500 sectors. >> worst performing stocks right now, tyler, marathon oil, hess and we were told energy, long energy a. floor below oil because of the geo politics that are taking place >> we just heard from scott nations saying no-no on marathon thanks for watching "power lunch. >> "closing bell" begins right now. it is an ugly finish to an ugly week for the bulls, the dow and s&p falling below their june lows both indexes now down around 5% just this week the most important hour of trading starts now welcome to "closing bell." i'm mike santoli in for sara eisen. david lebovitz from jpmorgan, thomas hoenig, charlie bobrinskoy, mona mahajan and

paul hickey. it was june 16 for the closing low. 3636 we're now almost half a percent below that right now this is a two-year chart, interesting to see where we've come from. this takes us basically back to right here that's the immediate post presidential election rally that we got it started on or right after election day in november of 2020 we pop to this level in the 36s and roundtrip from there now there's a lot of people talking about other levels below here that might be of significance which is more like in the 3400s we'll see about that things are getting very oversold a real washout type condition in the market today we'll see how it finishes up by the close. take a look at the energy dynamics here. participating in the down side more than fully today. the xle is down much more than the market today you see crude oil has had a

below $80 a barrel print this is crude oil relative to the s&p 500 energy sector. you see how they were tracking perfectly until right around here they diverged a little bit the dollar being stronger really accelerated. plus, the stocks seemed to benefit from the idea that they could still make good cash flows at 80 or even lower than that oil. now they are succumbing as well. there's no good place to hide type of feel to this market right now. it's unclear if we have to close that gap entirely. for more on this sell-off and where it might go from here let's bring in global market strategist david lebovitz. the markets are almost in concert, stocks, bonds, currencies, commodities, reprising for the idea that central banks need to chase inflation and kind of don't care what the economic damage is in the short term in order for them

to do that how does an investor navigate that kind of setup >> so the first thing that i'll say i think this actually brings us to a much better place than we had been over the course of the summer i recognize the sell-off today i recognize the sell-off over the past couple of days, but it feels to me like expectations are finally becoming a bit more aligned with the way that reality may play out and so there's definitely going to be more pain ahead. now that we have more clarity on the fed and we'll get more clarity on inflation, everybody is talking about what that may or may not mean for corporate profits next year, but looking at the fed's forecast that came out on wednesday afternoon, what was so interesting to me is they see a very tepid pace of growth with an unemployment rate that rises in 2023. that is going to be a challenging backdrop particularly for risk assets and so from an investment standpoint we're focused on following cash flows, and we think high quality fixed income is looking more and more attractive given where yields have backed up to

particularly over the past couple of days >> i guess the question is if you are an investor and considering equities as well, do you have to assume that you are going to have to ride out a recession of some depth in earnings decline that is not yet priced into stocks or do you think the market has come around to more or less being aligned with that likely outlook >> so i do think there's additional down side in equities from here. one of the interesting things we've been talking to clients about quite a bit over the past few weeks is that if you go back to the post world war ii period and look at the average decline in corporate profits during economic recessions, it's about 30%. that said, if you isolate the period from the late 1960s through the early 1980s, which i would argue has inflation dynamics more similar to where we are today, the average decline was only 15% and so clearly earnings estimates for 2023 need to continue to adjust lower, but we don't see as significant down

side to some of the more bearish commentators do in the current environment. we've seen the s&p kind of retest its lows here, move below the lows of june we think that, again, there is more down side from here but if thes&p were to move below 3,500 we would be buying to us that's a level where stocks really begin to look attractive >> not too far down from here if indeed we do get there in terms of the global picture which i know is your purview, the u.s. dollar going almost vertical at 20-year highs on the dollar index we saw what's going on with the british pound today collapsing on some of the fiscal and monetary moves there everyone assuming the rest of the world in some sense for one reason or another will be a bit of a mess. what does that mean for assets everywhere those stock markets have become even more depressed than ours have >> so the stronger dollar has clearly tightened financial conditions and is having an impact on economies around the world particularly those in the

emerging markets when we think about the global picture, though, i do think it's important to differentiate between developed markets outside of the united states and what's happening in the emerging world. when we look at places like europe, it does seem to us that these elevated energy prices are going to just be too much for that economy to overcome the pmi this morning was consistent with growth that is effectively flat and recession risk materially higher in the eurozone, that is the case in the united states. you have china coming out of a period characterized by covid lockdowns. we are seeing activity in that part of the world begin to bounce but what happens in places like china is really going to be a function of what happens in the developed world more broadly because obviously we are a key source of demand for the goods that they export and so to kind of bring it full circle, i think the reality here is the global story is really going to depend on what happens in our own backyard. i think when the u.s. catches a cold the rest of the world gets

sick is what we need to keep in mind here going forward. but if for some reason the u.s. avoids a downturn in the economy next year, we tactually think there's upside in the emerging world which has come under significant pressure due to slower growth and the stronger dollar over the course of the year thus far. > >> you mentioned you do see value in safer parts of fixed income, getting yield up front, rebuild that sort of cushion and also, i guess, sort of more reliable cash flows from equities do both of those things imply that you think the environment will become friendly to bonds and bond like assets, inflation is peeking and will come down, the fed is close to being done, or is it just a matter of on a relative basis they seem safer >> well, i'm not sure that the fed is close to being done i think they put that notion to bed on wednesday afternoon what i would say here it feels like the direction of travel broadly for the u.s. and the global economy is towards slower

growth and in an environment of slower growth we think long rates will need to reprise lower. and so duration, which has very much been the foe of investors so far this year, arguably should become a bit more of a friend as we look ahead to 2023. and then on the equity front i think what's important to remember is that the capital markets will bottom before the economic data troughs and the equity market will begin moving higher before the economic data begins to improve. we think that it will be rievley average. we don't see it as a repeat of '08 or 2020. 2% to 3% in real terms and things are back on track and markets are on better footing. we remind clients in the very short term there may be more pain in risk assets.

well in advance of the economy doing so on its own. >> that is the way it works. good to have you >> thanks for having me. >> all right, well, the fed's rate hike decision on wednesday sparked this latest round of selling. that move and the fed's policy decisions more broadly is drawing the ire of wharton professor of finance jeremy siegel here is what he said on "the halftime report" today >> the fed has just, you know, the last two years one of the biggest policy mistakes in the 110-year history of the fed by staying so easy when everything was booming and pointing to, my god, inflation will be a terrible problem and now, oh, yeah, we did goof badly there. never really admitted. i mean, still blames some things on ukraine and, you know, putin and the supply side even though oil is way below that level. i think the fed is way too

tight. they're making exactly the same mistake on the other side that they made a year ago >> joining us now is former kansas city fed president thomas hoenig it's great to have you to weigh in on this would you agree that it represents an error by the fed in regard to inflation and i guess does it matter how we got here in terms of what they have to do now? >> it's a fair point the fed was behind the curve they should have been at least removing a lot of that accommodation starting in 2021 at the latest, and they delayed throughout the entire year and, therefore, we ended up with the inflationary impulse that we have and it's become more embedded and, yeah, it wasn't all supply side by any means with the fiscal expansions and

the monetization, but we are where we are and now that inflation is embedded and the fed knows it and they know they have to get that down from the 8.3 which is actually becoming more and more difficult with time so they are raising rates and i think the 4.6% number they put in there are realistic and probably where they will be the question then will be what will they do in 2023 and i think, i suspect, they will have to go a little bit higher at least that will put continued pressure on the economy. i think it's pretty high >> 4.6, of course -- [ inaudible ] >> yeah, got you the 4.6 is the kind of committee's collective projection to get to, as you know, so that seems, it's not too far away, a little more than one percentage point higher from

here looking like they will get there in a hurry it seems that the fed has concluded by what they're saying and all the signals they're sending that they don't really see an alternative to significant further weakness in employment as a means to get inflation under control. does that remain a valid approach in other words, can they not essentially get rates to a certain point and then see exactly how the data come in from here because they do await that two or three months of more friendly inflation numbers >> well, that will be a decision they have to make. i do think they're going to have to get tighter than 3% most economists know that. and 4.6 by the end of the year is a likely number i think that will slow the economy. whether it's enough given the amount of inflation, above 8%, and given how much it's embedded, i think the possibilities are even more.

and so relying on a modest or continued increase in unemployment to slow -- to help with inflation i think is a low probability. i think they realize, although he didn't say it, they're going to have to suffer a recession to get this down. it's going to be painful, as powell said, and there's no way to avoid it. they are far enough behind, now they're in catch-up and there's danger in going too far. that's a risk they're going to have to take apparently. >> you've said a couple times inflation is now entrenched. you could have an argument from some saying, look, gasoline prices have completely roundtrip from before the war. you're seeing things like used car price that is are adjusting faster than what's in the cpi numbers. rents seem like they're cresting right now, if you looked at the listing. this is the argument that says

they're fighting a stale battle when it comes to trying to attack top line inflation the way they are and maybe they will end up going too far >> that's always a risk, but i think pointing out particular areas of inflation that are coming down is a risky business itself because overall inflation remains above 8% we've seen the wage increases which are pretty significant, are still behind inflation there will be a lot of wage pressure coming forward. we know that the core cpi is elevated and has not come down, so we're going to have to get through that i think -- and i think the fed is aware of what happened in the '70s when the fed at that point backed off of their tighter monetary policy too soon and inflation re-emerged, and i think this fomc led by powell,

we want to avoid that. i if i if they err, they will err above 5%, perhaps a little too long >> above 5% would certainly, i think, get the market's further attention from here. we'll see and, of course, powell has indeed said, you know, they have to go in that direction at least if not to that number. thomas hoenig, thank you very much appreciate the time today. >> take care all right. did get a bounce around the top of the hour. s&p 500 down about 2.3%. the low was closer to 3650 the dow is now off by 634, down more than 800. the nasdaq still down 2.4% and the russell 2000 down 3% up next, we'll take a closer look at the action in the energy sector, by far the worst performer. as we head to a break, check out

some of today's top searched tickers on cnbc.com. as you would expect it is all macro focused. the ten-year yield getting the most interest followed by the s&p 500, the dow, e thtwo-year yield and the nasdaq we'll be right back. this is connecting all your team with a shared point of view. this is the system you built moving from concept to customer. this is how. airtable.

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energy the worst performing sector on wall street made a big decline in oil prices. brian sullivan joins us on the phone from dallas where that kind of move is noticed. hey, brian >> reporter: i'm here in dallas. in fact, i have a bunch of oil executives here. here is the reality. tom lee told me two seconds ago it's a no bid market you're going to have to start buying some of the names here. throw out the xop, mike, oil stocks are trading as if oil was at $60 or $55 not $78. the disconnect, and i'm talking your market, the stock market, mike, the disconnect between the

commodity and the stock is widening today here is the thing, nobody understands the drop in price. oil demand has fallen nine times in 60 years it just does not fall off. i expect opec to try to defend the $90 mark the saudis implied they will do that today to your point, great stuff all day, it's just sell everything, get out of the way, flush it maybe we hopefully pull it forward a week >> oil is priced in dollars. the value has been racing higher and that's a big part of that story. a good reminder on what seems to be priced in to that sector. appreciate it, brian we'll talk to you again soon let's bring in the energy analyst from raymond james you heard what brian said. try to put this move into context in terms of what we're

seeing in the crude market, breaking to new lows it does look like a down trend for whatever the reasons behind it >> well, oil has now erased all of its gains since the start of the war in ukraine clearly the supply risks of russia trying to weaponize oil exports or additional sanctions, that has been overshadowed by demand side concerns about a global recession look, in the last 50 years global oil demand has turned negative four times, most recently in covid 2020 before that you have to go back to the global financial crisis it's very rare but it's not unheard of and as central banks seem very much inclined to push the world into recession oil demand is not going to remain unscathed.

>> right so i guess the question is if fears of a decline in demand, as rare as that would be, is there going to be a supply response? are there things the market is overlooking on the supply side one of the arguments for why it's tough to fight against soft demand is that an unburned gallon of gasoline today is not necessarily made up for later on when china reopens or whatever else happens >> well, several things on the supply side will help keep prices higher than they perhaps would be otherwise so one is the war is obviously not over and the european embargo on russian seaborne crude takes effect at the end of the year, divergence continues about 65 of those are in the

process of divesting russia's ability to produce and export and lastly let's remember the strategic petroleum reserve in the united states and analogous emergency stockpiles overseas have been utilized to keep the market well supplied since the first days of the war. if demand were to slow or turn negative then that will alleviate the pressure on governments from having to use these stock markets. >> where does it leave you with regard to the stocks in terms of what types of names or what position have been maybe punished a little bit too much given where commodity prices are? >> so across the spectrum of the oil value chain the producers, the service contractors, the

pipelines, the refiners, all of them fundamentally are tied to the commodity. we have to look at the futures curve. right now when we say oil is $80 a barrel you look at the futures curve down $70 a barrel a year from now. our view at raymond james prices will be as we are today or higher the next 12 months. so just on that alone we would be inclined to be buyers on the weakness because we do not envision oil going to $70 or even less as the futures curve is currently suggesting. >> pavel, we will see if it can find its footing thanks for the time today. appreciate it. we'll have much more on the energy sector coming up on "overtime" with legendary energy

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market down 2% though they have bounced in the last hour. this is the second week in a row for losses in the index. value and growth etfs getting whacked. value has performed better should you expect that trend to continue beef both sides that have debate with us right now edward jones senior investment strategist mona mahajan and bobrinskoy of ariel here mona, you can survey the damage and decide where, in fact, the markets might be mispriced in different pockets. why does growth start to look

better to you in this environment? >> charlie and i may not be too far off in our views rising yields in defensive parts of the market. we've been in that environment most of the year historically that peak comes about two months before peak in fed funds rate so if you think fed funds are peaking in the first quarter, a couple months prior to that you may get a peak in yields as well when yields peak, stabilize, tend to roll over, that's really when the longer duration parts of the market tend to work better and growth can work better you may get volatility that gives you the opportunity to think where you would want to position for potential growth

rebound perhaps in the year ahead. >> got it. now, charlie, you are a rally investor and have been sounding the alarm relatively early on inflation. you thought yields would go higher nominal growth has been very strong where does it leave you now, though, with the value trade somewhat tied to whether the economy can keep plugging along at a good clip here? >> that is the right question, mike you are right. we thought inflation was going to be higher, for some reason the fed didn't now we think inflation is peaking and will come down now the fed thinks it's time to get tough on inflation value has outperformed growth because of the reasons mona mentioned that growth stocks were overpriced. i still think we're a little too low on interest rates.

we've gotten them much closer. the ten year has averaged about 4% we're still below that i still think we have higher to go on rates which is generally better for value your fundamental point is right. if the fed is hellbent on crushing this economy that will not be great for any part of the stock market or great for value. >> clearly it's relative advantage. mona, when you talk about growth maybe emerging as a possible place to consider as being valuation reset has occurred there, you have the very largest nasdaq stocks that still have the premium valuation, more traditional growth or even staple stocks that fall into that category. >> i think for now with an economy that's potentially softening, that backdrop as well when growth, economic growth is slowing, investors may seek out

some growth in their portfolios. i think what we will see first recovering is the stable quality parts of the growth market we're still cautious on the higher valuation parts within stable growth there are secular winners from a long-term perspective if you think areas like cyber, like parts of the health care market that can be considered growth, robotics, et cetera, cloud, enterprise spending, anything with established business models. in fact, as we think about a market going through a downturn and then re-emerging from a downturn, that's really when you'll start to see especially on the enterprise side the spending rebound and even on the consumer side. think the next three to six months when you get the opportunity. growth has been beat up pretty badly down 30% already as we noted valuations have come in quite a bit. >> what about commodity related

stocks you have owned for a bit? are we seeing that mega trade roll over or is the decline now an opportunity >> a tough day to be on to answer that question they are up 21 to 30% on the year but were up 50% a couple months ago i still believe the demand for oil will be higher next year as markets, china, comes out of the covid lockdowns. we haven't been spending enough on exploration it will push commodity prices higher demand for food will continue to grow i still like apache and mosaic but it's a tough day to be on

making that case >> for sure. let me follow up with the notion of financials. yields have to go higher it's a benefit the economy looks like it could have more down side. in fact, the fed might want it to have more down side people lack confidence in the next couple of years >> yeah, and so far we're not seeing credit problems but everything you just said right now should be a great environment for bank stocks better net interest, higher rates, better deposit premiums for people not moving their money around and no signs, at least that we're seeing in our due diligence of credit problems so this should be a good time to own bank stocks, goldman sachs close to book. some of the bank stocks it looks goldilocks like that they could have good credit situation with a good interest rate environment, could be the right time to own.

>> all right we'll see how it plays out going to be an eventful final few months of the year mona, charlie, thanks very much. a quick check on the markets. carrying higher now. the s&p 500 up 1% off its interday lows. down for the week. bespoke co-founder paul hickey, i love your read on things here in terms of at least in the short term how the market has digested what it heard from the fed. we've had this revisitation. what's different and what's the same about what we saw in june about how the market is positioned >> there's a lot of concern heading into an earnings season similar to how we -- it's very similar heading into an earnings season, expectations in june and we're heading into an earnings season now where expectations

are low. from a seasonal perspective, we put all of our weight on seasonality and we've never done it solely on seasonality, an interesting dichotomy we're in one of the worst short-term periods over the next week or so the next three months is the best seasonal time the last week of september is one of the weakest october and the rest of the year, the fourth quarter, is historically the strongest years we've been down 10% or more heading into the fourth quarter the average returns are in those years about double the historic average that's somewhat positive on a really bad day here. as prior guests have been talking about this period is unique in the fact the fed is openly rooting for if not a weaker stock market, a weaker economy. >> that's for sure, yeah

and looking like the market is at least assuming that the soft landing is far less likely than it was a few months ago. the extreme moves that we're seeing in bond yields and to a degree currencies has everybody on alert for when they are just going to pause and reset a little bit lower, right? they've kind of become very stretched. what does it look like to you in terms of the short-term yield picture and other factors that really on a macro basis have been keeping the pressure on stocks >> we're starting to reach extreme levels in the market these kind of periods in the short term go on until they go on to say we will reach this level is when things turn better investors should just stick to their plans and not get too out of bounds with the -- what's going on day-to-day movement

a lot of what's happening in week is a reflection of fed policy and seemingly a lack of credibility on the part of fed members. this week it hasn't just been the fed, that you see a nuclear superpower it's probably very unlikely but that will cause concern on the participate of people. so if we do go ahead in the weeks ahead some of those tensions start to ease, that will certainly cause some relief on the market and for everyone talking about how offsides the fed is at the same time they're saying rates do need to be higher i think the reflection of what the fed is saying and try to talk a real tough game they should have just been moving rates to where they think they should be rather than just the slow bleed to higher rates here, just get it over with. in march they were too late to

stop buying treshasuries. now trying to ease us in just get it over with. >> three 75 basis point moves, maybe they don't consider that to be piecemeal and slow i get your point they have a destination in mind and we might as well just hurry to get there i suppose i appreciate it. thanks a lot on a big market day. good to have you >> thanks. you, too, mike chips stocks underperforming. kristina partsinevelos is here -- she's at the nasdaq. >> reporter: yeah, i'm at the nasdaq underperforming and moving closer and closer to the yearly bottom not just one but you have several names, broadcom, amd, applied materials, western digital. the list goes on all of those companies you see on your screen are about 1.5% or less off their 52-week lows. those i named dragging down the stocks as well as the smh, on

pace for the fifth negative week in six the broader market sell-off and higher interest rates, you have consumer demand for electronics, similar trends we're starting to see in the cloud now the higher rates that hamper growth and lastly an inventory correction that is under way forcing companies to reduce their orders and that's why we're seeing more and more analysts trimming their estimates. morgan stanley lowering to $95 today. they say it will be even worse than amd predicted goldman sachs for micron and western digital for memory chips in particular. they cut in august, just in august, and said today we clearly did not cut enough and then i wanted to add some positive notes web bush said they see long-term potential in artificial intelligence with nvidia, one of

the biggest beneficiaries, and you could see with the stock right now despite the massive sell-off across the board nvidia down .6% right now and that's where we are relative to all of tech how estimates -- how much estimates need to come down. >> absolutely. and whether the stocks have beaten the estimates to it thank you very much. the nasdaq composite down more than 5% this week. up next, we'll look at whether there are any buying opportunities april mid the tech wreckage with head of internet research mark mahaney. that story and much more on this rk sell-off when we take you insigned the "market zone.

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we are in the "closing bell" market zone. here to break down the crucial moments plus jeff degraph with one key chart to watch and mark mahaney on tech. welcome to all of you. nancy, a little bit of a comeback, a bounce attempt here in the markets we got to that three-month low below the june lows and the s&p 500 up about 1% since. obviously you don't want to make too much of one hour's action. what are you seeing today? how does it essentially illuminate what's going on, and are you seeing anything that makes you want to change what you hold and your approach right now? >> thanks for having me. i have a slightly different view than many of those on air today. i think the market tells us it's very confident the fed will make a policy error if you think about it they've

made so many policy errors since 2018 when fed chair powell was talking very hawkish and that gave us the 2018 bear market and then all of the recent misstatements or mischarac mischaracterizations i think it's important to be focused on that because it shows a judgment problem to answer your question, we began moving our clients back into bonds and now we can build short-term ladders, that's one way that we changed our thinking and then the second is we have options. we then went within our strategies and became defensive last year moved clients out and

reliable dividend growth that's a good hedge against inflation. those are some of the things we've been doing, conscious to be willing and ready to add risk back in. my 40 years in the business, every bear market is followed by a bull market. >> that's for sure i was just going to quickly follow up on that and say when it comes to the overall trajectory for stocks, the real call at this point is a garden variety cyclical bear market, pricing in an economic downturn or is it one of these multiyear meltdowns, massive generational reset like we got in 2008? do you have to make that bet and which way would you make it? >> i'm concerned that it's all going to come back to the fed, about a 2000 to 2003 market. i was managing very large portfolios then. it was not fun for anybody but i do think we are at peak inflation. we've seen it, in my view.

the question is how quickly does it come down and because the fed is looking backward, it makes it very difficult for them to make good decisions. i'll just say this in closing, fed chair powell said he was going to be very focused on inflation expectations they have remained pretty grounded i'm hopeful they don't just respond to last month's core cpi number >> i think the market hopes for a same our next guest says there is one key chart you should be watching jeff, we got the retest in the big indexes today. what chart do you think kind of sheds some light on where we might be going from here >> i think yields will remain an important catalyst for this environment.

i agree on bonds it doesn't sound like a lot but historically that's the point you're choking off recoveries. you are pushing your way through. we've seen it at the forefront of what the inflation data will look like and have a fed focused on employment and focused on wages and the like it tends to lag. what you are seeing from the markets and from credit it's telling you by the time they're seeing it, it might be too late and we're pushing this a little further than they might be comfortable with >> yeah, real yields, obviously the markets inflation adjusted yield on let's say the ten year. it is up in that zone where it's, i guess, restrictive the fed chair has said he wants

policy restrictive for some period of time how does it now filter into where we are in the equity index and the broader market so we're down at the similar levels to where we were in june. what should we be looking for in terms of the internal action do we want to see it to be not quite as bad, not as many stocks making new lows, or do we want to seep a more aggressive l liqui liquidation? >> the aggressive liquidation would be a bullish setup for the overall market i don't know that we're going to get that i think we're at 70% through the fed cycle, probably even more than that. that's a conservative estimate i think that's good news when we do the work on what the sectors are that react poorly and react well to these higher yields, it's almost exactly what you would expect you would expect materials to underperform and actually very

good news for bond yields. again, i think we get to 3.80 on the ten year will look like an absolute steal as we look out a year from now. you look at these very, have i inflation type names and they underperform in a pretty severe way when you get these real yields to where they are i think that's how you want to think about it utilities tend to do well in this type of environment actually we do see that tech does well. i'm a little reluctant to be in that camp when we look at the data that's a reflection of some idiosyncrasies i don't think it will be as dynamic as it has been in the past health care tends to do well and that's another area i think will perform pretty well with these restrictive real yields. >> all right so the market is seeming to say that peak inflation is kind of in the bag we'll see if the fed responds to those signals at some point soon

jeff, great to talk to you appreciate that. and turning now further to tech, the nasdaq tracking for back-to-back weekly losses more than 5%. microsoft, intel and alphabet all hitting fresh 52-week lows mark mahaney, head of internet strategy at evercore mark, obviously environmental factors are swamping almost everything else. but given that's the case, what is starting to, on a relative basis, seem like it's worth a look >> well, this is a very challenging environment for growth equity, for tech equity i refer to it as a pincer moving with the rising rates. they're having a few interesting outperformers that remind me and remind us all fundamentals still do matter. netflix and uber, etsy and trade desk up 24% since the middle of summer, since july 1st dramatically outperforming the market why is netflix up?

a real catalyst ahead of it in terms of a new ad supported business, why is uber up they just turned the corner on profitability. i do think even in this market fundamentals matter and if you're willing to look out 12 months we'll look back and say i should have stuck in and bought, stayed in or started to accumulate some of the best fundamental stories. mega cap has those, the amazons, the googles and maybe even a facebook the risk/reward is attractive. some of the names i still like and would consider and still would be buyers of >> when it comes to google, to alphabet, it did kind of break below its june low it's certainly looking cheap relative to its own history and even to the market, if i you adjust for cash. is it macro concerns when it comes to the why of the underperformance >> this is meta? facebook >> i'm sorry, for google >> i think google has a little

bit of a tougher angle two things you want to think about, they were a major beneficiary of the apple privacy changes that gutted online advertising, ad tracking tools that really helped google. google has benefited from the travel we went through the summer of travel love and google was a great derivative off that. now you will have tough comps going into the beginning of next year i'm not -- i don't like google the trade. i like google the investment meta is more interesting as the trade, not as much of an investment near term you will have an acceleration in revenue growth they will move beyond some of these really tough come ms just like we saw with snapchat recently talking about an acceleration in revenue growth you put an acceleration behind facebook or meta and you show margin expansion and both meta and google are talking about cutting costs. the market responds very well to

cost cutting at this stage and it should. >> nancy, have any of these moved into your target zone? >> yes, and i agree with mark. the large cap names we've been focused on and have added to over the summer and in the second quarter are names like google and amazon. microsoft obvious stock to talk about, they raised 10% and i do think can you make money in the stocks you may have to extend your time horizon. there is a secular tail wind to it the stock has done very well and we still own it and still like it it's one of our 12 best ideas. >> mark, on amazon, it has held up better but didn't participate in the upside in 2021.

is it going to the incumbents and the size and heft of amazon as defense >> maybe that is it. the stock hasn't done anything in two years now they have to spend more to re-energize those engineers who did very nice ly underpaid that's changed it's a different dynamic for amazon i think you're in a pace where online retail was the first hit earlier this year because of inflation shocks and demand shocks they will probably be the first out. revenue growth can accelerate. so many hard-hitting costs came at them earlier this year whether it was fuel, shipping, labor costs, and i think those start scaling through all of those. i like the setup in amazon i don't think anything changes

with cloud computing and the best story in tech advertising and aws are the highest margins, you want to be long amazon as a trade and as an investment >> mark, appreciate your thoughts today thank you on a rough day two minutes to go in the trading day, nancy, just a final thought here in terms of not too far from now we'll be in the earnings zone again. have you been stress testing stocks what do you expect out of earnings >> a lot of the companies we own, rate guidance though you did a piece on semis, a company like broadcom where they have a strong capital allocation strategy, have grown 35% and they see acceleration in their cloud and enterprise

we're focused on some of our help care overweight some of the names like cvs with very strong dividend growth prospects so usually you're getting in the dividend management long term sustainable earnings power so that's where we're focused. we are going to have some companies that will get crunched but generally i thought the second quarter earnings were pretty darned good and some of the guidance as well >> yeah. and certainly dividend growth is an inflation buffer. appreciate the time, nancy as we head to the close the s&p 500 is down about 1.8% had been down closer to 2.5% earlier. on track to close a little bit above the june lows and 3666 was the closing low. here we are about 25 points above that, 3636 was the interday low the u.s. dollar index up a

percent and a half on the day, a mega move for the currency index. the russell 2000 was the underperformer down 2.5% as we ride into another losing week but a little bit of an attempt to bounce off what had been some pretty decisive lows back in mid-june that does it for "closing bell." "overtime" now with scott wapner all right, mike, thank you very much. welcome, everybody, to this friday edition of "overtime. i'm scott wapner you heard the bells. we are just getting started from post nine. i'll speak to legendary trader . he has thoughts across every market today and how he thinks the fed can kill inflation once and for all without destroying the economy at the same time we begin with our talk of the tape where stocks are heading fro