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tv   Closing Bell  CNBC  May 12, 2021 3:00pm-5:00pm EDT

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many who expected it would get $7 million tops. >> i could see whery that would sell for $7 million. who gets it? >> christie's gets paid in ether. they will convert to it dollars. it is a great commission for them. >> thanks for watching "power lunch. "closing bell" right now >> welcome to the "closing bell," everyone. i'm wilfred frost along with sara eisen at the new york stock exchange the inflation situation leading to a sharp selloff of stocks and the nasdaq is in a decline consumer price index seeing its biggest year over year jump since 2008 led by surging price force used cars, energy and more that report is sending ten-year yields higher, 1.69 to a one month high tech is lighting up the loser board with the nasdaq lagging considerably today
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the faang stocks all lower the arc innovation fund pulling back as well. 59 minutes left to go in the session. the dow is down 500 points. >> mohamed el-erian will be with us to talk about the inflation report plus his thoughts on how long the tech selloff could last after the trading day we will get reports from companies who have seen numerous declines from their peaks. mike santoli is watching the market action. joining us, shara from -- mike, start us off with the market moves. >> an extra helping of pressure coming in reaction to the cpi number although really it is going in the same direction largely we have been experiencing the last couple of weeks. the overall s&p 500 has really faltered a bit in this trend we are now looking at like a 4% pullback from the all-time
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highs. what people are looking a of the is these levels kind of just below $4,000, which would maybe be where a lot of different things come together it was sort of where the market broke out from a lot of these thing would tell you if we will be in a routine pullback or more of a downside i have to say it is nothing panicky, it is kind of orderly repricing. that may or may not be a good thing in terms of finding a new low. the huge surge in used vehicle prices was not a surprise to the auto market. obviously it was depressed a year ago look at the one year gains over 100% in each case flattened out more recently. in other words, the market is suggesting this is too hot a number to hydroxychloroquinely continue very long maybe it is mean reverting within the inflation numbers another indicator, that the
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money has been repositioning for higher inflation in goods. look at chad tees. chad tees except for gold. this is a jp morgan compilation of futures positions by big money. it is high on the chart here it goes back almost ten years. it is just off the record highs. essentially all the trend followers are already in commodities, which is all to say nothing really about the number today except the magnitude and some of the specifyings came as a surprise directionally, it still keeps with us the same debate, what should valuations be when you have some valuation pressure at the same time the fed has said we are going to passively allow to it happen for a while. >> are you seeing sharper declines in areas where we are seeing hotter inflation because of margins in i am looking at subsectors, home building, semis, are getting hit hard. >> yeah. >> food retail is there any correlation to what is happening >> home builders is rate effects, also an overheated
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market where supply is constrained. semis, weak for a while. i don't know that what we are really seeing today is weakness in those direct areas where the products are going to be subject to the cost or margin pressures. to me, it is really just the deflationary boom type stocks in tech the sort of high-concept growth stocks that have been under pressure for months ut geing a push to the downside it feels like a giveup in those names because they thrive in an area where you can't find top line growth in the economy now you can. >> arc innovations, bringing year to date declines now to 17%. inflation is our top story soaring to its highest level since 2008 with year over year cpi at over 4.2 in april categories seeing the sharpest costs compared to last year, energy, higher by 25%. used cars and trucks, eyer by 21%. transportation services, food
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and apparel also seeing a bump in prices. let's bring in michelle myer of bank of america merrill lynch. what is all the fuss about the fed told us many times this was coming, it is going to be temporary. if you look inside the report there are a lot of places like air fares that do seem temporarily driven by what happened since the pandemic? >> i think that's right. we have all had warning. the fed included has made it very clear that they can very well see these very large increases in inflation but there is something about sticker shock. when you see the number actually print as high as it has and some of the record breaking increases it starts to become worrisome for market participants. i think that's kind of been what's shake ten markets today is that they actually saw these figures come out they are exceptionally large there is number of categories that are seeing the increase while i think it's fair say it will be temporary and there is a real good justification for that, the question is how long
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is temporary that's making people uncomfortable. >> how many months if we see a big sticker shock kind of number like this again in may, does the fed have to change its dovish rhetoric already? how many months is it going to take >> net necessarily i think it's actually less about these sticker numbers, right is it realized infla inflation, .3, .4, .5 on a month over month basis, and more about components for inflation and the drivers for future inflation for the fed to become concerned they would need the believe that it is becoming more persistent, which would suggest some of the stickier numbers in the inflation number would be higher and onerous, job support continues to be really important for driving price pressures on the labor market side. finally, extremely important is inflation expectations that's probably the number one thing that fed officials are
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keeping an eye on, particularly serving measures what makes a temp year move in inflation permanent is if expectations are higher. >> even if it does prove to be temporary, what about the size of this temporary increase in inflation? i mean that's bigger than expected, too? >> it is it is. that's fair. it was very hard to know how big of a distortion we are going the see in the price data. so we could observe this incredible increase in demand and we can observe very low inventories and production shortages. how it plays out in any given month in terms of pricing is a bit of a gap two months in row of strong inflation with some categories breaking records particularly you can see that in cars you know, it should level off. it should come down, certainly, in the next few months, because we are starting to see a situation where price levels are unsustainably high and you can
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start to see that cool off demand it should work itself out but it's not going to happen overnight. it is going to take time the question is how patient are markets? how patient is the federal reserve. >> what is your base case conclusion, michelle, whether this is a one month effect, three months, or much more than that >> it is certainly not one month, i can say with a lot of confidence that this can and will continue in the near term i wouldn't be surprised if you continue to see these types of outsized moves in inflation, maybe less along the headlines but within the components through this summer, if not longer, because the imbalances are so extreme right now we are at record low levels of inventories. in some sectors it is going to be a challenge get supply up and running again. you know, we have a while to go in terms of these inflation numbers showing through on a month-to-month basis, it is rehl rate issed the year over year numbers will
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cool because the base effects fade but this is not an easy thing to esolve the economy needs to find an equilibrium in supply to catch up with demand that's challenging given how strong demand is. >> part of the problemis we have never been through anything like this. we have been through inflationary periods but not panhandle and lockdowns of varying lengths. i guess, michelle, if we continue to see numbers like this the next few months what does that do to the overall health of the u.s. consumer who was in very good shape as a result of so much stimulus and savings and all of that, and the broader economy? >> absolutely, the consumer has been -- we have seen consumer spending, march had a takeoff in consumer spending. when we look at our internal data, total card spending is 2% on a two year basis. that's more than double what it
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was prior to the pandemic. impressive gains in consumer spending the risk is that now that prices are setting higher and inventory is limited you could see some softening in terms of consumer spending, particularly for certain goods where those inventory shortages are most acute. but that's part of the normalization process, right in order to get prices, inflation to soften, it is going to be a combination of both supply ticking up. hopefully that's most of it but potentially some cooling demand as well. >> michelle, thank you for joining us >> you got it. thanks to you both. we are selling off a little bit as we approach the close down 2.4% again on the nasdaq. after the break, going for gold commodities like lumber and crude surged over the last year. but gold hasn't seen nearly the same level of jump we will see with the ceo of kin ross when we come back you are watching "closing bell" on cnbc.
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breaking news out of the cdc on vaccines. meg trill with the details >> sara, cdc's advisory group is recommending pfizer's covid-19 vaccine now down to ages 12 to 15 under emergency use authorization. they just took this vote it came in essentially unanimously, 14 in favor, one recusal due to a conflict of interest overwhelmingly in favor of making this vaccine available down to age 12 this is the first vaccine that's available for that age group and vaccinations are expected to start for them very soon this is the pfizer vaccine guys, expanding the number of americans eligible for covid vaccination. back over to you. >> i guess the next question, meg, is how many parents will opt to do this and should parents opt to do this what does the skrrch the data say on whether kids aged 12 to 15 are susceptible to severe
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cases of covid-19. >> the research shows they are less susceptible to severe disease than older people, of course but the group today showing that as more adults get vaccinated younger and younger people are making up increasing numbers of cases of covid they say people 12 to 17 are now 9% of cases reported in the u.s. in april, 2021 while they do have less severe outcomes, they do still have some severe outcomes more than 100 deaths have been reported in kids so it is -- it can be a severe disease for some of them they compare to it the flu we have a flu vaccine that's a similar number of deaths you sometimes see with the flu for kids they are saying this is an important thing for kids to protect them and also to help the country stop transmission and enable kids to get back to doing the things they want do, going to school, their activities more safely. >> thanks, meg, so much. we are close to session lows -- in fact, session lows for the nasdaq down, now down
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350 points, down 2.6%. shares of kinross gold are down today after missing expectations as products fell 2% from last year gold itself, prices down % so far this year, down about 1% today. joining us is powell rollingson kinross ceo. thank you for joining us before we get to company specifics and earnings i guess you must have been somewhat licking your lips and celebrating that inflation print today. do you think it will be good for gold >> i am sentimentally bulgish on the gold price i made comment in september of 2019 i felt at that time we established a floor of $1500 when i lock at today what's going on macro economically in the world i certainly see where we are today with buoyancy to higher whether it is the amount of stimulus, covid stimulus, the money printing that's gone on --
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that side of it, or, in fact, the early signs of inflation we are starting to see creep into the system, that to me bodes well for purgt up side in gold. >> certainly a lot of strong macro arguments like that, paul, for gold what about when people suggest to you that crypto has taken up some of the oxygen, perhaps, that would have been been breathed by gold enthusiasts is that a fair point or do you disagree >> i disagree. i think they are two fundamentally different investments. i guess from my side, look, gold is a historical, proven store of value. it's very liquid it's regulated gold is -- in my opinion, it works in a diversified portfolio at both ends of the scale. when times are tough you tend to get a negative correlation where
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people look to gold for safety and in times of inflation, people look at it as a hard asset like currency diversification. i think crypto is just probably here to stay ere isrobably more regulation to come there is certainly a lot of volatility to me it is more of a technology play rather than a proven test of time store of value. >> all of those things are happening today and gold is down the do you is down 600 points, and we have seen the hottest inflation print than we have seen in 13 years and gold prices are lower. is it really an inflation hedge and a good place to be >> i think -- it is one day's trade. >> gold is down over the last three months when inflation has been the predominant story and a worry for the market >> it's actually -- it's actually been coming up in the last few weeks it started at the beginning of
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the year higher, and it dipped, and back a few weeks ago it was $1600. i think with all of this noise around inflation, you have seen it climb up over $1800 and that is a great price for many gold investors. most of us do our costing and planning around $1200. we are budgeting in the $1200 mindset. $1800 means huge cash flow for our sector it has come up in the last few weeks, i think because of inflation. and i think that story will continue on days like today, you do get a bit of a kitchen sink, everything goes out the door, you know, to cover sales and cover margin, but i am fundamentally bull ish and up from here. >> i know you care a lot about maintaining your dividend. if we do see gold prices continue to rally, is that something that would benefit or
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would you be looking to expand your footprint and buy more mines and exposure in that sense? >> sure. great question we -- definitely, our dividend aren't the current share price is about a 1.6, 1.7 yield. that bodes well with s&p 500 afternoons that's here to stay. we see that as a baseline sustainable dividend as we look forward we see strong growth in both production and gash flow. and there will be an expectation i think, in our shareholder base of some enhancement to return of capital. we are starting to look at whether or not we increase the dividend or look to, say, incorporate on top of the dividend some form of share buyback. >> paul, thank you for joining us today we appreciate the time on gold, from kinross as i said, session lows here >> thanks, paul. dow is down 600 points as we
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speak. we have got 40 minutes of trade. home depot the biggest drag. mcdonald's also taking a bite out as well. every sector is lower except for energy. up next, following the smart money, some of the traders on wall street sharing their best ideas at thissier's sown conference, leslie picker has that report. ten-year back on top, followed by tesla, apple, the nasdaq composite and palantir. all of the fngtoaa scks today getting searched on break.
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comcast business powering possibilities. selloff is picking upstream heading into the close we are looking at session lows with the dow down 626 points technology is again the center of the selling although every sector now is getting dragged in except for energy so far look at the nasdaq 100 heat map. you can see the pain spread across the tech sector apple lower, amazon lower as well chip stocks like nvidia, google parent alphabet lower as well. just a few pockets of green there from random pharmaceutical companies. gilead, regeneron bucking the trend. most stocks are lower. the nasdaq composite is down 8%, a little more from than that from the recent highs. down 2.6% as we speak.
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the sohn conference is taking place. >> the downward momentum in the broader markets is not helping the picks. sohn returned virtually with a variety of anders. on the value side, we heard a pitch from david einhorn he has been notoriously bearish and critical of tesla. but today einhorn pitched a derivative play on the ev space urging investment in copper the raw material he thinks will get a boone from the increased demand for electricity he like copper minor tech resources. the ticker is, the eck einhorn says the stock could more than triple if the price of copper rises larry robbins had a slew of picks including mckesson and
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walgreens. he made a brief defense of spacs saying there are quote tremendous gems that have been thrown in the trash. he highlighted mergers to pay attention to and lauren taylor wolf pitching kbr noting its underappreciated role as the number one ammonia player worldwide specifically its pivot more toward clean energy and more green processes. guys. >> not a lot of love for some of these picks as we have seen in recent years part of it is we are in a big selloff. the dow off 650 points anything on the macro situation, the market direction, where rates go, this inflation worry did you pick up anything there >> there were a lot of comments about inflation, about consumer spending as well larry robbins can bullish
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comments with regard to consumer spending saying that, yes, the government has provided stimulus, but he believes that people have this pent up demand to be together, to see one another and that they plan to spend that money to do so for many, many years to come we also heard comments with regard to the tech sector, bill gurley talked a lot about valuations and where he sees various areas as being underappreciated he believes consumer tech is upped appreciated and perhaps overappreciated he thinks some pockets of the sass market have become overappreciated there it was a great day to have this conference just because of all of the various changes that we are seeing in the market >> leslie thanks for that. alongside leslie is intraday chart of dow, at session lows, down 6 0 points, 2%. down 2.1% on the s&p, and down 2.7% on the nasdaq composite ten of 11 sectors lower.
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energy holding on to fractional gapes. no doubt will fall into the red as well. mike santoli, as we are at session lows one thing we haven't mentioned in detail yet is the vix a pronounced jump. you would have expected it the rise today you about it jumps significantly. >> it continued throughout the day. matter of fact maybe it is the source of some of the vibrations in the market that have people being more defensive not just the level of the vix, but also the setup with how it relates to the pricing of vix futures in coming months sometimes when it gets this inversion where vix right now is priced a of the a premium to the outmonths, it seems means a little bit of stress it is reposition force volatility it is not a strag signal but shows you unsettled tape what we have seen is a drop of the typical handoff of the baton in the rotation. it has been sloppier, a lot of inflation beneficiary and cyclical groups that have been in the leadership position as tech sold out looked a little bit extended and you have this very
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hotheadline cpi print that makes like it is a sell the news moment for those types of stocks things like home improvement are falling apart here denials are definitely outperforming but not necessarily carrying the weight. it seems like it is all in the context of a market that was -- people have been fully committed to equities. you had people with low cash levels and low short positions now it seems like a little bit of a retrench. >> looking across assets, yields are higher. >> yes. >> normally you would go to treasuries as a safety play when you get a big selloff, but that's not happening because of the inflation and growth story ten-year is pushing 1.07, 1.68 the there are a is stronger. mike, explain the cross currents and what the message is from the markets on the back of these inflation numbers and why we are seeing kind of sharp moves. >> obviously the bond market is in a orderly way pricing in a better growth, a better nominal growth in therefore probably higher inflation period rhett now. it is not a panicking buy.
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but there is not a safety bid. there is not an offset on that side of things the dollar i think is probably responding, too, to the idea that the inflation number or at least the vigil we are going to be in for a while wondering if the inflationary push is here to stay, wondering if the fed can stay with its plan is going to make us impatient. i think that tells most of story. i will point out, corporate bonds, corporate credit is in very good shape not reacting in a negative way today it softened up just slightly in recent weeks but it is not about people worried about underlying economy. it is more of an equity positioning and what are you going to pay for earnings in a world where you have higher nominal growth and you have at least this idea that you might have frictions in this economy that we haven't been used to for a while. whether it is cost increases or the bottle necks we keep talking
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about? what i would say as well, mike, is we moved away this week from the rotation underneath what was going on. >> yeah. >> all sectors are lower on week, all by more than 1%. in fact, almost all by more than %. oil was holding on to some gains today but has capitulated. the best indicator of that has been banks yields picked up significantly and banks also capitulated and fallen into the red. yes, the squares and the paypals are down more today. but even those banks that are most likely to benefit from yields rising and from the rotation if it was a rotation from tech into cyclicals are now in the red as well today showing a give up of risk appetite. >> exactly those groups have done a lot in a short period of time banks are still up 25% year to date you have a lot of winnings to be cashed in. how much more are you going to buy incremental when when the
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rest of the market is selling off. s&p down % from the high a couple of 3% to 5% pullbacks in the last couple of months we are still in the zone it sells like a flush, raise cash, trim back on our commitments. i don't see anything in terms of the vix term structure stuff that is getting some attention to say this is somehow a complete change in character of this mark just yet. >> obviously the concern is what michelle myer called sticker shot on the number we got from inflation today. 4.2% is a big number we haven't seen numbers like that in at least a decade. if you strip out the core, taking out food and energy, also a really big increase that we haven't seen since the early '80s that's causing some of the concern. it is important to go beneath the surface into the in be and see what might be temperature
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rather and what might not be sporting event prices sored 10%. we know stadiums opened. air fare soaring 10% used car prices. these are the kinds of things that may not stick this is part of the debate we did see pockets of inflation elsewhere which i guess would give those that are worried ammunition in places like away from home restaurants, in rents, and i think the concern here is that wage also continue to rise. and that could be a more lasting, potentially more worrisome signal that would cause the fed to do more but it doesn't seem like we are going to know about this mike until last month or the month after, may and june to see if we are going to continue to is he price pressures building like we saw? is the market going to be on edge if the inflation worry and the market moving on rates until then >> all of the things that you mention make this number flukey. in other words it is not something you would look at and
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say okay now we have to start extrapolating a higher price level across board not in the least every few weeks we have to watch and have suspense around some of the inflation numbers, a lot of the indicators and some of the fed speak around it. but i don't think it necessarily changes the story. as i was saying yesterday, one month's number can't do much to settle the debate as to whether this is temporary or language lasting. that's what we are seeing right here to some degree. i also again would point out i really do think that what's going on today is a continuation of the trend that really kicked off in mid february in terms of a complete dawnward revaluation the hot growth stories and essentially a rotation that's now become a little bit messier. but it is not necessarily different because of this number today. it is really more of a push in the same direction we have been going for a while now, a little bit more of a pronounced extreme in the short-term.
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>> declines of more than 5% for apple, amazon, apple. >> the whole nasdaq. >> let's bring in bob pisani as well bob, back here at the stock exchange, able to interact more immediately with some of the traders. what are people making of this selloff? >> the knee jerk reaction is sort of understandable because historically stock traders are taught to believe that sudden increases in expectation force inflation are negative for stocks this. makes some sense for example, higher interest rates, higher inflation increases input costs, increases material costs, increases labor costs. most importantly, stock traders are taught to believe that higher sudden inflation generally reduces p/e levels it puts downward pressure on prices because it puts -- it
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creates problem with the future stream of earnings expectations. the problem with this analysis is, it's true, but it's not always true. we are in a relative sweet spot. historically, 2%, 3% inpolice station in the stock market is not a bad thing. what usually is a bad thing is when you get suddenly rapid spikes up in inflation which we haven't had yet in broadway or when you get inflation what he the economy is tanked, inflation in recessionary periods. when you get a little bit of inflation in a boom time like we are having now, historically that's not necessarily bad there is a little bit of a knee jerk reaction here from the stocks that i am not sure is justified. certainly with speculative names like the thematic tech names that don't make lot of money, that makes sense apple, amazon, companies that
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have a strong stream of earnings i don't know about the long term impact we don't know whether this is temporary and we don't know the extent of the inflation. traders understand with prices this high they are shooting first and asking questions later. >> justified or not i totally get it on the fundamentals of course last year with a lot of the gains to the upside people could have said the same thing as we raced higher and higher without any change in the fundamental bottom line of many of these companies bob pisani thank you. david rosenberg joins us now from rosenberg research. your take on the inflation data this morning, very quickly, and more importantly, the market reaction >> i think the market is having difficulty differentiating between what is true lasting inflation and what is a price level adjustment and when you actually go beneath the headline, wilf, you will see that most of the inflation was in a few areas like used cars. that's a semiconductor shortage
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development. you also have 10% increases or thereabouts in hotels, accommodation, and in sporting events and things of that nature the expectation with the economy reopening it would be bouncing up a lot the cleveland fed actually publishes a median cpi this shows you the distortion. headline is up .8. but median was up only .2. so it was a very skewed report, in my opinion. >> so it sounds like you are in the fed camp, where you think this is transitory or not going to be as worrisome of a problem, david, what would change your mind how many months of these types of numbers what sort of components should we be looking for that would potentially be more worrisome? >> i think it is always important in any piece of economic or market date to look at function which is why you have technical analysts look at
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at the breadth in the stock market the breadth in this market wasn't -- inflation -- when you have -- that are up 10% in one month. keep in mind airline fares in the cpi are down almost 20% from where they were before the pandemic there are tremendous distortions in the data. [ no audio ] >> we are losing you >> distortions every where >> distortions in your phone lines. >> can you hear me now >> yeah. a little bit better. >> sorry about that. so the point i am making is that, look, if we get another number like this, you know, next month, the fed is clearly going to have to start changing its tone and i will be compelled to -- my forecast but it is funny. everybody is talking about the unfirm payroll number as an aberration and a one-month
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figure we should just ignore but don't say the same thing about the cpi. the fed prepped us for inflation because of the distortions they are going to come in high the next few months. i would say to be fair another one or two months like this and the fed is going thob in a book. but it's not my expectation. >> you have been bullish on bonds, david they are not looking too safe right now. big selloff, ten-year yield hovering around the 1.70 level on board with this whole inflation story. where do you go? where do you tell investors to go in this kind of environment >> look, near term, you could see more upside pressure on bond yields i mean the reality that we are still not at the peak we were just say over a month ago. but bonds aren't behaving well and growth stocks aren't behaving well. i think the markets have inflation on brain i have a view. look, there is uncertainty around everybody's view. but my sense is this the stimulus is going the wear
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off in the second half of the year the jobless benefits i think are going to term out in september and i believe that the supply which has been held back is going to come back reopening the economy -- on the supply side but not the demand side this time [ no concern is concern is i think the inflation situation we have on our hands look i am not embarrassed to say i agree with the fed on this one but i think by the end of the year supply and demand is going to come into better balance and the inflationary pressures will start to subside i am one of the people saying if you are going to -- i would find some prices at the long ends of the treasury curve i don't think that the inflation situation is going to be sustainable beyond a couple of months any more than the deflation was this time last
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year. >> mike santoli, bob pisani talking about some of the fundamentals earlier, of course on days like this, it is often the technicals that drive to the fore what about for the nasdaq, where the bulk of the selling is happening, the nasdaq 100. where are the key levels of support people are looking out to where it could still just be a pullback within kind the normal course of action? >> i would say down a couple hundred points below here is probably where you are looking at in terms of the nasdaq 100. it is not a big move it is back to where we were at points in march. it's also right around where that 200 day average would be for that index so i think that's ballpark keep in mind we had one of these flushes, february into march, kind of a similar dynamic where the dow type stocks ignored the nasdaq selloff for a while until they couldn't anymore. that's the kinds of selloff we
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are looking at the s&p is 15 or 20 points from its 50 day average all of these areas where you would have stops along the way, obvious points for dip buyers and bargain hunters to come in we are still within the longer term trend we are just kind of challenging them and having a shakeout at the moment. >> david, which data points should we watch from here? the data has been great on the economy, housing, manufacturing, services, jobs was a little light. what are we looking at to determine whether this inflation story is a real potential worry for the fed and will have to cut into their cycle and they will have to start changing their tone and potentially raising rates. >> in one or two months -- readings like this, the fed is. [ indiscernible going into any sort of inflationary environment when
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you have unemployment rate of 4% and an industry wide kpatization at 74% that's technically -- each with the stimulus it is still running around [ indiscernible i always take a topdown view of what is happening in demand and supply i don't feel the pressures on the system are going to allow for sustainable inflation. my view on the economy, look, [ indiscernible with the amount of fiscal stimulus in the system and even if people are spending 25% of their stimulus checks, that's 25% of a big number. [ no audio ] >> we lost you david got the point. you are not worried about the inflation story given some of the dynamics from ask the slack in the labor market. david rosenberg thank you for joining us on this important day. the dow is down 620 points we have got just about 15 minutes left in the trading day. we are taking you stride into the cnbc "market zone"
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commercial-free coverage of all the action going into the close. cnbc senior markets commentator, mike santoli, is here to break down these crucial moments of the trading day. 20d we have josh brown as well >> major averages are plunging for the third straight day with the selling exacerbated by the cpi data this morning pointing to accelerating inflation, the most we have seen in years every sector in the s&p is lower. consumer discretionary is getting hit the hardest, down %. josh, what are you doing on a day like today >> very little outside of communicating with clients but i talked my people today nobody seems concerned we don't have portfolios concentrated in the negative earnings jam bory. to us, it looks like regular volatility but with a powerful story behind it. i found myself nodding along in agreement to everything that david rosenberg said i don't normal owe agree with
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everything david rosenberg says on this network. i think he has it right. i think he has it right for right reasons. my first reaction is i would like to see you run a factory -- not you but like anyone run a factory coming out of a pandemic. >> i would like to see sara run a factory. >> right -- i would like. >> i could run a factory. >> it would be different. >> guys, let's not lose the thread here. people are hanging on our every words. this is the "market zone." >> i would like to see anybody run a factory for the first time coming out of a pandemic and accurately be able to forecast exactly how many units of whatever might be needed this is uncharted territory for people in the manufacturing side of the economy we will put services inflation aside. we have had inflation in services for, like, 20 years okay that's the part of inflation we don't talk about everything from chips to autos to trucks to boats to lumber, all of that comes as a result of
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us just not knowing what the need will be six months in advance. then we get vaccines announced in november, shots in arms in january. people just haven't -- need a chance to catch up i would not say this is the type of inflation that should lead you to make drastic changes in your asset allocation. but if you are looking for opportunities, i would be thinking about the types of companies that have pricing power, sustainable pricing power. because it is likely that we are not going revisit the disinflation of 2020 real estate, entertainment, two areas historically that have done a very good raising prices in response to higher prices in the economy. >> i get all of that you are also a guy that assesses momentum, the technicals when you look at the areas that did so well last year, and also saw quite a lot of inflows into as well, did you look at some of
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those and the way they pulled back and worry there is quite a bit of downside beneath them >> that's a great question thanks, wilf i was looking at the nasdaq before i came on the air the nasdaq over the last one year has now reraced out of its outperformance relative to the dow and the s&p. so that outperformance was something like 60% over one year versus 38% for the s&p that's like largely been erased. i think it is about 42 to 38 now. probably gives up the rest of it you know, what's really important to point out is that this is why people should not be investing in the rearview mirror allocating to whatever you gave you the best returns over the last quarter or last six months. if you do that on a regular basis you are de facto buying high, selling low. most financial advisers, people who do what i do in the wealth management industry have set the rules in opposition to that
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issue. we are buying low, selling high every time we are doing a rebalance in a portfolio so i think most people who are managing money professional as advisers are getting this moment right. then a lot of people on the retail side who are momentum players without discipline, meaning they go long because something is going up but they have no idea where to exit i think that's where you are seeing a lot of the excess volatility coming from that's where it should could from insurance stocks, large cap banks, the types of things that momentum kids aren't in, it's another day at the office. that's pretty much all i am seeing right now. >> the dow having its worst day since the ends of january, the s&p having its worst day since february cema mody. >> some of the day's biggest losers, and lemonade.
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virgin galactic plunging 11% today. sown owes down 10:% ahead of its prints gig economy stocks down more than 30% from their respective highs, including names like uber, doordash, and grub hub turning to electric vehicle and alternative energy highs after a rare up day yesterday all reversing course lordstown 20 about 12% names caught up in today's selloff. >> bottom of the s&p 500 right now, penn national gaming, down 9% caesar's, gap. josh you said you weren't doing much except for talking to clients today. if you think this is a temporary story, why not buy some of the stocks that are getting beat up hard today and have been some of the last few weeks, especially some of the high flyers like cema mentioned >> well, i think there are
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opportunities. certainly every day we are buying stocks. i mean we are managing separate accounts we are not a hedge fund trading everybody's account in a block where we need to add we are adding of course we are allocating new accounts around the clock. i think the issue here for investors trying to be tactical in those stocks that you are talking about most of those are companies that aren't even in major benchmark indices yet. they have come public in the last six to 12 months either as ipos or more likely as spacs they are not even in the s&p while some have large market caps they really don't matter that much in terms of the overall tape where they have an impact is on sentiment. i think there could be another leg lower. people were buying these stocks strictly on the basis of the fact they had just gone off. once the reward system is removed, i buy a stock, goes up 10%, i buy another stock, it
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goes up another 10%. once you pull that reward out of the system people look and say, i don't know what lemonade is. it was on robinhood trending, it was going up now it's not sell i don't think there is an investor to take that seller's place until we get much lower given the valuations in some of those names. i don't see as big of a tactical opportunity as maybe others do that's just my personal opinion. >> mike santoli, would investors welcome some kind of rhetoric from the fed that they do acknowledge how high this inflation print was? or would they rather see the fed come out and say in the next weeks, don't worry, it's transitory, we are not going to tighten anything whatsoever. >> they do that every day. >> i don't know who good acknowledgment would necessarily do if it is not going to inform ultimately a posture on policy i think it is too early for them
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to really say they are reassessing anything they have told you for months there is going to be an uptick in statistical inflation because of overlapping the weakness of last year. it has been previewed. it's here. this is what is happening. i also don't think it is the main thing 2345 in bigge picture way is driving the risk reward in the market right now one month ago, mid april, we were sitting there, the s&p was up 11% year to date. it was way, way overbought it was above its moving averages you had sentiment and equity allocations high and literally everybody said probably time for a rest, probably time for chop, some correction. this is here i think, yes, the inflationer to is absolutely a very persuasive excuse for what is happening and it does -- you know, at some point, probably prompt some kind
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of fed response but i don't think that's mostly what we are dealing with right now >> can i agree with mike really quickly. >> yeah, sure. >> i just want to say one thing. master santoli is absolutely correct. the worst possible thing that the fed could start doing right now is commenting on individual data releases. please do not -- please, restrain yourselves, please don't do that, and ask dudley, if he doesn't mind, to stop pending op eds and let's not have the fed be reacting to individual economic reports. that's a tactical mistake and t. >> they have stock buybacks by a transitory theme richard clarida said in a speech today said this is transitory we were expecting it and it could happen for a few months but they don't see it lasting the nasdaq right now w the sharp declines is 8.4% off its recent
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highs, nearing the 10% correction level tom lee from fund stratd joins the conversation here on cnbc. you have been bullish. how do you see the selloff today? do you see opportunities to buy. >> yeah, i think today's -- has the feel of a panic day, right, because the vix is spiking so that's forcing derisking. and today is tax day i did talk to a few desks on the private banks. they have been saying some of their clients had to raise cash, so there is selling today. as you know, there's a lot of people that need to get out of technology because that's a crowded long a day without natural buyers means you get a sort of big downdraft. you know, is this scary? absolutely scary but do i think this is going to break the bull market's back no i would be a buyer today i know it sounds very strange, but we have the vix soaring
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again. 30% today after 40% move after two days that's not what happens when the markets peak that usually happens at the end of the selloff. >> would you tell people to buy the nasdaq as well recently you were saying there was more downside there. >> yeah, on the nasdaq and let's use the qqq as a proxy last week we downgraded tech to neutral but we basically went end weight faang on the qqqs, i think it needs to touch the 200 day moving average, which means roughly $300 on the qqqs, custom is about another 5% from here so i think that there is still some wood to chop on the tech and the crowded long there but you know on the commodity-related trades, i think these are just the earliest days. i know people are saying today's selloff is cpi related but what makes me scratch my head is the
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ten-year barely budged. >> just to dive into that a bit deeper i know short-term trades can be hard to call but you think the qqq could have 5% more downside but you are happy for people to buy into other fairly broad indices or parts of indices even if it is the likes of energy or other cyclicals? you don't think that the qqq falling 5% would drag other things with it >> it's really a tricky -- wilfred, that's a great question because look at the ends of the day if tech is coming down and it is 40% of the market other thing have to go up for the market to sort of stay unscathed. so i kind of agree with you there. but if this is -- let's say this is a regime change where people are trying to get out of tech and the natural buyers disappeared because no one is buying that but there is still fire power on the sidelines which we know because i know our
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clients have been cautious so we want redeploy this in the cyclical stacks when the vix calms down this is not that different from 2001-2004 where tech sank like an albatross but everything else went up substantially and the indices actually powered higher overall. i think it is possible it is a great question because the last ten years the market was tech i guess what we are seeing in 2021, the market is not tech >> financials are outperforming. so are health care but they are lower on the day. consumer discretionary is the hardest hit. tomly thank you for jumping on the cnbc newsline. two minutes left in the trading day. mike what are you seeing in the market internationals, dow down 650 into the close. >> lopsided to the downside. it started three to one an hour or two ago advantages to declines it widened out from there.
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we are much closer to seven to one to the downside now. not quite 90% of the downside but not too far from that either look at the equal-weighted s&p versus the regular s&p this month. you still do see the average stock outperforming the market cap weighted version that's because the mega cap and nasdaq names are weighing down the index. we have been talking about the volatility index look at it here. it is popping back up toward the early year high. we did actually have a run-up in the vix toward 30 in the early part of this year, even a little bit above that 35 in the whole gamestop late february, early march, archegos time period little rattled once that comes down and get a spike on the chart that's a little more of an all clear. 30 seconds left in the session. very few places to hide today. energy holding onto a fractional
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gain other sectors shrply lower materials, tech, consumer discretionary, utilities, industrials all down as the bell begins to ring the dow is just down 2% itself some 665 points a fraction above its low of the session which was down about 700 points ten minutes ago. the nasdaq composite down 2.7% or 357 points. its low was down 370 very close to it at the close. >> that's a wrap an on ugly day. stocks closing near session lows, welcome back, everyone to "closing bell," i'm sara eisen along with wilfred frost and mike santoli, cnbc senior markets commentator. look at how we finished up the day on wall street we were lower all day long and spilled into the close one of the worst days for the dow since last october it was also on a losing streak
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home depot had the most negative impact on the dow, took 90 points off the average most stocks finished lower there is the s&p 500 down 2.5%. worst day for the s&p since february 25th. when it fell 2.5%. third day in a row of declines all sectors lower in the s&p 500 except for energy, which did finish positive or just about flat consumer discretionary tech and materials the hardst hit nasdaq down 2.7% at the close now down more than 8% off of record highs the russell 2000 small caps index slammed down 3% on the day. brutal down 3.25% cyclical, value, and tech. coming up, allians chief economic adviser mohammad el-erian on the selloff and how worried he is about surge in inflation. investors are now set for another busy hour of earnings, bumble, poshmark, sown owes,
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thread up and pang we will have the numbers as they cross. josh brown is still with us. omar aguilar joins the conversation first i will send it to you, mike it felt brutal, if you are bullish, then it future ugly but we are only down 5% on the s&p from all-time highs. i send it to you for the conte point. >> there issent mr. of urgency about the selling in the short-term in the context of a market that in recent weeks has become harder to please. we got up to a certain level at the recent highs where we seemingly priced in this peak acceleration in the economy, we had poor reactions toexcellent earnings custom we talked about in the past several weeks. it all was in the context of investors being pretty fully all in on stocks and looking for the next positive things and it wasn't translating directly into higher prices. we are dealing with offsets.
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inflation might be an offset a fiscal drag next year pooit might be an offset all of the things you could talk about as being offsets to the strong economic situation could be causing a bit of a pullback we are back to early april levels when people thought that the market was riding high there is your legitimate reason for the nasdaq to pull back 2.8 periods? >> it is an interesting situation because if you recall what we have lived the last six months is that the equity market has actually gone aheadof the economic data and it seems to be that we are always seeing the reverse effect, where the price inflation that we saw in equities, particularly in tech for the last year and a half is now catching up with some of the -- still very strong economic data but with a lot of
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noise now with the preinflation numbers that we have the reality is, we are still just at one data point and we will see what unfolds later on i think the question is how much of this will the fed take into consideration for future policy changes. >> what do you do given your explanation of the backdrop. >> i think we have imbalance between supply and demand, a significant amount of issues that we have between the labor market and again the last data point and whether the dynamics are in the labor market. still with the prospect that we still have a significant amount of liquidity through the fiscal stimulus that's distorting this data we have never been in a situation where the economic recovery has been as quick as we have seen yet the pricing power of the market has been way ahead of it. i think these corrections, while there may be the excuse of
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inflation, tomorrow may be an excuse of another soft data point it is a way for the gap between the prices and the economic data to get closer. >> give our viewers a couple of stocks you will be looking to top off in the next week or so with these pullbacks i noticed in some of your notes that you are warming up to some of the airlines? >> i think there is a tactical opportunity in the airlines, absolutely i would just say prodbly speaking anything travel related. my favorite name that i don't own right now and i am hoping the market gives me an opportunity is expedia i love the technicals. it is holding up just fine considering how much it is up. i actually expected it to be down more on a day like today. but maybe we will get there. that's the type of name that i would be pulling the trigger on. you talk about pricing power, as the economy reopens and travel returns to natural, at least on the consumer side, this is a company that can adjust algorithmically to demand for
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things like hotel booking, airline tickets, cruises even, believe it or not. that's the type of stock that i want to look for in environments like this. i want to say one other thing quickly before you guys close down here, which is that this is the best kind of problem that we could possibly have to trigger a correction and we keep saying correction. we are like down 3% in the s&p it hasn't -- we are not even in a dip. if this is how people are going to be behaving down %, we should have a correction. if you are going to have one, the reason you should have one is because the vaccine distribution is wildly successful there is consumer demand everywhere, people are getting raises, companies are unilaterally raising their own internal minimume software stoc down 20 points, whatever --
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like, that's fine by me. i will take that any time you want to serve that up. and the last thing on that, if we think that inflation is the issue, is the problem, understand most of the excess spending and costs that aren't coming from the supply issues that we documented are coming from the wealth effect the stock market itself is a huge source of inflationary pressure in everything from dishwashers to new home construction, cars, on, and on, and on so if the stock market cools off because of inflation, no more inflation. it's almost like a self-correcting cycle. i would just be considering all of those things in my mind before opening up my schwab account and making a drastic change in allocation to a portfolio. it's probably overdoing it if that's the way you want to react to this. >> nice shot out there for
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omar's employers, omar aguilar and josh brown thank you for joining us in the "market zone." let's continue this conversation by bringing in mohammad el-erian of allianz and former pimco ceo. before we get to today's market action i wanted to dwell on one of the triggers, which was of course that inflation prohibit this morning some people are saying we expected it to be higher than normal what's your take was this actually a big surprise, the data that we saw this morning >> it was surprise it was much higher unanimous what people expected even fed officials acknowledged it was much higher than what they expected. but the critical thing here is that this is only one month. and one must be careful about extrapolating. i think there is a different message going on it's the concern of higher inflation and a fed that's
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absolutely stuck on the notion it is will be transitory and is not willing to be open minded about it what that does, that combination threatens the robustness of the liquidity paradigm there is a reason why -- it is not just stocks that are down today. it is stocks it is downtown, it is gold it is bonds. it's across the board. this is a liquidity phenomenon and just like ample and predictable lickidity brought us up on our risk assets and our self assets now we have seen what happens when a little bit of confidence in this liquidity paradigm is shaken somewhat. do you think, mohammad, that the fed is behind the curve? how many more months of inflation like this would confirm they are behind the curve and lead to the type of action that legitimately spooks investors. >> because they have moved to the top down approach it will
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take many months of high inflation prints for it to be convinced its behind the curve i don't think the fed will prematurely respond. as much as i think they should follow what the bank of canada and the bank of england did, they are not going do that their credibility would be at stake. they are going to wait this out. that's what the market is worried about, is that because the fed may ends uphaving to slam the brakes, the market will start tightening ahead of the fed. and that's what investors have to and a half garrett if inflation numbers remain high. >> what if they don't? what if the fed is right are you convinced that that is the story here a lot of what drove the higher prices have to do with post pandemic phenomenons and trends, like airfares, and sporting goods tickets, and used cars, and a lot of distortion there because of what we have just been through >> yes
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and the fed is right in two ways but it is blind to a third one it is right there are base effects. it is right there are temporary mismatch between demand and supply also there are structural changes on the demand side and supply side that suggests this is a more persistent inflation trend than just transitory nobody is talking about the efficiency of aggregate demand anymore. we have so much demand in the pipeline it is going to last for a while. on the supply 150id you do have bottleneck issues, issues with better pricing power now among companies. the labor market you are getting mismatches, there are structural aspects. in my view, this is a 50/50. it could be transitory i hope it is transitory because if it is transitory then we can soft land to a better economy, good markets, and a policy transition so that is my great hope
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i hope they are right. but i think they have a 50% chance at best of being right now. >> the fed said, mohammad, that it will pivot if what we are seeing proves not to be transitory, if there are signs that there is sustained worrisome persistent inflation why do you think the market is not necessarily calmed by that fact do you think that the market thinks the fed can't control it? >> history tells that you that sort of pivot is a late pivot. by the time an outcome date -- as opposed to a forecast base -- by the time an outcome based fed decides it has an inflation problem, it will slam on the brakes what the markets know is that if you look at history, every time the fed has late, we have ended in a recession that's what we all want to avoid. that's why i think what the bank of canada is doing, bank of
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england is doing, is much part isser. we are not even thinking about thinking think about the stages we have to start thinking about it then we have to start with a small temperature, you are looking under that timetable at the fed doing nothing until the end of the i don't remember or this time next year. that's why there is worry. if there is a 50% chance the fed being wrong then we may end up by it having to slam the brakes. >> talk to us about the one day today and then the outlook for the three months over the summer whether i guess markets will be trying to weigh up all of what you have been saying about whether or not the fed is going to have to act a little bit later this year. >> i want to stress what josh said a lot of what is pushing this is good news for the economy. it is a good thing that demand is picking up, a good thing that the economy is red hot, as
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warren buffet said the problem is that remember what has taken us to these elevated prices in every asset class n every asset rally, what has taken us here is liquidity the concern here is that people will start questioning the liquidity dare people. put another way investors think in terms of risk factors the policy risk factors has been incredibly positive for the market place now it's becoming uncertain to somewhat negative. that's why you are seeing an across the board selloff, because once you start shaking confidence -- and we have only done it a tiny bit a tiny bit today is actually very small adjustment but once you start shaking confidence and liquidity paradigm then you start getting the across the board selloffs because liquidity comes out of the system.
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>> how do you ledge yourself for that risk which you put at 50%, that inflation is an alarming trend that the fed will have to fight and could be behind the curve on >>ates really hard sara, because the prices are so distorted. when you have so many years of central bank manipulation of prices then you no longer have safe assets. that's why people have been wondering all over the place trying to find new safe assets crypto, can you imagine, a volatile crypto being in your safe asset bucket? that's what people have done i think you have got to go to tail hemming and keep an eye on the vix. this is a reason why the vix spiked so much today people are starting to think, well, if i can't hedge myself in a traditional way, can i do it through certain sale hedges? >> on that point about traditional ways, mohammad, would you be avoiding u.s. tress
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reese more than perhaps the stocks that have had a decent run in recent years. >> i would be careful. if we have inflation and the fed is late in responding what you are going to bet is a steepening of the curve unless you are at the front end of the curve you risk actually quite a bit. it will not be a good hedge against the possibility to the fed being late to an inflation issue. >> what about gold it was lower today treasury didn't move much. we did see higher yields nothing extreme. are those places that you would look to go >> gold for me is a bit of a surprise i would have expected it to do a little bit better today. again, hold has benefitted from liquidity. the problem with gold, it has a lot of competitors right now a lot of think that
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cryptocurrencies, bitcoin is a better place to be than gold gold no longers that attribute that it used to have before. let me tell you, when liquidity goes out, it is very hard to generate returns and it is very hard to mitigate risk. and that's why it is really important that the fed turns out to be right. because if this inflation is not transitory, then we will see liquidity going up i want to be clear, i am hoping that the fed is correct. but i think it's only a 50% probability that they are correct. >> mohammad, just to round things off given you were seemingly quite encouraged by the actions taken by the likes of the bank of england, in your sort of bear case scenario which we all hope does not play out, but in that scenario could equities in the uk, in europe perform well or would there be too much correlation with u.s. equities falling? are there opportunities there. >> they would outperform in
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relative terms they have been doing better recently i think people underestimated the extent to which europe is starting to pick up momentum we saw that with the uk machinely -- gdp number. we saw it with the european commission revising its growth rate europe is starting to pick uch i think given valuing as europe will likely outperform the u.s this is the first time i say this for years, wilfred, for years. but like you said, you cannot escape a generalized selloff if it is originated in the u.s. i am not sure you are making money if that were to materialize. >> mohammad el-erian, great day to have you, thank you for joining us for an extended interview after this big selloff. earnings to tell you about sown owes. cema mody with the numbers. >> sara, sown owes one of the
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beneficiaries of the pandemic, continues to see strong sales and demand for its spersz. revenue topping expectations, 3 $3 million versus estimates of $248.4 million 12 cent profit gap the ceo says based on second quarter performance, the continued demand and power and profitability of our business model we are raising fiscal 2021 guidance again interest in sown owes speakers remaining intact despite competition. morgan stanley mentioning the reopening of retail stores playing a role in driving sales. the stock is rebounding after a down day wow, up 19% in extended trade. back to you. >> the nasdaq closed down 2.7% let's get to josh lipton at some of the hardest hit tech names today. >> wilf, let's keep looking at tech but look under the hood here a bit, dig into subsectors.
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want to start with the cloud names which have been under pressure again today that's their eighth day of losses in ten sessions now down about 15% over the past three months in 2020, the etf skyrocketed higher these were the companies helping us play, learn, shop at home i talked with an analyst who covers this sector ten cloud companies reported ruts and not one disappointed. five saw acceleration. only one traded up data dog i asked what is on his buy list? he mentioned snowflake, workday, c 3 dot i and atropa twilio has been hit hard but pat is a fan of lawson and the market opportunity that lawson is targeting i caught up with rob owens at piper, he covered the cyber
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security companies for a long time because of the hack. vastly underperforming tech and the market i asked rob for his top picks. palo alto networks, rapid 7, and crowd strike back to you. >> a lot of good information there. thanks let's bring in kate rooney for a look at the fintech names and how they finished up the day. >> payment stocks and crypto names selling off as investors back off from the high growth stocks we start with square the ligest laggard closed down 6% paypal faring better, down almost 4% today. both had blowout earnings last week both companies benefitted from the shift to digital payments. shopify closing down 2.5%. it has been another huge growth story in the past year
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it is now negative year to date. to credit cards, visa, mastercard, american express were down. they fared better than the broader markets. visa was the biggest laggard in that group coinbase, that stock selling off about 6% today the company reports earnings tomorrow we did have kathy woods arc invest innovation etf coming in this week buy that stock all ice on earnings after the bell tomorrow. bitcoin despite being talked up as an inflation hedge and a safe haven assets is down today about 4% ether pretty flat. dogecoin also selling off big. trouble in the crypto markets today. >> much more on this afternoon's big market selloff coming up as we plow through the rest of the show the nasdaq down more than 5% just this week we will discuss whether there are buying opportunities to be had. amazon closing down % today.
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mike santoli will do a deeper dive on that name in particular when we come back. don't go anywhere. "closing bell" will be back in a couple of minutes. how do plastic bottles turn into this? wm and repreve have given new life to over 20 billion plastic bottles. and we're just getting started. see how recycling is one of the many ways wm is always working for a sustainable tomorrow at
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back if february the to you closed lower lie 6 660 points poshmark earnings are out. >> they are reporting a better than expected loss of 3 cents. the street was looking for a loss of 42 cents revenues also stronger than expected at $81 million compared to $77 million the second quarter revenue guidance also in a range that is above what analysts had expected at just over $73 million gross merchandise value up 43% to $441 million with active buyers up 18% year over year check out the shares down 12% afterhours. thread up, a similar online consignment company. this lost per share of 17 cents adj adjusted revenues coming in at $56 million. that's up 15%. and also stronger than the street had been looking for,
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just over $48 million. second quarter revenue guidance also stronger than expected for thread up. in range of 5 to $55 million compared to analyst expectations of just under $49 million. the full year revenue guidance also much stronger than analysts expected thread up's first quarter as a public company they mentioned their gross margin is 71%, up from 68% their active buyers are up 1%. shares of thread up after-hours down almost 13% after-hours. we have a lot to talk about with ceo james rinehart when he joins us on cnbc tomorrow on "power lunch. sara and wilf back over to you. >> thanks for that one, court. we should also mention poshmark's ceo will be joining outside on "closing bell" 3:00 p.m. tomorrow. amazon was down 2% or so
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today mike despite winning a case against the eu caught up in all the tech selling >> it has been a confounding issue with amazon as to why it has been such an underperformer for months, even before this whole rough period for bigger tech stocks and with retail booming. here's amazon over the last year against the equal weighted version of the consumer discretionary sector not trading along with it, not getting the benefit of the fact that we have a flush consumer. how is amazon trading, look at it against the cloud software etf stock over the last year looks like exactly the same instrument here. that's the closeness, the parallel of performance. the cloud was down 2.3%. amazon down 2.3. the market seems to be saying that's the swing factor is amazon's web services. it shows you where the market
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seems to think the value add is going to be longer term, perhaps, and maybe the depression of software stock valuations outside of amazon has been a bit of a drag on that stock as well. we will see if that changes. guys. >> mike santoli, thank you. let's talk more about the selloff on wall street today jeff sought, charlie bobbinski as well. charlie, do you think these kind of readings are going to continue and define the investing landscape? >> unfortunately, i do at this point there were people saying they couldn't see any inflation, and those people have backed down. now it is impossible to deny the inflation. now this upside view is, well, this is going to be temporary or it's just higher prices versus a year ago, which were supposed. i don't buy that either. if you look at the month over month rate of .9% in the core
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inflation number, that is a spooky number. and that is a reflection of not where we were a year ago it is a reflex of what happened to the money supply. m 2 is up about 20%. velocity is starting to kick in. whether you believe $3 million is causing this, whether your money test and you believe the monetary policy is providing this whether you believeit is the inability to produce products -- every school of thought recognizes we have problem and it is going to be with us for a while. >> i love this show. we had the polar opposite from josh brown, mohammad el-erian in between, he thinks there is a 50% chance charlie, if the view you are taking is that it is going to be persistent and sustained how do you set up investments for that environment? our value stocks were slammed today. everything was dragged into the mess.
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>> in fairness, this is not the first day we have heard about inflation. we have been hearing about this all year and value has crushed growth year to date. but more than 15%. so value is holding up much better than growth and that's just because of the duration i mean, a simple dcf calculation is going to show if you have a dollar of earnings 20 years from now, it is worth a lot less than a dollar of earnings today it will hold up. inflation is like gravity. it pulls down every financial assets it is just that some are brought down less than others. >> buy the dip or sit on sidelines? >> i don't think we are quite over with the correction yet, but i think that's all it is, a correction in an ongoing bull market that has years left to run. we are coming up on the 50 day moving average, 4050
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he closed today at 4063. it will be interesting to see if the 50 day moving average holds at roughly 4050. if it doesn't, you are probably going to come back to the march highs, which was around 3950 to 4,000. >> on the topic of daily moving averages, jeff, apple closed blue its 200 daily moving average. is that a problem? is that something to look out for? >> the technical people will look out for that. it looks like it's -- i don't know, its 2-day moving average is at 122.56 looks like we closed at 122.77 it looks like it is testing its 200-day moving average bunt look like it has quite broken it yet. >> jeff, within your overall call that we are in a long term bull market does that mean you would be buying the dip in the
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nasdaq and some of the tech stocks and the indexes don't tell the story beneath the surface. some of these stocks up 10 to 50% from their all-time highs. >> look at teledocs. down from 300 to 141, 142, i am not looking at it right now. there has been carnage beneath the surface there has been a stealth bear market despite the fact that the s&p has been holding up until recently rehl fively near the highs. but we are in a secular bull market those tend to last 15 to 20 years. we are 12 months into this one yeah, i don't think the correction is over yet i think somewhere in the next week or two you buy the down >> charlie, i don't know if you saw earlier, you have been supplanted as "closing bell's" biggest fan of viacom cbs. it is now don --'s top pick.
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if you had more money flow into the fund today give our viewers a couple of stocks that you would put it to work in. doesn't have to be viacom cbs. >> it is now below our calculation of intrinsic value you are right, it is not my biggest table poundser i think it is still mosaic agricultural fertilizers the stock is up 53% this year. only 14 times forward earnings the agricultural economy is in great shape. in a inflation environment you want to own natural resources. fertilizer is a better investment than oil. oil is more of a commodity mosaic is a natural company with more pricing power. >> viacom cbs is 62% off its all-time high. it has been a tough one. >> charlie and jeff, thank you for joining us much appreciated >> thanks for having news you
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bet you. breaking news on the colonial pipeline cyber attack eamon javers has the details. >> president biden speaking moments ago on the pipeline hack >> rising prices right now >> we have been very, very close contact with colonial pipeline which is the one area you are talking about where -- one of the reasons that gasoline prices are going up and i think you are going to hear some good news in the next 24 hours i think we will be getting that under control. secondly, i have in the meantime made it easier for us to -- >> now we hear the president there saying there is some good news coming. we don't have exactly what that good news is, he's sort of hinting around that colonial might be making an announcement. we have reporting from the "washington post."
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just in the past hour. the "washington post" is feeling that colonial does not feel need to pay the ransom to darkside. the reporting comes from two people familiar that colonial will be able to rebuild and restore its systems without having to resort to that payment. that is according to those sources of the "washington post." we have not watched that reporting yet. we are efforting some comment here from colonial or from fire eye or from the white house on any of that. but an indication now that colonial might be in a stronger place technologically than we might have thought and not necessarily have to fork over the ransom to the darkside and the president seeming to sug suggest there is good news around the corner. after this afternoon's big
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selloff it was another tough day for the nasdaq down more than 4% since monday is this an opportunity to buy somify high flying names after the break we look at some of the biggest losers in the nasdaq 100 the chip stocks. really all of software down at least 10% from their all time highs. we'll be right back. the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets. outscale, with the resources to serve 1,500 clients in 52 countries. and outlast, with long-term conviction that looks beyond today's volatility. join the pursuit of outperformance at pgim. the investment management business of prudential. sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm...
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big day of selling here on wall street. the dow closed down 681 points the s&p had its worse day since february it has been a steep decline of three days of selling. the latest concern has been around inflation with the report showing 4.2% rise from last year in consumer prices sharpest incline we have seen in 13 years voom reporting. >> reporting a smaller than expected loss for the first quarter beating estimates on revenue. more importantly, e-commerce seeing a growth of 96% it continues to benefit from the shift to online shopping the
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resurgence in auto sales worth noting the company went public back in june and doubled on its first day of trade. main competitor is carvana shares up 12%. >> vroom up 2%. a pair of online retail names down double digits we will break that will down is now the time to buy the dip? we will discuss when "closing bell" returns.
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big selloff today on wall street there is the dow it closed down 2%. 681 points lower, right near the lows of the day. the trigger was the inflation read coming in hot, 4.2% rise in consumer prices from last year home depot was the biggest drag on the dow but every sector closed flat. scrummer discretionary technology and materials the hardest hit. declines we haven't seen since seven months ago for the overall market nasdaq 2.7% lower on the day time now for a cnbc news update with shepard smith. >> here's what's happening at this hour. it looks like war in the middle east israel and hamas, the fighting escalating again today, dozens dead, including a top hamas
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commander and civilians on both sides in the worst violence since the war there in 2014. the u.s. now sending an envoy has israel pounds buildings in gaza with air strikes, hamas launching hundreds of rockets into israel. and now the fight has moved to israeli cities arabs and jews fighting in the streets such that border guards have been cycled president biden says israel plans to defend itself and has an analysis soon. liz cheney vowing too all she can to make sure that the former president as she puts it never gets near the oval office again. she's promising to be a leader in the fight to keep the big lie about the 2020 election standing congressman elize staff knick from new york likely to replace
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her. kids from age 12 to 15 can get covid shots starting tomorrow. what about cdc's credibility its mask man details and rules for people who have been vaccinated or who are outside? are they still following the science in rochelle wallenski joins us tonight on the news on cnbc. it was a nasty day for tech stocks with the nasdaq close lower 2.7% down over 5% for the week. what could the recent crack in valuiations mean for the private market let's bring in ann barry go to have you with us do the two track each other closely, some of the vc and private equity names you would be targeting and owning -- >> you usually see a lag when it comes to the private side of the
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market but i actually think there is a different scenario here i don't think the private markets won't crack as much. there has been such a huge influx of capital into private tech companies in the early stages of the season they can't take the same type of hammering that the public market has pretty soon. >> to what extent is it a surprise to you when you consider so much of an influx of ipos and spacs that we saw in the first quarter of this year all of those good value listings in your mind >> i think there are some challenges with those and those are seeing the biggest drops we are actually seeing. i think in terms of what is -- for the private side we are seeing a rise right now the equivalent to the spac in the private market, spds, influx to the capital, single name focused. i am looking at that closely to
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see what it does to the stock market. >> interesting private spacs on the owneipos, we have seen carnage. high flying, well embraced there is a pipeline of more to come do you think this will do anything to chill that >> it depends on what sorts of positions are being ipo'd. soft bank has a huge peopleline coming tiktok coming to market. big asian ipos i think will experience strength. in the u.s. market there is concern this will chill the near term ipo landscape. >> what's your take on some of the recent listings and their first couple of earnings reports, the likes of roblox, are those names you think are still well positions >> roblox is interesting because
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it has generated very strong user growth and revenue growth it has a free cash flow profile that's terrific, ebitda profiles up 30% it is in the sweet spot of what is a new still emerging trend which is where creators and communities are finding ways to monetize on social platforms while still creating profit for the company that created the platform to collaborate in so i think roblox is an interesting paradigm shift for the social media landscape >> i know you said you don't expect the private market to get hit as hard as the public market but what does an inflationary environment and higher rates mean for valuations and for what types of companies the money will flow into >> i do think it means that discipline needs the come back into looking at which companies really have the most sustainable
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business models and which ones are likely to start moving into profitable growth over time, not just very aggressive top playing growth one of the beingest antidotes to inflation is productivity. capital in the private markets needs to start looking how and so i think it's really the capital that can bring value to operations, bring to expertise and not only provide high quality businesses with capital to grow with but also do really operational things to help them grow and grow into some cases. >> good to check in with you thank you for joining us up next, your earnings scorecard. poshmark is plunging but we'll break down the moves straight
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ahead. as we head to break, another look lower, lower, lower across the board. nasdaq and the russell 2000 index small caps hit especially hard 5% down week for the nasdaq. closing bell will be right back. if you wake up thinking about the market and want to make the right moves fast... get decision tech from fidelity. [ cellphone vibrates ] you'll get proactive alerts for market events before they happen... and insights on every buy and sell decision. with zero-commission online u.s. stock and etf trades. for smarter trading decisions, get decision tech from fidelity.
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welcome back there is the heat map of the dow. only two stocks positive during the session today. the market selling today as you can see. the dow is down 2% and the s&p down 2.2 the nasdaq composite down 2.7% quick check on this afternoon's biggest. bumble that stock mostly flat poshmark shares are tumbling despite a beat on the top and bottom line. companies blaming covid and severe weather and a programming note don't miss interview with poshmark ceo here on closing bell remember, this is one that doubled on its first day of trading and has since come down, getting hit hard after hours another online retailer seeing stronger than expected revenues. those shares after hours and bucking the trend, actually
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popping on a big revenue beat. up next, betting big on the reopening. morgan stanley is bulish on disney ahead of the earnings report strong recovery to watch when disney reports ahead closing bell back in a couple.
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now to our wall street look ahead. more big earnings on deck for tomorrow alibaba, disney, airbnb, doordash all gearing up to report what we'll be watching. the stocks that sold off so hard today on the back of inflation worries. as far as which charts to watch of what could be signals that comes next, i did talk to, he said watch the 10 year yield we saw a move there higher right around the 170 level if we break above the closing high we saw back in march, obviously, that could be a bearish development because some has to do with rising rates and the smh. the semiconductors index key for the market technology in particular and broken below a key trend line
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and march lows there as well could be important sell signal if we go down. >> i guess there's all sorts of things to be watching. a close below of 00 f600 below 200 day moving average >> some of the real heavily pressured stuff seems to get traction and facebook which outperformed today after having a pretty poor week, a lot of times these things get somewhat sequenced. if it was leading to the downside, maybe see some inklings there bigger picture, the nasdaq and the s&p 500 over the last year the valuation premium has largely come out of it, whatever we built up in the last year or two. it seems as if we might be a little bit more of on balancing footing in terms of the types of stocks and what the market is
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giving them credit for than we were just a few months ago. >> a reminder of how we finished on wall street the s&p 500 down 2.15% and the dow down 2%. 2.7% energy just eked out a fraction of gain but a lot of selling on wall street. that does it for closing bell today. "fast money" starts now. i'm melissa lee and this is "fast money. tonight on fast, the four most important charts in the market following today's big sell-off each trader has the one thing they're watching and why could tell us where we're headed next. a major trade alert. her position in one of the big banks. you heard that right karen is selling a bank. why reading the register on the name and bargain hunting five names down double digits from the recent highs. we start off with a major market meltdown


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