at 17.5 times next year's earnings, you've got to go all the way back to the summer of 2015 for valuations this low can they get lower of course they can but there's always a reason people are trying to figure out an investment thesis. >> they're playing the walk-off music, dom. >> they are. i'm going to walk off. >> thanks for watching "power lunch," everybody. >> "closing bell" right now. we'll see you tomorrow stocks taking a step back today as the fed meeting gets under way, and walmart sends a chill through wall street. the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen take a look at where we stand at the market we're pretty much at the lows of the day, down 1.25 of a percent on the dow the s&p 500 is down and the nasdaq is down 2% ahead of big tech earnings which kick off after the bell microsoft and alphabet within the s&p there's some strength in defensive groups like health care, utilities and

real estate, all green today everybody else is down consumer discretionary getting hit the hardest. here's a look at the stock of the day and partially who's to blame. walmart pulling back sharply on an earnings warning last night, taking a number of retail and consumer names down with it. much more on that in just a moment. also ahead on the show we've got the senate clearing another hurdle surrounding the c.h.i.p.s. act we'll talk to the ceo of medtronic who was part of the white house meeting with the president this week about funding that deal. plus, more signs of a cooling real estate market new home sales sharply missing estimates in the latest data we'll discuss it with the ceo of redfin whose stock has been tumbling let's get straight to our top story, walmart's big warning cutting their guidance because of inflation doug mcmillan saying the increasing levels of food and fufl inflation are affecting how consumers spend, focusing more on food instead of clothing and

electronics. walmart shares are falling on the back of that news, dragging other stocks like target and costco down with it. joining us now is gerald storch. he was the former vice chair of target and mike who published on the walmart news jerry, is walmart management to blame for mismanaging inventory, or a broader problem >> no, i have to say this is a broader problem. you know, there's a tendency to say, oh, we heard this from target when they warned so there's more of the same but there's a lot of new information here remember, target's warning was seven weeks ago. it's kinds of an open book exam. here's the retail sales report for june guess what the two worst categories were, apparel and department stores. what was the best? grocery. so it's exactly what we heard from walmart it's not just walmart and it looks really sad for the rest of the year. >> mark, you say it's old news,

though why? >> we think it's backward looking. our survey work says the consumer is actually getting a little less bad. i'm not saying it's getting better but we actually show discretionary spending intentions remain positive importantly i think from a consumer standpoint because walmart consumers, those making less than $75,000 per year, we saw sequential improvements and that's the first time since the war in ukraine broke out and inflation got worse. we're not calling victory but we look at the result and say this is backward looking. obviously gas prices had a huge impact, especially when you think about the lower income consumer they're off of highs still relatively speaking, 15% off of highs. and i think too that walmart, back to the previous comment, probably had no choice but to do this because target basically said in early june that they're going to start marking down a whole bunch of that inventory to

force walmart's hand so both of those companies are extremely heavy coming out of first quarter and i think needed to do what they need to do to get inventories in a better spot which they effectively promise to do by the end of the next quarter or so. >> nobody is looking at it like that, mark, as sort of backward looking. they put out a warning intra quarter ahead of their quarter release. i feel like this is as fresh data as it gets when it comes to seeing the consumer. >> if you look at how target stock has traded, it's bounced around but hasn't gotten worse i think the expectation probably increased that walmart would have to do this so there are probably folks waiting for walmart to do this i think the underprcerformance the overall market hasn't helped so directionally that might tell you that folks kind of think we're to a point where it's not quite as bad as expected they alluded to performance going forward in the release as

saying back-to-school this early is off to a decent start so that's something to be seen. so not a disaster from where we are from a consumer standpoint >> so, jerry, what do we make of it then as it relates to the consumer picture and the overall economy? what does the fed take away from this >> sure. i'd like to be optimistic about the future, but having run multiple retailers, you don't put out a warning like this unless you're pretty certain it's going to be a big problem it's very unusual for walmart to do something like this they had their earnings report coming out shortly to do this a few weeks ahead of that they're seeing a problem continuing to this day so i don't think it's getting better. the only the fed can halt this inflation, which is a consumer-driven event, is by putting a stake in the heart of that vampire and that's what

they're going to do. every piece of data about clothing sales is negative certainly there's some very high-end retailers who have done fine during this period. but the one thing we all know is that the strongest correlation for high-end sales is performance of the stock market. so if the stock market continues to perform poorly, then even the luxury customer is going to be affected by this and we'll see the same pattern meanwhile groceries -- we heard today from albertson's they're thriving, they're growing. grocery is growing that's what walmart said as well this is a pattern we've seen before consumers are flocking to necessities with what money they have left. if you have more money, you can still spending on discretionary items but that bars starts to increase, increase, increase, increase as the economy does worse. sad to say i think that's what's going to happen. >> albertson's, coca-cola and kimberly clark all had pretty good sales which shows where the spending is. mark, what should investors do off this report?

are you suggesting they should buy walmart on this clearing event if you think things are getting better or buy some of the other retailers getting hit? >> we're not recommending walmart or target, we've been recommending costco saying that's probably the best place in a tough neighborhood. we also cover consumer staples we think there's probably better places to be there where the consumer will be willing to absorb price increases so things from pet food to energy drinks and the like so i'd rather be there from a retailer perspective just to go back to the previous comment, the u.s. numbers were phenomenally good -- >> luxury. >> right, luxury versus mass, but obviously what's going on here from the willingness of the consumer to accept from a staples standpoint is still there. proctor, colgate, kimberly, coke to your point are all seeing pricing going higher and so far they're telling us elasticity is below historical levels. something has to give and i think what has to give is

general merchandise and apparel. people are spending less on that and spending more on staples. >> i think you both would agree with that but it is a confusing picture. thank you both for joining me today. walmart shares sharply lower. dow down 270 new home sales just came in at their lowest level since the start of the pandemic, sharply missing estimates for june how much cooler could the housing market get we'll ask the ceo of redfin next you are watching "closing bell" on cnbc.

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what's happening with the nasdaq we're pretty much at the lows of the day, down a little more than 2% all the big tech names are lower today. microsoft at the bottom of the list for the qqqs. remember, it reports earnings after the bell amazon lower, tesla. meta down 5% apple, nvidia. remember, all these names come out with earnings a little later this week in the wake of some warnings over the economy. today walmart, last week it was snap snap continuing its deterioration, down another 2%, now down almost 90% over the past 12 months. check out today's stealth mover. it is vista outdoor. roth capital downgrading the maker of remington ammunition and bushnell binoculars from neutral to buy, slashing its price target there to 32 from 53 on concerns that weakening ammo demand will weigh on earnings through fiscal year 2024 it's been a winning stock up through january. new home sales falling more than expected, down 8.1% in

june now down more than 17% from last year meantime, home builder p oulte having a decrease in orders. joining us now is the ce o of rd fin. glenn, thanks for being here. >> good to be here. >> we're talking about the "r" word are we in a recession in housing? >> yes the housing market always feels a recession first, just pause it's the ultimate high ticket purchase so i think we're going to see housing get worse first and get better first but things have got to get worse before they can get better >> what are you seeing right now as far as sales and trends and how much has it changed? >> well, it's been a sea change, especially in the markets that really boom during the pandemic.

so if you look at boise, salt lake city, denver, those are the markets that have had a price reduction. in salt lake city it's 65% of the listings have a price deduction. homes are being marked down because people are trying to get anyone to buy it before the school year starts it's going to be a real logjam starting to clear this inventory. >> what about pricing. we've seen two months now of deteriorating pricing. we know that's what the fed is trying to target here, on the inflationary front what are you seeing? >> well, we're seeing very aggr aggressive pricing there are several players that weren't as active in the past that have been very active over the past five years, so investors sometimes have been a quarter of all home sales, they are going to react very quickly to the market. you also have buyers coming out before the market turns

completely against them. normally price discovery is really slow because you have to quips a homeowner that her house isn't as beautiful as she hoped and she wasn't going to get the money that she needed. but builders, ibuyers, investors, they know how to get out fast that's going to drive faster house discovery and help the housing market recover faster too. it just means that it's going to be a wild ride on the way down. >> so are you telling your brokers to push lower prices, to push the sellers to accept lower prices >> we're doing that because it's in their best interests. time is not on your side if you're listing a house if you're hoping things will get better in the fall, that's not usually the case it seems like the federal reserve's resolve is fairly strong right now so if you've got two or three weeks on the market and only getting four or five showings per week, the market has spoken and you need to lower your pricing. so homeowners are often

resistant to that but it's often what's in their best interests. >> i get it. so what does that mean for your stock? it's down 85% now over the past 12 months. i feel like you're getting dinged as a web play where we've seen lower multiples and also as a housing play what are you hearing from investors? and what has it meant for your business fundamentals? >> well, i think investors just want to make sure that during the recession we are able to strengthen our competitive advantage that we're taking share, that we're improving sales, execution, that we're growing our website traffic. so you want to focus on the factors that you can control in this case, we have built a better mousetrap we're able to sell homes for 1%, sell them faster for more money so we should continue to take share. how the street values that as a business will change over time in ways that i cannot control. but i know we can become a better business every quarter. >> you've been cutting jobs, right? we've reported that.

what is the broker picture going to look like are you going to be able to retain them in this kind of environment? >> obviously we hate having to cut jobs it's very difficult when you employ your real estate agents in such a cyclical industry to hold on to people through thick and thin we do our best in this case i made a mistake in hiring too many agents at the peak of the pandemic but having said that, agent retention is very strong right now because the rest of the housing market is a disaster people would love to be working at redfin because at least here, our website is connecting them with people who still wanting to buy houses >> so are more cuts coming >> not in our core business. we may have to adjust the size of our mortgage business that's happened in every other part of the lending industry but in our core business we made our cut. we think that there will be some

attrition that we don't backfill that will give us continued leverage over our costs but we don't anticipate having to make another cut. >> okay, that's something at least. glen, we appreciate it, always glenn kelman, ceo of redfin. >> bye. >> let's give you a check on the markets right now. the dow down 224 or so s&p 500, some of these sectors are holding gains. health care, utilities, but it's the consumer names getting hit the hardest. also technology not having a great session. we've got communication services down 2%, consumer discretionary down 3.2%. amazon is getting hit. it's sort of a triple whammy for amazon the tech sell-off, walmart and some news on shopify also cutting back. after the break, wall street is buzzing about bombshell allegations surrounding china and the federal reserve. we'll tell you what one senator says he has uncovered, next. as we head to break, check out some of the top search tickers on cnbc.com.

10-year yield back in the top spot yield is a little under pressure at 2.8%. walmart no surprise in there 8% on its profit warning. amazon down 5% getting hit on all sides. there's the shopify fallout, down 14% as it cuts 10% of its workforce. gm off earnings down 3%. we'll be right back. this broker. let's open your binders to page 188... uh carl, are there different planning options in here? options? plans we can build on our own, or with help from a financial consultant? like schwab does. uhhh... could we adjust our plan... ...yeah, like if we buy a new house? mmmm... and our son just started working. oh! do you offer a complimentary retirement plan for him? as in free? just like schwab. schwab! look forward to planning with schwab.

what is wall street buzzing about today? listen to this, ohio senator rob portman accusing china of recruiting fed officials in an attempt to gain influence and glean confidential information ylan mui has that story for us. >> reporter: this was a two-year investigation by republicans on the senate homeland security committee and it centered on 13 fed employees with ties to the pboc or a chinese talent recruitment program. in one case chinese officials forcibly detained a fed staff member during a trip to shanghai

in 2019. they tapped his phone, accessed the fed contacts in his wechat account, threatened his family unless he turned over economic information and then tried to force him to sign a letter pledging silence or go to jail the report states, quote, china has engaged in a sustained malign influence and information theft campaign against the federal reserve taking advantage of america's open and collaborative research practices. it's based on 3,000 documents from the fed which conducted its own internal investigation into this incident and other suspicious activity starting in 2015 now the fed is disputing its previous findings. in a letter to the committee, chairman jay powell says he's deeply troubled by the report's unfair, unsubstantiated and unverified insinuations. sara, the committee has asked the fed to make those underlying documents in this investigation public back to you. >> so many questions, ylan

so what was china after here is there any indication that they got some of that inside information? >> reporter: so what the committee's report says is that china was able to get some modeling data, modeling information from some of these fed officials, but it was unclear how sensitive some of that information was the fed has several categories or tiers of classified or restricted information so it received some, but we don't know exactly what that modeling information was the fed's argument is, hey, we have a lot of this information posted publicly on our website and so there are security protections against potential foreign influence is very strong. >> so that's why the fed has pushed back so hard against this >> reporter: it doesn't want to be seen as vulnerable from threats from china it's unclear why the fed said it couldn't verify its own internal investigation. the committee told me that it

was surprised that the fed raised that objection sort of at the last minute. that's why it wants some of those documents to be made public. >> really interesting. ylan, thank you. up next, the ceo of medtronic discusses why passing the c.h.i.p.s. act is so important to the future of the medical device industry, when we come right back.

the bipartisan c.h.i.p.s. plus bill clearing a key senate vote today setting it up for final passage in the chamber in the coming days. this of course comes after president biden met virtually with the ceos of lockheed martin, cumm ins and medtronic the ceo of medtronic joins us now. jeff, it's good to see you we think about cars, we think about electronics, not necessarily medical devices for chips. what's at stake for you and your industry from this bill? >> well, sara, thanks for having me today i'm really excited to be here and excited to hear about the progress on the c.h.i.p.s. act in the senate today. chips don't just impact american lives when it comes to consumer electronics or automobiles, but it also impacts their health

and a growing majority of the devices, the technology that we produce, contain chips every single -- every single chip we use is tied to a human life. >> where are the chips that you use made currently >> well, we get it from the same supply chain that the other industries -- mainly outside the u.s. today that's why i think it's so important for the c.h.i.p.s. act to onshore more of this chip supply and to ensure our future. >> how quickly -- so assuming this goes through and the money then gets dispersed, the $52 billion, how quickly could we see it actually come to fruition where we make enough chips in the u.s. for you to use those in your medical device manufacturing? >> well, i think it will take cellar -- several years to get that capacity online, impact our

sp supply chain and have us more self-reliant in the u.s. there is a network effect here where we are -- the med tech industries an r & d heavy industry moec most of that is done in the united states. to be able to work alongside the semiconductor companies on research and development as we enter a new era of medical technology, the convergence of advancements in traditional medical technology like sensing and robotics and miniaturization converging with the digital space, we're entering a new era here and semi conductors are at the center of that >> how does the u.s., geoff, stack up against china this deal has been sold as sort of a competitor to china where they're trying to develop their own chips and of course the reliance on taiwan how do we stack up on r & d for medical devices?

>> look, right now the u.s. has a lead on china. like i said, the majority of the world's r & d for medical technology is done in the united states however, the chinese are really developing stronger and stronger local companies that are going to emerge as global players. and that is happening very fast. you know, when you start talking about leaders in med tech, in a couple of years you're going to have some chinese names on that list >> so what else was discussed at the meeting with the president >> yeah, look, he was really asking the ceos that you mentioned about, you know, how is this -- how is this c.h.i.p.s. act in a little more detail have more of a short-term effect as well, like with our r & d, and really trying to get into more of the details sector by sector. he has a really good understanding of the impact of

this and his team. this has been a top priority of his team you know, he was really just asking us for more information and for our help >> what about medical devices themselves, geoff? where are those made is that something that could be made in the u.s. ever? >> oh, sure. look, first of all, the medical device industry, there are several big companies like medtronic, but there's a lot of startup companies in this space. and a lot of those startup companies, like i said, are here in the united states a big component of the medical device industry is startups, and there are many located here. most of them are located here in the united states. you know, they typically start manufacturing here in the united states so there's a -- for medtronic, we have manufacturing facilities all over the country the east coast, the southeast, the midwest. you know, we have several plants in california even where it's a little higher cost to operate.

we have innovative manufacturing there. so we've got manufacturing all over this country. >> that's good to hear what about the more acute near-term issue of accessing those chips? where are we on the shortage as it relates to your industry? are you able to get them >> look, there's definitely some supply constraints i've talked to my peers at other med tech companies and we're all feeling it but the industry has done a good job along with the providers in this country of being adaptive and resilient and so it has not resulted in a significant disruption to care but we are feeling the pinch and that's why this act is so important so this doesn't happen again in the future. >> has it gotten any better? or has it gotten worse >> it hasn't gotten worse. i think it's been stable we look at this every day. it's been fairly stable. i'm optimistic about the next couple of months, but we'll have to wait and see how that plays

out. >> got it. i know you're somewhat limited to a quiet period. geoff martha, thank you for joining us here's where we standing right now in the markets, down about 220. just off the lows. the s&p is down 1.2% we were down 1.4% a moment ago it's technology, it's consumer discretionary, it's staples because of walmart, although some staples working out better like coca-cola and adm nasdaq down about 2%. up next, the big picture on what unusual spending trends for coca-cola products could signal billion other consumer stocks. you can listen to "closing bell" on the go by listening to the podcast on your favorite podcast app. we'll be right back. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated.

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today's big picture. the consumer is slowing and booming at the same time it's a weird atypical spending environment because of all the pent-up covid trends that's at least how the ceo of coca-cola put it to me thi morning when we talked about his earnings and what he's seeing from the consumer. for coke the results are stronger, double-digit growth on the back of higher volumes and higher prices. they raised their outlook for sales and kept their outlook for earnings intact, despite a major headwind from the strong dollar, 9% off of earnings coke's growing market share, its increasing advertising and the beverage category at large all doing well pepsi seeing that growth too but when it comes to the consumer, quincey says in the u.s. and europe he's seeing the consumer putting the brakes on spending and trading down in grocery and convenience stores but in leisure and travel,

spending is booming. for other consumer companies, it does depend where the exposure is because of all this reprioritization of things away from home. coke does benefit from the away from home business as well as being in a strong category but the key question for all companies is what happens after the summer will all this pent-up demand for experiences and travel hold up will it fall along with other pockets as inflation and higher rates take a toll? that's the question many of these consumer ceos are wondering about right now. up next, evercore's isi on what he expects from alphabet's earnings and whether investors should buy the stock off of that report. that story plus a rally for a pair of big industrials. and in gticobaseetng crushed, when we take you inside the market zone. i know what i like. i've been meaning to ask you, carl. does your firm offer personalized index investing? hmm? so i can remove a stock that doesn't align with my goals. i'm a broker, not a barista.

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we are now in the "closing bell" market zone. stephanie link is here to break down these crucial moments of the trading day. plus we've got seema mody on ge and 3m and mark mahaney on alphabet we get set for the mega cap tech names to report this week. steph, is this positioning ahead of some of those reports microsoft, alphabet lower. amazon also getting hit pretty hard after the walmart news. >> yeah, this is a really important week i think there was some nervousness to begin with. you had 35% of the s&p 500 companies reporting this week.

we have the fed decision, we have two very important inflation reports later in the week eci, core pce, we know they're going to be hot and you have walmart on top of the nervousness. i am not all that surprised about the walmart news after target and rh and several other retailers did talk about missing the whole shift from goods to services walmart had problems with food inflation and their low-end customer you have all this going on and such uneasiness about digital advertising spend in general alphabet, microsoft is 6% of the s&p 500. so you've got like 10% of the s&p 500 at our fingertips and there's a lot just riding on these companies along with amazon, apple and meta later in the week. >> right you mentioned the consumer slowdown it certainly is here, at least that's what we're getting from some of these warnings on wall

street walmart lowered its outlook and said customers are spending more on food and less on discretionary items like clothes and electronics. they were unable to pass on those costs as effectively as some of the other retailers. look at shares of adidas lower in today's trade also putting out a warning taking down sales margin and earnings guidance mostly due to the chinese market because of the rolling shutdowns on covid, but also saying that the consumer is facing challenging macro conditions that could lead to an overall slowdown in spending and that guidance captures that. and then there's shopify, the stock getting crushed after announcing layoffs for 10% of its global workforce that's roughly a thousand workers. the ceo saying he misjudged how long the boom would last the takeaway on the consumer, stephanie, is what >> i think it's very mixed i really do. you mention all those companies,

but on the flip side you know just as well as i coca-cola had a good number and they raised their sales number to 12 or 13%. we had pepsi last week that did the same they talked about a very strong consumer, resilient consumer in terms of demand in the face of double digit price increases we had mcdonald's this morning and they posted a 9.7% comp and had upper single digit comps across every region, so they're doing a really good job in terms of the menu changes and delivery and digital and all that kind of thing. so they're all seeing inflation, but they're also saying demand has held up. so it's a very mixed picture at this point we'll have to see, sara, if these companies that i just mentioned have pricing power or not because that's critical for them, at least at the onset. but i think it's a mixed consumer and i think the high end is doing better than the low ending if i had to choose between target and walmart, i would take

target not because i own it, i do own it, but it has lagged walmart by 23% year to date and trades at 13 times forward estimates and gives you a decent yield and has already taken their medicine. >> they're more of a staple. aren't they considered more recession proof because they have such a big food business? >> they do, they do. but so does target target is more of a combination. they definitely have more general merchandise over food but they have been increasing their food mission over the time the sector got clobbered my favorite, costco, is still trading at 39 times earnings and hangs in there but i'm watching that too to get back in at some point. >> it is getting hit on the back of the walmart news. i would say it varies by income group and also by category it really depends where you are right now. apparel doesn't look great 3m is the biggest winner in the dow after better than expected earnings, announcing it

will spin off their health care business ge is rallying more than 4% leading the s&p after profiting profit that more than doubled analysts estimates thanks to small sales in the jet engine miss seema mody joins us. both companies embarking on separate plans to spin off their health care units. is the market onboard or just the fact that they're not seeing a bigger slowdown in earnings? >> i think the price performance today, sara, tells us that being a large diversified industrial may not be the way to win on wall street. 3m revealing those plans to spin off health care, which accounts for about 25% of its total sales. they call it a smart and aggressive move for a company that really needs it the stock has fallen 27% since mike roman became ceo in 2018. that's the same year larry became the ceo of general electric and he has laid out a plan to break up the company into aviation, energy, health

care and simplify the story a bit. we're looking at shares of 3m on track for its best day in three years. ge shares up 4%. their main challenge is on renewables i asked when will this business turn a profit? he couldn't give me an answer versus the conviction he had for other business like aviation and health care. that's where he sees the growth. >> seema mody. seema, thanks. steph, either of these companies a buy off the news they're both down 25%. there's some slivers of good news >> yeah, i mean i own ge i don't own 3m but i like 3m as well and like this move quite a bit. you get a nice yield while you wait for the recovery and the spin but for ge, you're starting to see -- cope is starting to get respect and starting to get traction at the company in terms of making the changes that were very much necessary. so they beat organic growth was 5%. that's pretty impressive

free cash flow was better than expected of 200 million versus 800 to 900 million loss expected and i think, yeah, aviation is the bright spot for sure total revenue up 27% orders of 26%. total revenues up 27% compared to 12% last quarter, so they have seen a nice progression sequentially in the meantime, he's doing the right things. >> interesting to see earnings winners at the top of the dow. mcdonald's and 3m. walmart at the bottom. and then there's coinbase. not in the dow shares are sharply lower on an s.e.c. probe over whether some of its cryptocurrency listings should have been registered as securities coinbase's chief legal officer writing on twitter, quote, we are confident that our rigorous diligence process, a process the s.e.c. has already reviewed, keeps securities off our platform kate rooney joins us kate, what does this

investigation mean for coinbase and the rest of the crypto industry, just as they are debating this very issue of whether they should be regulated by the s.e.c. >> it's so true, sara. the diligence process the legal officer mentioned there from coinbase is a framework that other exchanges, about a dozen other crypto exchanges also use so this could set a precedent depending on what the s.e.c. decides. you could see penalties, lawsuits, class action lawsuits, and you can't retroactively list a cryptocurrency as a security so at this point there's about 150 tokens listed on coinbase. they can't go back and say oh, by the way, those are securities they'll have to deal with it they have issued a petition to try to get them to issue more of a framework and get a little more clarity but it's been one of the criticisms from the industry when it comes to the s.e.c., they say they want more clarity. the s.e.c. says we've given you more clarity these are securities and you've got to act like they are coinbase is registered as an

alternative trading system they have some of the broker/dealer licenses but haven't had to use that yet. we'll see if this changes anything on how they have to be regulated and work with the s.e.c. it could have a chilling effect, though i'm also told because there's no injunction and no cease and desist order, coin base can do business as usual. they won't have to change anything in the near term but all eyes are on what the s.e.c. says here. coinbase is the biggest u.s. company and the only publicly listed crypto company other than robinhood. >> but the stock is down 21% what is wall street so fearful of here if the s.e.c. does make a bigger move on coinbase? >> the worst-case scenario is that they are not able to facilitate any of the trading of the tokens they do about half of their revenue or less than half comes from bitcoin trading. if the s.e.c. said everything you're listing is an

unregistered -- from that perspective and also from a competitive perspective if people say, all right, i'm going to one of these exchanges overseas, coinbase has really tried to build its reputation on being the more compliant, transparent version of this. if they're not able to operate within the existing regulatory framework, really bad news for coinbase and you're seeing it in the shares today. >> absolutely. take a look at alphabet, it is lower it is reporting after the bell after snap's warnings on advertising spending they will watch ad revenue numbers closely to see if it's an industrywide problem or something more for snap. joining us is ever core's head of research, mark mahaney. google's shares 31% off the high would you buy it before earnings >> no. the probability is that

estimates come down because of fx, because of macro conditions. this is an ecosystem here. if there's weakness in consumer discretionary retail spending, if there's pressure on margins, that means the margin people will spend less on advertising and less on google it's secular, but secular cyclical i don't think we have anywhere near the kind of cuts we have with snap where estimates came down 20 to 30% a lot of this is priced in but you never know it's probably more in the 5% range, maybe 10% max but, no, i would not be buying alphabet in front of the print. >> but haven't estimates already come down for names like alphabet, especially in the wake of snap? haven't you lowered estimates today? >> yes, i did. i'm still fearful there's more cuts and i'm below the street. ethics is a real legitimate issue. that 12% appreciation on the dollar, companies like google, amazon, facebook, they have 50% of exposure to international

markets. and i really do worry about this data points we get from walmart. cuts in discretionary spend, that consumer discretionary spend that will affect advertisers. think about google as a major item and most retailers p & l. if that is being pressured, they have to take it out of somewhere. so i wouldn't be surprised if there isn't greater pressure than i thought on google i'd be cautious about google, amazon and facebook. i think numbers come down for all three this week. >> what are your expectations for all of them on hiring freezes, layoffs, cut backs in spending, those issues >> sara, i thought that was one of the biggest tells the number of consumer technology companies that have started to cut back. shopify 10%. or are slowing down or freezing, that's a real tell google has tremendous visibility into the global economy.

they may know the global economy better than anybody. so when they slow down their hiring and they do it twice in a relatively short period of time, we should all step back. hopefully this isn't -- i don't think there's anything permanent going on here and i don't think there are necessarily company specific issues. by the way, if you want to be defensive about this, you still have with google a 7% free cash flow yield it trades at 15 times gaap earnings you still have 17 times gaap earnings, you have cloud computing and i haven't seen any evidence there's a slowdown in spending for cloud computing so this will stock will hold better than others but i am fearful that estimates come down, the first thing stocks will get cut. >> that is some pretty bearish talk from you, mark. thank you very much. we'll see what we get after the bell. two minutes to go in the

strag trading day, steph do you agree with mark that the numbers have more downside and so do the stocks >> yeah, i think they do have downside to the estimates, although they are all down quite a bit, the big five, right they're down 20, 30, my goodness, meta is down 52% year to date. so numbers have been coming down people know things are slowing we know digital ads are slowing substantially. i only own meta and it's been wrong, but i own it because it does have size and scale when i think of alphabet, they also have size and scale their search business, youtube shorts has 1.5 billion monthly average users. youtube itself has 2 billion plus users that's size and scale. if their numbers come down, that story starts to get a little more interesting to me in terms of if the numbers come down and the stock comes down and the valuation gets more attractive at 17 times, it's kinds of in

the middle meta is 13 times but they're not immune and we know that. i want to pick my spots in this space but i have a very light positioning heading into the prints. >> one downside is global foreign exchange with the strong dollar stephanie link, thank you for joining us. >> thank you i just want to point out amazon because it is falling more than 5% consumer discretionary is the worst performing sector right now in the market as we head into the close it's shopify, it's walmart, all of those headwinds it's the broader tech sell-off amazon is down 5.3%. beyond consumer discretionary, there's pain in communication services that's what we'll be watching after the bell we've got meta down 4.5% some of the netflix and some of the media names a little lower twitter is bucking the trend, up 39.43 and verizon and comcast are a little bit higher. health care, utilities and real

estate are strong in the close that's the defensive part of the market consumer staples are holding up despite walmart's fall you've got names like coca-cola and pepsi doing very well. nasdaq down almost 2% into a very heavy earnings hour that does it for me on "closing bell." see you tomorrow into "overtime" now with scott wapner all right, sara, thank you very much. welcome, everybody, to "overtime. you just heard the bells we're just getting started here at post 9 at the new york stock exchange we get right to our talk of the tape the wait is over earnings from microsoft and alphabet and other key companies are imminent those reports, the analysis and of course the stock moves all strayed ahead. so much, as you know, is riding on these results joining me now, adam parker, joe terranova. we wait on the results our reporters are waiting. they will tell you when they are out. we will show you the stock moves. the super bowl,