hammered it goes on and on and on meta we'll try to get to some of that later today, too what's your final trade? >> westing house air brick they sell technology based equipment in the freight highest -- 2018 highs right now. it's moving quick. >> what have you got >> 8% yield, huge economic recession proof. >> i'll see you all in o.t "the exchange" is now. thank you, scott hi, everybody. i'm kelly evans and here's what's ahead an ugly market, super hugly today as the hawkish fed is followed by bad detail on retail sales and manufacturing and even more the disconnect between the fed and the markets is growing so who's got it right and how do you position we'll tackle it all. plus, we've had a ton of great news on the airline front lately, so why aren't investors buying it? we'll debate whether the market is too bearish and get top picks for 2023 and don peebles called the

carnage in office real estate, but he called it a big opportunity too. and speaking of the markets, let's get a check on things as we stand at 1:00 p.m. eastern time the dow is pretty much at fresh session lows right now, down 886 points that's a 2.6% drop the s&p down similarly to 38.87, and the nasdaq down more than 3% it's below 11,000. now, yields are falling sharply as well. take a look here at the ten-year yield. 3.34%. we're down almost 20 basis points since the fed and since the cpi. the 30-year, 346, and the two-career, still way high here. you can see in terms of this inversion, 424, and that hawkishness is the issue here for markets. it's after pretty much every other piece of data as well as jobless claims came in worse than expected. even the better jobless claims data is a quandary, because the strong labor market is probably the main thing keeping the fed in hawkish mind-set right now. let's get to more of it. our big theme of the day here, the markets versus the fed

who's got it right bob pisani at the new york stock exchange with a look at what's going on with stocks, and steve liesman has a roundup of that data and central bank action bob, let's start with you. >> what's happening today is the soft landing crowd is having a horrible day, because the economic data is awful the soft landing crowd's thesis is, we're not going to have a hard landing earnings will be flat to maybe slightly up in 2023. we'll avoid this earnings apocalypse and things will be okay. the problem is, the data isn't really going in their way, and now they have a valuation problem for the stock market so, look here. we have the fed still higher for longer that's an issue. but now we have the soft landing case is a lot harder to make because the economy looks like it's starting to weaken. so earnings right now, the important thing is, how much do they need to drop? they're declining, but they need to drop more, if the economy is really slowing down dramatically the valuations, though, are still high believe it or not, the prices are still high right now this is what i call the valuation problem. i see here, the average 2023 earnings estimate for a

strategist, down 6%. that's a mild earnings recession. but the forward multiple is 19 boy, that's expensive. very rarely, kelly, do you get over 18. it's only happened in the dotcom bust, and we saw it in 2017 and 2020 but most of the time, it's below 18 you've got to make an argument right now, with these valuations, that the economy is going to be a lot stronger in 2023 and you see the data today, that argument is just a lot harder to make we've got a valuation problem right now. >> so, bob, just to be clear, even with the market's big drop this year, it's still more highly valued than normal. >> yes, the strategist themselves are dropping the earnings estimates for 2023. down 6%. if you applied the numbers that they have for 2023, down 6%, the multiple on the s&p is about 1 that is way above historic average right now. though analysts are a little more optimistic. that's a different group of people they still have multiples, earnings estimates a little higher, but most people are

following the big wall street strategists these days they tend to pivot a lot more quickly and tend to be a little more accurate. >> that's crazy we're still up at 19 times by that basis. bob, stay right there as we turn to steve liesman where we have had data, central banks alactio, tell us what's happening with the dow now down more than 900 points >> it's this gap between the fed and the market boils down to a sharp difference about what recent data say about the current state of the economy, kelly. and especially inflation and where it's going the here's a little bit of my take on what the market is saying versus what the fed is saying the market says, recent inflation data shows it's falling. the fed says two months is not enough core inflation is still 6% year over year. i need substantially more evidence, powell said. markets saying the economy is weakening. recession is likely, at least according to our fed survey. the fed says, yeah, but the labor market is still hot. wages are going to drive inflation. morgan stanley writing, the fed chair sees the recent round of weak cpi differently than the

market both october/november cpi prints were downside surprises to market expectations, but not so much for the fed you can see this disagreement between the market and the fed in the 2023 outlook. median forecast of fed officials for the funds rate next year rising to 5.51%, it had been 4.6% in the september outlook. but fed futures pricing trading at 4.4% for year end that is cuts after a few more hikes. so the market sees the fed en route to making another policy error, by tightening too much and not taking account of low inflation and a weakening economy, and maybe those earnings coming down that pisani was talking about. the fed is fairly hellbent on not making the last error by tightening too little and letting inflation continue to rip. >> stick around, steve where do we go from here and how should investors position. peter boockvar and andres, it's good to have you both here

peter, just jump off of what steve was just talking about and what bob mentioned, as well. the dow is down more than 900 points right now what's it going to take to quell the selling pressure >> hi, kelly i think today is a realization that while the fed is almost done raising interest rates, whether they raise 50 or 75, is kind of irrelevant at this point. it's the point of keeping them evaluated for a long period of time that is what is going to continue to sell growth. as long as they stop raising rates yesterday, by maintaining this level, every month that goes by, there's someone that's having to refinance their debt at a much higher level than what is maturing. and that is why i see more of a grind it out economy, a death by a thousand cuts economy, because rates are going to stay high for longer, and we should get off of how many more rate hikes are left and focus on, again, higher for longer >> do i bail out of the stock market them, andres? go to the other side of the ledger and pick up 4% on a cd

for a one-year and see where we are in 12 months' time >> one thing's for sure clear, which is a 60/40 didn't work this year, and i don't see the dynamics drastically changing next year, except maybe bonds look more appealing than they did this year. so, yeah, the 60/40 doesn't work you need some commodities exposure and some cash exposure, right? last time i checked, they saw a 3% savings rate. that's unheard of for the last 15 years, that that type of hikes leading to a higher savings rate so, yeah, the world has changed. it doesn't mean sell stocks, it just means, you know what, maybe we won't see all-time highs anytime soon >> peter, why did the mood get so much worse after the ecb's press conference this morning? >> well, we saw a pretty sharp rise in european interest rates. christine lagarde said that they're going to be raising rates more than what the market anticipated. they had laid out a plan for qt, which will start in the second quarter. while it's going to start very

slowly, at only 15 billion euros a month, it's likely going to pick up thereafter in q3, q4 so you saw 30 basis point increases in some european bonds, and that's rather sharp, so i think it just reaffirms this global monetary tightening still has a ways to play out >> bob, what are you hearing from traders do they want the fed to stop hiking, start cutting? what do you hear >> sure. look, 2022, the story was about inflation and figuring that out. 2023, everybody is obsessed with the recession and what side of the recession debate are you on? so the soft landing crowd has had a lot of currency in the last few months. and haas why the stock market has lifted to the extent that today is about the soft landing crowd basically losing a lot of talking points, that's a good reason why the market is down, in addition to what peter is talking about on the ecb so, again, you go back to this valuation question here, they wanted to stop because they're very concerned the hard landing crowd is screaming really loudly, and they're going to have more

influence, the more they see the economic data weaken >> you know what's peculiar, steve. it's like the best and the worst news right now, jobless claims, right? you know, here's the one data point that would tell us if the economy was worsening quickly right now, and it keeps holding up and the longer it holds up, the more that means we're going to have wage pressures or a decent jobs report that are likely to keep the fed from cutting sfnsfnl substantially. that's probably going to be the main reason why they make a bigger policy mistake. no one is cheering for a worsening labor market, but it's a fascinating dichotomy and that labor point is probably the most important one of all >> -- the fed and the markets -- >> steve, go ahead, and andres, i'll come to you go ahead, steve. >> i'm having trouble right now keeping the old pete seger union side, "which side are you on?" out of my head right now but that said, that's really the key right there, kelly that it's the difference between the fed and the market over the outlook for the labor market

powell has said repeatedly that he believes that wages are going to drive that really important non-housing core services section of the cpi, and the idea being, services are all about wages, that's what the cost structure is and if the labor markets remain tight, you're going to keep driving up wages, that's going to keep driving prices for something like 55% of the core the market just disagrees with that and thinks that the labor market is going to -- if the market is going to be right, it's going to be right that the labor market is going to come off fast, and that's where the disagreement is. >> and what were you going to say, andres? >> what i was saying is, it's interesting that it's not part of the conversation, a scenario where we get a recession, and by the end of next year, core cpi is at 4.5, right what happens then? isn't the goal to get it to 2 to 3? we're kind of assuming that it's either a recession or soft landing, but inflation hasn't gone to 3, right like, core cpi is still at 6%. so i don't think the conversation around inflation is

going away anytime soon. >> well, speaking of which, let's show what bill ackerman was tweeting about, in the case of where inflation really could be heading can we even get to 2%, peter is 3% more likely. here's what bill ackerman said he said, i don't think we can get 2% inflation without a deep job-destroying recession, and it won't be stable there. he said, accepting 3% plus or minus inflation is a better strategy for a strong economy and job growth over the long-term. what do you say, peter >> well, i agree that it's going to be tough to get it down to two structurally i think three to four is where inflation is going to be eventually settling out. i disagree with him, though, that somehow 3% is a good thing. inflation is a tax and a 3% tax is worse than a 2% tax. so i only see trouble ahead if we settle in on a higher inflation rate, because interest rates are going to stay higher for longer and i think the consumer still drives this economy. and a higher cost of living is

not going to be good for them. >> but peter, i hate to even go here, but we'll here over the next year or so, i imagine which would you rather have? a 3% job with no job or a 2% tax with one >> well, that's going to be this fine line that we have to dance around i think bill's point was somehow that 3% wasa good thing. and i agree that while it will be tough to get to 2, 3% is what we might have to settle for, but that doesn't mean it's a good thing. >> andres, let's boil this down to what tactically you would do here as the fed faces this question about pivoting or if so, how hard and when? what do you say? what's your advice >> look, if you're in the camp that we're not totally out of the water and that inflation will take a little bit longer to get there. i think the value stock versus growth stock still works i think having the diversification around commodities still works. and having some cash, because i do think that we'll have good opportunities, right we're not going to go straight

to all-time highs in this kind of environment >> what are you watching on the charts as the sell-off is rapidly approaching 1,000 points >>3900 to 4100 we had strong inflation reports and we held at 3900. we are essentially there right now. we're 15 points below that we break below that, that's a bit of a warning sign, technically. and also, we have not been able to get over 4,100. that's the point at which you break the downtrend we've been in all year. we've been in a trend of lower lows and lower highs all year. if you get over 4,100, you break the downtrend, the soft landing crowd will say, wall street signaling that we may get a softer, mild recession and that argument is harder to make when you drift lower and get the kind of crumby economic data that we got today >> sure. 3884 is the s&p level roight now steve, a final word to you what would change chair powell's

mind >> i think if you had weak job growth, weak wage growth, that would be a big step in the right direction. another couple of good inflation reports, i think the fed might be able to settle down in this 4.5 to 4.75 range. one of the things that a trader i talked to was really bothered by yesterday was the unanimity of the fmoc, in terms of the 17 and the 19 going above 5%. look, isn't there anybody on the fmoc who's looking at the bond market and has some sympathy with that attitude it's not like the idea of the market is a crazy idea that maybe the fed, maybe we're going to have a sharp recession. why isn't anybody on the fmoc sympathetic with that outlook. it would be one thing if they were a majority in favor, but this was 17 of 19 saying, we've got to go up to 5% next year >> andres, it looks like you agree with that? >> yeah, look, the fed does not

care what the bond market is signaling right now. their biggest concern is inflation. and i think that is -- there's some miscommunication here it's almost like -- i don't know if you've seen the movie "he's not that into you" from the early 2000s. i think the market is gigi right aw away, just misreading. the market is like, maybe self-landing that's a good thing. so there's a miscommunication going on and we'll see who wins out of how far this one. i think the fed will unfortunately win out. >> thank you all, peter boo boockvar, bob pisani, and our steve liesman. it's been a rough week despite bullish outlooks from a number of executives we'll debate whether to only stocks into 2023 and will the fed worsen the cracks emerging in commercial real estate? and as we head to break, here's a look at the markets dow is down 129 points s&p is down 112 to 3833.

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welcome back to "the exchange."

the airline index is down 3% this week. a lot of things are down this week, but they have had bullish outlook from delta and united. delta raised its guidance. in fact, united's ceo scott kikish kirby addressed the disconnect with our fill lebeau earlier this week. listen >> investors have a hard time with two things. one, recessions have to be bad for airlines they don't realize we're coming from such a depressed level. the second is capacity the investors are worried about total industry capacity and are probably will today with united's order but the reality is the constraints on pilots, on aircraft manufacturers, and air traffic control saturation means supply is going to be constrained and chabllenged. >> my next guest is still bullish and delta and united are two of her top picks for 2023. joining me is helane becker and jeff kilburg is here with me as

well and he is bullish on boeing. helane, let's start with you what are investors afraid of here recession? >> yes, in a word. i think scott summed it up recession and too much capacity. and our view is that the airlines are already in a recession. they had about the worst thing that could ever happen to them occur, which is, we were back to 1950s traffic levels, traffic in april of 2020 was down 96% and we've come back very strongly. one of the things that we point out and we wrote a long report today in which we discuss it, is that we're within five percentage points of 2019 traffic levels and that is with business level being down and international being down about 25% still. so in our view, we've come so

far, and yet the stocks are back to where they were in 2020 to us it seems like they're already anticipating a recession. z and it's counterintuitive. normally airlines lag, and in this case, they've led >> jeff kilburg, first of all, would you be eager to pick up the airline stocks here? would you share the market's hesitation >> there is a dislocation, kelly. and when you see a dislocation, you want to be a little adverse. boeing is a name, technically, it's above its 50-day, above its 200-day, and look at the option market if you sell an at the money putt at 182, you'll collect $10 there is a risk to the upside. i have a price target on boeing to 210, but i think i would rather own lockheed martin lockheed martin is all focused on defense, where boeing is only 50%. it's about a 45% dispersion. we are overallocated to lockheed

martin but boeing, we do like it here defense stocks have been a bright spot this here. if anything, you're reminding us that boeing's defense exposure may be one of the things that's helping us right now in what's otherwise been a tough take. helane, normally, you would think, if we're going into a recession, that would favor the discount carriers, maybe consumers are a little more price sensitive, maybe even businesses but right now, that's where we have the biggest questions about nuts and bolts operations. look at jetblue, even spirit what would you do? i think jeff, you would be top tier as well what do you with the rest of the field? >> we downgraded -- actually, we downgraded jetblue and allegian and don't have a buy on spirit on the cost side of the equation, rather, cost percent change basis, their costs are going up much faster that those of united and delta and american and you pointed out that those

are two top picks. and that's how we're thinking about it we think the revenue growth will offset the cost pressure that those airlines will be affected with but from the consumer perspective, we're seeing a shift in mix, and we're seeing a change in the way that people are traveling. so -- >> what kind of change >> what kind of change >> interms of mix shift and th way they're traveling, we're seeing people not necessarily live where they work anymore, but they still have to come back in the office, so there's this hybrid environment, where they're back and forth, so they're traveling more than maybe they have in the past. and then in terms of mix shift, we think as more international markets, especially in asia pacific open, we are going to see an increase in demand for those markets as we did in europe in this year, and in the u.s. earlier this year and last year >> and it's fascinating, jeff.

a lot of people are trying to do this thing right now, where they're almost living two lives. >> feeling like tom brady threading the needle it is hard, but it's a great point. from a trading perspective, you have to focus on the names look at boeing $14 billion in cash and cash equivalents. i think you want to own names that are essential, are fortress balance sheets and that makes sense moving forward, as we really recover from the pandemic and that traffic >> all right and jeff, we'll see you in a couple more minutes as we continue to follow the markets and get some other picks we'll leave it there for now with jeff kilburg. helane, thanks for your time today. helane becker with the airlines. coming up, coin base and affirm sinking to new all-time lows sinking to 90% this year are rising rates to blame for the collapse in crypto and fintech stocks as we head to break, here's a look at the dow heat map this will tell you about the market today, only one name is in the green and that's verizon,

up three quarters of 1% today. everybody else is lower. ibm, the lager down 4.7% but apple in the next-worst spot 'rsney down there as well. wee down 935 points. the exchange is back after this. d 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. if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more.

welcome back to "the exchange." we have siege pressure intensify in the markets all session long. the dow low is 950, we're 20 points off that. the nasdaq, the worst performer, down 3.4%. let's take a look at the megacap names, which are all firmly in the red. you can see, for instance, apple, second worst performer in the dow today, down 4.5% alphabet down almost 5%. microsoft and amazon down big at

least for them, too. and netflix is having its worst day since december, on a report that they're returning money to advertisers after falling short of surviewership guarantees the stock is down 9.5%. roblox is getting slammed after showing a month-after-month drop in daily active users and lower than expected growth in year over year bookings these shares are down 17% since january and 17% just today tesla is actually one of the few outperformers in the nasdaq today, but we're still talking about its lowest level since about november 2020, this after an s.e.c. filing showed that elon musk sold another $3.6 billion worth of shares. this spring, he said he was done his yearly sales now this year are nearly $40 billion the stock is down 55% since january and is about to close out its worst year ever as a public company interestingly enough, up half a percent after all of that news

today. let's get to frank collins now for a cnbc news update >> here's what's happening at this hour. three people have received lengthy prison sentences for their part in a plot to kidnap michigan governor gretchen whitmer. their sentences range from 7 to 12 years massachusetts governor charlie baker will be the next president of the ncaa. baker will start that job in march after his term as governor ends he'll be the first politician to lead college sports' largest governing body in washington, d.c., the ethics panel of the city's bar recommends that rudy giuliani be disbarred. they say he likely violated at least one conduct rule those findings are preliminary giuliani criticized them, calling the recommendation, quote, a personal attack that's the very lathe. kelly, back over to you. >> frank, we'll see you soon thank you. up next, real estate mogul don peebles will join me with the winners and losers of this

commercial real estate market, and why he says the new york office market has permanently changed. speaking of real estate, it's actually one of the best performing sectors today with its drop in yields names like boston properties holding up better than most of the market their decline, about two-thirds of 1%. we're back in a moment

welcome back to "the exchange." all s&p sectors are lower today, although real estate is actually one of the top performers. it's down only 1.5%. one area in particular feeling the pain is commercial real estate right over in new york, offices are still less than 50% occupied that's translating to the office reits all down double digits, in some cases, down 51% and while my next guest expects the pain to continue, he does see some opportunities, don peebles is the chairman and ceo of the peebles corp., a privately held investment and development company with residential and commercial properties in most u.s. cities don, it's great to see you again. welcome. >> thank you, tkelly. >> can you offer a top-level word about what you think is going on with markets and the economy right now, as you're here on a day where people are fretting quite a lot >> look, i think that we've got a lot of worries about recessions coming in

interest rates increasing has slowed the economy down significantly and the concern is whether they go too far. what was encouraging yesterday was a 50 basis point increase as opposed to a 75 basis point increase so i think that we're slowing down and i think the market will ultimately adjust, in many sectors. >> when you say adjust, how much more losses could we be facing in some of these commercial real estate sectors >> i think the commercial office place market has been hit by a double whammy. high rates and a recessionary environment, but also a change in the way people work americans are working differently. remote work is here to stay. hybrid work is here to stay. so there's a far-less demand for office space, and that's putting a lot of pressure on reits that have a lot of inventory. and these markets are not created equally. new office buildings are much

better than older office buildings. >> let's say i'm in one of these funds. can they take my money and convert it into residential properties welcome like we've seen in lower manhattan? this was happening over the past ten years. empty office space was becoming fancy new apartment space and is that going to happen across the country and could that bail out investors here >> i think it can help in new york, but i think that what's happened is since the value hit from a commercial office building that was performing properly, prior to the pandemic, the valuations now are down 30, 40%. and will go down further and the exit is a conversion office space, for many of these buildings. and i think new york city and washington, d.c., to a lesser degree will be helped by that. those are the two hardest-hit markets in the country is new york city and washington, d.c. >> what's going to happen if some of these funds do end up having to sell assets at, you know, distressed or even fire

s.e sale prices. it feels like that could be another shoe to drop here. >> i think that there'll be losses any fund or reit that's heavily concentrated in commercial office space in the major u.s. markets, excluding say texas and florida are in for a very rude awakening. there are going to be significant losses the cost to convert these buildings to apartment use, which will produce ultimately less income than those office buildings produced pre-pandemic. so i think you're going to see a lot of losses here >> wow so what's your advice to investors? where's the opportunity? what should people do right now or does it all -- is it all predicated on the fed eventually pausing its rate hikes >> i think pausing the rate hikes would be helpful, but it won't bail out commercial office space. i think you've got to look at the more entrepreneurial funds that are able to pivot so you have larger funds, the blackstone funds, the black rock

funds, some of the goldman funds. those funds tend to be much more entrepreneurial and nimble and they have other places to go they have other strategies and i think that, you know, taking these commercial office buildings and converting them, especially those who are now buying so anyone buying commercial office buildings to make the conversion now, those are going to perform well. so there are going to be -- there are some new funds that have come out that are opportunistic. there are some new ones that have come out to raise money to buy and convert commercial office space in new york city and washington, d.c. and san francisco and elsewhere. i think those will perform well. >> yeah, makes a big difference when you're starting with a much lower purchase price final question, i'm a little surprised that a company like we work wouldn't see better fortunes right now, because the traditional work environment has broken down, but people do still have the desire, this need to kind of have a place to do their business do you think that model will emerge better from this overtime, or is it simply just challenged because there's fewer people in that pool than there

might have been a couple years ago? >> wework is not a new innovation, anyway i mean, people have been doing this for quite a while, many decades. so what's happened is, wework was focused on the start-up than the entrepreneurs. and that's not where the opportunity is in flex commercial office space. it's for the small mid-sized, and larger companies that want to remain flexible now and i think also, what's going to happen is commercial landlords will have to change how they lease their office space. it will be more short-term you'll see more commercial office building owners actually get into the same kind of business that wework is in, with flex space so that's going to put a lot of pressure on wework's ability to produce better earnings. >> and if you want exposure to, you know, kind of that third place, that third place people might show up and casually work, you just buy shares of starbucks and don't need to worry about the fundamentals and real estate at all don, thanks very much. good to see you again.

don peebles with the peebles co corp coming up, the nasdaq is the underperformer as they digest the fed decision marvel and docusign have the biggest impacts. a closer look at the megacaps next speaking of the semis, the cmh is on its pace for a month the semiconducto oen arsft good leading indicator. today, straight down back in a moment

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to wow everyone on your holiday list. offering a variety of american made products. weathertech! nice! like floorliners... cargo liner... tablet holder... boot tray... cupfone... sink mat... pet feeding system... anti-fatigue comfortmat and more. order the weathertech gift card instantly for the perfect gift at weathertech.com welcome back, everybody. tech, a clear laggard today after the fed's half-point rate hike and sustained hawkish stance we've seen major pressure across stocks steve cockovak is here. >> it's bad and getting worse throughout the day shares of the megacap tech names falling with the rest of the market, with those losses extending into this afternoon, let's go to apple shares first down more than 4% this week.

remember, bloomberg reported apple was working to allow those third party app stores on the infect with a new law. apple's lucrative app store business could be at risk. now over to microsoft. shares up 3.5% the ftc sued microsoft a week ago today in an attempt to block its $69 billion acquisition of the video game publisher, activision that deal could take longer to close than microsoft's initial target of june of next year. then it's amazon, down as well, but it's the two names that rely on the digital ad market, kelly, that are getting hit the worse so far today meta and alphabet are down around 5%, perhaps a sign investors are more worried about those ad-supported social media companies. >> obviously, netflix down sharply and some concerns about what might be going on with advertisers there as well. talk a little bit about those advertising trends i mean, obviously, they're super sensitive to a recession but you still think that those

companies would benefit, if marketers have to pull back, are they going to pull back at meta and google first it seems unlikely. >> and we're seeing layoffs across traditional media companies. "washington post" yesterday for example, so, those get hit first, but facebook -- meta, rather, just went through those huge layoffs, as well. they're all cutting costs. we were reporting a little bit earlier this month about layoffs are still on the table at apple, too. >> i understand we still lumped three all together in many ways, they still trade the same but a name like amazon, faces very different issues than some of the others and i'm surprised there isn't more differentiation. at this point, this mature in the cycle, i would, it just seems to be, almost telling you, they only perform well in a hi high-liquidity, low-rate environment. >> i was looking at amazon's performance last week, and it

was the laggard of the week. they all grew last year, all of these shares, but amazon was the laggard. they didn't grow that much and now it's meta taking it on the chin this group, this year but still, amazon for some reason just doesn't have the shine that it used to, perhaps that's because jeff bezos is no longer running the company but it's -- yeah, they're hurting and going through all of these inventory problems a lighter consumer in the holiday season and all of those issues and advertising, too >> and it was a pandemic darling. and i was pointing this out earlier. if you look at a stayed company like generac -- >> i saw you tweet that today. >> this company that's profitable, it's been around forever, but when you have your shares run up the way that you did and you can lump amazon into this category, anything that was part of the stay-at-home trade the last couple of years, is seeing this massive post-pandemic. >> that's tech in general. just overall tech was the benefit of this stay-at-home we use those tools to work from

home, to bec locked down when things turn the other way, tech takes it on the chin. >> still ahead, while the megacap tech names are taking a hit, tesla has somehow managed to reverse course today. it's one of two positive stocks on the nasdaq 100. up two-thirds of 1%, and jeff kilburg says now could be the time to buy. 'lreinhel jo me with what's got him feeling bullish next on "the exchange." researchers believe the first person to live to 150 has already been born. it could be you! wow. really? of course, you'll have to eat your greens, watch your stress, wear sunscreen... but to live to 150, we're developing solutions that help doctors listen to your heartbeat while they're miles away, or ai that knows what your body will do before you do.

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welcome back to "the exchange." what do bonds, china, and tesla all have in common investors ran away from this year, but cnbc contributor jeff kil kilburg, should we say you're running towards them tiptoeing? >> i'm listening >> you're fast walking >> i don't know if i can sprint anymore in this old body, but, yes. >> why do these three perk your interests? >> the old bond trader in me has to take interest in the fact that for the first time, we have to listen to the bond market everyone is so predicated, all of their investment thesises for 2023 is baudsed on what the fed is but the fed has been horrible on forecasting. we're giving them a lot of credit the four-year note is at 4.23%

we saw that max yield coincide with the max low in the s&p 500. if we look at the s&p 500, kelly, i think the bond market, you have to believe in the bond market that's the thesis, which is taking me overseas, because i see this lag, this disconnect. what did we see earlier in the year we saw the bond yields going from 1.5% in the ten-year up to 4.25%. there was a huge disconnect and a lag in equities selling off. now we're seeing calmness coming back into the market >> you can say that on a day when the dow is down 9.16. >> it doesn't feel good, but we haven't moved. that was an 882 on the s&p, exactly three months ago there's been a ton of noise, a lot to digest. but on days like this, you have to remain calm i'm looking overseas at pgj. the nasdaq golden dragon index the fesco etf gives you exposure to alibaba neo just got updwgraded today i was a little early buying this, but this was a theme in

2023 as we see china reemerge it's been very hard to measure china. >> and marco papich told us the same thing last week on bonds, basically you said that stocks are tracking two-year yield right now if you think that the two-year yield is not going any >> in a lag effect exactly right, kelly talked about this before on cnbc saw the two-year note above 4% a lot of institutions buying that yield, embracing the yield i should say up to 4.88 now simmered down an opportunity for equities to get over the opinion and i know bob pisani talked the technical move above 400 that's when people say, uh-huh maybe the bond market was right. >> get to that point still sitting where we are. >> agreed. >> one of the more controversial ones you're looking at, tesla. >> it is. >> you want to argue stock underperforming fundamentals because of elon musk i can

understand the case for buying it that said, does it require management change to perform better face another year of tough liquidity with what the fed's doing here >> i don't get political, but i look at sentiment. sentiment is really important. investor sentiment a beat up stock. saw elon sell more shares. big pblock just yesterday go back to november 2020 when the stock took a breath at 136 a parabolic move since it's fascinating in an opportunity to buy here. use options, really qualify and quantify what your risk is owning this here, get a lot of this political component undercurrent in the rearview mirror. >> why why in the rearview mirror >> maximized seems in june had maximal conversations about inflation. back in october, the world is imploding. maximum equities scare pessimism. right now seems max elon if that's a word it's max elon.

an opportunity in tesla, i think technology will be refocused in 2023 but very hard to see it right now. >> quick final word. also picking around a little bit in energy. tell me where and why? >> i run a sector rotation map model all year trying to find things that make sense. stay away from sectors revealing weakness. >> i thought energy qualified. >> 55% xle year to date be selective valero, look at chevron. themes we saw in 2022, dollar is good there puts more in sales in that same theme in 2022 owner the sector of energy persists in 2023. >> big holing out there today saying actually you should buy the dollar go long if it's has another big year that's the case, bring an energy trade? >> is does that's the consensus view. fed is right my view from chicago, sometimes nashville, the fact the fed has never been right going back

decades and decades. i bet on the old bond trader in me, kelly. the treasury markets, specifically two and ten-year forecasting that we will get through this storm. >> all right leave it on that hopeful note. we need to today jeff, thank you again. appreciate t. great seeing you. dow's down 931 crypto crushed and the fintech space. got big movers and whether more pain is ahead, next on t"the exch exchange". l? mm-hmm. for 1,100 bucks? ga-a-a-ap! looks like your wallet may need a sling too. tell me about it. did that goat say "gap"? he's talking about expenses that health insurance doesn't cover. eh-ehh-eh! well i'm talking about the money aflac pays to help close that gap. aflac, huh? aflac! ga-a-a-ap! aflac! gap... uh-oh! that duck can motor! get help with expenses health insurance doesn't cover at... aflac! ...dot com. if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund

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welcome back get to one more thing before we go big moves in crypto and fintech stocks both taking hits knop surprise in a market like this kate roonesy here with what's behind it. >> yeah. some of the most rate-sensitive high-growth names in tech under pressure today investors worried about consumer spending with retail sales number and higher rates affecting lending and trading slowdown hitting some of these

stocks affirm and upstart, worst performers within the sector today. borrowing costs and delinquencies go up their margins tend to get squeezed and among those questioning whether lower-end income americans will be able to repay loans. sofi, meanwhile, holding up a little better. unlike most fintechs a regular big gets to borrow from a discount window seeing rise in interest income thanks to higher rate, the coo bought about $5 million in that stock yesterday helping sofi and also block. lending and spending, trading, one of the worst performers within the group paypal is down and an outperformer lately. one. highest rated fintechs average analyst overweight price target about 30% higher from where it's trading today, but jitters it may be losing market

share to apple pay robinhood hit by a trading slowdown overall and contagion fears, ftx, weighing on coinbase, bitcoin down today and so far a lot less volatility any that space, and less trading activity tends to drag on revenue. finally, car companies outperforming. underperforming, rather, on s&p around fears of the economy and consumer spending as well. kelly? >> saw higher charge rates in november that kind of thing surprised bitcoin is holding up frankly with everything happening. usually see rationale below ten. what do people say somewhere. >> rate sensitive. crypto-specific news hitting bitcoin hard as it may have a couple years ago at this point seems more set to things like the u.s. dollar strength and interest rates.

really was the big mover other than that, within all of this ftx drama, what's going on with specific crypto companies, actually has really not performed too badly in the context of what it probably would have dawn few years ago. it's become more of a mainstream investment in your average portfolio and it's very much traded like a risk asset also outperforming smaller toks riskier, seems crazy, but better than the rest. >> it's not ftt. that does it for "the exchange." dow down just under 900 points "power lunch" begins right now. you mentioned, kelly, dow down 900 points. sell-off on wall street

inte intensifying i'm in nor tyler mathisen. nasdaq down as well investors concerned the fed's relentless rate hike campaign tipping our economy into recession this hour a look at the health of the consumer, recession protection and what a slowdown means for oil, tech and the trade. first a kelly and a check on the sell-off, welcome, hi, everybody. tech hit hardest under recession fears. we have the s&p down about 2.7% today but 3.4 nearly for that nasdaq selling picked up after a bad retail sales report this morning showing worst drop in 11 months. other poor data as well. tightening out of the european central bank add it up, it's landscape now. apple worst performing dow stocks, as a matter of fact. netflix down big on advertising concerns down almost 9% today more on that later alphabet, microsoft, google shares down 5% the bond market, yields falling on concerns over growth. ten year back below 3.5%