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tv   Closing Bell  CNBC  May 2, 2022 3:00pm-4:00pm EDT

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of the three major indexes as of this hour, off just 0.75 of 1% but it will be a busy final 60 minutes. >> the hope is we're just pulling forward the volatility from the fed meeting that's the hope. thanks for watching "power lunch. everybody. >> "closing bell" starts right now. thank you, tyler and kelly here we go again stocks under heavy pressure as may gets off to a choppy start the most important hour of trading starts now hello, everybody, and welcome to "closing bell. i'm sara eisen coming to you live from the conference in beverly hills, california, where all the financial heavyweights are here talking about this market and this volatility here's where we stand. s&p down 1.3%. dow off session lows got a little lower than down 500. down about 450 at the moment nasdaq outperforms communication services interestingly is the only sector that's positive right now in the s&p. the russell 2000 index down 1%
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check out some of the most actively traded names at the new york stock exchange at the moment you've got a mix there at&t with a bid, nio, we've seen some strength in the ev names despite the broader sell-off nokia, ford under pressure and uber down 5.3% some of the reopening names are getting hit. we've got a great lineup of guests for you here from the conference including an inside read on the consumer and impact of inflation with the ceo of kroger and a conversation with the vice president of meta's global business group, nicola mendelson. meta is a rare bright spot in the session. let's get right to the market. stocks picking up where they left off following an ugly april and four down weeks for the s&p. take a look at the 10-year yield. briefly hitting 3% earlier today, the highest level since
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december, 2018 joining us first on cnbc is manny roman. talk about goodluck having the right guest for the right time good to see you, manny. >> good to see you too thank you for having me. >> significance of the 10-year yield over 3%? >> we think that the fed will raise rates by 225 basis points for the year. >> meaning there's going to be a couple of 50 points? >> more 50 points, maybe even a 75 basis point there's a lot of things we don't know it's a new market, the situation in russia that doesn't seem to get better and the ukraine crisis and then you have a lot of unknowns what it's going to do to the consumer i know you have guests coming on your program to talk about the consumer the question is always the same. how much rates hike can you have barometric pressure things start breaking. >> will things start breaking? >> well, if we raise rates
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significantly, eventually the consumer will slow down. >> are you talking recession >> you're talking bordering on a recession, one or two quarter of recession like we saw in the first quarter and the consumer being much slower going forward. and i think that's perfectly fine i'll always have this image of someone trying to land a plane when there's a lot of wind it's not easy. so the soft lappending is possi, but it's not always easy and i think that's also an opportunity for a lot of us to find a place to invest and make money. >> right so how is pimco navigating this? first of all, are you still underweight bonds? do you think this will go farther? >> if i had a chrirystal ball, ' slightly broken. of course the market overshoots and it would be difficult for me to tell you the exact moment the reality is we're not that
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far away from a point where it makes sense to add risk. and then the fixed income market has an ecosystem with many different opportunities from investment grade to mortgage bond a lot of these things happen to be attractive now and are going to be more attractive over the months to come and the skill is to how to add risk in your portfolio and how to find opportunity. in a volatile world, it makes a lot of sense i think that's what we look forward to and that will be the opportunity for months to come. >> the bond move, though, has been fierce and intense. do you think we're near the peak at least when it comes to treasury yields in this episode? >> once again, my crystal ball hasn't been working so much. i wasn't around in the '70s, but i was around in 1994 and i remember the move. and the move was pretty wild but there was really no inflation. the reality is we don't really
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know when inflation will come back whether it's three months or six months. that's all we know right now and we'll have to navigate this and look at the data and make sure we make the best possible decision at the time. >> i wanted to ask you about a specific bond deal that pimco participated in last week. it was this carvana debt that was sold to apollo we had the ceo of apollo talking about it this morning. i know pimco is a buyer as well. >> well, we have this tradition not to comment on any investment we make. but when they are interesting transactions, we'll have plenty of capital and we'll participate and we think that's the right thing to do. as i said, the volatility of the market opens up the game it opens up the game to add and i think we'll welcome it i slightly disagree with the ceo of apollo. i think the reality is that the volatility is a very good thing for fixed income managers,
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broadly speaking for pimco and others. >> you got paid a good yield on it, 10.25% but i guess the question is was it smp ksome kind of canary in the coal mine where it's going to get a lot harder for companies to access financing and they'll have to pay higher rates. >> the high yield market is in much better shape than it used to be. that being said, you would rather have a select number of high-yield issuers in the portfolio rather than the broad market, because the broad market may have many sectors that you may not wanti to own. i think you want to be careful about the credit you decide to pick and how you're going to build your portfolio that makes sense there's going to be opportunity also of investment grade they're going to be great companies to own and earn
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significant yield. i think to encompass both the public and the private side and find the best opportunity is the way to do it. >> where are you guys on the dollar, which just continues to scream higher? >> i think if the fed keeps on raising rates fast, i think the dollar will do well. i think when you look at europe, and i say this as a frenchman, it's difficult to be overly optimistic there are many problems. the ukraine war being one of them but there are many problems on the horizon. and real social choices question in terms of what kind of country do people want and how are they going to be competitive, so on and so forth. >> not too bullish on europe. >> not too bullish on europe i would say it's part a personal opinion for someone who's moved to this country a long time ago. >> manny roman, thank you so
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much we don't hear from you often so it is a treat. after the break, shares of kroger handily outperforming the market this year they're up around 20%. we'll talk to the ceo, rodney mcmullen, about what are you seeing right now from consumers and whether food inflation is near a peak. you're watching "closing bell" on cnbc. the s&p is down less than 1% right now. we'll be right back.
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it has been outperforming but now is up 0.2. s&p is having a nice recovery, only down 0.6 and the dow is only down less than 200 points we were down over 500 just a few moments ago, so another roller coaster day but it is being driven by strength in names like facebook or meta, nvidia, microsoft. still some pressure on amazon and apple after earnings last week check out today's stealth mover, global payments at the bottom of the s&p 500 right now. the payments technology company. out with earnings this morning topping eps estimates, but guidance for 2022 was down more than 40% -- shares are down more than 40% over the past 52 weeks. it was the guidance that was soft, down another 10% today meanwhile, take a look at kroger, also a stealth mover to the upside all year long really. shares are higher by around20% in 2022. nearly 50% over the last 52
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weeks. this coming as inflation hits a 40-year high joining us is kroger ceo rodney mcmullen great to see you, rodney. >> great to see you, rodney. >> so the market is telling us there is some concern about this ugly mix of higher inflation and higher interest rates. are you seeing any change from the consumer right now >> we're seeing a little bit with consumers starting to buy more of our own brand product, especially with certain customer groups we still see people upscaling their purchase during covid people have learned how to cook and people like the premium products when you look at cheese, better wines, some of those things so for the most part not a lot of changes customers on a budget. you're seeing them switch a little bit to our brands, a little bit smaller basket size, but they're coming in more often now. part of that could be covid driven as well. >> are you expecting a wider consumer slowdown here >> say that -- >> are you expecting a bigger
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consumer slowdown? >> so far we don't we think customers are really trying to make sure that they stretch their budget one of the things that we try to do is make sure that we use our data and our understanding of customers, helping them to see promotions that apply to them to be able to help stretch their budget. >> what about food inflation, is it getting worse is it getting better >> it's still getting worse. if you look at ppi, there's still more likelihood some more pain to come if you just look at raw ingredients in terms of corn, soybeans, wheat, all of those things, it still appears there's more to come we're going to do everything we can to minimize the impact on customers. >> the fed wants to deal with inflation, but it can't supply grains from ukraine which is dealing with a war so what is your expectation for how long this lasts on the food and grocery side of things >> yeah. originally we had thought it
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would start slowing down later in the year as you start cycling. we would expect inflation to slow down as you start cycling higher inflation later in the year, but we don't see anything to cause it to go down and probably there could be inflationary pressure. now, i have so much faith in the american farmer and other parts of the world too, but i'm kind of biased in the u.s. and american farmers, i think, will really step up and plant a huge crop and hopefully the weather cooperates as well. >> rodney, we have not spoken to you since you disclosed that you had a conversation with carl icahn. he's in your stock now he wants to have some board directors and he wants you to do better when it comes to gestational crates for pigs and ceo pay. have you had further conversations with him than that initial one? >> i have not. our board has interviewed the potential candidates and when you look at supplier
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responsibility is something that's important to us and our board for years and it continues to be incredibly important to us when you look at the gestation crates, our supplier -- we've asked our suppliers by 2025 to move away and our suppliers expect by 2025 they will move away and our organization, we deal with over 70 different groups around esg topics on over 40 topics and we think it's incredibly important to engage with our shareholders and learn animal welfare is something important to us. >> what do you expect from icahn, are you expecting a fight? >> i have no idea. you know, when you talk to people, you get all kinds of different speculations so we really don't know. and we're super proud of the things our board has done over the years around animal welfare and pigs we will continue to do so. >> you said you're interviewing --
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>> the board has interviewed the candidates. >> is that a possibility that you welcome that >> the board is recommending to keep the slate that's been recommended by the board before. >> we'll see where that one goes speaking of your employees and your pay which was an issue that icahn raised i know you took a pay cut last year, but there still continues to be action from the unions what are you expecting it's a tight labor market, wages are higher, and we've seen a lot of pressure lately from big retailers, especially from their unions what do you expect on that front? >> as part of one of the things we did several years ago, we decided to invest in incremental $500 million in wages. we've actually invested $1.2 million in incremental wages and our total average hourly rate has increased from $17 an hour to $22 over the last four years. our teams have been able to work together to work at process improvements and other things. we've been able to take over a billion dollars a year of cost out in things the customer
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doesn't see so we can afford to pay our associates our associates have been through a heck of a lot during the pandemic and we're incredibly fortunate we've been able to do that in addition, we've added incremental pay for supporting and improving pension benefits in terms of the sustainability of those at well. >> you have about 500,000 employees or so? >> 500,000. >> and you're hiring is it ill. >> absolutely. >> how are you finding the hiring process and do you assume wages will continue to rise? >> we assume wages will continue to rise. right now we have about 20,000 openings we have a lot more full-time people than we had before, and that's one of the things that we make sure we're giving a great customer experience by having more full-time people than we would have in the past >> wages keep rising, food inflation keeps rising not what the fed wants to hear rodney, thank you for the time rodney mcmullen, ceo of kroger. i want to show you what's happening with the market
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because the nasdaq continues to gain, up a third of 1% right now. buying in netflix or meta. s&p only down 0.4 of 1% and the dow continues its recovery as well it's now downonly 150 points. coming up next, is the market nearing a sustainable bottom mike santoli looking to break down a key indicator of exposure to equities. later, we'll talk to the vp of meta's global business group about the latest read on the advertising market and competing with tiktok and twitter for ad dollars. beig bk "osg clin bell." 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.
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well, this is a bit of a change from what we've seen friday and some of the other recent final hours of trade. we've now got energy, technology
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and consumer discretionary in the green. the nasdaq has turned positive in the last few minutes after being sharply lower earlier in the session. the dow is down only 59 points mike santoli taking a look at how the recent volatility is impacting positioning for investors in the dashboard what do you see? >> yeah, sara. it's actually very defensive not at extreme extremes, necessarily, but in the bottom 10% of all readings since 2010 this is a deutsche bank composite equity bank positioning. it's not surveys, it's actually how people are exposed to equities right now through a combination of measures. you'll see it right here so the s&p down 15%. this was about a 15% high-to-low drop in 2015-16. this was the 20% decline at the end of 2018. so it tells you you're getting in the zone of when you might be able to say that the market is looking a little more sold out obviously it can go deeper, things can get nastier this is 2011 where we barely
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touched a 20% drop we had the sovereign debt scare of 2011. so it's one of the elements of why people are looking for perhaps some short-term relief eventually, even though the tape looks a little broken. we tested new lows for this move today and now we're coming back off it sara, you mentioned this late-day comeback. a week ago today we saw a nice one as well. a sell-off and more than a 1% recovery into the close. didn't say much about what came next, but certainly better than the alternative. >> what came next was another wave of selling as we see the recovery continue. mike, what about the fact that it's being led by tech the chip stocks are up a lot today. some of the beaten down communication services stocks, like a meta or netflix up today. what does that tell you given that we're seeing this rate move continue usually that's a part of the market that gets hit. >> i think it's mostly a matter of the laggards getting a little bit of relief. it's kind of a first in, first out type of effect
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when you do have some people looking to get a little bit less negative going into a fed meeting, a fed decision on wednesday, people have it in their minds that last meeting in march, that was the event that swept away a potential catalyst and actually gave the market room to rally in one of its best bounces. the bounce didn't hold it's definitely in traders' minds you don't want to leave too negative when the market is getting oversold and you have one of those big catalysts less than 48 hours away. >> a long way to wednesday, though as we see this continued recovery, the dow down 31 points at the top of the hour we were down near 500. coming up, the vice president of meta's global business group of whether she's seeing signs of an advertising spending slowdown around the world. later, we will discuss whether it is time to buy those llffhiye f tafter a nearly 20% se-o ts arorhe group. we'll be right back.
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what a comeback for stocks in this final hour of trade. the dow about to go positive it looks like it's just ticked up there a moment. it's down only 37 points it was down more than 500 just an hour ago or so. s&p 500 also positive and the nasdaq led the way today it's up 0.8 of 1% continuing to build. this despite the fact that treasury yields are higher, the dollar is stronger both of those have been big headwinds for the market lately, butclearly there is some buyin and it's coming in some of the beaten down places like technology, consumer discretionary and communication services communication services a notable winner today up 2%, gaining steam in the past 30 minutes or so
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meta is very much a part of that strength today, up 4%, sharply outperforming the market the past week. joining us now, first on cnbc, is this -- is nicola mendelson thanks for being here. >> it's great to be here. >> clearly meta is in a better place than a week and a half ago. there was a huge sigh of relief on user growth and yet we did see the slowest ad growth in about a decade since the company went public, i think so that's your business. what are you seeing right now as far as appetite to spend from the big advertisers? >> so we are seeing user growth out there. it's been a bit of a tricky period for the overall market but also in particular the tech market what advertisers are saying to me and that's kind of the business that i'm in is that they very much see us as an important place to reach the customers that matter to them to
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be able to help them grow their business they're excited about the advances that we're seeing with reels, one of our fastest growing products ever, taking 20% of time on instagram now they're excited about monetization opportunities there. they're leaning in with us on all things commerce and messaging as well so there's a lot and they see the road map that we have ahead and they're excited about it. >> but you are affected by the macros we saw the slowdown in europe clearly. is there more to come on that front? >> so i think all the business leaders that we're talking to here have been talking about the slowdown as a result of what is happening in europe, with the war as well. we're also seeing some of the challenges that have been talked about more generally around supply chain the pandemic, which let's not forget is still impacting people, and also different businesses in terms of not having people in there but what i'm very excited about is the fact that with the users that we have, with the engagement that we have with people on our platforms that we're a fantastic place to help people grow their businesses
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so another topic that's coming out very strongly here is around the meta verse everybody is talking about the metaverse. >> but i do wondering if the pivot that you are being forced to make forward video to compete with tiktok and toward keeping engagement and user numbers up in light of what we've seen from competitors puts a crimp on what you're able to spend right now on the metaverse and to focus? >> so what we've seen, we're a tech company and i've been at the company almost nine years. we've made some very strong pivots before. we know the playbook, we have the muscles in how to do that. we're investing at the moment not just in the metaverse but also on the core business as well we're investing in personalized advertising, we're investing in privacy, we're investing in data and brand safety with video being over 50% of the time spent on facebook, that's an important product that our advertisers want to be able to utilize, so that's why we're leaning in there at the moment
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as well, which is exciting. >> when does the metaverse, as zuckerberg envisions it, as the pivot for the company, when does that actually come to fruition >> so the fully realized version, that's some years off but it's actually a continuum of where we are today we're already seeing a number of businesses jumping in that are utilizing a full video suite of opportunities there and ad products but if you've got a question, you can go experience what a virtual restaurant feels like we're seeing many more advertisers making augmented reality filters and ads. makeup companies like ephora, you can try on the product walmart sold out on a desk where you could take a picture and put it in your living room so it is a continuum of things that we're seeing before we get to that fully realized vision. >> how does the twitter deal,
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elon musk taking it private, affect facebook or meta? >> that's not something we're focusing on. certainly a lot of conversation about it at the moment here at the conference one of the things i'm focusing on is what i can do to help the advertisers get the growth that they need. >> is twitter a major competitor on the ad side of things >> as an industry we face a lot of competition i think sometimes people look out at the tech market and think there isn't, but there is a huge amount of choice out there what i know and what i'm confident about is we've got the very best ad products that are out there. >> as far as consumer behavior which you mentioned, we're in a weird place coming out of the pandemic there are some serious questions about users and engagement we saw the netflix subscriber growth and just how we're changing our behaviors and whether social media has peaked. how do you see that? >> what we're seeing and we just reported that our user numbers were up. we're also seeing normal businesses both large and small are learning lessons from the
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last couple of years about how they can reach customers in more efficient, more effective ways that's where the whole growth we're seeing in messaging is coming to fruition because it's a much more personalized experience how you can get information backwards and forwards to the customer as quickly as possible. >> nicola mendelson, thank you for the update i'm doing a panel with her later today. she was the head of global business strategy at facebook. when we come back, stocks staging a major comeback the dow firmly positive, up 87 points it's all happened in the last 30 minutes. look at the nasdaq, it's zooming now, up 1.2% what a crazy comeback. jetblue feeling blue after spirit rejected its takeover offer in favor of its merger with frontier. we'll tell you the latest on the isdding war and keep tabs on th turn-around with 24 minutes left of trading. we'll be right back.
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welcome back check out some of today's top search tickers on this first trading day of the month of may. 10-year yield takes the top spot the 10-year yield is just under 3% we got past the 3% level for the first time since 2018. it just keeps on selling bonds and pushing yields even higher ahead of the fed's double dose rate hike and potential turning of the balance sheet set to happen this week amazon continuing its losses from last week, down 1%. apple not participating in the tech rally that we are seeing right now. tesla is and it's up 2.3%. the s&p 500 unbelievably turned positive after a big decline earlier and it is technology stocks that are leading along with communication services and energy amazon i mentioned under pressure after a bearish note
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from wedbush coming up, we'll discuss whether more pain is ahead for that stock that story, plus scott minor's biggest fear right now for the fed ahead of this history meeting that we are facing this week we'll be right back in the market zone, next.
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we are now in the "closing bell" market zone. mike santoli is here to break down these crucial moments of the trading day as always. plus our own phil lebeau and jetblue's battle for spirit and tim on the outlook for tech stocks which have turned around
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and this market is higher across the board. we've been gaining steam all hour long after some real selling pressure earlier in the session. the dow was down 527 points and it is now positive we've got reuters reporting this afternoon that elon musk is talking to high net worth individuals and private equity firms about getting financing for his twitter bid. david faber talked to the ceo of apollo about that this morning here's what he had to say. >> if you guys had participated in any way, it would have been on the credit side. >> yes. >> people seem to be misinterpreting, was that of potential interest to you? >> absolutely. >> why >> for the same reason twitter and elon's holdings in tesla are infinitely bankable. the question is whether it will be a good investment and that's what elon and the entrepreneurial team does with it from the equity side. >> david joins me now with more, as we're both here for this conference so what have you learned
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>> it's not clear to me that there's any truth to what reuters is reporting you heard mark say, sure, we would have potentially been there. he got $13 billion from the banks, a $12.5 billion margin loan the real question is whether he can syndicate the $21.5 equity guarantee that he's made that's a big number. but that's not where apollo would necessarily play or other firms that are providing credit, sara they would be playing on the credit side. so the question then becomes can you lever it even more if elon can somehow take his equity commitment down a bit and replace it with debt that's not what i'm hearing. listen, this is an extraordinary transaction inso many differen ways, including of course even the enormous equity check that he's writing >> is it bankable? >> yeah. >> so does any of this question
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whether this deal will get done, these financing nuances. >> no. that's a good question, but no, i don't think so the interesting part will be that musk equity guarantee of $21.5 billion. you've got $12.5 billion that's a margin loan. $13 billion in traditional financing, just paid back by the cash flow of the acquired company. but the $21.5 billion, he's already sold a bunch of tesla stock to try to help pay for it. how many people will be go out to to try to come in for a billion here, a billion there and believe that he's going to transform the business in a positive way i think that's the key question. we do believe and there's a belief that he would love to whittle down thatt equity check if he can. >> and what happens to tesla stock. it's up 2.5% the whole nasdaq turned so i'm not sure we can turn it on this but it has been a question for
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tesla as it relates to his sales? >> clearly he was part of the selling pressure that we saw unclear how much more he can raise in terms of stock that's not already committed or that he wants to in some way he's the world's richest man there's plenty of ways for him to go about doing it perhaps there's some sort of security that some of these credit funds can come up with that's a hybrid itself that can replace equity but my sense would be he's simply going out to marc andreeson. hey, do you want to give me a billion dollars? or maybe some sovereign funds. unclear whether he's going to sell more tesla, which is a key consideration in the marketplace. >> so we're here with all the biggest deal makers in the world and i'm sure the tesla story comes up in conversations. is it just an anomaly? what does the pipeline look like now that we have seen valuations come down for a lot of these companies? >> a period like obviously
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twitter is a one-off the world's richest man spending $44 billion, $21.5 billion of his own money basically is not something you see very often, if ever the volatility lends itself towards not doing deals right now. it's very hard to price your sale price and/or what you want to buy at. we have this adjustment in multiples right now, as you well know, sara so you typically see m & a get pushed back a bit in that kind of environment, but there's still a pace of deals. >> and i do wonder if it's the public companies that look more interesting to some of these pe giants than the private companies just because of what's happened, the carnage out there. >> and the other is how you market your products there are hedge funds that have enormous investments given the downdraft in overall valuations. where are they marking theirs. >> it feels like it needs to come down. >> yes. >> and that takes a few months.
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>> yes. >> david -- >> nice to see you. >> i'm learning a lot. >> very nice to have you here at this conference that we've been covering for years. >> i'm thrilled to be included david faber with news, as always. >> thank you for having me, sara. we have seen a tremendous sell-off turn-around big down day turn into an up day with the dow up 17 points right now. s&p and nasdaq both attempting to hold their gains as well. mike santoli, anything spark this turn-around we're seeing yields higher, dollar stronger. those have been pressures. what's the story >> i don't know that there was necessarily something in the way of a headline that sparked it, but we're trading very technically right here we probed to new lows for this move got the s&p back to these levels from march 2021. a lot of folks were looking at 4080 or so you mentioned yields are up. yes, they are. but the mechanical selling of stocks started late this morning when you finally got a tick of the 10-year treasury yield to
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3% it backed off then we didn't make new highs in yields, it just wavered around there. i have no idea if it matters, but the regular session in treasury futures ends at 3:00 eastern and that's when we released higher. i just think it's very much a low conviction market. you have these air pockets because you have this very stressed tape. sometimes you pull the rubber band back and it snaps, and sometimes it snaps higher. >> i think factory data didn't help either, coming in a little light from the u.s take a look at shares of the airlines we're watching spirit in particular hit pretty hard after the carrier's board rejected jetblue's $33 per share takeover offer because it doesn't believe the deal would win approval by regulators they offered a $200 million break-up fee spirit agreed to be acquired by frontier back in february in a cash and stock deem worth
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roughly $22 per share. phil, where does this leave us is it over or could jetblue come back >> oh, jetblue could come back it's a steep hill given the fact spirit has made it clear that they do not think any combination with jetblue would get regulatory approval. so that sets up the question, does jetblue -- they hinted that all options are on the table do they go hostile here? do they do a proxy battle? do they do a tender offer? you have the spirit annual meeting taking place next week i think we'll see something happen here over the next several weeks. whether or not it is a hostile offer or if jetblue says we made our best effort, we made two runs at them and spirit said no. hard to say at this point. clearly, we have not heard the last of this. >> clearly so, phil, any other
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consolidation possibilities as a result of this are there other players in the mix? hawaiian or alaska, would they go after them? >> no, not really. i don't think so i get no sense from talking with people in the industry that there are other options that are out there that jetblue is looking around i don't see this as jetblue saying we have to do a deal just to do a deal jetblue believes that spirit and jetblue combined is the best option that's out there and that's why they're making this play >> yeah. see if they come back. phil, thank you. phil lebeau. take a look at shares of amazon off the session lows. this follows amazon's worst daily performance since 2 006. that was friday after the company reported a net loss and later than expected revenue guidance some on wall street are starting to turn a bit more cautious, like wedbush mike, the stock has recovered a lot, it's barely down right now, but has there been a big change
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in thinking about this company >> not in terms of formal sell side approach to amazon, no. this is kind of a lukewarm downgrade of an outlook, but it's not -- it's not to a sell you've still got 48 out of 52 analysts with buy ratings, four holds. so in other words you almost like to see more downgrades. the stock is a third off of its highs, and so it still seems as if just the multi-year brute force appreciation in amazon seems to have completelygotten analysts in this mode of not wanting to fight the stock i'm not saying you have to capitulate and turn negative but it seems like it's not necessarily going to be the play caller on where this one moves next. >> what is valuation telling us about amazon what's it discounting at this point? >> it's always tricky in terms of figuring out valuation. amazon's earnings are kind of a residual for how much they're
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investing in a given quarter there's no way to call it cheap but it's a whole lot cheaper than it was a year and a half ago, based on a reasonable earnings outlook i think you might start to see whether buy side or sell side further calls for some other restructuring of the business. a lot of investors in amazon aren't thrilled about owning the logistics and all what it takes to run the retail side of things not saying that there's a split in the offing any time soon, but that's the kind of chatter that you want to see to show people are getting impatient with it. >> meantime, amazon scoring a win in a labor union vote in new york city. deirdre bosa has been following that. >> this is the second staten island warehouse to vote on unionization 618 against the labor organization, 380 for the alu, the amazon labor union our audience might remember that first staten island facility did vote in favor of unionization.
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that was a surprise victory. there's another vote happening in an alabama warehouse that is still being decided. but efforts have gained traction today's defeat may be a setback for organizers, but this is very unlikely the end of their efforts. they now have five days to appeal the alu tweeting that this fight has just begun, sara. >> deirdre bosa, keep us posted on that. as amazon just turns positive on the session, it follows stocks staging a mass i've comeback into the close the nasdaq leading the rally after closing at a 52-week low on friday. joining us is tim lesco. do you have any faith in this comeback would you be buying into it, that the worst is behind us, tim, or we just simply don't know at this point >> i think it's really hard to try to pick bottoms in the market or pick tops in the market certainly you're having a
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revaluation of the market and a market that was due to correct at some point. hard to predict today. i think what we're seeing is over the long run we've had a very high allocation to stocks and people are starting to rebalance as there's some competition for stocks in the marketplace. >> but do you think that earnings for some of these mega cap tech names in particular, like meta or alphabet or apple or amazon change the story on -- change the appeal of these stocks for so long it was about higher interest rates you don't want to go into long duration technology names. but now there's a real focus on fundamental slowdown for some of these giants and the fundamentals they are facing. >> we've been importing inflation factors from other parts of the economy whether it's the conflict in europe or supply chain issues creating higher commodity prices and higher grain prices. so you have a lot of things that don't really affect the technology sector affecting the rest of the economy.
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so act the higher interest rates, you might think that technology would be a pretty good place to invest because they don't have the same inflationary pressures on the costs you've been sold so not really bearish on technology, we're having the highest valuations come in when interest rates come up. >> is there anything that you like any massive dislocations as a result of the selling? >> any time you have massive dislocations in the market it's time to seek bargains or reasonable prices for things that have good earnings. tech at large has had pretty good earnings. i know we're picking on retailser that are a combination of retail and tech because their retail is struggling a little bit more i don't see any reason why the long-term trend of secular technology isn't going to continue >> and finally, a lot of people are making the valuation comparison to the dotcom bubble, to other periods in the market
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like the financial crisis in terms of some of the moves we're making how do the tech valuations stack up now versus some of the other pain points in history >> the valuations going into this correction of the market were much better you had an s&p 500 at 22 times earnings and nasdaq at 60 times earnings we did not enter this correction at those levels even though the interest rate environment was half of what it was in 1999-2000. so hard to make a real good comparison we also don't have the pressures of y2k that led up to the bubble in technology. certainly it's never fun seeing the volatility we're seeing in the marketplace now. >> tim lesko, thank you very much we're up now 80 points on the dow, nasdaq solidly higher mike, what do you see in the market internals as we go into the close? >> they have improved. not even that terrible when the
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market was at its lows take a look at the advancing versus declining volume. so somewhat more to the upside than the downside. still a pretty well mixed day. the nasdaq looks better on that score. did want to take a look at a balanced portfolio, 60/40. this is the aor etf that reflects 60/40 you see it barely outperforming stocks, the s&p 500 year to date but that's a nasty move in a balanced portfolio on a three or four month basis shows you why people are on the defense. so volatility index could be significant coming off of the 35 level, pulled back toward 32 by the close. three points off the high sometimes means something. in a very short time maybe the fever is getting reduced even though it hasn't broken yet, sara. >> mike, thank you less than a minute to go here into the close and the turn-around holds. the dow after being down more than 500 points will end higher
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led by microsoft s&p up more than half of a percent and the nasdaq gaining 1.7% into the close. a big rebound especially for technology, all the big names. amazon joins the party as well, as microsoft leads the qqq that's going to do it for me for "closing bell. i'll send it now into "overtime" with scott wapner. scott. welcome into "overtime." i'm scott wapner you just heard the bells we're just getting started in just a little bit i'llbe joined by tom lee. a new month beginning for your money, it's gotten off to a volatile start an interesting turn in the close today. does it mean more pain is ahead or are stocks near a bottom? we begin with our talk of the tape a big call by someone who's gotten this repeatedly right eric johnston who now says h


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