exchange." "power lunch" begins right now and selloff on wall street, stocks are tumbling, nasdaq getting the worst of it. finding places to hide is becoming more challenging. and our market experts will tell you where they are finding safety such as it is, what they are buying and how much more selling may be ahead but first a quick check on the markets. >> stocks are at session lows giving up all of yesterday's gains. you can see the dow jones industrials down more than 2%, 6 642 points s&p s. off 2.75. and nasdaq losing 404 points and the stock market driven by big swings in the bond market. yields climbing again, the ten year yield about 3.7%. and there is a lot of focus on

apple, which is down about 5% following a rare downgrade to neutral by bank of america the firm says slowing demand for the iphone will cause the stock's outperformance to end. >> and our next guest says the uncertainty created by the fed is causing the market to revalve stocks and future growth creating an environment where earnings, cash flow and balance sheets matter. and he is managing partner at d.c. l.a., also a cnbc contributor. and it seems to me that as we look at the market, which is really a weighing tool between risk and reward, there is a lot of risk but there doesn't seem to be much reward anywhere these days am i wrong >> no, you're right on that. and i think one of the things that investors have figured out that compared to what it was two or three years ago, there is an alternative now. you don't have to be in

equities, you can be in cash where you can get even short term treasuries and you can be in bonds that can give you 3% to 5% for those looking for that margin of safety, you do have other alternatives >> that is really the case here. bonds are investable again both in terms of where their yields are and if you go in and buy a two year treasury at 4 plus percent and you just hold it, you take all of the duration risk out and you get a nice 4% yield, which looks pretty nice in today's market. you do have a couple of stocks that you think are sort of stable enough, beautiful balance sheets, yields are nice, returns are steady and they are both in the pharmaceutical area, the health care area >> and the other thing to think about stocks like this, they are not correlated to the stock

market in the sense that they are not dependent on what the fed is going to do with interest rate, they are not cyclical depending on what in demand is for industrials or semiconductors and technology. these are companies that have secular growth bristol is nine times earnings it has huge amount of products it has a dividend yield of 3%. it has been out of favor, but it is up over 10% for the year because it actually has its own secular fwrooet. growth j&j has phrma up 60%, 30% med tech and 10% consumer. trades a little more expensive close to 15 times earnings, but 2.75% dividend yield and both these companies, dividends are also increasing over time. you want that to keep up with inflation. so while people do go into bonds, remember inflation is something that people have to worry about their portfolio for the long term. bonds, think of them as an anchor in your portfolio, but you do need pricing and earnings

to grow and dividends to grow which will keep up with inflation and help you get ahead. >> can i ask you about the cash part sitting on cash if you are somebody who has cash sitting on the sidelines to rot, at what point do you think that i need to just buy a two year treasury with it just so that the inflation is not killing the value of the cash that i have on hand >> so a couple things, first thing about the risk profile if you have been sitting on cash is it because you were scared of the market if you had cash thinking that it is part of my portfolio, i agree. you know, buy the two year treasury but you could also buy corporate bonds that could get you a little bit higher than that as well but i would only put it in bonds if that is what you wanted do before i wouldn't do it to say, hey, i'm going to park it there and then come back when the market bottoms. we don't know when that is but i think putting that cash in there if you don't need it for two years, not a bad thing there are some good bonds out

there that you can buy but don't think of it that i'll sell out of it trying to time the market >> and i know it is impossible to pick the low point in the market, but we're seeing really this has been a really bad month for stocks i think worst since march of 2020, which was of course memorable because of the pandemic at that time. where do you think we are in this selloff, are we in the sixth inning, seventh inning, what >> so i would look at it two ways when the fed said terminal value will be close to 4.5%, that was a signal that multiples have to come down. secondly, we are not even through started earnings season, so i think that that will bring the s&p earnings down. so i think that we're close to seventh inning we've got a little more of a bump to go down. but i'd be selective here. you can nibble here. it is not a question if you are a long term investor, but could the s&p break 3600, absolutely

and then depending if you think earnings will be around 200 for the s&p, you could get a 3200 to 3400 but that is cheap at that point because now you're saying that there will be no earnings growth going forward. so i think that you will get that opportunity to start now with specific companies and those that are taken under the wood shed because investors are scared of them >> we've talked quite a loot about how earnings sort of took a back seat to what investors were thinking when they were putting their money to work. i'm curious now that you and a lot of our experts who are coming on are saying earnings are very important now, but don't these companies have comps against last year? so many especially in the consumer discretionary space, they had incredible years last year so when we're looking forward to earnings, they might be on a great path, but compared to last year, it will be a struggle. >> yeah, and some of them have reflected it already companies like paypal have

already been pulled in so i think it is the guidance going forward saying this is where we think the next six, nine months will be. if companies say we think things are better for us, whether it is, you know, in terms of if you look at a visa, mastercard or the consumer part, but i do think that there are no short term catalysts that will make this go forward, it is only when the market looks ahead 12 months and says we're through the storm, that is really hard to tell back seat driving here in 2009 and 2010, it was oh, yeah, that is when the markets came back up, but they came back up when earnings were still going down so we don't though when that trough is going to be so you just have to be selective and patient and diversified. if you are going to try to time it, you could go another 10%, 15% down there is no kind of button that says we'll stop here >> thank you for bringing us some perspective here. you've got the dow jones

industrials off about 618 points right now and across the board we're seeing markets at session lows volatility is not just hitting the stock market though. but also what is normally a very sedate u.s. treasury market. for more on what this signal, rick santelli is with jerome snyder who manages one of the largest actively managed etfs. hi, rick >> thank you, contessa yes, i'd like to welcome jerome. contestant a said something that i want to throw back at you. volatility in the marketplace, and you can hear the noise in the background, is ramped up a bit. but i certainly think that the trern treasury market i think it is the same market but something has changed. >> fundamentally what we're seeing is higher cost of capital in the marketplace transitory mechanisms which really help to allocate risks throughout the market have fundamentally gone to a higher cost of capital meaning that

offers are wider, functional markets are wider so we're witnessing a recalibration from the low rate regimes into a more normalized one from the early 1980s or '90s. >> it is the great reset and it doesn't mean that the market is broken, it doesn't mean that the market is flawed it just means under the current conditions, big ranges are necessary. >> and investors have to adapt to it, so they will think about it in terms of volatility in their portfolios, having longer holding periods, maybe higher cash amounts but from a transactional point of view when you think about the worldly liquidity and transactions, we have to recognize the fact that the visibility out there is the ultimate cause as well, lack of visibility is ultimate cause as well of why there is volatility in the market. >> but everybody is talking about the bank of england and everybody is very critical of the bank of england. yet when i look at what they

have done, here is what i see. i see a country that is still in a problematic unique situation where covid and brexit okay and their debt to gdp is less their ours', 86%. and quantitative easing while they were doing tightening, christina lagarde has the same play sheet so do you think the bank of england ought to be singled out, isn't it all coming home to roost? >> central bankers go from a dull profession to a dynamic profession and they are being dynamic in trying it to reconcile inflationary expectations with fiscal policy. so that is what we should be expecting from every central banker >> they coordinated what -- they were all going down to zero, but multi speeds, whether europe, japan or the u.s., they are never going to be able to coordinate with the up side. >> but cyclicality is a different situation. from a timing per spending

difference, we're playing different games in different innings of the event so when we think about it, the u.s. is in a very different situation, perhaps later in the game than eurozone and bank of england and the situation dealt to them will have to be dealt with in a variety of different factors. the fighting power of the fed might be viewed in a different lens than the bank of england. >> let's ask the question that they want to know. like the president, what do you think inflation will be one year from today >> it will gradually come down from what would he see i t -- we see. i think that one of the issues, we'll see that trajectory move slower however, it might take a little bit longer than people expect which ultimately means that rates in the u.s. might have to be a little stickier than people expect and where we are -- >> if i magically beamed 3.5% inflation right now to the u.s., would the curve be okay but,

would rates be okay? >> still above the inflationary target and unfortunately we don't live with a magical element in the dhi we'll live with a longer railroad line that takes us into 2023 and 2024 which mean that the fed will have to be in the position to maintain a rate culture to be defensive in inflation. >> what do you think about rates? >> ultimately front end of rates is where we want to be focusing on primarily because the terminal rate is fairly priced in, 4.5% to 4.75% we see the 1rvolatility but to precision what you are seeing is irrelevant because what we ought to look at the massive recalibration. so cash being defensive, even more ag notnosticagnostic. >> like t-bills. >> and front end bonds and diversification. because the visibility once again the next one to two years

might be clouded by internal or external events that might not necessarily be smooth. so investors want -- >> you think the fed ought to pay more attention to global issues two months ago i pointed out how the gilt started to move quickly, how energy induced recession was obviously on the way. is the fed sticking it too close to the vest at home, should they pay more attention your final thoughts. >> ultimately you have to look at what the fed mandate is and focusing on the global economy is important, but not necessarily in the context of where we are today with the inflation fighting jerome powell said he wants to be focusing on the inflation metric until they actually see some signs of weakness in other parts of the economy and that might be the next qxt couple of quarters so volatility is here to stay. >> always nice to talk to somebody who can talk faster than me. thanks for joining me in chicago. >> that was very self aware of you, rick. it is true, you are a fast

talker but sometimes you have to get a lot of information in in a very short amount of time >> santelli dodownload coming up, sentiment hitting a new low and new research on which nations are at risk. plus the russell 2000 versus the s&p 500. why one strategist says it is a historic opportunity to own small caps and mortgage etf hitting a new 52 week low and down about 25% this month on pace for its worst month since march 2020

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the rapid rise in rates and the dollar along with high inflation causing collateral market difficult there you see some seema mody has new reports on which cups are most at risk in the em world and potentially may need financial support >> that's right, we know higher rates were coming but goldman top emerging market strategist says the speed has put more pressure on emerging markets and they also yield about 8% to 9%, that makes that yield less attractive when you have the ten year treasury yield around 4%. goldman sachs points to egypt and ghana currently engaged in

discussions with the imf pakistan also taelttempting to a t default. and also turkey and chile sitting on high levels of dollar denominated debt survey revealing investor sentiment has hit a record low, institutional investors in total managing $460 billion in dollars an asset management said they are trimming positions across regions except for equities, they prefer latin america, specifically brazil, brazil has outperformed the broader emerging market etf, those citizens head to elections this sunday even if you don't have exposure to these stocks overseas, it still affects your portfolio emerging markets now make up about 58% of global gdp. so when they slow down, the rest of the world feels it.

>> brazilian election, there is a possibility of unrest in brazil after this election >> a lot of emerging markets including brazil because of food inflation, you've seen more concerns around the prospect of riots or protests as food inflation nears a 10 year high in countries like brazil that really hits consumers on the ground and that that certainly been a key agenda item going into this election this sunday >> and i'm sure we'll talk about brazil here with our next guest. >> he want to dive into how you trade emerging markets our next guest has names to buy as well as some to avoid david reidle normally we like to start our enter vies with a big broad view, but because we were just talking about brazil, what is your take on brazil, do you think that this is a good time to invest some. >> absolutely not. i would sell everything you have

in brazil today just going into this weekend do you not want to own petrol pras they have indicated that you may not leave office quietly i think there is a real possibility of unrest there this weekend and there is definitely going to be uncertainty. >> i mean, that is a pretty stark warning to say whatever you own right now in brazil, you need to sell right away. so you would be willing to sell at a steep loss just to be out of that position >> you have to be out. you could be down 10%, 15% in the beginning days of next week. you can buy it back next wednesday if you choose, but sell it today. >> eem down 28% year to date we've been through the issues that are facing international markets and especially emerging markets. give me a sense of where you think it is safe to put your money where you may get a return on that investment >> absolutely.

i'd be buying a large global multi national budweiser anheuser-busch, bud, they get about 60% of their revenues from developing economies they are good at working in emerging markets good way to get broad based exposure though they are doing good job of managing their costs for people looking for an individual country, i notice that indonesia wasn't on that hit list of countries that will be get hurt in the current rate and currency environment they were a topchoice during temper tantrums in the past. they have done a good job stabilizing their macro level economics, they have been very much better on their borrowing and i would by indo energy, a way to play indonesia which is a great powerhouse >> and i see you are also advising that people get out of

u.s. listed chinese names. can you explain why and are there specifics there that you think are especially dangerous >> i'm still concerned about renewal of of the tax evasion on some of the data heavy 9/11s gds holdings, ymm, 360 finance these are u.s. listed chinese names that could come under the scrutiny of beijing regulators once again and i'm still not convinced that the audit controversy between washington, s.e.c. and beijing is really settled. i think that the proof is in the pudding there and i'd avoid those three names for now and wait for a better time to come into china >> so what you've talked about there is really tremendously helpful for sophisticated investors who buy individual shares like some of the ones you've mentioned but as i look at trying to get exposure to emerging markets, what is the smartest way it play, is it through an etf, if so which kinds, or is it through

individual companies, company names where you have specific security risks and country risk as well? >> those are great questions i think the recommendation on anheuser-busch answers some of those questions for you. you have strong corporate governance, a u.s. dollar denominated company that is benefitting from some of those things, and you have pretty broad based exposure that serves like a mutual fund in a way to many different markets around the world. if you don't want to goi indonesia in individual names, could you buy the etf up 2% year to date, significant outperformer of broader based weakness >> very interesting decision we really appreciate it. i've personally found that beer is a good hedge against many th things >> and as a brewer, i concur >> david, really insightful.

and before we head to break, check out peloton, this is a headline worst highlighting, down 16% can it go lower? after announcing a new retail partnership with dick's sporting goods. peloton is down 80% this year. plus kevin o'leary, mr. wonderful, looking to buy one area of the market that he has never boit before. he will join us with a long at what it is, a shark at work. dow down near lows once again.

welcome back to power"power lu lunch" as markets remain lower, there are a few bright spots out there and that includes some names in the reinsurance and insurance type business even as we start to get some of the pictures of the damage down in florida that hurricane ian has left behind. we're talking about names like every rest reinsurance, also wr berkeley, chubb, travelers all in positive territory despite having some of the highest catastrophe exposed lines in ian's path of course it will likely be weeks before we understand the full impact of ian on florida

and other states but some of the analyst estimates are looking at the damage right now already tyler, back over to you. and let's get to christina for a cnbc news update >> and here is what is happening. we have new video of the severe damage from hurricane ian. sanibel island cut off from near by ft. myers after roads were washed away on the island itself some buildings collapseds as well others piled in to heaps of debris and winds are back up to 70 miles per hour as it gains strength across the atlantic and is expected to come back ashore as a hurricane in south carolina tomorrow the senate is voting on a spending bill to keep the federal government from shutting down tomorrow. the bill is expected to pass and get approved by the house before being signed by president biden. the u.s. has imposed fresh sanctions on iranian oil exare the fors, this as talks had broken down over reviving a pact

to limit doeevelopment and phil collins and his genesis band are selling their music rights in a deal worth more than $300 million the buyers say they will seek to reintroduce the catalog of '80s hits to younger generations. just another day in paradise >> well done and she didn't sing it so the lawyers won't get up in arms over how much money we'll have to pay i've had this experience ahead on "power lunch," whether it is big tech, momentum stocks, housing, financials, retail, just every corner of the equity market is struggling today. our next guest says if you are looking for opportunity, now might be the time to bet on small caps she lloiusexwi jn nt. to go bey. and strengthen client confidence in you. before investing consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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our internet isn't ideal... my dad made the brilliant move to get us t-mobile home internet. oh... but everybody's online during the day so we lose speeds. we've become... ...nocturnal. well... i'm up. c'mon kids. this. sucks. well if you just switch maybe you don't have to be vampires. whoa... okay, yikes. oh sorry, i wasn't thinking. we don't really use the v word. that's kind of insensitive. we prefer day-adjacent. i'll go man-pire. we're in a market selloff right now, less than 90 minutes left in the trading day. want to get you caught up in the power rundown. and the case here for small caps let's bibegin with bob pisani

>> contessa, we're just off the lows but it doesn't matter, we're down 100 points. just look at the two days here, we've given up all the gains that we had yesterday. more importantly, we're essentially at two year lows on the s&p 500. got about 750 stocks at new lows here at the new york stock exchange that is about maybe not quite a third of the nyse, but it is getting there. important thing is, we had some not very good earnings commentary this morning from car max. all the autos are down right now. higher rates they are talking about, higher prices so that means affordable problems. gm and ford down, all the parts markers at a new low for once big cap tech eks speculative tech, doesn't matter, large, small, everything is down 3%, 5%, even 6%. amd down 7%, that is a new low nvidia, 120, a new low waiting for micron earnings to

come on. apple just 176 a few weeks ago, is so already seeing a significant decline in apple on top of everything else and i've been talking about new lows, a lot of them down there, but mortgage rates particularly, going to 7%, they buy and sell mortgage backed securities they are weak. and new low for all almost of them except if square. and there are the mortgage r rates. new lows there and these companies, when they buy and trade these mortgage backed securities, value of them of course much lower and that is a big problem for all of them. some of these invesco, 60% decline this year. >> look at that. bob, thank you for that. let's get to the bond market the ten year yield is off highs of the session about 3.7%. it is at 3.761 now for the ten year it briefly touched 4% yesterday before pulling back. but look at the volatility here. big moves for the ten year

the yield on the two year remains solidly above 4% at 4.184% and volatile day in the energy markets as well. a lot of speculation about next week's opec+ meeting and whether they will cut output what are you hearing, pippa in. >> that's right, a lot of chatter about what might happen at that meeting next week given the recent volatility in the energy markets we'll have to wait and see what happens there. but we did get the latest look at how oil and gas executives view the industry. dallas energy fed survey on average wt i-88.74 by the end of this year with forecasts ranging from a low of 65 to a high of 122 per barrel executives pointed to a number of challenges facing the industry, including inflation and supply chain issues as well as criticisms from the biden administration let's check on prices here, wti

at $81.48. and we're continuing to follow the latest from the nord stream pipeline leaks, the operator saying just now that it will begin assessing the damages as soon as it receives the necessary permits. the company adding that it is not possible to predict the time frame for restoration until the initial damage assessment is complete >> all right, pippa stevens, thank you for that despite the recession risks, our next guest says this is an historic opportunity to own small caps here to make her case from bank of america securities, jill, great to see you let just tell the audience how our conversation began we were on a plane together and you said to me normally in times of uncertainty and volatility, people run from small cap. explain why you think that might be a bad move. >> yeah, thanks for having me. as you say, normally small caps are not what you want to own if

you are in a down turn going into a potential recession, economists are looking for a mild recession next year but i think today there are fundamental differences in the backdrop and i think importantly small caps have been pricing in a lot of the risks already and so when you look at the lower pe multiple of the russell 2000, it is trading around 11, 12 times recessionary lows only one that is very cheap versus history right now large cap multiples have come down more in line with average, but they are still not historically cheap and when you look at that relative multiple of small versus large caps, trading almost lowest levels we've ever seen outside of briefly during the tech bubble. so i think small caps are pricing in a lot of the recession risks already, the equity risk premium of small caps when you look at the russell 2000 is at record highs whereas for the s&p 500, it

hasn't risen as much as it typically even in a mild recession. so especially for investors with longer time horizons, this looks like a great opportunity to own small caps, overweight small caps relative to large and that was really what we saw during the early 2000s after valuations were last time this cheap, that was a great decade to own small over large. >> and do you think now is the time to get in or are you willing to go in and deploy cash right now in small caps? >> i think there is obviously risk if the market remains volat volat volatilener near term. forecasts haven't been baking in a mild recession next year we think earnings forecasts still have room to come down although at this point, you know, again even small cap earnings have been more quickly adjusting to reflect that expectation than large cap earnings have, which remain much

stickier and i think we could see further volatility near term, but we actually think that there could be more down side risk to large caps than to small caps. you know, once the markets bottom out typically early cycle environments tend to be the best phase for small caps but i think that there are still fundamental reasons that small caps could hold up well in this current backdrop we've seen cap eex spending and guidance hold up really well even in the most recent earnings season and small caps tend to benefit from capex cycles in the u.s. more so than large caps they should benefit from reshoring of u.s. manufacturing. and the guidance for small caps has held up during the most recent earnings season so certainly room for further cuts, but we think that small caps have been pricing in these risks. >> and let me jump in with sort of a final question here we don't see as many small cap

managers as we do large cap stock folks here on cnbc but a lot of your brothers and sisters in your business say what is really important right now are strong balance sheets and reliable if not growing dividends. and i want you to talk about that within the context of small cap shares i'm guessing that greater percentage of them do not have fortress balance sheets, not to say that big cap stocks are immune to that problem and i'm guessing that they are less inclined to play plump dividends. >> you're right, topically a lower proportion of small caps will pay dividends and the russell 2000 when you look at it as a benchmark will be a lower quality benchmark in terms of the number of stocks that are actually profitable, about a third of the index are non nonearners but i think that what is

interesting is number one, if you look at the s&p 600 small cap index, that is one that we've been highlighting as a higher quality area of small caps, only about 10% of those stocks are nonearners, so higher quality benchmark, less exposure to areas like health care and biotech where health care is still ranked much more -- >> is that where you do most of your stock picking from that higher quality benchmark >> yeah, we do like quality as a theme overall within small caps. i think within small caps we would focus on quality stocks with strong free cash flow interestingly the s&p 600 dividend yield has been trending above the s&p 500 dividend yield. and difference did he said paying stocks within small capsr so there is a big performance difference so i think that is a theme that is going to work

>> that is interesting so the s&p 600 has a higher dividend yield than the s&p 500, did i hear you right >> yeah. interestingly. >> once again you've told me something i didn't know, not that that is a really high bar, but feel good that you educated me on that jill, we appreciate it >> you see why it pays to talk to the passenger next to you on the plane. because she can come in and like really -- i learned a lot sitting next to her. so i thought maybe she could share what she knows it was great i'm thinking about some of the -- i don't know what i'm talking about. big tech the real laggard amid the market turmoil, nasdaq sinking 4% and apple the big loser as wail street what is next for the tech giant and reports remain of slowing

demand for those phones i guess. but retail investors still seem to think that it is a bastion of hope in the market we'll discuss apple and more when "power lunch" returns lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're basically sitting on a goldmine? i don't think they have a clue. that's crazy! well, not everyone knows coventry's helped thousands of people sell their policies for cash. even term policies. i

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apple, down more than 5% after bank of america down graded the stock cut the price target there, shares are also underperforming the market this week and that could make skittish retail investors even more so. let's get to kate rooney with more or course apple is a stock that lot of investors own and some own it but don't even know it because they have a lot of it in mutual funds or etfs >> and the average retail investor right now is heavily indexed to apple so anymore pain in that name could add to a tough year for most investors and increases the chance that they will throw in the towel all together and sell. according to evander research, the iphone maker accounts for 20% of the investor holdings, most widely held stock out there that and tesla, and call it a last bastion of hope for retail. this group has been relatively

resilient buying the dip that is slowing down which they say is a sign of det tteriorating confidence a dropoff started on monday. this is a very important group to watch, some analysts say retail investors have been the one, quote, cushioning the market in recent weeks the chart here show as spike in retail right alongside some of the recent recoveries in the s&p. and if this group does decide to sit on the sideline or sell, it could mean more trouble for the market one silver lining, sometimes retail capitulation where selling is a sign of the bottom. there is another sign mom and pop investors may be losing a bit of interest in the market. decline of google searches those are back at pre-pandemic levels after being relatively stable the last year or so there is a lot more on that story on cnbc.com. and up next, kevin owe

latlate laterry oh, laterry has never had a kufl feeling in the bond market until now. he will tell us what he is buying and what is he staying away from.

welcome back to "power lunch. stocks lose all of yesterday's big gains. our next guest says he's buying one investment he's never bought before let's bring in kevin o'leary, cnbc contributor welcome back let's talk about the markets generally and what you're buying specifically what do you think? >> well, the markets are obviously in a very tough place and one of the major reasons that i don't think we talk enough about is that there's alternatives to equities for the first time in decades, so if you're a typical fiduciary and have a bogey of 6% to distribute in a pension plan, let's say, for the last 20 years it's been extremely difficult to use treasuries to help you achieve that goal and so generally speaking people put less weighting into fixed income, particularly risk free risk

income in a two-year treasury under 50 basis points for a long time that's not the case today and for the first time in the last couple of months i like many others have started to tiptoe through the tulips into what i did decades ago, bonds again, even two-years because, frankly, preservation is my mandate, performance is important but preservation is the primary mandate and right now, 400 basis points plus change looks pretty good for the next 4 months given the uncertainty on the fed's decisions coming up and how and how deep and how long the recession will be. and so that is part of the reason today you see these dramatic sell-offs because people just like me are spending up to 40% of their day like i did looking at bonds, it's been so long. >> yeah, it has been really long out on a tangent we had our delivering alpha

conference yesterday and the tangent is this, quite a few of the investors there were talking about eventual, maybe not immediate but eventual huge opportunities in distress debt which is a whole other vector than what we're talking about here about capturing 4.1, 4.2% in a treasury. what do you think? >> yes, eventually, not yet. we haven't seen those spreads blow out enough yet. i mean if you have real guts and you think that we're going to have a soft landing and think the fed may pause in q1 of next year there's money to be made but not -- i'm not going to take that risk. when those credits blow out, they really blow out they blow out in absolutely stratospheric way, blood in the streets, that's when you have great opportunity. we're talking about 20%, 30% returns and have to look at the covenants. people forget there is a lot of

work you have to look at the covenants and litigation, bankruptcy, i've done that before but have to dust up my chops it's been so long. >> so let's talk about the stock draft. actually it's been very illustrative this week talking about the stocks that -- the picks that were made when the draft happened and where people are now. you're in fifth place. middle of the road your performance is down, what, 20%. would you stick right now for, say, one of your choices, moderna, kevin. >> i would the thing about the draft and i've been privileged enough to have won it once, you have to take outlandish bets to get to the top of the heap. right now i'm happy to be sitting in the middle because it won't matter till april when i plan to win this year again and i'll tell you how i'm going to do it. right now arc has been decimated, down almost 70% on the year, cathie wood has a

concentrated difficult mandate until things turn around in her incredibly volatile stocks if you want a chance to win you've got to get a funky chicken position like that when it turns it just sweeps by -- >> wait. does that mean you think it's going to turn before april >> well, i'm optimistic that what will occur is we will bottom out what we needed to happen is happening. apple broke 150. that's going to be baby with the bathwater, throw in the towel, all the analogies you want that stock is going to 120 where i'll buy it again. it's going to be brutal. grown men will weep in the streets because that is the most indexed stock in the world everybody owns it and so do i. everybody owns apple but now it's broken that 150 support and did it really concisively and it's going to go south and so when that occurs, we need something like that to bottom tech and that's the granddaddy consumer/tech stock. that will be a good thing.

then i hope -- >> producer is correcting me the stock draft ends in february not april so hopefully all of this turns -- >> then if that's true, all bets are off. >> kevin owe leary, thank you for joining us appreciate it, mr. wonderful >> take care bye-bye. up next the nasdaq down close to 4%. off 10% this month alone we'll take a look at some of the names getting hit hardest ahead. look at the nasdaq off almost 4%, "power lunch" back in two.

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welcome back some parts of the tech trade are getting hit harder than others dom back with us too. >> at these levels, ty, contessa, we are looking at new 52-week lows so if you take a look at the reasons why, there are a number of stocks trading at least 30% below their average price on a rolling basis for the last 200 days so they're longer term trends. check out these names. names you know, meta platforms adobe, some of these and zoom video each trading around 35, 36, 37% below their 200-day moving average so bigger hits than others compared to their average. one more place to look at. some of the semiconductor stocks these names, as well, advanced micro, intel, nvidia, 37 to 39% below so 16 stocks, at least 30% in the nasdaq 100 below their

200-day average price. i posted them on my twitter feed >> thank you very much thank you very much for watching "power lunch." >> "closing bell" starts right now. so much for a comeback stocks are falling hard giving back yesterday's gains as the sell-off intensifies looking at session lows for the nasdaq and s&p. most important hour of trading starts now welcome to "closing bell." i'm sara eisen take a look. the dow down 666 points. hard to find a winner today, the s&p 500 down almost 3% you've got every sector lower, the hardest hit is consumer discretionary, carmax is a part of that story. ugly results, down 23% but its weakness across the board. utilities at the bottom of the list, so is information technology, energy is faring the best as a group. it's down 1% as you can see, yields are higher again the