some of these companies have actually paid a dividend not some of the biotech names necessarily. but vertex is a stock that has seen investor sentment as things go the worse for other parts of that tech trade. >> all right thank you very much. dominick chu. >> thanks for watching "power lunch," everybody. great to have you back. >> nice to be back thank you very much. "closing bell" right now thank you, tyler and kelly the nasdaq getting hit hard as a week full of data and earnings gets under way the most important hour of trading starts now welcome, everyone, to "closing bell." the take a look at where we stand. down 1% on the s&p 500 dow down less than half of that. it is faring a lot better. the nasdaq that is bearing the brunt of the selling today tech heavy stocks down 2%. tesla, amazon, meta, apple, nvidia weighing on the nasdaq. small caps down almost 2% as well and the dollar continues its march higher there are the laggers right now on the nasdaq. the chinese internet names

getting hit hard on the week long shut down new covid concerns in china. new big part to have day's selloff overall. there is tesla down 6.5% coming up on today's show as well, tony dwyer breaking down whether we have seen a bottom in the market or the bottom in the market plus, a rare interview with marathon manage mment bruce richards we'll ask him where he is putting money to work right now. he was on a few months ago and bearish. warning of recession then. let's get straight to the market stocks pull back following last week's rally mike santoli here to look at the recent performance defensive stocks, that's really the only groups that are, woulding today utilities and real estate now health care just turned negative >> yeah. it's consistent since we steered away from inflation panic to worries about the durability of economic growth. it has been a defensive market the overall look of the s&p 500, look, can you build a case here that there is a shot that mid

june lows might hold maybe they have to be retested it's down 5% or 6% from here but it's done nothing to prove that yet it's not really escaped this clear down trend from early april. that's been the issue for a while. the rallies have been sold we were up 7% or 8% from the very lows to the -- last week's highs. but so far still sort of a show me story even if as i said we started from a lower valuation and going at those lows. that's a net positive. take a look at that cyclicals versus defensive trade it really did give way recently in the last few weeks. this is goldman sachs. cyclical versus defensive. that tiny hook higher was, you know, last week we got the jobs number this is coming into the week i do think it's worth noting that the defensives in this definition and with many, those include a lot of technology. we have a little relief on the big growth stocks that might have been that hook higher that we saw so far, it shows you that the growth outlook is going to be the big toggle as we go into cpi

and earnings season. >> market feels really nervous about calling a peak in inflation. the we have cpi on wednesday some are insexpecting a nine handle on the other hand, people saying inflation is peaked. we've seen prices come down. did you see esther george being dovish which is very unusual for her and for the kansas city fed. she is worried about a slowdown. >> worried about a mistake i do think it's right to say the market is nervous about calling a peak at least the stock market is the bond market is kind of saying, look, if you look at the few years out inflation is not going to be the big problem. it's not always correct. but they moved on from that. that could be because they figure a recession will be the ultimate thing one way or another, there is victory against inflation. it could be the hard way or easy way. that's what the stock market is struggling >> easing on the other side. >> mike, thank you we'll see you soon for more on the market, let's bring in tony dwyer. you expected a summer rally.

we certainly got that. we're 6% off the lows. whap what happens next >> exactly right we found a great indicator making qualify whether it's a bottom or the bottom and then figure out it's a bottom, how much should you rally before you retest the low and what we found is that we sthu expect about another 5% to 10% from current levels before we reach kind of the bounce peak and then go back lower >> so what is the model? what goes into that. >> like everything i do, simple. i don't understand the complicated stuff. it's a ten week rate of change on the s&p 500 of it's very simple. anybody can take -- can make it. you do a ten week rate of change when it hits minus 15, in other words, the sea&p 500 goes down 15%, bloelieve it or not, sarah, it's rare. it only happened 16 times since a 500 stock index.

so it goes down 15% and then pivots back up to minus 10% or better hit an extreme and then start to bounce and when that happened in the past, there is only one occurrence i can find where it just kept going down that was early 1974. >> so you see a few more percentage points from here and then what? back south >> it's interesting. 37% of the time 6 out of the 16 times we found that the market never retested so i went back and looked to see if there was anything consistent about that of course there was. it was the fed -- what we talked about before a major signalling change from the fed. in other words, you know how people refer back to 1970 when is the only time the first six months of the year we're worse than now the fed had already started easing in september, october of 1969 that's why you get the second half recovery. so the consistency is you don't retest, i made this mistake in 2020, you don't retest when the fed is fully backing and easing

already. >> but we're expecting a plot more rate hikes, right we haven't seen any signs from the core of the fed that they are pivoting even if the market is starting to move on >> it's interesting. as you know, there is two ways that rates move up you have market driven rates and in this psyccycle what is diffee fed told wrus they thought the term nat rate was quickly. guess what the two to ten year did? it went right there. so you already got the affordability index and housing, having come down really hard so that is tight that is already shutting down the housing and real estate market but threaten is also the variable rate debt tied to fed funds. more so if you want to use the new one. so every time the fed moves -- we already discount by discount. we already reflected the fed's aggressiveness but we have not done that variable rate debt there is two kinds of legs that can hurt you and rate hikes. it's the market driven rates and

then the variable rate driven by the fed. as you said, sarah, that has yet to see the peak. we're going to go up another 75 basis points in a couple weeks. >> how would you be positioned right now as far as sector and what leads this market higher in the near term and what you hang on to in the longer term given some of the carnage we've seen >> as you know, when we start calling for this we thought the growth stocks would outperform basically, nag is so extremely oversold and levered that got hit so hard in the first six months that's what's going to bounce the most >> right >> it's going to be a -- now is not the time in which -- we said this for the last month and change, now is not the time to chase energy when the demand side of the equation or materials or those areas that are deeply cyclical. it's very -- kind of always said -- it's not good when you're spiking rates to a historic degree into a generationally leveraged system with increasing inventories and weaker demand. that's why it's so important to

get the bottom you need that change in the fed that allows investors to look through that statement and know that the other side has some legs >> we haven't -- we simply have not gotten there yet so what -- to what extent do you think the cyclicals priced in a recession? >> look at copper. copper is the one that everybody like me comes on and talks about. >> five weeks down down again today >> five weeks down but it's nowhere near -- it's back to its prior peak i looked at any recession, copper goes to $200 to $250. it currently is -- as i look over on that five week down turn, $342 so if you're going go into a recession, what we've done -- and it's the three things that are going to cause the summer rally, oversold condition check, the fed that the fed discounted on the market driven rates check and the ten year is back to a $2.98. and then the perception that they can generate a soft landing. and that's where we're at right

now. so those three things are still in place for a rally i think all three of them are probably unlikely to continue which is why it's a bottom versus the bottom. >> tony, thank you very much always good to talk to you >> great to be with you. >> updated thoughts. short and long term, tony dwyer. euro and dollar, a whisker away from hitting parody. another 1% plus move no signs of slowing for the stronger dollar. we're going to discuss what the currency moves could mean with your port foal low with marathon's bruce richards. you're watching "closing bell" on cnbc. down about $1.60

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the parody party is imminent the dollar is in the middle of a relentless and dramatic march higher it is crushing the euro. look, another big move today falling to almost $1 against the dollar so latest trigger, increasingly deteriorating outlook in europe. france's finance minister saying that europe should prepare for a complete cutoff of russian gas calling it the most likely scenario energy rationing and a partial shutdown of european manufacturing would trigger a recession in the euro-zone and the euro looks at risk they say falling to the mid 90s in the month ahead. for the u.s., the stronger dollar means cheaper european vacations for americans, for one. also helps us fight inflation because it makes imports km

cheaper. that strong dallas also hurts our exports and slashes corporate praofits from companies. anyone that does business overseas mike wilson from normorg morgan says the climb signals an 8% head wind for s&p 500 earnings and unless the fed pivots or inflation turns weaker, it's hard to see what stops the dollar from marching higher. another huge move. joining us no you is bruce richards of marathon asset management global credit manager with approximately $23 billion in assets under management. usually has some good macro views, bruce do you think the dollar continues to climb higher? how much so? >> it's remarkable -- hi, sarah. remarkable to see this 20e--yea high in the dollar versus the euro and baskets of other

currencies the euro is not only weaker gdp and weakness in the ng markets where the weakability for europeans to procure energy but also the fragmentation that we're seeing in europe you see that through italian bonds and spreads as well as other peripheral spreads andin general, europeans have become more risk adverse so what you're seeing in europe, you're also seeing necessity b i the bank of japan and the yen. there is weakness there as well because they capped, you know, rates in europe and people are bailing out euro assets and japanese assets and coming to our markets to buy our treasuries and our u.s. dollar and so the fed has a more complex, you know, equation here because the theshry rates have not moved up as much as they should v i think it also speaks to the weakness in crypto assets why our dollar stronger. >> do you see all this continuing >> i do.

and i think the dollar strength will continue to keep our rates lower than probably otherwise should be. to your point, i think that u.s. companies which rely on s&p 500, for instance, relies on 25% of the revenues from overseas sales will see a continued softening in the international sales i think the trend is well in place. but the fed has only gone from 0 to 1.75% today where it is now in terms of fed funds. on the the way to 3.5% only half way there and so if you continue with this trend of much higher rates hin the state with treasury rates and support of action by our central bank, vis-a-vis other central banks, you're going to continue to see the flow of capital coming to our currency >> bruce, you have been early in the recession bet. i believe recently told your investors that is the best case scenario right now so what are you expecting at this point when and how severe of a

recession? >> we think the recession begins in the first half of next year and we think that european recession starts in the second half of this year. either this quarter or the fourth quarter in terms of, you know, s&p 500 earnings, for instance, we think we're already moving towards an earnings recession so here's the fact for you i just want to make a comment on the call i went back and looked at the last four recessions earnings dropped, s&p 500 earnings dropped between 20% and 30% in each one of the last four recessions and so companies are getting squeezed on all sides. you have squeeze on the cost to goods and wages and everything that goes into input for manufacturing and services and on other end, we think rev knees are starting to flatten before turning down. and at a time when interest cost is going up, particularly for the high yield companies interest charges are rather significant. there is more leverage loans in the system than fixed rate high yield bonds. and when you look at fed funds

300 basis points from where we started to where we're going to be at year end, that's a lot of down grades and a lot of potential defaults coming through the system as a result of higher charges. >> so are you seeing interesting opportunities right now in distress or not yet? you see it still coming? >> it's coming we've seen a couple companies file for, you know, for bankruptcy in this last week or two. but generally speaking the high yield market has gone from overly rich 425 basis points to 8.5% yield where it is today we think it's a good time to start dipping your toe and buying really high quality double b and we think ultimately it will get to 10% and then back up the truck it's all about defaults and all about the down grades that come first. the rates react after the fact they don't project forward so we see the higher cost of goods. you see revenue start to turn

over you see the higher interest charges start to bleed cash flow you'll start to see the downgrade cycle and big credit cycle begin. and we're looking at cccs right now and avoiding cccs. it's a bit early to go into what they think is -- >> because you think those junk bonds neelds to jump up higher sounds like a bad recipe for stocks >> it does and, you know, we don't think the equation for stocks is going to change. the average, you know, earnings decline again 20% to 30% in a recession. and average stock market declined for a recession around 30%. and we're about two-thirds there on the stock decline but not even begun to see earnings start to roll over and it will. and so i'm singing a song right now. i used to sing a song "lean on me" referring to bill weathers song regarding the fed and right now it's all about

"ain't no sunshine when the fe fed's gone." >> you even sang it. >> it's a phenomenal opportunity to have a lot of you dry powder. that's how we're set up with a lot of dry pouder to take advantage of massive dislocation coming >> but last week there were whiffs of the fed might be maxed. the fed might been to pivot. the fed might have to ease on the other side of this a as these recession fears heat up and signs in the commodity market that price being are coming down this could all change pretty quickly. >> yeah, one very interesting die nam sick what you saw on friday with employment and we're seeing a very funny thing happen as we move towards what we sthi go think is a recession, we have a shortage of labor. wages going up and very strong employment prints. this could be a very, very

interesting period of time that makes it that much more complicated for the fed because given the strength in what we see in economic activity to date and given the increased job gains that we've seen, it just puts further inflationary pressures. i wouldn't be so quick to draw that conclusion. we think that fed funds are going from 1.5% where it is now to 3.5%. that's a whole lot more and it takes you into early part of next year before you can count on that belief >> bruce richard, thank you. did not know you could hold a tune like that either. that was fun though depressing. marathon asset manager bruce richards thank you. get a check on markets now down 200 on the dow. s&p 500 down 1.25% we're losing a little momentum only group that is positive are utilities, it was utilities, real estate, and staples they all turned red except for utilities. communication services getting beat up the hardest in the market today some of the social media names,

twitter, not surprising, down 10%. meta is down as well lower price target consumer discretion aries not faring well. all of those stocks having a good week last week. still ahead, why jeffries tech analyst says twitter is facing a perfect storm as elon musk tries to pull out of the deal. and the analyst call that is sending shares of lululemon and under armour lower check out the top search tickers on cnbc.com. ten year yield getting the most interest there is buying of treasuries today. that means the yield is a little lower. we drop below 3% there is twitter, of course, with all the news around elon musk tesla is not feeling -- is feeling the pain as a result it's down more than 6% and crude oil losing 1% on concerns about the economy and china. but the s&p 500 down 1.2%. we'll be right back.

check out today's mover,

kontoor brands bucking the market trend wells fargo initial jting cover of wrangler and lee jeans. the analyst there believe kontoor's free cash flow and dividend yield make the stock a good place to hide in this choppy market. we know we're in a good denim cycle. all about the jorts. twitter shares falling sharply in the wake of elon musk abandoning the deal to bite company. up next, a top analyst discusses whether investors should be avoiding the stock with musk trying to get out of the picture. we'll be right back.

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take a look at shares of twitter plunging down more than 10% as elon musk tried to back out of buying the company. in a letter disclosed, musk's attorney said twitter has not complied with the contract obligations. let's bring in the managing director and technology sector specialist for jeffries. am good to you have. how do you begin to tell investors what to do with this stock? >> for sure. thank you for having me on, sarah. it's a nuance situation. to say the least and i think the best way to describe it is it really is a perfect storm and a combination

of multiple factors including a wors worsening macro environment and loss of key personnel. i think we all need to put that in context and keep in mind that despite the recent correction in shares, especially today, twitter is still trading at a pretty significant premium relative to the trough valuation as well as significant premium to both google and others. the. >> what is the trough valuation? >> historically this troughed at nine times forward and if you look at where twitter is trading now, it's about 14, 15 times 2023 but put things in perspective. meta is 15 times who wi google is trading 159 times you saw snapchat negatively preannounce. so they're in a really difficult position right now >> so what is this company worth as a stand alone without elon musk if that's where it ends up?

>> if you use historical valuation in terms of where it troughed in the past, you know, that would put it at about $25 a share in terms of -- i think that is where the trade at nine times ebida. investors are trying to see do they close on existing terms does musk truly want out and have to pay a $1 billion termination fee or negotiate a deal at a lower price? >> if that is the case, if they settle and renegotiate the deal at a lower price, where would you see that price somewhere between $54.20 and with we are now? >> it's unfortunately impossible to answer. the key message is going to be that lit gaigation is going to e messy. both parties are going to be incentivized to settle and we've seen this rhetoric before we've seen this when they tried to back out at tiffany they renegotiated a lower price. i think tend of the day, resettling or settling and

renegotiating at a lower price is likely the best outcome for both parties >> in the meantime, what do you -- you mentioned employee turnover, morale, loss of jobs what do you know about what is going on inside of there as this company hangs in the balance >> they lost the head of products they lost the head of revenue and this is a time of turmoil where the entire industry is facing significant headwinds the companies also in the process of reshaping their technologies back. there have been a company trying to go ahead and shift from brand to direct response so they've been revamping the entire tech stack. it's a lot of headwinds that the d company is facing and that's what we're dealing are right now. >> any implications for tesla that you feel strongly about it's interesting that stock is do you remember 6% you may think that tesla shareholders would be happy if musk walks way in this deal though it doesn't seem like it's going to be that easy.

>> yeah. i think that's a fair conclusion i wouldn't necessarily extrapolate today's trading action in tesla relative to what investors want today is a pretty nasty day in the markets. you're seeing high multiple stocks really get under significant amount of pressure today across the board and tesla certainly getting caught up in that. but in general, i certainly agree with your premise that, you know, there is only 24 hours in a day musk got his tentacles in so many different operations. and if he's less distracted with a twitter acquisition, that would be a positive outcome from a tesla standpoint >> since you mention the high multiple selloff, how do you think we're set up for tech earnings season? where are the best opportunities? >> yeah, for sure. it's such a great point here so the nasdaq pulled back significantly. and, you know, you look at the retracement in ten year yields across the board from 3.5% a few weeks ago, years ago, now back down to 3% that is generally a positive backdrop for secular growth. i think at this point the prior

guest said it perfectly. this is a tale two of cities in terms of calendar 2022 first half was about multiple contraction and now how much do the earnings have to get revised downward negatively? in terms of pockets of opportunity, we want to look at areas we think are more resilient including software, especially cybersecurity more areas that are least likely to get cut from a budget instant point. >> got it, jarrod. thank you very much for joining us >> here's where we stand right now in the market. he mentioned what we're seeing in the nasdaq. nasdaq 100 down 2% right now it is communication services and consumer discretionary weighing on the s&p 500 nasdaq calms down. wall street is buzzing about kanye west again reportedly taking a big step building his retail empire details straight ahead then wednesday, join on the evolve global summit featuring an interview with the ceo of

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what is wall street buzzing about today? kanye west they filed trade mark applications with the u.s. patent office to protect yzysply

for retail stores. on line ordering services and shirts, shoes, socks, hats, accessories, lingerie and underwear. of course, kanye already has major deals in place with adidas and gap. unclear whether this filing could include those brands usually does when he releases stuff online could be some kind of pop-up store. and there could be trouble brewing between kanye and adidas last month he called out the brand and ceo directly for copying his designs with the new adeed adidas slice according to trade mark attorney, west filed for trade marks 465 times since 2004 of the filings, only 15 have come to fruition some of west's filings that haven't made the cut in the past include half beast, red october,

kanye travel ventures. he said this is not uncommon with big brands but most of the filings never materialize and become abandoned still the sneaker world, of course, is buzzing casino stocks are getting crushed today. why that group is falling on hard luck straight ahead that short plus down grades hitting shares of met yashgs lululemon and under armor when we take you inside the market zone

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contessa brewer on casinos and julia boorstin on meta and, mike, never good sign when kraft-heinz is one of the winners. >> exactly it is a growth issue of course, you nknow, coming int the day exacerbated by new talk of restrictions in china and this idea that there is this sort of global economic gloom that pervades in the morning we've been able in our nooshgts g markets get a bid in the day there was attempt to firm up toward midday and back off towards there. the big tech stocks that had carried part of the load last week also not doing great. of course, apple is trying to relate it on some level. but inconclusive definitely a heavy market today. >> a lot of warnings about

earnings you heard bruce richards of mature on this saying that sort of earnings recession is not fully priced in yet. we heard it from jeffries when i asked the tech analyst about the setup. what is your feeling as we kick off with bank earnings towards the end of this week >> it's interesting. >> i could not argue with anyone that there are risks at the second half of the year. we have to hear from companies how they're setting things up and what their guidance is analysts will track company guidance more than anything else in terms of the macro and dollar the market is extremely unusual leading into the peak of earnings forecast. if you look at past cycles and you had a down turn in earnings estimates, the market was pretty much up in the six months prior to that peak you can say because it was so expensive this time and rates going up maybe so i don't think that investors are being caught entirely flatfooted by the prospect that the numbers are going to be coming down to a

large degree >> let's talk costco posting strong monthly sales in june up 18% compared to last year another data point in the recession or not debate taking place right now. costco ceo was on squawk "squawk on the street" earlier this week he said people are in a personal recession. but he also said the costco consumer seemsing to doing pretty well. listen >> overall, i think that the consumer is not doing bad as can you say unemployment is down significantly. if people want to work, they can work so, you know, my view at the moment things are not so bad >> mike, costco is one of those that kind of does well in a consumer discretionary boom and then also times of recession because it's a staple stock. is that -- has that been reflected in the valuation and what else is leaning that way? >> it is reflected in the valuation. expensive stock. it waxes and waynes to a degree. but definitely not specifically

the lowest end consumer that really is what costco depends upon the small business component is in there i think it's -- i think he's kind of right:there is a squeeze going on although if you look at checking account balances and credit card delinquents, they all look better than they did prepandemic even in that sort of lowest 20% or so of income the income spectrum. that may not last for long doesn't seem like it's going to be a consumer lead down turn if that's what we have. >> by the way, the staples, general mills makes a new high now every day. coming off of earnings a lot of the companies, procter & gamble and walmart all higher today. again, i guess that is the classic recession trade. >> it is the classic trade whether you say go towards quality or low volatility stocks or resilient or noncyclicals, yes. it takes you there they look really expensive if you look at cyclicals versus defensive on a valuation basis people are paying a premium for

that safety. not saying too much of a premium yet. but there is no doubt they're paying up. >> the biggest winners today all of the casinos close ford a week here as they try to slow the spread of a covid outbreak contessa brewer joins us will these companies be able to weather the storm of persistent restrictions how do you trade the names >> well, it's kind of like that old song, "they'll get by with a little help from their friends" in, this case, parent companies and profits from other locations. sands benefits from singapore's rebound. the restrictions largely been lifted there las vegas is, of course, booming and fueling mgm and wynn and in fact, wynn has not only nevada but boston property this is a real reversal here boston is outearning any individual wynn property in the macio. that is crazy.

macaio properties were beating wynn before the pandemic and before this total closure this week global ratings put wynn and sands on watch with negative implications because of the pressure of china's covid policies bernstein predicts gaming revenue for july in macao, 3% of 2019 levels. >> it's a tifl time to be there. but if you think about the demapped across the border, you think about the importance of macao frankly within the greater bay area, we're huge, huge bulls on macao >> this was the first time craig billings sat down with the bernie sanders rob goldstein you can see more of this epic exclusive conversation on wednesday. you don't want to miss that. meanwhile, sarah, you know, here at home we're focusing on the impact of rising gas prices, inflation. i asked those ceos, you know,

talk to me a little bit about what do you see as the canary in the coal mine for whether we're heading into recession and it was interesting they said, look, the pandemic may have made las vegas somewhat recessionproof in that even though gas prices are soaring and the cost of food and housing and all of that interfering, people just now view experiences differently than they did before the pandemic >> no. the they're prioritizing the question is how long does it last people can relevant yea start to get hit and see unemployment rise >> mgm's former ceo had told me a couple weeks ago, look, in the lead-up to the recession in 2008, i totally missed it. our fourth quarter of 2007 was gang busters our best ever. he said i was looking at what was coming in and from billage yoe, the luxury properties across the nation.

he said when i should have been looking at circus circus and we already heard, sarah, some of the casinos say at the very entry level, the bottom demographic that isn't that profitable anyway, but that's where you start seeing chinks in the armor. >> always interesting when you get competitors to sit down together, kudos. it's not easy to do. looking forward to that interview on wednesday contessa brewer. meta, take a look. one of the biggest losers now in the s&p 500. underperform from hold cutting the full year revenue forecast earlier on "power lunch," laura martin discussed her concerns that it may take too long for meta to see a return on its enormous investment in the metaverse. listen >> why on the stock in 2022 if the return on the investment you mentioned to day are in 2030 let's go somewhere else and come back in five years and see if his metaverse reality is the right one and whether he is going to be this partner

>> julia joins us. that time line, right, is that how long investors have to wait before they're seeing returns on investmenthere >> well, look, maybe zuckerberg is being cautious here but this idea that he doesn't expect the metaverse to be generating significant revenue on the scale of some of meta's other businesses like facebook and instagram until to 30, avenlts are expecting that for the next five years at least the meta verse business is investment mode. expensive, expensive investment mode i think there is some sense they'll be getting indications of different ways that you're going to be able to make money there, the types of commerce, the revenue that meta is going to be generating there in the meantime, they have to deal with the core business right now. >> and there are issues there,

right? one of the ceos i spoke with said allst advertisers see yellow lights flashing everywhere, slow down, watch out, be careful how you're spending money of course, facebook is navigating those issues. at the same time as it is also navigating apple's operating system changes which make it harder to show advertiser exactly what the return on investment is. so they're busy working to figure out new ways not only to have accurate measurement but also accurate targeting and even as they made progress there, there is more potential challenges ahead with the eu and others trying to use privacy as a priority and, therefore, limit the way targeting and measurement can be done. so a lot of challenges here. they have a long term plan to gen generate revenue on metaverse. >> is there a spillover effect

from any of the investors at twitter, all that drama? >> i would say if there is any company that is having big impact and a spillover effect, it is tiktok tiktok, of course, you know another stock, but i feel like any time i talk about tiktok, we should be showing the stock charts for twitter or snap, for meta even for pinterest much so much attention has gone into tiktok. and tiktok is building in ad business so right now you have tiktok stealing the eyeballs. the ad revenue three time what was last year. so, yes, twitter, i think, has raised attention to the fundamental challenges facing the platforms and even the issue of bots. i think tiktok is really one posing a threat. here is another thing about meta that laura martin pointed out. they have a new reels format which is successful but not fully monetized yet.

it is their version of tiktok. they need to continue to grow that reels engagement and then really make money it from. they have done it before >> we know -- >> they've gone to the new foremats before. >> we know it's a priority sorry, i didn't mean to cut you off there. je julia boorstin turning to another downgrade, jeffries cutting the rating on lululemon and under armour jeffries says onest biggest beneficial rifz pulled forward demand from the pandemic adding competition is rising and headwinds growing including lower margins and the new steeker category and tough comps. and then with under armour, a different story. they're concerned about management volatility. they don't have a ceo. and lagging fundamentals nike remains a top pick for that jeffries retail team the most controversial one is

the lulu we have not seen evidence that that necessarily is the case in recent quarters. >> not yet, no anyone that is skeptical about lulu's ability to keep growing as it was in recent years, it's no the new i think there is an argument to be made the kbhp overearning they talk about the sales per square foot. just off the charts. maybe that is not sustainable. there was an inventory bulge in the early part of the year it does seem as if some of that premium valuation out of lulu continued to compress just a bit. the street still likes it though wlchlt that is a positive or negative or that is just people clinging to hopes that it's going to find its former glory >> just in the last hour, headlines from the atlanta fed president saying the recent inflation data has not been as encouraging as i would have liked. and that we're still pointing to another .57% increase in the fend fed funds rate in july.

i highlight this even he's been one of the more dovish ones. worried about the impact that will have on the economy and even he is talking tough we'll see wednesday. >> last week he said he expects a 75 basis point hike in the july meeting i think he expresses concerns about the possible impact. but it does point out that inflation, the data itself are not cooperating with the market's view. >> he and others are saying that economy can hand this will we're at the two minute mark what do you see for the internals? >> yes absolutely and for the new york stock exchange, it started out pretty rough there as you can see it's still almost 6-1 declining to advancing volume. so pretty much across the board. take a look at gold. it is breaking down here it bottomed a couple times

17-30 if you wond want to look t prepandemic, 1600. yields perhaps are a factor here a general longer term waning of interest certainly not inflation heads. mid 20s. bottom end wrf it's been since around april gold is getting hit by that stronger dollar. it continues to strengthen as we head into the close, take a look at the dow jones industrial average it is faring better than some of the other major averages only down 172 points or so caterpillar the biggest drag along with goldman sachs, nike, so it's the cyclical trade what is working to day hk is doing well very defensive tilt.

we only knew highs of the day come from the pharma and health care sector. communication services is the worst. nasdaq down 2.3% reversing some of last week's gains. that's going to do it for me here on "closing bell. now i send it over to scott. >> you just heard the bells. we're getting started at post nine in a little bit i'll speak to ed yardeni stocks may have hit bare bottom. but we begin with our talk of the tape let's ask courtney gar see yashgs pawn capita