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tv   Power Lunch  CNBC  May 6, 2022 2:00pm-3:00pm EDT

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that's why you see bitcoin outperforming some of the smaller cryptocurrencies and they're not seen as having the same bottom as bitcoin, at least. not getting sure participation thank you very much. kate rooney. economist dave rosenberg says there was a key piece in today's jobs number headed in the wrong direction and it has him worried and he joins us next on "power lunch" which begins right now. ♪ ♪ kelly, thank you very much welcome, everybody, to "power lunch. i'm tyler matheson massive swings, this hour we'll talk about how to navigate the ups and downs and protect your investments to the extent you can. we'll ask our guest for sectors and stocks that can ride out the volatility and a longtime investor is finding opportunity in tech. we'll tell you which stocks she's buying, but first, kelly here to get us caught up on the markets. let's do it. it changes all of the time
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these days, nasdaq's down 256 and we're still off session lows and we were positive earlier today and can't manage to hold those levels and the nasdaq dipped below 12,000 earlier in the sell-off for the first time since november of 2020 and we're 138 points above that level and it's still down 1.5% right now energy in the green, chevron, the best performing dow stock and as oil prices rise, wti rise above 109. apple, bellwether reversing course and it's high are, trying to bring the market with it and its gains evaporating and it's up half a percent right now and walgreen's is one of the dow leaders and the flipside, disney is down, and it doesn't help that adidas and underarmour has tough trades of course, it's the tech sector that's been rattled the most let's get to christina partsinevelos at the nasdaq with today's biggest movers. >> rattled, uncertainty.
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it all remains extreme especially after yesterday's 5% drop we are still here and still in the red and that means five straight weeks of declines and it's been decades since that losing streak. if you look at the nasdaq over the week, it was down about 1% so far just before coming on set. treasury yields, though, they continue to matter putting pressure on equities why? because bonds act as a barometer for inflation and investors' view of whether fed policy error might ensue. the market has taken the yield of 3% with confidence after wavering this 3% psychological level earlier in the week. health care, technology taking a biggest hit led by biotech names by ilumina, it and you have moderna down over 6% moderna is a very good example of the volatility because moderna was up about 3% to 6% on monday, tuesday and wednesday and yesterday and today you're seeing moderna hover 6% lower
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and quite a lot of volatility there and the biggest swing to the upside because it's not all bad on the nasdaq 100 are led by monster beverages and amd. bottom line, elevating reaction in fed policy is causing a rise in bond yields and a steady rise in share prices. >> in a nutshell that sums it up there are stocks that investors can turn to to ride out the market turmoil savita is with b of a security savita, welcome. i want to get to that category of stocks that can outperform or provide some protection in this volatility, but i want to start by something that was in the note ireceived of your views and that is that the underpinnings of the market over the past, let's say, 14, 13 years since 2009 and the turn have basically been turned
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inside out and i'd like you to go through what some of those underpinnings were and what the new new is >> sure. yeah i think we're at a really pivotal time in terms of kind of a massive regime change. so think about from 2008 to just, you know, a couple of years ago, we had awe very accommodative fed and a com dative and fiscal policy which kr crescendoed and all of the money went to corporates and consumers and the bad news is the fed is about facing in terms of easing monetary policy to tight monetary policy to quantitative easing and we're seeing a massive inflexion just in liquidity and that's one big change the second big change that's worth paying really close
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attention to and has been a boon for u.s. companies is the idea that we've been enjoying this period of globalization. so companies have taken advantage of cheaper costs of stuff, people, arbitrage just any sort of arbitrage you can think of outside of the rest of the u.s. has taken place and we've seen margins for the s&p demonstrably increased >> you've kind of got a deglobalization theme at work here. >> exactly a guest about an hour and a half ago said you cannot count on the old guard winners of that prior regime to kiss you back now and that you've got to look elsewhere and that elsewhere for you is health care christina partsinevelos pointed out that health care has been one of the laggards today, but health care is such a broad field. she was pointing to a lot of the biotech stocks and a lot of the
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names on your list are not biotech stocks, but are in health care. explain why health care and which names. >> yeah. so i really think that there are microreasons to like health care i mean, if you look at the sector, it's less economically sensitive than most sectors in the s&p 500. it's a sector that generally does really well during a period of economic uncertainty. it's more defensive, no matter what, we will take our medicine and eat and staples and health care are the recession plays i think what's also interesting about health care today is investors who are looking for companies that have their own story, so idiosyncratic risk rather than just a macro play on the cycle, health care is a sector and that's why the analyst gave us stock ideas in terms of which stories they saw as the strongest and the most
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geared for a better environment ahead. you know, some of the stocks that they mentioned were humana, ticker hum, thermo fisher, boston scientific, stryker, cvs so there's a whole array of different types of companies to your point and it's a very heterogenous sector. it's overall less economically sensitive. it's got a strong dividend yield, strong dividend growth and it basically offers yield growth and defense at a very reasonable price i mean, if you look at the valuations of the sector we are almost at rock bottom relative to where it is trading in the last cycle, despite the fact that health care companies literally saved the world in 2020, they haven't really caught a bid until this year. we're seeing the sector
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outperform and that's what you want to pay attention to is the slow momentum change. >> right. >> moving out of growth here, longer duration sectors like tech into some of these more defensive, but still growthy sectors like health care >> savita, i wish you nothing but good health. >> thank you like wise. >> that wouldn't be as profitable, though >> let's get to the economy. the ten-year three-month spread is flashing some pretty bullish signs. instead of a seven and a half year high as rick santelli is pointing out, this as they continue to add jobs at a rapid pace more have been add the in the last eight months and our next guest doesn't think it is as rosy as the headlines would suggest. dave rosenberg is chief strategist give us the bear case. i don't know if the bear case would be bullish for the markets at this point or vice versa, but tell us what you think is going on >> well, look,i think the labo
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market for one thing is a lagging indicator and everybody focuses on the non-farm payroll headline which, of course, came in above expectations, but the household survey was a big negative and it was a survey which amazingly nobody talked about today since april of 2020 and so what i would say is a couple of things on the employment side is when you get this divergence between household and payrolls, it usually takes place at the tail end of the cycle and usually the household survey when it starts to go down at a time when payroll is going up and that happened in each of the last four recessions and that's what you want to pay attention to and i'll go back to the most important thing that came up this week which was the adp number they don't tell you what companies are doing and small
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companies are in the weeds when it comes to having a front window on the economy. in the past three months the small business sector has let go 105,000 people, kelly and that happens at the peak of the economic expansion the large companies and there's a large company bias in the non-farm payroll survey. they're starting to let people go and that is a phenomenal, albeit troublesome indicator leading into the economy out of the jobs market that everyone seems to think they're not red hot and they're not looking at the forest past the trees. >> one of the things that will be super annoying over the next 12 months is we look like we could be headed for a recession either because of the factors that you're seeing with will ready a loss of momentum and kind of the way i've been looking at it is because the fed isn't tightening enough and they'll have to slam on the brakes in the future my point is if we get to a
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recession it is like someone will say, see? i was right. see? they would have tightened more and we wouldn't have to slow this much. see when i'm saying? i think the markets are trying to figure out what's up and what's down. >> well, it's because -- i mean, this is the most complicated situation that we've ever seen in our lifetime. we have a shooting war in europe coupled with an ongoing pandemic and maybe in the u.s. and canada we're starting to love life again, but that's not the case in china where they shut down port cities to millions of people it seems like every couple of weeks which has an impact on global supply chains so it is a very complicated situation right now, and so i say that -- we've got these exogenous price shocks we can go back and talk about how strong demand is
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it's not about how strong demand is real gdp and just demand in the economy, people don't realize that if you look at the monthly, gdp numbers, they're running from october march i know you see the chart of the three month, and it will cap up with the fed funds rate. >> naturally is if you're looking at the relative stocks in the s&p 500 they're telling a very significant story that's not consistent with the bullish theme from a steep yield curve to benefit from a three hef month treasury bill. the bottom line is we have this massive exogenous price shock and no longer a demand story that was a demand story and the supply story it's just that the supply curve globally continues to shift to the left and now you've got central banks saying enough is enough
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we are now going to start to have to offset that by shifting the demand curve to the left and that's how you get the recession and actually, i would say that most people calling for a recession they'll tell you, kelly, it's a 35% chance so that way if you get it, i did say 35% and next year's story. no, it's already in the data, real incomes of the united states lower than the past eight months >> if they tightened real incomes wouldn't be as bad >> well, no. i agree with that. you're caught between a rock and a hard place. >> we have to go. >> if it was inflation caused by demand that would be one thing and you get the inflation shock and now the interest rate shock. either way, we get a recession out of it. >> exactly exactly. on that note, dave, thank you very much. it's good to see you today david rosenberg. >> coming up, looking to get back into tech with the nasdaq down 13% over the past month well, our next guest has a stock
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she is eyeing for the long term. plus three stocks, three trades. these are aren't necessarily beaten down names, but one's quite the opposite they're holding up and trading at least 3% higher over the past week there you see them do these bright spots belong in your portfolio as we head into break a look at peloton which are trading at an all-time low the company is targeting potential investors. it reports its quarterly results tuesday. (fisher investments) in this market, you'll find fisher investments is different than other money managers. (other money manager) different how? aren't we all just looking for the hottest stocks? (fisher investments) nope. we use diversified strategies to position our client's portfolios for their long-term goals. (other money manager) but you still sell investments that generate high commissions for you, right? (fisher investments) no, we don't sell commission products. we're a fiduciary,
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obligated to act in our client's best interest. (other money manager) so when do you make more money, only when your clients make more money? (fisher investments) yep. we do better when our clients do better. at fisher investments, we're clearly different.
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slaying is our business. and business is good. unbeatable internet from xfinity. made to do anything so you can do anything. ♪ ♪ welcome back to "power lunch. i'm dominic chu. stocks are well off their lows of the session and still plenty of red on the screen with the nasdaq on pace for their fifth straight week of losses, so we wanted to take a look at some of the areas that worked, actually this week. take a look at the semiconductor etfs like vaneck semiconductor, ticker smh and that's lower today and still up 1.5% this week and you look at monolithic power on semiconductor posting strong gains this week, as well. overall, so those names showing signs of life. i'll send things back to you. >> despite today's downturn in the names they're up
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>> thank you, dom. >> as the volatility on the street continues our next guest says it's time to focus cold hard cash that is there now and not some promise of profits. joining us for interesting looks for stocks she's been watching chief investment officer with wheel house capital. good to have you with us real, sustainable cash flow. why are those metrics so important right now as we go into what may be a highly turbulent, economic period >> ty, i grew up in the private equity industry in the buyout space and the training has always been cash is king or in this case, cash is queen at the end of the day and your moments of turbulence in the macro economy and turbulence in the markets, having good, free cash flow generation and having a strong balance sheet and having the ability to weather the storm that was proven to be successful over the long term in both the private and in the private capital markets and the
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names of those attributes. >> we will get to some of those names in just a minute let me take you back to your prior life in private equity and ask you if given the market conditions today you would be sort of salivating over potentially buying some companies and do you think your former colleagues in private equity may jump in and do some deals? >> well, i'm very much don't know that well, tyler and when i talk to everyone in the private equity whether it's those buying the buyout funds and pitching the ideas for the next big deal, everyone is definitely looking and they're running the screens and they're looking for high-quality businesses where the market caps and the enterprise values now make doing a deal attainable sizewise because the capital structure can be supported and where there may be some responsiveness by management teams and those to have those conversations and i would say, tyler, the issue rid
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now in this volatility it is very difficult to bite the bullet and to entertain those seriously the private conversations. so we need a little bit less of a roller coaster before those decisions can be made in a way they can be executed >> with that in mind, let me get a quick thought on the buyout of twitter by a very private investor and is this one of those companies that would be on your buy list or truly, my question is -- he has a right to do whatever the hell he wants with his money, but shouldn't he have put that $40 billion into finding ways to find more nickel or more cadmium or more base minerals that he's going to need for his batteries? >> tyler, it is interesting. elon musk is a private individual and when it comes to engaging in the public forum ese far from private and what he's doing with twitter is very interesting.
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wh what i would say about the consortium is not the traditional public equity and it's not buyout money and they have musk listed and whether it's sequoia or bessemer, a private individual high net worth individuals and venture capital. when i think of how that business could be run as a private company, the governor situation will be incredibly complicated. that's going to be a business that will be highly levered and it's not clear there is enough cash to support that kind of diddent and how you have all of those folks in a room trying to make decisions around operating growth and operating excellence and it is very challenging, i've got to imagine >> let's go to your choices and real cash flows and i have to ask what they have in common
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delta, and alphabet which is your way of getting back into battered tech. >> i would put booking and delta into one bucket and there's huge pent-up demand to enjoy visions even in a recession. that was in early 2020 and at the time i was in las vegas and i had just been evicted in my hotel as it was being shut down. a well known music executive who said as long as it lasts when it's done there will be enormous pent-up demand, for which he said vegas would be back and hitting 55 to 65 because that is fundamentally a strong cash flow business and we're seeing record demand levels come back. that is a $4 billion cash flow business and that is one that's seeing record search, interest in traveling both domestically and internationally and i'm enthusiastic about those
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>> i'll have to leave it there, but you've left me with the phrase of the day. pent-up demand for vice. ann berry, thank you. >> thank you. our coverage of the volatile market continues materials, consumer discretionary and industrials are some of the worst performing sectors today and as oil prices climb up below $210 a barrel mewh "weluh"t the top performing nas enpor nc returns. meet jessica moore. jessica was born to care. she always had your back... like the time she spotted the neighbor kid, an approaching car, a puddle, and knew there was going to be a situation. ♪ ♪ ms. hogan's class? yeah, it's atlantis.
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it has been a wild, volatile week on wall street to say the least. let's look at where the money was moving in etfs energy etfs brought in $64 million this week and more than a billion dollars so far this year that's where a lot of the action has been the biggest reason for this week's action, europe taking steps towards a complete ban of russian energy imports eventually also, opec keeping production levels unchanged and as stocks get risky, some of these high dividend paying energy companies look more and more attractive. look into the big etf movers this week. the united states natural gas fund which tracks the nat gas
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price up about 10% there you see it, a one-week change up 10% down a good bit today. the xle spdr energy up about 8%, 8 2/3 and higher and the vanguard is up 8%, as well the data come from our partners at track insight more information available on the ft wilshire etf hub. meantime, let's go to courtney reagan for a c nbz news update courtney >> hi, tyler i am courtney reagan, here is your your cnbc news at this hour russian officials did not comment on the accusation, but a state media reports that a dozen civilians and some children had gotten out of the city mariupol's mayor had said earlier that 200 civilians were trapped in a bombed-out steel plant. >> a spacex rocket successfully
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brought four astronauts home from the international space station overnight. they splashed down off the coast of florida near tampa following their departure from the space station after a six-month mission. it's been a busy day for spacex. the company founded by elon musk shortly after that splashdown, spacex launched 53 new starlink internet satellites. >> in a story appropriate for the upcoming mother's day holiday. a new census said the median age for women giving birth hits 30 for the first time this is a significant financial component with women investing in their education and careers so they can be better off financially when they do decide to have children with that, i will send it back to you, tyler and kelly, wishing you a happy mother's day >> the same to you, court. thank you. >> ahead to "power lunch," as we continue to watch the sell-off one market veteran says fundamentals matter more now than any time in the last 20 years. he will join us to explain and give us three names showing
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strong fundamentals. plus from fundamentals to technicals a number of stocks in the s&p 500 still holding above their 52-day moving averages and they're up 3% this week and we have those names and the trade ahead. stay with us here on "power lunch" with the dow wndo 355 we're back in a moment ♪ ♪ - hiring is step one when it comes to our growth. we can't open a new shop or a new location without the right people in place. i couldn't keep up until i found ziprecruiter. ziprecruiter helps us get out there quickly and get us qualified candidates quickly. they sent us applicants that matched what i was looking for. i've hired for every role, entry-level technicians, service advisors, store managers. ziprecruiter helps me find all the right people, even the most difficult jobs to fill. - [announcer] ziprecruiter, rated the number one hiring site. try it for free at
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>> welcome back, everybody let's get the snapshot with 90 minutes left in the trading week and everything going up across the markets in stocks and bonds, in commodities i will also even talk about some big moves and some solid reasons to own the fundamentals right now. let's start with bob pisani down at the new york stock exchange well, sort of. bob? >> kelly, it's -- we're closing essentially near the lows of the week we have another hour and a half. remember, 4063 would be a 52-week low in the s&p 500 we're not there yet, but 30 points you can move very, very quickly in this market tech is the story today and the story is mega-cap tech holding up better than speculative tech. what's going on is we're continuing to get compression in the multiple here and talking about a slower real estate market and all of this more speculative technology stuff
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continues to get hurt rather badly. heavily traded etfs, boy, there have been titanic moves and efforts to trade around the qqqs today. invesco qqq active trade and there is a short version of that that is the inverse version of it and that's the third one, sqqq titanic volume and a lot on either side for the triple qs. you have energy stocks and defensive names like utilities and consumer staples like kellogg's had good earnings report, campbell's and that's the leadership word on the plus side you want to know, kelly, how difficult it is to trade this market bausch and lochl is a very well known name, big eye care company and they were very excited about going public at the nyse 21 to 24 was the price target and the mid level was 22.5 they priced at $18 that was almost 25% below the midpoint, kelly and is that good
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or bad no, that's not good. that's the sign of a very, very difficult market and remember ipos it's not just about the demand for the company it's about how much demand there is for a stock in general and this was a difficult day for them to go public and they are above the initial price, but tough for them back to you. >> i was going to say at least they're above water. thank you very much, bob pisani. the dow is back near session lows and down 400 points and in the bond market the ten-year up this afternoon and rick santelli with more. >> yes, the long-dated treasurys after the fed meeting on wednesday. we did have an important jobs report today, but the fed meeting was important. look at the three-thai chart of two year since the fed meeting it's drifting lower and as a matter of fact, it's a strategic change from leading to following and here's what's leading the long end and the 30-year bonds and you can see the difference it's been a big week for the there are and i'll go quickly and here's a 30-year chart and
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we're near 20-year highs and whether you look at commodity currency and the dollar and it's hovering at the lowest half in 2020 and the dollar hovering near 20-year high versus the yen and onshore, offshore, take your pick you see the there are index is basically on pace to close at a 1.5 year high as well going back to november 2020 so when interest rates move up and other central banks are behind the curve, dollars get precious and the dollar index reflects that. back to you. >> thank you very much let's move to commodities now. strong dollar. you might think they're week and energy has been performing well as it approached $9 on nat gas and of course on wti crude and we're looking at almost $100 a barrel pippa stevens. pippa? >> hitting 99 cents this morning
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before giving back those gains and then some. the contract down now more than 8% and we do need to put this move in perspective and still up 11% on the week and holding above eight bucks. back in march we were at 450 that is a big move today's action is a combo of locking in profits as well as weakening weather-driven demand next week and moving over to oil which is higher and on track for a second week of gains the looming eu ban on oil remains in focus here. wti remaining at 109.78 and brent crude at $112.36 turning to energy stocks, the big outperformer today and up here almost 9% for the week. eog is leading the way following earnings that stock trading at a three and a half year high today and other notable movers include devin at a seven-year high >> it took these stocks a long time to break above previous
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levels pippa, thank you very much >> despite what we've seen in the markets all of the major averages are down 10% and 20% for the nasdaq my next guest says the bottom is not in and david trainor is with us and he's with research firm david when will you feel like maybe we've put in the lows? >> you know, i'm not good at timing the bottom here, kelly, but i think, look, the saying that counted on the way up don't fight the fed will count on the way down we've got years and years of excess liquidity that we have to unwind there's still a lot of really overpriced stocks out there. so we've not seen the pain and we've not seen the end of the speculative bubble popping and in the meantime, what investors need to take away from this is that it's time to sharpen your pencils and getting back to making sure you invest with real companies with real earnings you say we have years and years of hyperliquidity to drain out
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of the system. does that suggest that it will be years and years of the kind of markets that we've seen over the past six to eight to 12 weeks? >> tyler, i think that's the million there are question i think the fed has been looking to walk a very fine line and the question is do we rip off the band-aid and see the market sink and plunge the economy into recession or do we try to make this a gentle and gradual unwinding? never in the history of the world have we been able to make it a gentle and gradual unwinding. so it would be a feat never before accomplished and it doesn't appear that after the last couple of days they're going to be successful in accomplishing that feat this time around either, tyler, but i think that's what they're going to try to do and that's part of why the fed took such a gradual dragging their feet approach to attracting inflation they're behind the curve and the markets are catching up now and the fed is catching up to be
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behind the curve on inflation. >> cisco, carmax and ford, why those? >> mainly because they're cheap and generating cash flow they trade the discounts to the no-growth value. in other words, the stock price assume that their profits will decline. while the companies are generating huge amounts of cash flow and have great growth prospects and not top line growth prospects like we saw with popular tech stocks and they're growing 20%, 30% growth at the top line and zero at the bottom line, but all of these firms have great prospects for cash flow risk going forward while market expectations are for cash flows to decline. >> well, that's the theme of this hour, isn't it? looking for these cash flows, david, thanks so much. we appreciate it >> all right ahead on "power lunch," while the federal reserve has the tools to curve some inflation, it doesn't have the tools to influence say a war, global shutdowns of economies
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a lack of workers and reduced food output. veorhasana dives into what insts ve wrong about the fed right now. we'll be back in two minutes you'll always remember buying your first car. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine.
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welcome back to "power lunch. the s&p financial sector trading lower today and for the week and some of the bank stocks are holding up relatively decently overall. check out the etf, ticker kbe up by around 2% today and despite that still in green just a little bit there for the week. similar story with the regional banks trading in the green for the week, as well. take a look at citigroup, up about 6% so far this week. bank united shares up 9% and b of a, bank of america up 3.5% and keep an eye on some of those bank stocks. ty, back over to you. >> gotcha, dom >> the fed policy being blamed for much of that inflation, but in an op ed written by our next guest when it comes to fed policy investors may have it all wrong. there's only so much the fed can control, stopping shutdowns, end
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are wars and the supply chain, ron insana, senior adviser to schroders america. >> that's true there's not much the fed can do about the shortages, the supply chains or food imbalances or energy prices, right >> everybody is suggesting that jay powell emulate paul volcker. instead of being a volcker be a vulcan it's illogical to be going after inflation in this way. obviously, the fed needs to normalize interest rate policy and jay powell himself said as we heard we have two jobs for every unemployed worker. i just don't see where raising interest rates more aggressively as some have suggested and demanded that the fed do solves any of these problems. we are literally short people in the united states. not just workers we're short people the population grew at the
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slowest pace ever. it's a baby bust that started to reverse and we have immigration policy even as joe biden started to reverse that and again, even when it comes to food shortages, bird flu is in something like 37 states in the u.s. i would, you know, i wish that people would be looking at a more measured response from the fed and be looking at other solutions and other policy prescriptions that would change the outlook in the longer term, if not in the short run. >> so then, i guess my question is if i stipulate that the fed can't do things about bird flu or china would you -- are you critical of what they're doing or are you saying at the same time that we need some breaks and some good luck like covid, like bird flu, like the war. >> china is literally nailing people into their apartments and
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there are a thousand boats off the coast of china that aren't going anywhere and i'm not critical of the fed so much as those who want jay powell to be volckerlike. i'd rather he be mr. spock when volcker finally turned the corn or raising interest rates. >> do you think he's not thinking it through? what tells you that he's not >> certainly the people around him aren't they're thinking that they'll defeat inflation by raising interest rates when it's not the problem. fiscal policies are restrictive this year. when you look at first quarter gdp, the decline in government spending took three percentage points off growth in a minus 5.4% grow thor and we would have grown otherwise, nor should we at this juncture and if you have fiscal tightening and monetary tightening, it seems to me that the fed is hell-bent on doing what volcker did which is to create a recession to drive down
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a recession when they're not analogous in any way, shape or form >> thank you, ron. wish your wife a happy mother's day. >> you as well, sir. >> thank you >> the whole time, ron, we'll bring you back and have a debate about inflation and the fed. anyway, team full-pointhike. three stocks, three trades and we have three names that are holding up amid the volatility not only are stocks higher this week and they're crossing key technical levels to it is upside our trader is taking his position on these bright spots but you can invest in them. at t. rowe price, our strategic investing approach can help you build the future you imagine.
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welcome back to "power lunch. believe it or not amid this mega two-day sell-off there are stocks holding up not just in performance but even on the technicals illinois tool works, for instance, three stocks that have surpassed and stayed above their 50-day moving average and are up about 4% let's bring in our trader to see which of these names are worth owning jeff kilberg is a cnbc contributor. jeff, great to have you here today. would you pick up illinois tool works? it's up 5% this week. >> we beat the drum a lot on
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industrials. illinois tool works, located about 15 minutes away from the office here in chicago, this is a name for the first time to your point that is back above its 50-day moving average. all of the names we're talking about is above the 50-day moving average. they beat q1 earnings by 2% and sales beat by 5% but something comparable is john deere. it's a little more expensive than john deere but only down 15% year to date i think it has the ability to move. it's come really close to its 52-week low but i like itw. >> your picks here go with the idea that we heard on scott's program. you've got to change your playbook now you can't go with the old -- the old winners, so your second one here is borg warner. i've not heard anybody here over the past decade, get me some borg warner now, that's what i want and get me some illinois tool, that's what i want. >> no doubt about it
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and we've talked about this new playbook we had to have this wrestling match between growth and value but boring names come back in vogue. i don't own this name yet. it's being considered on our list this is the leading auto supplier certainly we've seen a lot of car market inflation we're looking for that to abate. but you really dive into borgwarner which is not a name you talk about this is a $9 billion market cap name, very small market cap. at the end of the day they're going into ev and doing a couple of thing i'm not buying yet i've owned honeywell instead which is $132 billion market cap but there's reason to dig into a name like borgwarner. >> it's that rotation from what you know to what you don't know. xilum, a water tech name do you like it >> i do. we've owned this a couple of years. this is one of the leaders when you talk about breaking technicals, go back to december
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when it broke its 50-day moving average. when you talk about water and the global leader in water technology, this is a critical name they're in 150 countries with 160 employees worldwide. so i think you have to understand in a week like this, you can't flinch i go back to my lou holtz days, you can't flinch you have to realize where there's opportunity. in a week like this, all the names are up but still down on the year this is where you can be selective and you can decipher what is going to make sense. these are the type of names, two industrials and one cyclical that makes sense volatility is not going to abate any time soon. >> no matter which way the overall markets are going, you can be comfortable with these picks? >> that's right. you have to understand these are much smaller that some of the names we talk a lot about, amazon and apples, but at the end of the day this is 2022. this is a different year you have to understand sector exposure, stock exposure when you look at the 52-week
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lows at some of these names that we don't talk a lot about on cnbc, these are names that offer opportunity if we see a snapback the biggest risk to the marketplace is not being invested >> all right, sir. thank you very much. have a great weekend, jeff jeff kilburg. >> you too happy mother's day, kelly. >> thank you. up next, despite the sell-off and extreme moves, there are stocks in the nasdaq 100 that still have triple-digit multiples. get me some of them! the names are next
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welcome back, everybody. there's been a lot of damage done to high valuation stocks, but there are still a number of names in the nasdaq 100 with triple-digit -- are we talking price to earnings multiples? >> we are talking forward price to earnings multiples. there's a debate here, right you know, folks say looking at forward pe ratios is a better indicator of what it could look like in the future but then there's always that whole, well, it's estimates we're talking about, right these are not actual numbers we know analysts don't always get it right with their predictions. but if you want to take that forward tilt towards looking at valuations, let's start with the forward pe ratio and do it for the nasdaq 100 overall according to data from fact set, it currently sits at right around 22 times forward anticipated earnings at the highs in the post-pandemic recovery, it was
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closer to around 31, so there's definitely been a valuation compression. but to kelly and tyler's point, there are still a handful of stocks out there that trade with some of these triple-digit valuations when it comes how much you will pay today for every dollar in anticipated earnings in the next year. take a look at these names zscaler trades, according to data from fact set, with a roughly 318 times forward price-to-e price-to-earnings ratio at this level. datadog, crowdstrike, and amazon, roughly about 120 times. so, again, if you take a look at the valuation picture, there's an argument to be made by some folks out there that we talk often about the opportunities and trying to buy dips, has it fallen enough. there are also people out there, kelly and tyler, looking at this saying valuations could come down even further if some of the
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stocks within the large cap nasdaq 100 index are still trading at very, very loft evaluations. >> those are really outliers, right? >> those are outliers. >> those are truly outliers. is there something in those individual companies about the way they report products -- excuse me, profits, or the way they do their accounting that causes that to -- those numbers to be that high? >> you notice a lot of these are cloud-based type firms, software type firms so there could be nuance how they report their numbers and what the valuations assigned are it could also be that many of these names had massive run-ups in the pandemic recovery and then all of a sudden -- >> amazon. >> -- as earnings expectations start to contract, maybe they are contracting further in certain ways than the prices are. so price to earnings can either be an extension of the price, which is not happening right now because many of these stocks have pulled back quite a bit or a ratcheting up or down of
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earnings expectations for the coming year. you can say for many of these names maybe they're coming down a little faster so it could be an interesting point to look at. >> have a great weekend. happy mother's day. >> i keep trying to say you too. you guys too >> all right don't forget we've got "power lunch" podcast listen to the whole show and past episodes. subscribe to your favorite podcast platform. >> and "closing bell" starts right now. thank you, kelly and tyler and stocks are under pressure again, but off the worst levels in what has been another choppy session here on wall street. welcome to "closing bell," everyone, i'm sara eisen here's where we stand in the markets. down a little more than a percent on the s&p 500 not every sector is negative, though most are. energy and utilities just popping into the green they're higher but everyone else is down. materials are the hardest hit today. real estate at the bottom of the list as well some of the high growth software names getting hit again. the nasdaq 100 down 1.7%


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