if uryou not thinking the markets going and that really is the dynamic here and it feeds on itself back and forth. we want to continue to not only monitor inflation but how the psyche is effected with what they think is coming around the next corner. back to you. well, if you thought the cpi was bad today, the next guest says we could see 9% readings in august and september

nl, people called by the fed neglectst week she thinks the fed will start hiking by next month barkley's making a similar call as well. joining us is michael schumacher michael, thanks. and for those who say why did so much change with this report what would your answer be? >> the fed was hoping for a much more moderate report and this is bad across the board. goods inflation is up quite a bit. people thought maybe this would moderate the headline number is terrible. i think we eall knew about energy if you look below the surface of the report, it's not encouraging at all back to the fed. >> and as you speak, we have the dow at session lows. if the fed switches to rate hikes next week, we only have

until wednesday to price that in is that what-the market is pricing in right now >> they're not yet ready for 75. i hink that would be a big risk-off move if that would happen i would besurprised. the fed has prepped the market thoroughly for 50 next week. we just went 50. inflation isn't good maybe growing more aggressively in july and set the stage for conceivably 75 or more likely 5075 to throw it out here next week a you and i institutionally would agree it seems like long shot for the fed to go to 75 in a couple of days we've seen almost absurdly impossible and yet they're saying it should be considered a real possibility.

the only mechanisms left by which they could signal that kind of abrupt shift would be basically through a report in the "wall street journal." we can't hear from fed officials themselves >> we really are thinking 75 we know it's the blackout pare idea but we don't ad mere here to that. much better off in the fed 's persp per perspective to raise the rate next week and communicate with the market this tightening is going to go on for a while 50 give or take throughout the year 25s late in the year 75 next week doesn't seem to get the fed a lot of benefit and there's down side that comes with it.

>> is the market looking for 10 to 9% reports? maybe they'd take a pause. is that out the window now >> bob eluded to the idea of peek inflation doesn't really work anymore. flars are pricing 9 plus and the clients i've been talking to for the last few weeks. would the fed pause or go 25 or be more market friendly? that's perhaps the most discouraging thing of the report >> perhaps encouraging if it means a response is hawkish or otherwise. iffy with were going to have an inflation problem, maybe that would beworse than this that

looks like an obvious you have to do something. >> if there's a wake-up call, let's hit inflation over the head until it goes away. you can say maybe it's not so bad afterall >> michael schumacher of wells fargo. now is the perfect time to get defensive in the market. health care, staples, utilities. those sectors have held up relatively better than the s&p 500. the co chief investment strategist at hancock investment management not like there's a lot of places you feel great being invested. but are these the safe havens? we think so, kelly and we are facing a global economic slowdown and that's not being reflected in some areas of the market treasury yields continuing to back up.

and a global economic slowdown and ultimate loo recession so, we're looking today at the back up in treasury yields as potentially a solid entry point as we move throughout next number of weeks and months here. we also look at quality stock ises, which are the baby that's been thrown out with the bath water. good return on equities. good earnings that are now trading at discounts we think are worth a look right now we see cyclical areas like international value stocks leading the way. there are opportunities amid some of the carnage but getting more defensive and embracing the idea that volatility the new normal >> where do you think we are in

the market >> we can talk about what stage of the market and at what point that endures >> the cycle are aging rapidly we're not used to cycles that move with this type of velocity. and inflation being enemy number one causing the aggressive fed tightening and looking like it may bring the economy to the brink. in order to slow down inflation. we haven't actually seen analysts revising down earnings estimates yet. they continue to move higher

there are a number of things that need start to hack like they're bottoming untily with can start to feel more comfortable adding to risk and portfolio. >> kind of like a nominal boom and a recession in real terms. final comment. i don't know if we still have -- we all know what happens when the zoom screen goes black again, recommending. i think you can see me now li let's give a parting comment are we talking dividend growers? would your be in technology for instance what do you do with industrials and financials >> we like technology, communication services good return it on inequity, low debt we want to embrace the more defensive areas.

wore with looking at companies that can play this idea of consumers moving away from the things that they want more towards the things that they need and energy and oil and food prices go higher within consumer discretionary is going to get hurt areas like utility offer nice opportunities in our deal. >> thanks for your time. appreciate it. coming up, new ins suggest work from home is slowing. what does it mean for home improvement stocks and housing some and as investors pivot from growth to profitability, we're looking at the most profitable companies. this chart is one of them. we'll tell you whether it's a buy or bail for our trader and a final check of markets dow's down 820 points. s&p down 14. nasdaq down 1014

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tracking the sector down 2 to 3.5% the only components are the staples like supermarkets and groceries. and bank of america out with a new report that includes restaurants andb travel the reopening beneficiaries. she is senior hardlines retail analyst and she joins us now welcome but mainly the biggest sprays is actually home spending showing up >> it's always been interesting to track through at the pandemic, how consumer spending behavior or plans have shifted >> it's interesting and we saw t that, compared to march, there's a shift in how they plan going

forward. anything from restaurants and travel, we saw a pullback in intentions to spend. one area was a bright spot, home improvement. it's been one of the strongest cat girs in retail and one of the strongest this earnings season as well it's still holding up well strong home price appreciation and other important metrics and the stocks have gotten caught up in this route of housing maybe undually >> even some of the other names that are more exposed. williams sonoma. these are places to look for strengths. as we ponder what the future is going to hold, here's what

howard schultz had to say about the difficulty he's had coming back to the office >> i have been unsuccessful despite everything i'm trying to do to get our people back to work >>ia a want them back? >> i pleaded with them. for i said i'll get on my knees, do push ups they're not coming back at the level i want them to we're a very collaborative, creativive group i realized this is a different generation and i've been schooled by our people don't say too much y with have to establishb a new way of working and i've embraced it >> liz, with people not afraid to tell howard schultz no, i guess. >> it's interesting because one area we saw a bitff a shift in

this quarter's survey is-we asked whether consumers prefer to work from home, previously we had seen i think 92% had said yes in march that fell to 68% in june we did see a bit of a shift in preference to come back to the office in this survey. >> let's turn to some of the other segments when you say they're pulling back on consumer discretionary, this is last week. where are people pulling back the most >> in my coverage and hardline retail, we saw this in furnishings. and furnishings and home goods too. you're more cautious on the names in that space. williams sonoma and big lots as with well. we've started to see some of the evidence in their reported numbers. williams sonoma still sounded pretty good. but a lot of the back log in

demand is from prior ordards i don't know if you tried to order furniture in the recent past but it takes a long time. when it liveries happen, that's when it gets captured in the sales. we see orders that happened even six 34u7k9s ago. and we may capture the full demand picture could bea sign of things to come in the future. >> and that there are parts that are if wing to underperform here still the a uto parts retailers. you think they should see a benefit? >> the auto service providers as well driven brands, which is the largest operator of service franchises across the u.s. with brands like take 5 when people actually start

getting back on the road and unfortunately start getting in accidents as well, the service providers are going to have a pretty big benefit >> to have data this timely is hard to figure out the landscape. liz, thanks for bringing that to us we appreciate it >> thank you >> liz suzuki. still ahead higher rates are definitely hitting fintech all down more than 5%. every name is down 50% since january. coin base and affirm down -- and we went looking for companies still in the green we'll trade in everything from energy to housing. as we head to break, here's a look at the dow heat map with goldman, being and dow ink with worst performers walmart and verizon the only two in green right now stay with us

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matching your job description. visit indeed.com/hire we're coming off the lows. the dow down for the 10th week in 11. all 11 sectors are in the red with consumer discretionary tech and financials the worst performers nine of the 11 groups are down more than 10% from recent highs. utility and energy are the positive exceptions. semiconductors are down. all but one are negative for the month.

higher rates are hurting the home builders. what's working are the consumer staples. hershey, kellogg and hor mel let's get to tyler mathisen. >> out gunned ukrainian forces try to hold on to a key city in ukraine, president zelenskyy is step issing up calls for more weapons to the west and rapid admittance to the european union. he says that would prove words about ukraine being part of the european family are not just words. the former acting attorney general will testify next wednesday in front of a january 6th congressional committee. he's to pressure the justice department into supporting his false claims of voter fraud. and in a post on his new social media platform, trump says his

daughter, ivanka, had, in his words, checked out after the election and hadn't studied the results as closely as he did at least night's hearing, a clip from previous testimony was shown in which she said she accepted the determination the election had not been stolen tonight on the news, why builders are putting up new houses with no intention of selling them at 7:00 eastern. >> interesting thank you and we'll see you soon ahead, as the nasdaq sinks, one market strategist is diving right in, lacking for bargains he'll make a case for the names ahead and let's get show and tell where we a show you a chart and the story. docu sign missed earnings estimates. they widened to 8 million a year ago. ceo dan springer told tech check

he's focussed on the it ripple effects from the pandemic as well >> we ebelieve interest rates are going up it's going to be a challenge for businesses like ours where we have financial services and real estate people but-concept of the macro economics beyond that in terms of things like inflation, recession, we don't inthk hath is as big a challenge as we're facing in the pandemic

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welcome back, everybody. stocks are sliding and on pace for their worse week in january. met cnbc ran a screen that has eked out gains for the year one she's buying and one she's avoiding from the list the chief market strategist and cnbc contributor she is onset, which is so nice welcome. great to have you here in person your first buy is berkshire hath way.

tell me why. >> one of the ways we're experiencing volatility and today is one of those days it's quality withb dividends and has the components we think am vesters need >> profit and up today with the 2.6 drop, it's negative still a lot of people will take that berkshire is a name that had been out of favor. cathy wood with the new warren buffett. does this have staying power >> absolutely. i think if you look at the holdings it has, this isn't a un-time event. this is going to last for possibly 24 months the demand for quality and cash flow, dividends, that's not if wing away anytime soon >> so, berkshire hathaway is-first one that gets a vote for your boi

next is a smaler cap stock, hanging on to gains for the year of less than 1%. why do you like this one >> this is an interesting one because right now everybody's trying to figure out how to keep their portfolio in order with rising interest etras. obviously a mortgage dealer does not fall into that naturalicate goir however, mr. cooper, most of their income is from mortgage servicing, which does quite well when interest rates rise it's a natural hedge >> he was making the case and the market had born this out hath it was a place to hide. don't they have services to help them they don't seem to have a lot of credit for it. >> over 40% of the revenue stream of the business book for mr. cooper is mortgage servicing and over 71% of the income is from that space.

they're more amped to the rate hike hedging scenario. >> you hink his one is okay some. >> you still have to keep servicing. services can know through-stock. -music don't saup on hath prunt. then mr. cooper. his one has been okay but mot kbrat a. >>-covid reemt has been a huge hit. hair cancer drug has been just a knockout and halts been emorms and his is one-recession-proof areas. the need for-krug does not know away with recession. going back to putting a port polio oorgt, shing hath can make

lou a recession is important >> are all other maimsing health care you would like some. >> halts a sok we really like and we've held all lou covid you want somebody earning out good pipeline krugs. >> hay have a rack record. hay can at least draw on that. hose are your buys, all looe of them and this is a paying a kdividend our friend at&t. >> we think part of the boom is financial engineering. really goofed what they looked like the long term is stacked against them if you're doing well, you

probably want to take the chip thaufz table >> we spoke to someone bullish on all of the names. saying this is a hard place to cutback on >> you know, i agree with that story, that people will basically get rid of everything before they get rid of their phone. if anything, data rates. everything is going down the odds are stacked against them yes, people will hold on to their phones but you can get a google phone for 20 bucks a month. you have to think whether the tthe traditional wire surface providers will be able to surviechb. >> not that it's a friend but if you finally push people to the point they have to cutback, they might look at the gaggal phone or other options out there >> 5% dividend yield

there other names you typically would feel excited buying at those levels or is that a red flag >> we think there's financial engineering going on if you look at the balance sheet of at&t, that's where the real red herring is even after the spin out, loads [ inaudible ] and it's quite extensive for them >> true. so, with that in mind, the impact of what we're seeing in the marketple where does that leave you strategy wise for the remainder of the year now? >> we have to see a round of earnings revisions right now we look look the markets could be sustainbible, trading at 17, 16 times.

that's a great price >> and we had a gegs top of the hour who thought we were at the top of the frachg the 10-year yield. and as we move throughout cycle, that starts to move lower again, that's a tough call to make and i wonder, for those who might have listened and said i'm not so sure, what would your advice be >> now fed rates are pricing in 75 basis points. that would be a shock to the market what we believe is the likelihood of a policy mistake with that would happen

or are they just going to struggle >> i don't think we can see the 10 year get higher if we get to where fed funds futures are forecasting, right nowwe'd have a flat as a pancake curve, front to back >> next time we need cappuccinos and maybe a better tone to the market great to have you here today still up next, it's been a rough go for the fintech names like affirm today adding to the pain wale talk about the big moves and what's behind the drop next. take a lack at some of the names bucking the down trend we mentioned staples earlier how about some of the names that sell them? they're all in the green this afternoon. and president biden is set taaddress inflation and the supply chain out at the port of los angeles. this event should begin

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welcome back, everybody. the tech-heavy nasdaq on pace for the 9th week of losses in the past 10 as its worst since the.com era. the next guest says there's wants to with fundamentally sound companies. he is the founder and president of jewel financial do you stick with safety in the big cap names or where do you go from here? if you want peace of mind, you have to look at the red cap space or the ones that air on that side.

it's easy to tuck tail and say i don't want anything to do with this this is the precise time when there are fundamentally attractive names that nobody wants to touch names that a few months ago nobody could get enough of any valuation metric whatsoever. now these names have come in to reasonable levels and nobody wants to touch them. example, let's look at meta. despite challenges they've had, they're expected to grow 20% that's a decent valuation. what i like most is no debt. is you're talking about a cash flow tighten, no debt and a reasonable valuation the stock has come down

considerably, obviously. are you going to nick exact bottom probably not a choice of on semi. and they've been such a tough sector and i don't want to go near this until we figure out inventories and demands. why would you pick that up right now? >> exactly what you said this is a company that is very dominant within the semiconductor space in the automobile environment they haven't told us they're starting to see the supply chain loosen considerably. so, i believe we're going to see this demand for these chips. increase continue to increase

and look for this company it to continue to deliver if they are in fact seeing the supply chain loosen a in a space that is right for a turn around that we're going to see in the supply chain. >> made your case for semiand what about alphabet? >> this is probably the staple among the fallen things i think just is is cheap we believe is going to be a here a very long time.

and so, very attractive company down at the evaluations. appreciate your stock picks. president biden speaking on inflation at the port of los angeles after that super searing hot cpi report and consumer sentiment tanking, i should say, to an all-time low also in the report, perhaps most worrisome, consumer's inflation expectations moved higher. 24 that's what fed officials could trig arwage price spiral that's why you've seen barclay's, jeffreys, to name two, move their expectations to a 75-point basis hike. and markets were definitely not priced for or anticipating we're going to hear shortly on the inflation charges.

>> the president in the op-ed a couple off weeks ago laid out the three a-point plan for tackling inflation the first was letting the federal reserve be as a hawkish as it needs to be in bringing prices lower it did include a variety of measures aim add particular industries and a third was aimed at lowering the deficit through taxes. and from the huge back log of

ships that has been lessening, with at least goods inflation come town even while it accelerates in other areas the s&p down 97, the nasdaq down 357. we're only 150 points off session lows for the dow 3.13% for the 10-year treasury two-year, as we've briefly showed a moment ago, is at the highest level since 2008, as it has to rapidly reprice what the fed is likely to do at the meeting in september as we wait for the president himself, we turn to california where kate rooney joins us with a brief update on the payment stock. kate >> that's right. fintech has been among the hardest hit of those is tech stocks today the group's had a tough year so far. it started after the spike in the 10-year. take a look at shares of affirm. the boi now, pay later company one of the biggest laggards of

the week this is the daily chart. down more than 4% for the day. down more than 20% after apple announced a new buy now, pay later product. looks like block is the laggard of the group, down more than 7%. still down double digits since yesterday. cathie woods fintech is down more than 6% along with the ark funds just about 6% and check out some of the crypto-related stocks and coinbase seeing some of the deepest losses as bitcoin dipped below $30,000 it is still very much tightly correlated with the high growth tech names and not getting any sort of decoupling today you have microstrategy, another crypto proxy trading in sympathy and lower today, as well and the bitcoin mining stocks. you have riot, marathon digital, hut 8 and they've been relative

outperformers in the crypto space and they're dropping significantly here and have been outperforming bitcoin -- excuse me, underperforming bitcoin this week and the year. the credit card and payment networks not spared today either and inflation recession hifks could hit those companies and the consumer, but it might be a slight boost in the near-term. wolf research estimates that every 1% of incremental inflation would drive a .5% increase of revenue and visa and mastercard, specifically >> kate, they've had a lot to grapple with and we've heard the sec chair talk about major changes in market structure. would that undermine the business of robinhood and the others >> we saw robinhood take a hit after that was announced, and the expectation that it's setting in -- >> kate, thank you president biden now speaking on inflation at the port of los angeles. let's listen in. >> as we used to say in the united states senate, i hope you excuse a points of personal

privilege. well, i think that sal must be related closely to my good friend from holy rosery high school in clairemont mike dicostanza you think i'm kidding, i'm not thank you, sal look, everybody, before i begin, i want to say a few words very briefly about the january 6th hearings that were highlighted last night the insurrection on january 6th is one of the darkest chapters in our nation's history, a brutal assault on our democracy, a brutal attack on law enforcement, some losing their lives, and we heard about it last night again it's important that the american people understand what truly happened and to understand that the same forces that led january 6th remain today it's about our democracy itself. we have to protect our democracy. i know it sounds corny to say

it we're all raised in school that every generation has to protect it i never thought that it was going to be this straightforward a challenge before the rule of law matters in democracies and we're seeing how the battle for the soul of america has been far from won, but i know together, and i mean this, we can unite and defend this nation, democrat and republican, allow no one to place a dagger at the throat of our democracy. that's what those hearings are all about. i didn't get to watch them because i was doing other business, but i'll tell you what, there is a lot going on. the reason i'm here, thank you, sal and thank you, gene and the port of los angeles, as well mario from the port of long beach and thank mayor garcetti of los angeles and the mayor of long beach who i expect soon to be the congressman of long

beach, the way it looks like [ applause ] >> you guys did a heck of a job when i came out here a couple of years ago to try to get things moving, everybody, management, labor, elected leaders as well as, at the time, we also had governor newsom pushing hard, as well look, we have two excellent senators, dianne feinstein and alex padilla i'll tell you what, you don't look any worse for the wear, man. you're looking awful good. you're looking awful good and annett, you've always looked good compared to these guys and me, but seriously, thank you, anette for the fire you bring, i really mean this it's in your heart allen and i just had a little meeting together we've got to change it, allen. we can't give up we have to turn this corner, and

john, you're the real deal anybody -- i don't want to get you in trouble thanks for sticking up for me and we have a labor secretary that i'm his translator, mahdi walsh from boston, and the only thing you have to know, he always has your back he always has your back. i had an urncle who said joey, you're labor from belt buck toll shoe sole, and he used to run a labor union. today i'd like to speak about my top economic priority, fighting inflation. i understand americans are anxious. they're anxious for good reason. i was raised in a household where the price of gasoline rose precipitously and it was a discussion at the table, it made a difference when food prices went up and we've never seen anything like putin's tax on

both food and gas. america should understand our economy has unique strength that we can build on. the job market is as strong as it's been since world war ii not withstanding the inflation we added another 390,000 jobs last month, 8,700,000 jobs since they took office an all-time record, never that many jobs in that period of time unemployment rates are at historic lows. millions of americans are moving on to better jobs and better pay. since i took office, families are carrying less debt, on average, in america. they havemore savings than they've had and we're doing it all while cutting the federal deficit by $1.7 trillion this year and 320 billion last. if i hear one of my maga friends once again talk about debt and deficits -- i'm going to be

good they increased the deficit by $2 trillion, anyway, that's another story, but look, this is the largest decline in american history. because of the progress, america can tackle inflation from the position of strength unlike any other country in the world because every country in the world is getting a big bite and piece of this inflation, worse than we are in the vast majority of the countries around the world, but make no mistake about it i understand inflation is a real challenge to american families today's inflation report confirmed what americans already know putin's price hike is hitting america hard gas prices at the pump, energy and food prices account for half of the monthly price increases since may. inflation outside of energy and food what the economists call core inflation moderated the last two months. not enough, but it moderated and it's come down we need it to come down much more quickly my administration will continue everything we lower the prices for the

american people and the congress has to act and they have been of late one of the key ways to fight inflation is by lowering the cost of moving goods through the supply chain when i first started talking about the supply chain when i came here well over a year ago the american people understandably wondered, supply chain, that's not a usual part their jargon every day, but they understand fully now they understand it if you can't get the material needed to build a product, your building, whether it's an automobile or whatever it is, it makes it difficult to be able to move and that's called a supply chain and that's why i've been focused on ports last year ports around the world were disrupted because of the pandemic, so we brought together port operator, shipping companies and labor and to ease the bottlenecks and as a result, over the lholidays, 97% of the packages were delivered on time and on shelves when we went

christmas shopping remember, we weren't going to have anything on the shelves you all did it no, no, not a joke, you did it on time with minimal delay delivery times are actually quicker than they were before the pandemic and today there are about 40% fewer containers clogging the docks for long periods of time than there were last november. this may was the strongest month in the port of los angeles' history. the strongest month in its history, and we are helping fund improvements because of what my friends in the congress have done we passed the infrastructure bill and we're funding major new initiatives on the docks, on dock rail systems. the port of long beach moves goods more quickly, the port electrification so communications near the ports and communities can breathe cleaner air because they're using electric machines that are not generating using gas, coal, et cetera, and we are continuing

to expand capacity of our ports thanks to the bipartisan infrastructure law look, this is a time we took a different approach also to trucking remember last december we brought together industry and labor to tackle problems facing truck drivers. it took the double -- we added double the number of commercial driver's license in order to speed things up. we did it. learning. the result, we have record-setting employment and trucking earlier this year and the wages went up even after accounting for inflation we will keep at it, with a new super chain envoy. general steve lyons. general lyons is a four-star general and he handled the transportation command and only tens and millions of things from little thi