down 190 points after yesterday's fed -- >> and morgan stanley says a hawkish fed has shaken the market. significant, that is getting closer. >> thanks for joining us today. >> "closing bell" starts right now. welcome to "closing bell." i'm scott wapner. this make or breakout begins with the outlook for stocks. 24 hours after the fed signaled interest rates could be higher for far longer than the markets thought, that surprise sending interest rates higher, stocks lower. that dynamic continues today. there is the scorecard with 60 minutes to go in regulation. stocks in the red throughout. not significant losses. nonetheless, weaker across the board. the dow dragged by cisco after they announced they would buy splunk for almost $28 billion. speaking of tech, nasdaq the

weakest of the three following the fed decision and chair powell's comments. nvidia and amazon among weaker names today. yields are the real story of this day. they hit fresh cycle high across the curve. that's probably taking a toll on tech as well today. our talk ever the tape, whether the fed upended hopes that the rally in stocks may soon resume. well, let's ask cameron dawson, new edge wealth. good to see you. is that what happened? did the fed do that? >> i think that the reality that hire heyer yooemields has surprised to shrug off a tighter fed and higher yields. i think we are at the point where the market says, hey, maybe we won't get those cuts in 2024 as early as we expected, and if we look back when we traded to the high back in july, you were trading at 20 times forward for the s&p, 33 times on

the nasdaq, and so that was a very full and mitch multiple if you weren't going to get support from the fed. that was the message that the fed gave yesterday, which is why we think these interest rates have -- >> was this more hawkish than you expected? >> no. he did think that you would see the 2024 rates start to move higher in the dot plot. that is what we sauchlt it drifted higher by 50 basis points which really just said that the fed is saying that just because inflation is moderating, if we are seeing higher growth, that means that they cannot cut rates simply because the risk is that inflation could come back. and so if we think about the most bullish scenario for markets, it was that we could get good growth, inflation would moderate and the fed would be-in mentally easier. if you take the last part out, it means that valuations can't be the oaksole upside driver. >> it's interesting t seems as

though the biggest problem for the fed at this very moment is not necessarily the level of inflation. it's the level of economic growth. >> yeah. >> much stronger than they had even expected it would be. >> very much so because if we go back to the jackson hole meeting in 2022, powell said that a period of below trend growth would be necessary in order to get inflation back to their 2% target. that's what they forecasted in their s&p -- or in their sep all year, and that simply hasn't materialized. so it's not just about what the inflation reading is today. it's what the inflation reading is in the next six months or 12 months. so they are concerned that if growth is above trend, that that would cause a reacceleration in inflation, which is why they don't want to talk dovish because the risk would be then that inflation would reaccelerate and they would have to do a lot more. >> do you think a risk of recession is higher probability

because of that hawkish tilt? >> i am not sure if it's necessarily a higher probability just because what's 25 basis points of an incremental difference? we think there is still risk of recession in 240. the timing is highly uncertain. there was so much expectation in '23. we are just starting to seat bite higherstraits. look at the housing data a starting to roll over again. if we see things like new home sales roll over given where interest rates on mortgage rate is going. we don't think that we are ready for an imminent recession. we think it's more of a 2024 question and eventually these higher interest rates will bite but we simply haven't seen the evidence of it yet. >> so the question is, what to do now if you're an investor after the fed decision. i want you to listen to what jeffrey told me yesterday about what the ideal portfolio might look like right now.

>> a year and three quarters ago, bonds were overvalued. as rich as stocks were when it began that bear market they were cheap to bonds. that's changed by a factor of four. so you have gone from bonds doubly rich to stocks. now bonds are doubly cheap to stocks. so it's been a four x shift. and i think that should be respected in portfolios. so i think 25% long-term treasurys, 25% not in cash, but in this short-term not terribly low in credit, not pristine credit stuff, then 25% in stocks and at this point i think there might be a case for building position in commodities. >> all right. that's the gundlach portfolio. what about you? >> we went from a world where bonds and stocks were wildly expensive and now we are in a world where stocks are rich but

bonds are much more attractive in valuation. now, for long-term investors only 2 # a percent in equities does depend what your overall goals are. jeffrey is a bond guy. we have typically higher equity valuations, of course, depending on a client's risk tolerance. but i think his point is clear, is that there is a case for commodities in portfolios. ours is much smaller than that remaining 25% in what he has. so we look at our overall allocation. we would agree that bonds incrementally are far more attractive than we were, but you have to judge that versus where your capital gains taxes could be as you are rebalancing portfolios. >> would you agree with his characterization that bonds are doubly cheap to stocks? >> i think that there is still upside to bond yields. if you are looking out over two to three year basis, you could see much better performance out of bonds. i wouldn't necessarily call them doubly expensive just in the

sense that because we could see that continued uplift in yields in the short run. we shouldn't forget that tomorrow we also have the bank of japan coming out. and that could result in further upside to bonds, mostly if they signal any change to the yield curve kroll. that in basis from a strategic perspective, yes, bonds are more attractive. and if you can take less risk to get to the same return, that is possibly something that investors should consider. >> let's bring in joe. did the game change yesterday? >> the clear message came from the treasury market, scott. volumes. i don't think the federal reserve did anything that was incorrect. i think they tack the right position. but it's very clear as you have said on the network that focus is on strong growth, strong economy, and, therefore, the consequence to that has to be that rates stay higher for

longer and the only outcome that i see, the only possible outcome that i see is that consumer spending weakens and the economy turns south. >> do you regret the purchase you made earlier this week of the qs? >> no. i don't. i do not regret that purchase. what i see in front of us is i do believe the upcoming earnings season has the potential to be a good one, a positive one, and i think it will be good in particular for technology and m megacaps. megacaps and technology -- trends. so i am not concerned about that because, scott, you're talking about technology and megacap, they don't need to access the debt market. the larger issue i have, we look out to 2024, the earnings estimates are too high. the earnings estimates in the near term, i don't think they are unreasonable.

but i think the earnings estimates as you look into the future and you understand the monetary policy that will be maintained and higher private sector borrowing costs, i think those earning estimates have to come down. >> all right. there is a lot of talk about where valuations are, specifically in megacap tech relative to rates and what the earnings projections, joe, are going to be. listen to this tech investor, what he said about valuations in the megacaps. >> i completely disagree. the reality is that the multiple that you are paying for nvidia today is lower than it was at the beginning of this run. >> that's fair. >> and the earnings power is being -- has been demonstrated already. if you want to invest in that cycle and invest in a cycle that's going to last ten years, those are the stocks you want invest in. >> joe, speaking of ten years, a lot of the megacap forward pes are above their ten-year

historic average. he makes the case they are not as overvalued as some like you to believe. >> i agree with that. if you are trying to find where is there confidence within the he can itty markets, it's narrowing. you can look towards energy and you could look towards the balance sheet-rich companies like nvidia, like a lot of the semiconductors and like the megacaps. so i think in the environment that's ahead of us, scott, you are willing to understand that you will accept positioning in a lot of these names where you can question the valuation because you believe that they will be able to be resilient in the environment and grow that the valuation as, in fact, we are witnessing with nvidia currently. >> all right. so what's your take? is tech going to remain the place to be in large regard these stocks have gone straight up since the beginning of the year. working fits and starts and some modest pull backs, let's call it that, is this the place you want to be?

>> i think for the long term, yes. and if there is weakness that is something that can be viable. the short term, though, we think tech could continue to struggle. actually it peaked versus the market back in july. the relative performance is ruling over. if you look at from a valuation me perspective, the technology sector was trading to the same peek as in 2021 in a wildly different interest rate environment, a wildly different fed environment. so there is a point where kind of regardless of the earnings fundamentals, valuation can become a risk, in and of itself, and a source of short-term volatility. that's what we think we are seeing. so tech did run up a lot more. it was more overbought. it was overvalued. it leaves more room to correct. the long-term earnings trends can still remain very, very attractive, and that's why we look to add positions on one of those corrections, which i think will get better valuations at

that time. >> a good good point. fundamentally, you could make the case as you have made as to why the stocks will be the places to be, but there are other market forces at work that could still drive these stocks lower in the near term regardless. >> absolutely. and i think a lot of that comes into the forefront in 2024. i think we will be able to avoid that for the duration of 2023 because i expect the earnings are going to be strong. but in 2024, if we are in an environment where it's risk off, where the overwe will meng attractiveness of the bond market, which jeffrey highlighted with you yesterday and i completely agree with, takes hold in the market, then risk off environment, nothing will be immune to and you will see the megacaps and technology even with their cash-rich balance sheet, they are going to decline. >> tell you what, joe. i am interested to know why you sold bank of america. that jumps out if you look at other sectors, some talking about catch-up trades.

you have to figure where rates are, the implications on the banks, the economic projections, too, weighing on the outlook there. >> i don't see the broadening out of the rally that so many have expected as we move towards the end of the year. jpmorgan is a large money center bank that i bought back in march. i'm maintaining the position there. bank of america is a position i maintained several years and it has significantly under performed. i think the challenges will be ahead of a lot of these money center banks in terms of seeing significant defaults. i think low loss provisions are going to have to, obviously, move significantly higher. you have regulatory standards that still suggest the hoarding of cash on balance sheets. i just don't see financials as we move to 2024 in what i expect to be a weakening economy. i can't see that there are going to be witnessing relative out performance. i saw the idb, the biotech etf, what is -- what is it, in fact,

that the biotechs need in order to go out and do the r&d? they need the funding. they have to access the debt market. if you have to access the debt market right now, it's incredibly challenged. if you talk to institutional investors, one of the biggest opportunities in the market now is in the alternative space owning private credit. >> you know, i want to go back to tech for a minute. i am looking at the moves in some of these semiconductor stocks today. stay with me. i have want to bring in kristina partsinevelos. nvidia is down 10% in a week. broadcom was down by a pretty large amount earlier, now come off those levels because of a story out there about it and alphabet. what do we know? >> the first point, the rally and the subsequent steep valuations. i guess? a reset. both down over 9% just this month alone, to your point. nvidia down double digits. valuations are coming under pressure ahead of earnings that

are out soon with the rise also in treasury yield. you can see today nvidia down 3%. to your point about broadcom, it was or is considered an a.i. darling for custom chips, but down about 12% on the month, down 2% today. what happened today? a report said that google was thinking of ditching broadcom as the chip supplier in the next three to four years o google since said they see no change in their engagement with broadcom. that could change. you saw shares come up off of the earlier lows. another bright spot that i to point out globalfoundries. that's up almost 4% on the month. positive. why? it announced it won a ten-year department of defense contract to build semiconductors. they could keep winning deals since the fabrication hub is on u.s. soil. >> yeah, that's a good sweep.

thank you for that. kristina partsinevelos, of course. joe, back to you. broadcom, you own it. this headline out there, google says, well, not really now, but who knows about the future? stock was down 7%. still down 2%. how should we look at broadcom today? >> it's a public negotiation between google and broadcom suggesting they can benefit from potentially moving chips away. they had a strong working relationship in the past. i don't expect any change to that. if i have to worry about my position in broadcom, we have bigger issues for the entirety of the semiconductor industry and, therefore, the equity market overall itself. i still view broadcom as a reasonable valuation play, an alternative to owning nvidia, which i also own, and clearly in terms of generative a.i. has the ability to generate significant revenue in the future because they will be able to fund the necessary r&d and bring the

innovation forward. i am not concerned about broadcom. >> all right. i will give you a check on what's happening at the market in the very -- you know, in the moment, if you will. the lows of the day. dow's down 254, so the point decline appears more significant than the percentage windows. it's a follow through after the fed meeting yesterday. the nasdaq where the action is. down 1.1/3%. so, cameron, back to you on the semis. do you want to be here or avoid it? >> i think for the long term, it's similar to the broader tech stories that you want to be there. it doesn't mean that these names can't sell out more because they had a strong run-up. i think we would look to a retracement of the whole move post the nvidia beat back in may to get a sense of where the names could find a footing. tech overall, it's really important to -- for tech to hold

that august low that it hit back just a few weeks ago. if that doesn't hold, the 200-day would be in sight, which could mean we could have a bit of a mid-single-digit to high single-digit decline from here. we are watching that those august lows hold the entire market to get a sense of how much further this could go. >> yeah. it's a good point you make. one that jonathan krinnski is talking about, too. those august lows of 43, 35, joe, the need to hold that. or you start talking with air pockets. however steep the pocket might be, you need to hold on to some of these technical levels. >> i'm coming back to what i said earlier in the show. i am more concerned looking out over the next nine months than the end of the year. i think we will be able to maintain the prevailing trend. i think we are, obviously, going to have difficulty as you move towards the end of this current quarter. that's for sure. the u.s. dollar by the way is

uncomfortably high. i think earnings potentially can give the market the lift needs as we move towards the end of the year. now, that being said, that might create a significant inflection point for the equity market at some point in q4 because looking out into 2024, those earnings estimates are way too high and the consumer will weaken. the bond market is telling you that and chairman powell did yesterday at well. >> guys, thank you. see you back on the east coast very soon, i know. to our question of the day. did the fed just upend the tech trade the rest of the year? yes or no. vote. @cnbcclosingbell on x. we are just getting started on "closing bell." next, navigating the ipo landscape. lo toni is right here at one market. he says, well, he will give the themes he is watching in the space right now, the one name

that may be the vul of the ipo market after the break. we are back in san francisco after. the opening of the door f

ipos. it's exciting. it's what institutional investors, endowments, foundation, sovereign wealth funds, those firms that feed capital into the venture community, it's what they want and what they need. and it's a natural part of the

cycle. so it's really exciting that those doors are opening back up again. >> that was glen on halftime time with me earlier today. speaking ong the resurgence of the ipo market. all three names trading near their ipo prices. joining me to discuss this, lo toney, plexco capital. good to see you out here on your coast. >> exactly. >> he says that the doors are opening. are they truly? >> i think we are starting to see them open. i think what's going to happen is people will analyze these three different companies. they have dramatically different business models and sizes, which is good thing, because it gives us a chance to digest this new information and look at the performance. >> speaking of, what do you make of the performance? it's not great. the first day of pops has been pretty nice. what's up with that? >> not so much. when we look at these three, and i will exclude clavio for the

moment. arm and instacart, there are challenges there. we are not seeing the same level of growth. arm is priced a little bit close to perfection right now given where its revenue growth is. look, it's going to trade, i don't know, where is it, like 147, 150 pe multiple versus looking at nvidia, about 100. so priced as a premium with not the same level of growth as nvidia. and i would say looking at instacart, the optics look good. it's a profitable gig economy company. however, if we peel back the onion and see where some of that growth is coming from, probably a third of the revenue for ininstacart is advertising. . speaking of growth, you make a good point about the maturity of these companies, arm and insta, for example. they went public as mature companies.

you talk about what level of growth can they attain from here. >> yeah, that's right. >> the rate. >> that's right. these are why historically people are attracted as investors to ipos. they are looking for those companies that can be these next magnificent seven big tech companies that can both provide the growth at a sustainable level over a long period of time. and so i think that's why we're seeing some questions. now, all that said, i think going back to the clip that we just played, yes, we are seeing at least that good companies will be able to get to the public markets. but we need to be cautious. >> instacart, the valuation is not nearly what it was. and the prevailing thought is that there are a lot of companies out there that have yet to take their, quote, unquote, medicine and valuations of some companies that want to go public still needs to come down. >> that's it rate there. instacart in particular, we look

at those series a investors, even to the series b,, b, you series a led by sequoia, those investors are able to appreciate returns that ar greater than what they would have received if they had just invested in a, you know, etf, right, over that same period of time. however, when we start looking at the later investors, you know, in particular people that came in about the series g or so, t. rowe price, dst global, they are underwater. now, here is what's going to happen. there are more companies that have a similar profile to instacart. in other words, companies that raise at a high valuation in the free money days, right, 2021, they are still good companies. they will get out into the public markets. however, it's going to come at a discount. so those investors that invested at the later stage will probably

see similar losses to -- >> let's talk about what i would call the latest staining that you -- stage you could be. you see what's happened to the prices post-first day pop. what does that do to the psyche of a retail investor looking at the prospects of investigating in companies here forward that come to market that have the sexy names and big stories behind it but you look at the performance and you say, eh, what do you do? >> and i think those investors are probably saying, well, should i go magnificent seven big tech or some of these hot sexy ipo names? and i think people are going to start looking at a lot of the performance of these companies and then really start to question whether or not the upside is there to warrant shifting dollars away from the big historic brand-name companies. >> we always talk venture, mostly with you. but do you have a good mind for tech overall. nasdaq right now is down 1.2/3%.

the message yesterday seems to be more hawkish than some expected. has that reset game about how we should think about nasdaq stocks, megacap stops, magnificent seven, yields higher than what the implications are? >> some of the same dynamics that we are closely observing in the private marketplace play out in the public market. looking at the macro, the yield curve, geopolitical. as a lot of companies that are in the pipeline thinking about going public are probably looking at this as an opportunity if they godon't get out before thanksgiving to think ahead to '24. your point around what it is happening with the fed, they gave a very hawkish signal. i think that will make investors take pause. but i do believe that ultimately

the best companies, there are great names, reddit, stripe, turo, great names in the ipo pipeline and we are seeing some resilience from the big tech names. so i think '24 will be a solid year for tech overall. i think people are going to be mindful to watch out for any gotchas. >> clear he skies ahead. maybe a few storm clouds to watch out for. thank you. lo toney, plexco right here. next, an apple turnaround. the newest iphone hitting shelves tomorrow. will this be the catalyst for growth that investors have been hoping for? we will hear from morgan stanley just after this break. "closing bell" will be right back. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns...

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we are back with less than 30 minutes to go. session lows, you saw the graphic there, there is our wall. it is red as you can see. the dow is down just about 1%. the lows of the day. s&p down 61 points.

nasdaq is still off better than 200 points. we should show you yields, too, if we can put those up, because that's a considerable story today following jay powell and the fed chair and his comments yesterday. the roadmap ahead of where fed members think all of this is going, results on the left, green, and on the right, red. that's the story. we will track it with less than 30 to go. apple today, that stock is in the red. the iphone 15 going on sale tomorrow. that after reportedly strong preorders comes at a time when shares are tracking for their worst month of the year. joining us morgan stanley's eric woodring, covers the stock for us. good so see you. tomorrow is the big day. reports are so far, so good. what's your read? >> it's tough to say early, only five days into the post-preorder period. i would say relative to expectations, and given what we know and the concerns about china, i would say these first data points have probably been

better than expected. lead times, by and large, for the iphone 15 family are slightly longer than the iphone 14 family at this point in the cycle. as you know, there is a lot left to go. you can get a head-fake early in the cycle. i would tell you today that demand is outstripping supply. there are some supply shortages, especially at the highend with the iphone 15 pro max. but by and large, i think that the data points thus far better than expected. >> i just had the noted tech investor glen kachur on with me. apple he suggested was the one that stuck out like a sore thumb with its valuation relative to the rest because in his words the smartphone market is weak. how do you counter that? >> in the near term, i am not sure i counter that. frankly, the smartphone market is weak. what i have said, you know, apple is here, call it $175.

that's about 25 times my fiscal year '24 earnings. i would like to see the stock kind of de-rate to the 160, 170 level before i come back on here and say, scott, this is the time to get more aggressive because we are at a period right now where there are risks. china is a risk to apple. the department of justice investigation with google, apple is not a part of, inherently becomes a risk for apple in the event there is an adverse scenario. and when you look at the three months apple performance post-an iphone launch, apple performance in line with the stock market. so we need to get past this period of elevated risks. you talked about the ten-year earlier, the ten years, 4.5%, another headwind. so i don't think that apple is a name ineed to be vocal. data points are better than expected but i feel more comfortable to see more consolidation in the stock.

i pitched you more aggressive on apple. >> so much appreciate your extraordinarily honest view on it. i know the viewers do, as well. do you think 16 # or0 or about reasonable level the stock could trade down to? >> this a high-quality company. if we are looking forward and say we're concerned about the world, i do think there is going to be generally abba flock to higher quality companies. we know apple and the iphone is a staple in people's lives. they are not going to give it up. that doesn't necessarily mean they will refresh this career, but it doesn't mean that the platform that we know that apple has that is so powerful is gone so to speak. and so i do think 160, 23 times my earnings power, again a premium to the historical average, but i think apple has shown how this platform has changed, and again you are onboarding new users, 150

million new users last year that apple can monetize. i think that's an important tailwind for the company. we have high single-digit revenue growth, mid-teens eps growth. 20% free cash flow growth. i would argue 23 times. that's relatively attractive. so, yes, i do think 160 is where i tell you, scott, let's get more aggressive. >> wow. you know, look, in some respects, investors need this, shareholders need this phone with be a big fit, for no other reason, than to reverse the trajectory of where iphone revenues have gone recently, if not overall, growth -- the growth path for this company, which is, you know, suddenly been questioned the last few quarters. >> it has been. totally fair. this has been a very challenging last 12 months. the consumer is challenged, generally speaking, especially after we look past kind of the post-covid boom of technology

goods consumption. the consumer a little bit weak here. that's not just a u.s. comment. that is a global comment. i think apple stands out amongst the rest of my coverage in terms of being more insulated. if i have $1,000 and i allocate it to some form of technology good, you better believe i am going to buy a iphone before i buy a pc, a speaker, a tv, for example. but it's a challenged mark out here. so the iphone launch is an important -- the iphone 15 is an important launch for apple. when people ask me, is this device evolutionary, revolutionary, it depends what phone you have. if you have an iphone 11 or older, this is a revolutionary device. it is much faster has a better camera, the action button a fun little new feature on the side of the phone. if you have an iphone 12, 13, 14, it's nice to have. it's not a need to have. the one thing i will tell you is that i own an iphone 12 pro.

i placed an order for a iphone 15 pro max. it's big in my pocket, but i care about the camera, the displays as i watch videos more. that will be important in dictating the growth of this phone this cycle because ultimately plays -- pricing plays an important factor when we think about the iphone 15 cycle. >> i think you are calling me out for the model of the iphone that i use. that's neither here nor there. eric, thank you. up next, we are tracking the biggest movers heading into the close. kristina partsinevelos is standing by with that. hi, kristina. >> say goodbye to fox and hello usa network. i am not talking about rupert murdoch. more details on wewwe smackdown next.

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bell." back now to kristina partsinevelos for a look at the key stocks to watch as we head there. >> tko group and endeavor getting slammed as wwe's "friday night smackdown" moves to nbcuniversal's usa network from fox. it began trading last week after the merger between wwe and endeavor's ufc. sources say that the smackdown deal is worth over 1.4 billion bucks. investors, as you can see, are

not exactly cheering on the news. hopefully, has nothing to do with "usa today." shows down 15%. fedex is higher as -- bank of america raising the price target to $330 up from 3 # #. they say company's cost-cutting efforts are helping and discipline in gang market share is working and that's why shares are up about 5% of after the earnings call you can see. >> all right. nice move. thank you kristina partsinevelos. last chance to weigh in on the question of the day. we asked did the federal just up end the tech trade the rest of the year? yes or no? head to ask cnbc "closing bell" on x. the results after the break.

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. to question of the day. the results. did the fed just upend the tech trade for the rest of the year? yes or no? it can still rally. no. it can still rally. that's the winner today. 55.5% of the vote. up next, housing stocks, they are slumping. what's weighing on that group today. what it may mean for the broader economy. that and much more when we take you inside the market zone. (♪) the first law of thermodynamics states that energy cannot be created or destroyed. (♪♪) but it can be passed on to the next generation. (♪♪) (group singing for kids birthday) toooo youuuuu! (sean) i wish for the amazing new iphone 15 pro!eneration. (jason) sean!

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uh, how long are you... i'm done. i'm okay. . mike santoli is here to break down the crucial moats of the trading day. kate roope any on fintech spots.

and what today's housing sales could mean for the home builders. it's not rocket science, it's hawkish fed, skittish stocks. that's the dynamic that we have since the decision and the commentary yesterday. >> yeah. obviously, the bond market having to reprice the fed's path going into next year to some degree and really just creating just an extra push into the direction that the stock market was already leading, which is it's been consumed with worry about whether the consumer, the broader economy, corporate earnings can handle the level of long-term yields we have already. pushing the highs. it also is following a certain script. we knew this was supposed to be a tough week after the september options expiration. it is proving to be. we are in the s&p 500 right at or just below the interday low from august. this is a retest of that sell-off. starting to get a little bit oversold, similar oversold to mid-august, back to march. some of the stuff is lining up

to say we needed some kind of a proper, you know, kind of shake-out to the downside. we are getting some of it. i am not saying it's over. at the same time, bearishness in bonds is reaching some extremes. what do you know, tuesday morning is the other half of the -- trade. we will see if we have the makings of a low or it is really just kind of this feedback loop of worry. >> got to watch the technical levels, too. kate, as said, sitting next to me here out in san francisco. fintech stocks, 3% decline. almost every name. >> getting crushed. a race. these are rate sensitive names. sofi, robinhood lower, affirm the biggest laggard today, down 8%. the buy now, pay later lender,

paypal and square lower. a lot of uncertainty, paypal in the middle of a planned ceo transition. then you have got block. that executive shake-up was a bit more sudden this week, the head of the payment side of square, alisa henry stepped down. jack dorsey taking over that part of the business. she been at the company more than a decade. block down about 14% or so. credit card names lower underperforming today, some analysts say thanks to the weaker travel and restaurant spending there. >> mike santoli, talk about a comeuppance for some of these stocks in what is no longer a zero interest rate environment. boy, paypal has been really part of the center of that. but a lot of these stocks have seen a similar fate. >> for sure. when you talk about the sofis and affirms of the wurls, they are still growing fast but still from a small base.

you see on day like today they are going to be discarded. there is also a talk of people taking profits in. so big winners of the day. you can see that in the index performance and also selling losers on a tax loss harvesting basis that sometimes happens in the fall when mutual funds close their books. all that coming together. paypal and square, i agree the issues over leadership, but also kind of the unmet promises of exactly how profitable these businesses could be a fast growing area of digital payments. the pie is growing fast enough f everybody. it's not reaching shareholders in a manifest way just yet. >> yeah. back with you in a second. thank you so much. diana, what we're witnessing today with the home builders. >> it's been a rough day in housing. mortgage rates moved sharply higher and august home sales low. the average rate on the 30-year fixed mortgage 7.47% today. that's up from 6.85% on june 1.

i am using june 1 because we got the read on existing home sales in august this morning. contracts signed in june and july. sales missed expectations and we are actually the second slowest august pace on record, second to august 2010 during the financial crisis. no surprise the home builders are taking it on the chin with itd down 2%, almost 3% on the day. also reacting to the kb homes quarterly report yesterday, lower home completions and lower prices, which could hurt going forward. so again now we look to next week when we get more data on sales of newly built homes. >> you will bring it us. thank you so much. mike, i am looking at megacap tech names. the loss is over a week, jumped out in terms of the red on the board. one week, amazon down 10.5%, nvidia 10, tesla 7.25.

i know you don't believe it's directly rate related, but nonetheless, this -- the nasdaq is choppy as a result of what is happening in the treasury market. >> without a doubt. i wouldn't say rates don't matter. of course they do. gets overcome in real time by a lot of other factors. i think a lot fit in the category of widely owned with a massive embedded profits year to date those stocks and ter all kinda getting harvested on some level. every one you named is in that category. yes, rates do bring valuation into focus. we are in this zone right now where it is a little bit about the macro dynamics. out of the corporate earnings season. we haven't had much in the way of guidance updates. that's weighing on the indecks. i am concerned with the consumer cyclical area, down 2% today and showing you when you talk about housing, the other areas of concern for investors, it is about how much is being

restrained by rates at this level. we had the energy cost as well. you know, when you are have a balance outlook from the fed, that's that they told you yesterday, more or less, worry equally about inflation and growth, you know, it means that you could never quite be comfortable on one side or the other. we will get through it. the market can find equilibrium. we have done it before. it takes time to test whether that's the level that's really going to hurt economic activity or not. >> yeah. i mean, you really hit it on the head. i am looking at the discretionary space as we speak, which really where the, you know, the most acute part of where a lot of the selling is today. discretionary down 3%. some of the casino names, caesars is down 5%. so really those names you zeroed in on for a good reason. >> of course, auto and housing related is -- fits right in there. rate sensitive. we could be seeing the start of a real washout as opposed to the

beginning of something. we got to wait and see. >> all right. we will go -- mike, thank you. we will go out today virtually at the lows of the session. dow down just about 370 points. s&p negative by one and two-thirds percent. the nasdaq still down sharply today. into o.t. with morgan and down. >> all right. stocks settling session lows. that is the scorecard on wall street. the action just getting started. welcome to "closing bell: overtime." barically's ceo weighs in on the fed's messaging that put the market on edge and explains why investors need to get used to a new normal on of intel spin out mobile eye. a rare ipo winner since going public a year ago. >> let's begin with the market. more pressure for the bulls today adding tloes