housing. >> bizarre to think if mortgage rates go below 6%, wow would have seemed crazy a couple years ago. thank you very much. frank thank you as well. >> always great to be here with you. >> thanks for watching "power lunch," everybody. >> "closing bell" starts right now. a fed hangover and down beat data sending the market tumbling today though we are off the worst levels of the day, the dow is down almost 1,000 points at the low. this is a make or break hour for your money welcome to "closing bell," i'm sara eisen look at where we stand in the market the dow, only one stock higher today, which shows you the breath of the selling. verizon is the outlier everybody else is down goldman sachs, united health care, microsoft taking the most off the dow. s&p 500 down 2.3%, every sector lower right now, hardest hit,

technology communication services at the bottom of the pack names like netflix selling off more than 8% technology, materials, industrials, all at the bottom of the list. there's the sector heat map for you. it shows you the scale of the pain today a big unwind that we are seeing with some of those tech groups down more than 3%. that's why the nasdaq is in the eye of the storm it's down about 3% not too far-off of session lows. big declines for names like apple, microsoft, google, nvidia, meta, netflix all taking the index lower. tesla is an exception, it's higher today but it's been lower the last few weeks. we'll be all over the sell off for you with great guests to help you make sense of what is happening. including jeff solomon with his thoughts on the fed decision and the market impact. plus the one and only jim cramer will join us with his takeaways from his monthly investor club

meeting. we begin with the market and economy. a slew of central banks joining the fed today. we have the european and bank of england joining. steve liesman has the latest for us steve, it really does feel like for the markets right now central banks are front and center and the message was, higher for longer. >> reporter: yeah. and nowhere to turn, sara as well several banks as you said joining the 50 club today, hiking by 50 basis points following the fed's movement on wednesday as investors endure global rate hikes and inflation. all hiked by 50 basis points today, norwegian up by a quarter. and ecb cigle naing more aggressive rate hikes ahead than the market expected. it's a toxic mixture for markets, rates are rising and the economy looks to be

weakening. the data tough today, retail sales down .6 compared to .3 it was a strong october. philly fed worse than expected empire state way worse than expected but jobless claims stronger, 211 versus 232,000 on the estimate jobless claims remains a key point for the fed. looking for slack, the jobs market shows strength while the market focuses on the retail and manufacturing data the disagreement between the market and the fed, shows up in the 2023 outlook medium fed forecast rising to 5.15 fed future prices year end at 4.41, that's cut after a few more hikes on the market sees the fed en route to making another policy error by tightening too much. >> i didn't think powell was as

hawkish as he could have been yesterday. am i wrong he was way more hawkish at jackson hole talking about pain, last time they raised interest rates where he seemed to make the point that financial conditions weren't tight enough and they had a lot more work to do he was kind of hawkish but not down 1,000 points hawkish, was he >> reporter: i don't know how to put that in context like that. i think it's a good point that he was not dramatically more hawkish than he was previously first of all i want to make a couple points, i think what markets were listening for was some sense from powell that he got a little more comfort with inflation given the last two reports. you read morgan stanley today, he did not pick up on those two inflation reports or change their forecast the way the market did when they saw those two better inflation reports the other thing i think was hawkish for the markets was not the new level of the funds rate projected for 2023 it was the

unanimity. 17 of 19 fed officials, above 540. they look at that and say is anybody listening to us out here we have a point of view in the market that's not going to go that high and they didn't see any comrades in arms out there >> i agree but also i think, steve, it's surprising they raised inflation forecasts for the year so did the ecb they don't see the inflation rate coming to target i think until 2025 and that seems like it's going to be a big question how low can we get next year on inflation? >> reporter: you're right. and i think the other thing about this is, i'm not sure the market takes into account the situation that both lagarde and powell are in. you are central bank president with inflation running, core inflation at 6%. you cannot sound dovish in any way, shape, or form. you have to hold the line and be as hawkish as is reasonable in

those circumstances because you are triple your target rate. you got down to 3, 4, 5, then we can talk but not at 6. >> i think the market expected him to be hawkish and i think he was kind of, but it wasn't extreme. steve, thank you very much appreciate it. >> fair enough. >> for more on the market and the economy, let's bring in paul hicky and neildada neil i wanted to talk to you today because you've been a bull on the economy i'm wondering if anything has changed as the data has come in weak. >> has the data come in weak if you look at the atlanta fed that puts this together, q4 gdp tracking is close to 3%. and that's important because the consensus if you look at blue chip is at 0.5%. there's significant upside risk to the consensus and by the way, i think the consensus is off sides on gdp growth and the fed frankly as

well in the first half of next year because the consensus is looking for, basically, no growth. and look at what happens -- i think it was mentioned about home builders earlier in the program. >> yeah, they're up today. >> some recession. with home builders working. >> they've been beaten down pretty hard. >> up is up, sara. up is up do you want to make a bet whether residential investment is going to be as weak in the first half of next year as it is right now. i can assure it won't be at the same time remember the fiscal squeeze people were talking about this year? what happened with that? what we know is the personal income numbers are coming in stronger than expected because folks have been underestimated what was dumped down from the state governments onto taxpayers and that's using personal income at a time when gasoline prices are now at year-to-date lows so the risk to the economy are when the fed is hiking

aggressively and energy prices are very high. that's not what's going on right now. gas prices are falling and the fed is signaling that it's going to step back so that's where i am at. i think the fed -- >> definitely pretty bullish. >> i don't know that it's bullish. i think it's bullish for the economy in the short run. >> it is compared to consensus. >> it's out of consensus okay i'm out of consensus, that's not happened before but look, i would say it's good for the economy but ait also means the fixed income market is miss priced. it reinforces the fed's higher for longer approach and prompts people to push out recession expectations thereby making cuts in the back half of next year less likely. >> paul, do you agree with neil or is he crazy >> no, i certainly don't think he's crazy

but, you know, i think when you look at the -- what the market is saying here, neil was talking about interest rates maybe the bond market is mispriced here but the fed, the uni anymorety steve was talking about, they're intentionally inverting the yield curve. the fed talked about the important of the yield curve talking about a recession. you have the fed fund rate 100 basis points above the yield, going back to 1994 when the fed has telegraphed its rate decisions. when it's been this inverted you've seen a recession imminent all three times. so i think in that respect the market is saying to the fed, hey, you know, we're looking at different things here. i think in that respect you get a little bit of a shock here in the markets. it it's one day it's certainly a big decline but i think overall, taking a step back from a bigger picture,

there's some things to like about the market here. first of all what drove the market lower for the first half of the year was the fact that as neil said, energy prices were higher, the dollar was strong, that's come in, rates are tom st -- rates are starting to come in now as well they're now headwinds for the market when you look in october, they were better than prior lows. and right now the market's behavior around the trend line we've all been watching so intently it's been a disappointment as we haven't been able to get above the trend line but the behavior has been different we pulled back immediately and sharply the prior periods. for the last two weeks we've been hanging around those levels and azs technicians will tell me the more often you test, the weaker it gets so you can take solace seasonality, december is the

back end the lows are typically in the middle of the month right around december 15th, going back to the early '80s so in that respect the second half of the month is back end loaded and that sets us up for a potential surprise to the upside. >> today is the 15th. >> yes >> to your point on technicals -- >> you're very observant >> since you mentioned it, able to pinpoint it to that date, thought it would be helpful for people. >> i just wanted to add some color, i talked to a hedge fund today, saying there's a technical level folks were watching, 39, 33 approximate on the s&p 500, i don't know if you follow these strategies. it's a trigger and it makes them sell and picks up momentum on the down side and people who follow these strategies sell. so perhaps that led to such a big decline earlier today. just one explanation but bottom line, neil, if the

worry -- if the worry is no longer inflation and it starts to be growth for next year and earnings, you're pushing back on that idea because why? because we're seeing a lot of rate hikes and a big adjustment, and it's happening globally so what's the bottom line for investors? >> well, the bottom line is it's the surprise factor of the recession. one of the ways you get a recession is through an element of surprise. companies think things will be okay and then something bad happens and that prompts them to adjust the cap x plans, hiring plans, inventory, so on and that creates the downward spiral. but what if we've been talking about this six or seven months and companies have done that now household demand holds up better and companies are offside on growth. that could be a period of catch up -- >> the financing costs are going up, that's going to impact

earnings no matter what. >> a lot of them have also termed out at the end of the day, remember, if you get the call on the consumer right, everything else about the u.s. economy will fall into place and right there, between still large pile of excess savings, lower gasoline prices, and steady labor markets, that's enough to maintain a reasonable pace for household demand. and look whereby i mean, i bet you every mortgage broker is on the horn with people that got stopped out at 7% interest rates and they're calling them up and telling them to get back in. you expect to see housing demand pick up, which is i think part of what the builders are reflecting between these two things look, the consensus is for no growth in the first half of this year so i think the risk -- >> but it's also still for a soft landing it's not for a hard landing. so a lot of people think the earnings expectations are too rosy.

>> the odds are going up of a nt landing. final word paul hickey you share the optimism on the market it sounds like? >> yes the market is giving a better message but the kourncounter to neil's point we had such aggressive policy tightening in the last few months here and it takes time even as the chairman admitted yesterday it takes time to take effect 50 basis points seems like a step down and seems light compared to what the last four hikes were, but historically even that was a large move so we've seen an enormous amount of tightening in the system in the last six months. we're still going to feel that going forward in the next few months here. >> by the way, i wanted to mention what's happening with bonds today, very strong bonds right now, the ten year yield 3.42, two year, 4.25 seeing the yields come down.

the dollar is also strong today the pound is weak, neil and paul leave it there great discussion thank you both for joining me. >> thank you. a check at where we stand in the stock market low of the day, we're down about 755. on the s&p every sector is down. communication services and technology, those groups particularly hard hit, down more than 3.5%. names like netflix selling off hard, down now 9%. we'll talk about that later, some bearishness around the netflix ad supported model but a lot of growth stocks hit, meta down 5.5%. technology, chips slammed right now, materials and industrials and financials what's holding up best, energy and real estate but both down almost 1%. joining us is jeff solomon great to have you. >> good to be back >> especially on a day like

today. what would you tell folks at home >> everybody take a deep breath. remain calm. >> why >> markets have days like this the market is reacting to the specifics of what they heard from the fed chair yesterday i'm not surprised -- >> what did we hear from the fed chair yesterday -- >> he's going to continue to do what he can to tamp down inflation. >> didn't we know he was doing that anyway. >> he's been incredibly forward on this. straightforward. very transparent. >> but is he wrong should he be more worried about the economy. is the market telling you they're going to make a mistake? >> he pointed to specific things in the '70s where the fed took its foot off the gas in terms of tamping down inflation and it got worse. so he's following the playbook, get out in front of it and make sure it goes away. he has the ability to cut rates later on if there's a problem with the economy in times like this you need to invest in places where you have a high degree of certainty of outcome regardless of the

volatility of markets. we put out our 2023 themes, there's great themes in there for the longer term investor should hold regardless of how long it takes the fed to tamp down inflation. >> let's focus on them focus on fundamentals, what are they showing >> the consumer continues to be resilient but i think they'll be selective. >> retail sales were a bummer today. >> it's not one size fits all, to use a retail term i think you have to look at the different buying patterns of consumers. so, you know, i was at a conference yesterday you and i were both there. >> the yale. >> right you can't get a room in meek knows until 2023, you can't get airline tickets how do you do that with consumers saving in other areas. there are new buying patterns

emerging post covid. this is something i've been saying over and over again, the old data sets the things people look at to see where the consumer is going to be, how they'll behave is out the window 2019 and earlier doesn't matter. what happened in covid doesn't matter new patterns are being formed. some of the things we saw during covid will be stickier, some emerge as new trends as that happens you on'll see t dispersion around people's expectations be sure of a few things, deglobalization. the decoupling of china and america, the chinese influence and american influence -- >> what do you do about that >> there's going to be capital spend on reengineering supply chains and reshoring we've been talking about this for years. we'll be building more chip capability, more fundamental commodity capability

in the united states, more ports in the united states. >> nobody wants to touch the chips if we're going into recession. >> we might be going into a recession, it'll be short -- >> you're thinking longer? >> we have to spend so much money to replicate what we get from taiwan. the likelihood of taiwan being an independent country in a decade, it's not high. like it's -- there are certain things that are almost destined to happen. i hope it does i hope that's not the case but you can't expect that to be the case especially with chips. so we will spend a lot of money in this country building chip infrastructure we had a whole legislation around that. so i think those are the kinds of things we're looking at. >> energy. >> energy. so basically, you know, when you look at what moscow did, everybody -- it threw everybody into a tizzy we had eight months to prepare for how to get increased natural gas and oil supplies into ukraine and into eastern europe,

right. so that has actually been happening. it's been great that we, as a country, the united states, has a net energy exporter. we're doing things to stand in the face of the supply problems they might be having in europe that's great >> so you would tell investors to buy these energy companies even now after the rally they had this year as a long term -- >> because we're going to need all kinds of energy sources. historically it's been carbon based versus new energy. now it's just all energy so i think you'll continue to see pushes towards alternative energy, towards solar, towards any kind of energy that allows for people to have energy independence countries to have energy independence so i think those are the kinds of things even on a day like today you can make that investment and have it work out over the long term even on days like today. >> you know i'm going to ask about crypto. >> yes. >> you took cowan into crypto

and a first for custody, right >> yeah. >> how's that working out? >> it's a tiny business for us we were trading spot crypto. cow ban is not at all entangled in the ftx mess. i think those of us on the inside, those catering to institutional investors, recognize companies like ftx are a problem. you can't have a company that does execution and brokerage and custody all in one, because too many conflicts. >> it makes you wonder if crypto investing overall is the problem. >> i think we're going to -- it won't be back to what it once was until there's better regulation i can't give you a window when that's going to happen or how long that takes. but there has to be more regulation and eventually this ends up in a highly regulated fashion. >> what's the level of interest right now? >> they're continuing to look at ways to play in the space but it'll take longer to do that as things settle out.

let's not minimize the ftx changed i think people's perception and changed -- institutions will be more reluctant and reticent but the ones who have the ability to see where this is going long term will continue to play. >> final question, you're big in i.p.o.s. there have been none. >> yeah. >> how does it look next year, i.p.o.s. >> i think i.p.o.s, little window you see the vicks get in the low 20s, high teens, there's companies that need to be financed we see it in life science and health care, capital intensive business these companies will not miss the opportunity to catch the windows. there will be windows. we're still in one technically even with today's activity where there's a lot of issue over the last 30, 35 days. >> a lot of mergers this week, too. that was this week, monday. >> yeah. you look at horizon, horizon

pharma, for example, those thiny will still get done strategically still a lot of stuff to get done there. i think buyersnd sellers are firing out where things shake out but we'll learn more as we head into '23 and once that happens people need to get things done, they will >> it'll still happen just lower prices >> yeah. things are going to continue to happen there's a lot of good, fundamental reasons why there should be consolidations in industries when you have difficulty in the capital markets companies that might otherwise finance themselves to continue their growth will look to be sellers so there's the tension should i go the m&a route or capital client many clients look dual paths >> there's a buyer >> there's always a buyer. the question is really abilout

price. private equity still has dough to spend they're doing the smart thing waiting to see where things shake out. but they have a lot of money to spend, that is a three to five year run still in this environment. >> good to get kcolor from you thank you. >> thank you. on wall street, we mentioned the home builders they're rallying despite lennar's weaker than expected earnings and all this talk about higher rates for longer diana joins us what's driving this? >> the average rate on the 30 year dropped to 6.13%. the rate last peaked on october 20th at 7.3% so it's down sharply in a relatively short period of time so no surprise the home building etf itb is in the green, they were down in the premarket due to lennar's earnings yesterday

it showed a drop in guidance on new orders in the conference call this morning, stuart miller harped on the lack of supply in the market and said the short fall leads the industry in what we believe is a short duration correction and said lennar is not fire saling homes despite reports it was selling backlog to investors. >> thank you very much 4.3% in a down market higher for lennar let's check out the dow heat map. is it broad. every dow stock is lower right now, except one, verizon, the only outperformer. if you look at what is dragging the most, united health care, goldman sachs, the usual suspects here, ibm we're off the lows of the day but still looking at a decline of about 740 points, s&p down almost 2.5%. mad money's jim cramer joins off

fresh off the monthly investing club meeting i love this, i watched it. >> i know you do, thank you. >> the 2023 outlook -- it's a great day to have you on we have to start with the sell off we are seeing. why and how people should interpret this >> okay. i listened to diana just a second ago you're supposed to be selling stocks that people are buying but rates aren't going up and the fact is that stuart miller, executive chairman of lennar said there aren't a lot of homes being built. i'm using that as an analog. things aren't going the way the fed wants. the fed wants housing prices to crater, margins to go lower. the fed wants you to spend much less, if possible be fired jay powell -- >> they're looking for a less tight job market. >> yes you are more of a diplomat because you're from cincinnati and i'm from philadelphia.

i think the problem with the market is a lot having to do with yesterday where some people just don't seem to understand he is not trying to get expectations beaten he doesn't want wow it's supposed to be four and comes in at plus three. he wants minus one he wants to get back to where we were he wants to go and hear people at the supermarket say, it no longer costs double to get cream cheese i can afford steak again he wants people to say you know what, housing is within reach. these are common goals that we usually have that a president might have but what we've done is created a juggernaut economy, fuelled by a lot of growth packages that make it so it's very difficult, even if people got laid off to not find a job immediately so sara, in this environment, the only thing that really kind of creates less purchasing power

is what's happening on your screen right now. >> which is what >> stock market going lower. i'm not saying he's rooting against the stock market but i'm writing a piece tonight, do you think this man cares do you think he cares microsoft is down 9? he's thinking good, maybe something will slow down the purchasing power -- >> financial conditions matter it's part of his strategy, his monetary policy. >> look, the stock market, he does not share president biden's belief that the stock market is really the repository of rich people he thinks there are a lot of people that save through it. president biden had almost scorn for the stock market because of how little money we have. >> we know there's an impact. >> but we are in a jam here. and we're in a jam because everything keeps costing more and he just has had it he doesn't want to hear, hey, we had some really good numbers yesterday so we're okay. he's waiting for the big

picture. >> the pain that he laid out. >> unemployment, say 4.5 that wouldn't -- that would be part of the plan 4.5 would be great >> down from 3.7 >> made it so that we had buy more that we only hid master work paintings. >> both remembered for taming inflation. >> have you been to palm beach >> i have been to palm beach i prefer miami. >> most of our viewers are down there, of course there are yachts there and the first thing you always say is we are an incredibly rich nation and then you think for a second, we have incredibly rich people in our nation. and i think i give credit people watch our programs and say, are sara and kramer are talking about it's okay the stock market goes down? no it's collateral. i mate by necessary collateral. >> it's a side effect from the

medicine we need. >> exactly i like that. >> i want to talk about that. >> that's good it's medicine. >> i'll use it on the 6:00, i don't know how much people watch your show and my show. >> hopefully a lot of overlap. >> we want that. >> so can we -- >> i talk about burrow and jamar chase. >> burrow making a come back. >> what i love about your call is you started off talking about your mistakes. >> right. >> which not everybody does. here's how tv works, i heard you watched the call so i went to my exexecutive producer and said i'm going to ask sara she watches it i went on and i tell things like i forget about market cap. i loved nvidia so much that it didn't seem to matter to me it went to $820 billion it shouldn't have been that big. i want people to take into account should something have the market cap it does nvidia was 29 times sales.

there's a time to buy. there's a time to sell, too. and even though i loved nvidia at 29 times sales. no go. there's a company communicate to shareholders i'm not saying they have individual communication with individual shareholders no. but do you return the calls? >> who does not do that >> bausch health >> a weak performer. >> one of the worst you've seen. i called them -- one time i left a message my staff said who are you leaving that horrible message for? i told them, bausch health >> do you regret that? >> i read them what i call the riot act you'll love this one you have to stop having lunches and dinners with management. the ceos are unbelievable sales people they come back and say i don't buy that

i come back from lunch and say, even a $12 latte from blue bottle i'll come back and say i had the greatest meeting you won't believe. and jeff marks who works with me says, jim stop taking those lunches, please. >> you have insight from them. >> but -- sara -- >> but they sell. >> -- have they ever said to you my stock is high >> no. >> maybe you want to wait, buy it 8% lower? no i can't believe it, this company makes semiconductor that go into cell phones. >> but it's an important lesson for people who watch too because we talk to a lot of ceos. >> they're salespeople when i worked at goldman sachs i remember the ceo explained to me, i said what are you doing, he said i'm in the sales business, i sell goldman sachs so when i meet with the ceo of goldman sachs he's selling goldman sachs. but they're a little bit better because we know they're cutting

some conversation. this is one that's really important we have a thing called tan in our business. the total adjustable market. >> heard more about it with the run up. >> smile direct, one of your favorites. they said they had a $500 billion tam because everybody's teeth look bad. and then when the stock went to 53 cents the tam staid at 500 billion. >> it's the future concept. >> and one more. when the fed says things are too high don't say what do they know. say, they've gotten hawkish. this is november of last year. maybe we should temper enthusiasm these were mistakes. some i did better on than others but they're things i want people to know. >> but you did a lot right too. >> but the call itself is usually about things i screwed up on. i've seen money managers on your

show they never made a mistake one day i'll be like that. i'll never make a mistake. i'll bat a thousand, chase will catch everything, all 100 yard drives >> but then what would you talk about on twitter >> you think i would be involved with twitter if i didn't -- no i'm just saying i want people to know i make mistakes so i can talk about how last november i said from now on we're going to buy companies that make things and do stuff profitability and return money to shareholders while not paying too much for stocks. >> that was the theme of the year. >> that worked. >> does it work in '23 >> in november we switched to that. >> does that continue to be the strategy >> yes, it is. then i added you have to buy them when they're cheap. we didn't fall for fads. like there's guys who ring the bell, the spacs. once -- it's like, here, please take my money and give me

nothing. that's what a spac does. we have every right to lose every penny and return some of it terrific we love boring in the end boring. the more boring it was, the better. >> hormel. >> hormel. that figgy pudding spam juice. that was a hit. >> gross. >> and then finally, don't panic. look at today. people right now are trying to think about meta down 6 i have to get out of that no, maybe it's an opportunity. have conviction. have conviction. i really ran through those, i'm sorry i was so fast. >> but it was instructive. given that on a day like today are you buying >> yeah. we bought emerson today. i've been waiting for emerson to come down. this guy, lyle carsonback is doing such a great job reinventing the company, getting

out of housing we all should be composting. i didn't mean to point, that's rude. >> that's okay i use a sinkerator it's convenient. >> he's making the company into the company you call if you want to be carbon neutral in 2030 they know how to do it you bring them in and they have fixed so many -- emerson has been one step ahead of everybody else and i've been waiting for the stock to come down, met with the ceo a couple times he's a no-nonsense guy when i come back and say the guy makes chips, wow, he's doing auto i actually was waiting and then we get a day like today so today can't be the day i say i'm afraid to buy emerson. i have to say, let's get started buying some emerson, a lot of good things, not expensive,

dividend, which i think matters, a changing stripes company only honeywell has been good at trading -- >> you've liked this name for a while. >> it's hard to change stripes lyle is changing stripes honeywell changed stripes. so what else are you working on? >> i think we're trying to figure out the outlook for next -- my biggest question is the outlook for next year as the focus shifts from inflation this year to growth next year, what are the earnings expectations telling us are we not pricing in a hard enough landing a soft landing appears to be priced in. i hate to sound negative but is there down side because the market is looking at the economy as not falling into a deep recession. >> i'm writing a piece right now how there's two economies, the economies people from the east coast, midwest and they know how to fire better than anyone it's like they -- the day they got their job let me teach you how to fire. and then there's people out

west do we like call them in? do we say i'm sorry? do we give them a raise? they don't know how to fire and they're part of the problem, not the solution we have to have stock based compensation, people realize, things got too inflated, i'm sorry you have to fire it's amazing that meta, that they fired it was incredible. >> and it was a turning point i think for investors on that stock. >> it shows you if you fire, if you get your expenses in line with your revenues, you're going to have a win. not today. today is a day people got too excited yesterday. remember we were up 500 earlier this week. and everyone kind of feels like, wait a second. things got out of control. i will tell you, though, that after today, people are going to forget like the market doesn't have a lot of memory. by tomorrow we'll be thinking get out for the weekend. by monday we'll forget what the fed said and people will come in and look for things to buy you want to be ahead of those

people >> jim always valuable. >> that's it >> they're wrapping me >> that's it i'm supposed to be the cohost for the second half. everyone told me i was the cohost >> we have to go to the market zone you know the market zone final 20 minutes. >> my feelings are not hurt. >> it was a great summary. the lessons were good. thank you for coming on and sharing them here on "closing bell." >> i appreciate that. >> for all of you out there, sign up for jim's investment club, it's a one-hour presentation and i highly encourage you to take it out. >> i tried to make it funny, talked about my partner's dog dying. >> nvidia. >> i mentioned my wife, she's my ceo a lot. i try to make it interesting. >> you do it very well. >> appreciate that that's why i was thrilled you told me you could be on the show. >> mad money, 6:00 p.m. eastern time on cnbc there's the qr code. doug peterson, that will be good. >> he doubles as the coach of

the jags not having a great year. that's the name. no, he's s&p i'm sorry. >> are you throwing out sports references that i don't understand i got the burrow just be happy. >> you knew burrow chase you probably know chase. not the bank, the player. >> yes jim thank you. see you later. >> thank you. we touched on chips with jim. i wanted to point out they're getting wrecked today, vaneck down 3%. let's bring in cj muse from ever core who published a note this morning with the top semis picks for 2023 is this a group you want to be in for 2023 if concerns are about growth and it's been so cyclical >> sara, thank you for having me on i think absolutely if you look fundamentally, looking for a bottom in the march/april time frame and if that's the case then the time to buy semis is between now

and february so, you know, we're not sitting here saying there isn't a number cut ahead in january there absolutely is one coming but, you know, typically on the second or third cut you want to buy semis and that's our view here we think the stocks bottoms october 14th we've run 30 plus percent since then, down roughly 4% today. we don't think we get back to the october lows and we think the time to be short was, you know, in 2022 for semis. but now is the time to start doing the work and starting to accumulate into that inflection which we think comes in in the march, april time frame. >> i do wonder how much sentiment and positioning factors in here. because you say in the call that you think it's a very under owned group. >> it is i would say looking at our investor polls, over the last four quarters we've gone from

70% overweight to 70% underweight in our latest poll i would say very interestingly, in polling, investors who they thought within tmt would be the best performer in 2023 and semis came in first. so i do think that you're right, positioning is very important for semiconductor stocks and, in fact, you've been paid really to do the opposite of positioning thus far this year and i do think that, you know, investors are underweight. but i think that will change and i think the window for that to change is obviously -- well, i believe in the next four months. we'll see if i'm right obviously today highlighting an inflection has not proven to be right. but i think the next four months we will be proven right. but time will tell. >> i want to get into the names with you we're showing on the side of the screen your top picks, nvidia, asml is on there wolfspeed, why did you pick the

names you did? >> i think there's a group of names that are both offense and defense. so adi, asml, broad come, those are names that will do well in a down take. but also in a recovery, cyclical recovery they'll do well as well part of our call here is that we want to move more offensive and on that front, we point to marvell, nvidia, wolfspeed and those are names that offer compelling growth and that's why we're positioning there. >> we appreciate you joining me. thank you. >> thank you >> with a big call today for ever core. let's stick with tech because the megacaps are getting hit hard steve kovac here with a look at some of the bigger movers as the nasdaq drops 3.3%. >> shares of these megacap tech names falling with the rest of the market and the losses

extending into the afternoon let's start with apple, those shares are down more than 4% this week we got the report from bloomberg that apple is working to allow third party app stores on the iphone in compliance with a new law in the eu going into effect in 2024 if more countries impose similar regulations, apple's lucrative app store business could be in trouble. and microsoft, the ftc sued them a week ago today in an attempt to block the acquisition of the video game publisher activision. that deal could take longer to close than the initial target of june of 2023 also at amazon amazon is down as well off nearly 4%. but it's the two names relying on the digital ad market getting hit really bad so far today. we have meta and alphabet both down around 5% meta taking it on the chin, though look, it's the worst of the group here, sara

it's also perhaps a sign investors are more worried about the ad supported social media companies. i wanted to point out one more bonus, row roblocs down about 15%. >> got it, thank you for running through some of those big losers today. we are going straight for you commercial free into the closing bell market zone, down 800 points right now breaking down the crucial moments and dan ives on his note on tesla and kate rooney on the fin tech movers. kicking off broadly charlie with this deep selloff, reaction to the fed, to the ecb, got some weak data on retail sales. what do you make of the selling today? what does it tell you? >> unfortunately this time it's simple one of the old addages in the market is don't fight the fed. and chairman powell has made it clear that despite the data in

the other direction, he was proven wrong before in underestimating inflation and he's going to make i everybody sure he doesn't miss that again. so he's, in my opinion, ignoring the data showing inflation is getting better and made it clear they're going to be higher for longer and the fed has real power to bring on a recession if they want to. i think he's fundamentally wrong about wages and the labor market being the cause of inflation wages are up less than inflation but he's stuck on this idea and if he wants to cause a recession, he can. >> so we've heard a number of times today on the program -- we started off with someone who said the consensus is too bearish on the economy we had jim cramer, we have jeff solomon saying good opportunity for long term high conviction buys are you buying today >> yeah. but i want to be careful i'm absolutely long term bullish. wonderful values we calculate

our portfolios every day it's a big discount but in the short run, no doubt a recession is not going to be good for the stock market. some of the information coming out from retailers, some of the consumer data has not been great. so i agree long term we absolutely like the market a lot here short term it's going to be bumpy. >> what does that mean in terms of what you're buying? >> unfortunately what i'd love to say is in something like this market you should buy more defensive names but those defensive names are more expensive. right now what's on sale is -- are things that are going to have a tougher time in a tough economy. so the great names we have some -- for example, borg-warner, the auto supplier, extremely cheap but a recession people buy fewer new cars. the expensive stocks, lockheed

market and j&j, they're cyclical but not cheap. this is a tricky time you have to invest for the long run we think that's what all good investors do but know that, again, i'm not making any promises nor should anybody else in the short term >> a lot of caveats there, charlie. stay with us let's talk tesla hitting a 52-week low today and then edged a little bit higher now in the green, bucking the overall down trend but an underperformer in the last few weeks elon musk revealing in an sec filing he sold another 22 million shares of tesla valued at $3.5 billion. let's bring in dan ives. your note getting a lot of attention today dan because you think this is a big issue for tesla. does it change your view on the stock? >> we're still bullish long

term but teelon musk is using tesla an atm machine to fund twitter and it's a boy that cried wolf, to say he's done selling but you continue to see forms. this is a black eye for musk in terms of the twitter situation and it's cast a shadow on tesla. the clock struck midnight. invests are frustration building. >> why are you maintaining outperform >> on the fundamental thesis, my view where tesla goes in terms of one of the most transformational names in electric vehicles. the stock is oversold in terms of 2023 but the near term a must driven selloff now it's about course correcting but it's a moment of truth for musk and the board to get through this this has been a train wreck situation that continues to get worse. >> what is the fix for it? he owns twitter now. he's focused on twitter.

>> well, i think that's a big part of the problem. right now the attention is focused on twitter, not tesla. but also in terms of selling stock, 40 billion over the last year come out with some plan, communicate what the sales are going to be like need to be more transparent and that's why this has been agitating for investors. and musk has gone in the eyes of investors from a superhero to almost a villain on wall street and that's something he needs to turn around quickly here. >> what i'm wondering is that overstated in other words, is there real fundamental risk besides selling tesla, which that's a real risk and not paying attention as much when it's reported he has key deputies in place running this do you think it's going to affect the sale of tesla vehicles, the supply of tesla vehicles any of the things that make this

company valuable to you in the long term? >> brand deterioration for musk is brand deterioration for tesla, that's part of the problem. the twitter circus show is having an impact we believe on the brand of tesla that's part of the problem that's why the spider web continues to get worse i think there's real risk here if he does not course correct. i think that's why this has just been a black cloud over the tesla story with every form 4 it gets worse and every tweet gets worse. i think that's part of the problem. >> you're not taking down your numbers? >> because right now fundamental i think we can look at 430,000 for q4 but in the near term if this does not course correct then this potentially changes the tesla story and that's why i think this is what i view as the fork in the road time for musk. >> you're nervous about it dan thank you for joining me to discuss. appreciate it. fin tech stocks getting crushed

today. kate rooney is here. how much of this fin tech weakness is the result of today's disappointing retail sales number the rate story, what are you hearing? >> it's a little bit of a combo. the retail sales disappointment was a huge part of it. the consumer names like block, paypal, any companies that rely on consumer payments that's not good, if people are spending less that's disappointing. shares of block down the worst of the group down more than 7% today. paypal relative outperformer they have benefitted from some upgrades and seen a bit of a discount here and been one of the more favored of the fintech names you're seeing it in the credit card names. at the end of last quarter when they talked about their numbers said they weren't seeing inflation or any sort of slow down, if that changes, you have visa, master card, amex today underperforming the rest of the

s&p. the rates, these are rate sensitive high growth names and then you have within that a lot of the lending names, so names like affirm, upstart, some of the worst performers out of the group and when borrowing costs go up, it makes their business a bit diezier, especially if you see more delinquencies in those businesses and fears around buy now, pay later and how it's going to hold up in the economic environment. >> kate rooney, thank you. let 's get back to the broad markets as stocks struggle into the close. joining me is nancy and charlie is still with us nancy, everybody is worried ability higher rates for longer, the message from the fed, the message from the ecb and yet bonds are getting bought right now and yields are slipping. what do you make of the selloff and what do you do >> this is one time i'm going to

basically pound the table and say you go in and buy now. the fed is almost done the bond market is telling us that they're almost done and that we should expect economic slow downs. so it's important to buy the right kinds of stocks. but this volatility, the market movements today have been very typical of every post meeting press conference the market is reading the same data and saying listen, the economy is slowing and we have multiple exams of that shipping rates, new orders, inventories rising m 2 flat you can go on and on, and there's plenty of indication, pmi is rolling over that inflation is on the move down. i think investors should be looking at the same thing the fed is looking, a three month annualized rate. you have estimations below the funds rate so i think we're closer to the end of this and this is a good time to be going in and buying high quality names that are reliable growers and i brought

one for you today. >> tell us >> zilum this is a company that's a water treatment and solutions company. has been hurt by a tremendous back log the supply chain is now easing they embrace our theme which is economy companies embracing the digital revolution they saw growth in europe despite the european economy and pay about a 1% yield and grow thedy tend 10% the last thing that's important is it's an esg darling so this is one on any weakness you step in and just add to holdings and it will continue to perform in slow growth environments and high growth environments >> down 7% or so in the last 12 months outperforming the market, really outperforming the last three months charlie, do you disagree with nancy's premises that the fed should be closer to the end and

you should be buying stocks. >> should be, absolutely i agree. that's the whole frustration here is that the market is looking at the data and saying the fed should be close to the end. but i just don't think you can listen to that speech yesterday and believe that's where chairman powell is let alone the rest of the people -- >> so nancy -- >> yeah. >> i want to pick up on that point are you saying to fight the fed, nancy i thought you were supposed to not fight the fed. >> the fed has been behind all the way through and the bond market and stock market have led. they're going to lead out of this if you look at the dot plot in september of 2021, they didn't even get to 2% until 2024 and that wasn't a majority of the fed governors. so on wall street we put emphasis on every short term piece of data and metric and that's the overreaction that you're seeing. if you look forward, which you should do as an investor, they are not going to have any choice the market is making that choice for them already in many

instances and we are seeing economic slow down, gdp got reviced down again today to the mid 2s >> retail sales, yeah. >> and it's a great time to be buying stocks. stocks bottomed a couple months before volker changed his tune in 1982. and they erased the selloff in three months i'm not saying that's going to happen now but by the middle of next year you'll be happy if you went in and added high quality names, embracing the digital revolutions and companies who provide the solutions in a low productivity, seriously limited participation rate from a labor standpoint you need to own solutions to that, that's technologies and the companies benefitting from embracing digital. >> sorry charlie, didn't mean to cut you off. how does that fit into your world view of the market. >> if you're willing to look

longer term, 100% agree. there are companies that are going to do well on the other side of the recession. between now and then it's going to be painful. if you are going to take the strategy i am taking of investing long term be ready for volatility in the short term the only thing i want to push back, a lot of us were telling the fed they needed to be more serious about inflation. >> you were. >> way before the fed got serious. i think this is going to be the same playbook. a lot of us are going to be telling the fed the inflation situation is in better shape and they're going to be slow to react. the fed is always slow, always behind the data is always behind. and they are making it clear that they are behind so i think we're going to have a tough fed until the middle of next year. >> so nancy, thank you very much for your contribution. love the passion today, pounding the table. in the final minute we have with you, charlie, are you fully expecting a recession?

is that in your base case next year, and how do you guard against that >> the chance of a recession has moved way up i think i tried to tell you most of the year i thought the economy was in good shape, consumer was in good shape, balance sheets in good shape i'm telling you the fed is having an impact and i'm seeing softness in retail, seeing people concerned about inflation and the impact that it's having on their -- their salaries which aren't keeping up. the chance of a recession is higher today than i would have told you three or four months ago. well north of 50%. probably 75% that we'll get some kind of recession in the next two or three quarters. >> how do you allocate more than to health care and staples really quickly, 20 seconds. >> no. we don't like to invest short term they're going to well in the short term but that's what the market loves you have to buckle up the cheapest values are in cyclical names, inflation protected names.

oil and gas are going to do well. >> thank you very much as we head out tough day for stocks down 2.5% for the s&p 500, 3.75% for the nasdaq as the dow finishes lower 770 points it's not the lows of the day but a pretty broad and pretty ugly sell off in reaction to the fed. the ecb, a weaker retail sales number and the fear of higher rates for longer that's it for me on "closing bell." into overtime with scott they're cheering down here, i don't know if it's worthy, though, given this market action welcome to "overtime" i'm scott wapner you heard the bells. we are just getting started here at the stock exchange where the stock market had a miserable day. adobe earnings crossing any moment now the tech space wrecked big time today. we'll have that report, the