tv Squawk on the Street CNBC May 9, 2022 9:00am-11:00am EDT
>> what are we down on the high now? >> we are already down 13%, maybe, from the high at this point. yeah that's a ways. >> significant yep. he's right. >> if we go another 15. >> yeah. >> keep your eyes -- bitcoin, $32,000. >> 32,9 or something. >> we have got to run. make sure you join us tomorrow by the way, happy mother's day belatedly, to everybody, including becky. >> thanks. >> i didn't do that. "squawk on the street" begins right now. good monday morning, welcome to "squawk on the street," on j carl quintanilla and jim cramer. on a week where macros are going to take the wheel amount of lot of fed speak on cpi on wednesday. futures under pressure as yields
continue to climb this morning we got the ten-year near 3.2, settled back just a bit, maybe on that boss particular headline >> i think that what we are up against is each this morning we were down substantially at 4:30, 536 i think we have to take out levels every single -- this morning was negative and i tend to believe that what the -- except for the s&p 500 is doing a lot better than the nasdaq and the nasdaq is filled with companies that are under in their cash position or in danger of going through their cash position not great. >> truist this morning, even though half of nasdaq components are off 50% from the 52-week high, nasdaq in a recession scenario, they argue, down 17 to
10-k or so are you there? >> i am not. this isn't 2020. the companies we are talking about are making fortuned. it is the bottom half of the russel 1,000 are horrible. the top -- there are companies that have a lot of cash, i am not worried about them the biotechs, 37% under cashed no one had raise money palantir is a good example dramatic slowing, dramatic decline in their cash flow but they have enough, but why is eight the right level. >> their operating moirmg is going to go from 30 year on year to 20 in the third quarter. >> i don't want to call it disastrous revenue up 16% from government that's the slowest last year, capital of $30
million. they are doing so poorly in terms of -- growth i don't want to dwell on them because that's kind of a stock you never would have heard of if it weren't for cathie wood let's go to teledock, the competition is horrible. lockheed martin, it was on face the nation a abundance of orders, unique to man. it is a classic s&p name that's doing well for every ten that are bad there is probably two or three that are good >> right. >> yeah. >> in terms of weak demand, b of a has been tracking mentions of weak demand in earnings calls. takes you back to q2 of 2020. >> yes, we were talking about that this morning for the investment club. it's clutely clear that people want to repeal the whole gig every bit of it. first of it was for stay and
place like draft king. then peloton you this now they want to go after the ones that are very good and take the -- like the workdays, a great quarter. and the larger ones. tyson food came out this morning. this one is the first one that's the actual break that we might have in that the double digit gains -- doesn't sound good, gains are slowing. beef wasn't as much, pork wasn't as much. cpi composite numbers, used cars down you want the race of prices to come down for some companies but not their earnings to be crushed. it's just very hard. >> it is hard. but at the same time you have got some companies that are adapting this. piece we have on uber, this employee memo basically looking at a seismic shift in investor demand, they are going to cut marketing demand, incentives,
hiring will become a privilege. >> i was looking for the in-fi -- the memo -- it is interesting for meta they are not hiring the lower enengineers. i think the perception is while they are doing poorly, i think it is the opposite there is a lot of higher engineer talent that could be laid off right now, it is going to be a white collar recession too many engineers hired as software as a service for medical insurance. these people are all going to be looking for jobs it is incredible how much money has been lost. >> in assets, you mean, in equities >> well, they have been -- the stocks have been correct like you take the top ten losses in russel 1,000, they are all companies that i think you would call uninvestable because you don't know what their cash position is going to be. >> right where does that leave you on
some of these levels of support? we talked about 4k last week 20% would be 3850 on the s&p. >> i like that. >> you do? >> that's what i like. i go through the s&p and i see so many companies i actually like you have an emerson reported a really good quarter last week. nobody cared that's mistake a lot of good companies -- dupont had a fantastic quarter a lot of companies in business with russia and they had to cut out the -- you take the 1 or 2%, but it might be $238 million and we are acting as if that's -- geez, how did that happen no a lot of companies pulled out and those have to be ratcheted down in terms of your valuation because they just gave it up. >> right so you are on board with a 20% decline on s&p there is other levels. you go to some retracements of the rally, 50% of the retracement would be 3515. i don't want to give you the others. >> i don't think it will be that
bad. i am trying to bifurcate the market into companies that sourcely need money or will need money the next year and companies who -- that have become accidental high yielders because their prices have come down so much i looked at caterpillar this weekend. those are interesting companies. think about the nature of that, right, versus -- i don't know where plug power should be i had him on, told a good story, but there is no there. look at the rivian. >> we will talk to david later about ford and this block sale. >> i don't want to sound -- look, i obviously sound too down about it i don't mean to do that. i just think there is a lot of stocks that people lost a great deal of money in i don't know where they have went i don't know if as becky said they are hedge fund redemptions or the robinhood types that have
been blown out but where is all the fresh cash? >> there was a morgan stanley piece on wires this morning about those who got in on the robinhood boom all of those gains have essentially been wiped out. >> they are still stig listen only a small percentage of people were trading options. doesn't matter, everything turned out to be an option that they were buying the common stock options i am seeing a lot of companies that are doing well going down and companies that are doing poorly are going down. think about it saudi arabia put more -- cuts in the east we are still sending -- and they can't keep the thing down. that's amazing by the way, the refinery margins are the highest they have ever been, that's going to get congressional attention. >> yep, there is a piece on that this morning as well
incredible numbers record refining margins. >> diesel. everybody talking about diesel. >> that's big. there is still the expectation that cpi for april is going to be .2, the lightest since january of last year and this morning on squawk they said they expect us to get back to target. >> i am confident we are going to get inflation back down to our 2% target but i am not confident how much of that burden we are going to have to carry versus getting help from the supply side. >> copper is back to his log year, aluminum but the problem is they are up substantially from two years ago. coldwell steel went up, for audio, went all the way down and bounced a little i disagree i think that everything slowed from a level of expansion but it's not come down to where it is back to 2020. i was out with olein last week
they are making so much money. >> who >> olein dow is making so much money. i hate to be a bear, but those have to turn negative. they are not. >> as of last week maybe you throw bitcoin in there as well down 20% in two days 32,500 right now. >> still dpog doing better than the nasdaq nasdaq is really horrible. then you come back and say which is it going to be today, russ-ukraine, the chinese lockdown there is a piece how -- might stabilize. no, you see, they have to have zero covid before it can stabilize. there is still a lot of hope. >> the export data out of china two year low as the virus hits the factories there. putin's victory day speech a lot of asolutions to world war ii-style fighting. so the centering around ukraine not helping at all. >> a mass call-up, a specialized
operation, they haven't called it a war at the same time, they were talking this weekend about getting more javelins in i had air environment on they have got the switch blade 600, maybe not as accurate look, this could be -- this war is not going away. i was hoping he might use it as saying, listen, we are happy, we have taken this -- we have this corridor to crimea that's what we have always wanted no, he didn't give us. but he didn't give us a victory. i think he felt he would have by now. >> now there is a draft document that russia might ban energy. >> it would be a depression for germany. they would lose everything to the u.s. companies i don't know look, against that, stocks are cascading. you can pick some that are good. they are just all going down with the index
but -- tech is the bet, semis, you know their numbers are going to be extraordinary. and yet no one cares. >> yes i think fax fact set this morning said the only argument for the bulls today is oversold. >> i don't want to say, look, i don't think it is wrong to pick at something i just don't, because every company isn't doing badly. you can buy a natural gas company, buy any of those. buy slum better. >> we will watch it, watch energy, one of the big cross-currents of the week rivian down 18%. news of ford selling 8% of its shares in the ev maker david broke the story. if you are looking for levels, 4061 would be a fresh 52-week low, something we got to last may, and we do look to reach
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as we said earlier, rivian is down sharply in the premarket. sources telling our david facebook hear the ford is selling $8 million of its stake in the ev maker as the lockup period for selling expires david joins us on the phone, broke this news over the weekend. not helping the mood today >> no, no. it was an odd thing, carl. a saturday offering.
i don't recall that very often i am sure jim also can agree that's not something you see the lockup expired yesterday, six months after the ipo what was that ipo price? $78 on the 9th of november you had it expire, and ford was ready to go with $8 million. that's only 8 of 102 million shares the fact that they were so willing to hit a bid immediately on a saturday is odd it is done the shares have been distributed. >> it is 8:00. >> yeah. you are unhappy this morning, jim, with the stock trading below 23 and 24. there was another seller i don't know who it was. i don't know if you have heard
any number. >> i tried. >> any number of large firms hedge funds, d 1 who has a lot of privates. again, don't know who the seller was. the saturday offering was strange. i don't know if you have seen that >> i have never seen that. ford will be using the money for lithium, for nickel deals, and for battery jvs. they did make 150% on it but there was a hope it could have been billions here. maybe that can still happen. when you look at this group, it is just pathetic they are pathetic. >> do you have any sense as to ford's future plans? i mean, they hit $8 million on the very first minute they can on a saturday. are they going to continue to sell more of what's left >> that was a cutback of what they were going to sell. i think they initially had higher hopes they are being -- ford is being
cash worth they have never counted it as being something they could use but i think in the end they have a lot of factory building to to. i just don't know. you need -- you need a lot more cash coming in >> yeah. as for rivian, you know they have been hit by supply chain issues, not being able to get things they thought they would, brought their delivery targets down from certainly what was anticipated when they went public it was vaulted at over $100 billion market value far below that ford is keeping 94 million maybe that's a goodsign. >> that's what i am saying exactly. when i met with the amazon sustainability people, rivian is going to produce 100,000 trucks. and they are going to buy all 100,000. obviously, because of the supply chain, that didn't happen. but david there is a lot of pie in the sky lucid's numbers -- reservations but the number of deliveries is
not so great i think in the case of ford they wanted to get in a little cash in just to kind of make people more interested maybe in rivian itself >> as you point out, ford is still up nicely. just nowhere near the numbers that conceivably, if the stock stayed there at six months from its early days they would have been able to see a return which you obviously urged them to to as soon as they possibly could but six months is a long time in the market. >> when he went to 120, i know they were itching to do it david, how about this one. the market cap s&p is now down at a loss of $5.7 trillion since the market high. how do we sustain that >> i don't know, jim i don't know i -- you know, us talking about
rivian in particular, i talked a lot about the private investments these hybrid funds, the enormous hedge funds, tiger, d 1. c o 2. given they are down 40, 50% some of these firms on their publics, it's a mess out there, jim i am not sure what it portend for the future but on that front it is not particularly good. >> i agree i still come back to if the company makes things, good stuff with a good yield. it's just that that universe keeps shrinking, it's bothering me. >> on top of that the lordstown 10-q out the cost of their components, not the manufacturing, the cost of their components is running above their anticipated selling price for the endurance. >> that's horrible rock waller nation makes a lot
of these -- a lot of theirst ins. they had a tough quarter a. lot of it was because they couldn't get the parts. it's not -- look, the only ones that people are buying are, say clorox, they came on the show and said listen i am looking for a july price increase. the stock went up. if jay powell recognizes the only good earnings are only from companies with price increases we are done. stop predicting what they are going to do and be more data dependent. a lot of people tried to buy the anticipated bounce in cpi. but that amount of money lost in lordstown alone -- the amount of money people have lost is just so tough. >> it is, it is. a lot of the charts we talked about, down 90% is no longer uncommon. >> no. and a lot of cathie wood names. >> thank to david facebooker with the news he broke over the weekend regarding rivian which
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look at futures here after aufr after four straight weeks of equity outflows, longest since the pandemic and five straight weekly losses we are going to start again with some losses. mondays, jim, have typically been the worst day of the week. >> it is, it could cause a short-term bottom. i am not denying that. >> cpi is going to be the big tent pole of the week on wednesday. opening bell in five and a half opening bell in five and a half minutes.
bell. >> yeah. i found one that i wanted to buy. it's got a lot of risk, but a big reward it's called wrist strike >> like hunting for truffles. >> one of the greatest horses. -- before we think that valero, which is what i will be recommending is completely devoid of any reason to be -- or marathon p, what's happened is there a tremendous pull in diesel from europe by the way, the worldwide market but this jet feel, they have had to pause and make a lot of jet fuel because there is more travel once again, kinds of like, jay powell is god, i wish they would stop traveling already. >> well, that may start happening, right, if the monetary loss -- the balance sheet issues of the house -- >> i think it will
but i think right now, they need to push it over a little the two-year is up so -- by the way, if you want to get a mor mortgage, those mortgage rates they are no longer just given to anybody. that's a big change because a lot of people are worried about credit rask because the amount of debt is doubled versus what we thought. >> that brings to us spreads, which we haven't touched on. high yield, biggest loss in almost two years on triple cs. yields near 21-month highs we are going to start talking about fallen angels at some point i imagine. >> yes, we are i am watching carvana. credit card debt is up 20% after 120 days it goes to a collect agent. i was once in that situation with the collection agencies, they don't make a lot of money back let's be very careful to stick with companies that were not -- did not come public in the last
18 months unless -- there is only one, ee, which is a company called accelerated energy. that's the ability to have floating natural gas that's the only ipo i could foind that i want to own. >> in the last year and a half otherwise, if you became public in the last year and a half, no thank you. >> that was the wrecked weekend. the lost weekend >> there is the opening bell, guys, and the s&p 500 heat map obviously dramatically leads the breath at the big board. three to five components green here at the open, jim, as 4063 would literally be about a 52-week low maybe by a point >> we are littered with thing that people are trying to make a case for i saw a case for wework today. there was more of a case made in
the series we crashed is going to look better than wework the debt is 13%. phil lebeau, only tesla is cash flow positive. many start-ups need capital. where are they going to get the capital? >> that's why we have used carvana as a cautionary tale. >> oh, man. >> as jonas of morgan stanley said last week you need to raise the money when you don't need night they did get multiple billions in. they saved their situation that doesn't mean you can -- used car prices are down substantially from january still up from last year but the decline is substantial. >> the index is down 6.4 from january. the biggest drop in the history of the index. >> in the history of the index. >> it is going to feed some disinfligs. >> it is the cpi, overweight in
cpi. tyson, all the foodstuffs are down, except for prepared. we don't have chemical deflation. -- i have -- -- on, they are building plants. people are responding to the higher prices. ford has chips to be able to make 150s. mary barra says they have chips to be able to make their new line, the cadillac if demand could switch from travel to goods it would be good >> but it is going in the other direction. >> because they are falling so fast you have these companies that make anything for the home and they are just hung because they paid a lot for the raw costs and now they are selling things, big inventory blocks everything that's clothing, any time you rented anything like clothing wise, no, there really just is a tremendous downturn here but we have to recognize that everything is going down
i mean nike isn't doing as badly as under armour, but nike needs the chinese market to open up. i think a he's doubled down on covid. doubled down. >> every dow component in the red. we are witness a deceleration or shrinkage of growth in the economy, why the chevron the worst performing component. >> i think people were saying natural gas was up that's not their bailiwick maybe -- i think chevron is a buy. they have a good yield. >> you are not going fooled by weakness in energy >> no. no interestingly enough, they are pumping less this year than they were last year these guys in many cases, pumping less, and refining, by the way, a lot has come down in terms of their capacity they can't pump as much because their refining capacity is not up there. >> one way to think about it is
that this would gratify not just the oil curve but the way producers responded to this whole period, we don't trust this demand picture to last forever. >> rick money creve came on my investing club conference call he started a good company, devon. i asked him don't you have to turn the spigot. the answer is, yeah, they are all kind of saying i don't want to risk it because by this time, it could be down it's just that i don't see the down i mean, if china comes back, everything hinges on china, everything. >> there is a report, reuter's takes a crack at how long the chinese lockdown may last. i mean, to the degree they have sources who know what they are talking about. they are talking late may at the earliest. >> late may. >> that's how reuters defines night all they have to do is use
their biontech. >> crushed it on the top and the bottom line. they reiterate their guide for the year on vaccine sales. >> i know. i got my fourth booster, waited in line with everybody else getting it there is no doubt that the chinese had inferior vaccines which make it so that you get very sick. we had people that we know personally who did not know they had omicron. they just tested because they had a scratchy throat. these people were back to work in four days in china, i don't know i mean, it is -- it is very frightening because the numbers out of china this morning were so horrible. >> the export numbers. >> the export numbers. you are sitting here thinking, where are our guys going to go i had sem practice energy on last week. they are killing it. mexico used to expart a lot of natural gas. if people don't reshore to
mexico, this is going on for a very long time, no one has really reshored. incredible great work force, eager to put people to work and i hate to say this and not a lot of pollution control versus europe. >> one question asked why isn't the vix dramatically higher? it is up a little bit. >> i worked on that. if vix doesn't take out 35, then there will be people who in that world who say we are done. that's it. what you see today is the bottom i'm not against that, because the vix is -- vix should be taking out 35. so be looking for things, be looking for things to buy. i mean it. you are skeptical. >> what i hear you saying is if we don't crack 35, we are close. >> i think the accidental high yield component is so high here in energy you could come up with
great ideas, sem practice is great. i have american electric power on tonight yields three -- six, you are not going to get something -- i can argue that you are going to have some semis that are down enough. i think when you look at some of the retailers. i look at home depot and lowe's and i say to myself, is there no garden season at all >> we are going to start to move into retail earnings season. barring horrible qualitative commentary. >> you are going to have companies who are going to be worried about the dividend and then we have other companies that are still selling too high, even in these tremendous declines i really like home depot but then you look, 21 times. home depot is really fascinating to me. they had bad weather this weekend. this was planting weekend. they are at 18 times now but there is two weekend left in planting season. if you get this kind of weather around the country, it is going to be a terrible planting season
for gardeners. >> fortunately, it is going to get better around here in the northeast this week. >> i hope so. >> there is not a lot of research this week but b of a removes disney from the u.s. 1 list they have coke and kraft. >> we are going right against that for the travel trust. buying disney. i know you are ahead of earnings we forgot, they make earnings, $400 million worth people go to them. >> dr. strange two cracked the all time -- >> it is a two headed stool. it is not just theme parks and espn it has a movie division. they are going to start coming out. do i sound like a desperado? that was at 155. not here chaefic was not born yesterday they paid a lot of money for fox. that wasn't shapic $71 billion. i want to see if there is a writedown this quarter. >> you are a buyer here. >> absolutely, for the trust
>> disney? >> right here. kind of right here you know >> interesting, jim, because of the five or so ndx components that are green, netflix and comcast are among them. >> are you serious >> at this moment. >> netflix is now valued at a -- multiple purposes, so low, because we have such a tough anti trust that chart looks like off rest north face does okay on everest. k 2, nobody gets out alive i think you want to buy oils, companies that yield four that used to yield three. you want to buy industrials that were marked down because of russia, which is one-time only and i think you can buy any chemical company, because everybody is in short supply and particularly, if, by the way, if the russians cut off natural gas. >> that's what i say, you buy
basf even with the risks -- >> no. >> european? >> no. you know, that was my old karen cramer's family is from lubest has beenen, one town, a company town no i do like dupont. >> i was going to say, you like dupont. >> and brie is doing a good job. >> other calls today one was virgin ga laktdic, more delays in space travel. >> i don't think people realize how pathetic one of the top ten losers. they put it back to january. now it is reservations per is their new metric, per stock price. everyone is trying to use a new metric because if they use earnings per share, doesn't work. >> the classic example of the boom you talked about, jim. >> i know. >> the spac boom. >> did you see the draftkings piece from nay thanson they are saying look they could
win but it's going to take a long time and they have the lose a lot of money in the interim. the interviews they had with jayson robbins he is chastising, not saying things are good. but i feel like that stock had a better than expected number and went from 16 to 12 on better than expected. because it is better than expected loss. you need better than expected gains. >> we had them on, was it friday >> i thought he was terrific but always admitting what has to happen, which is that california has to get passed. the other guys have to give up i don't want to build my business around hoping other guys give up. >> jim, twitter. obviously given the broader tape outperformed but the journal has got details and the times on the investor presentation when musk sees revenue by 2028 going to almost a billion users. >> i am bullish on the private twitter. i think they can get away --
twitter, they have a ol go which makes it the more vicious you are, it goes the highest this is engagement that i think he's going to accept but what he really wants is that if you make money off them, they get a cut. and a decent cut and i also think that if you build your business on them, you are going to have to give them some of the vision but they have to take a hit at the beginning. and they can do it when they are private. >> we will see there is also a piece in the journal about tesla's ties to china and therefore musk's ties to china and whether that opens up the deal to a sievious review given some of the investors out of qatar and others last week. >> it seems like no one else has their lines open double. there are some companies i have crocs on later this week. they have got some issues but they are confident -- they make
a lot of stuff from china. look, that's a thin read i just think that before we really do sippious, we should be happy that someone is doing well. >> by the way, what does it say that we are refusing for the moment to dip below the lows of the year >> i am look at certain stocks take nvidia. it has been front and center in the blast stzone 346 to 180 they had a settlement with the sec over things in 2018 about how they handled cars, ethereum. why isn't that stock down more that's been the bellwether if david were here right now in the heat of the market, i would say watch nvidia at 1:00 it was down seven points twhach one. >> lamb research, one of the worst kpoen sneepts the orders for last-minute research are extraordinary. plus did you see the flyovers,
18 flyovers by china they had to scramble the jets in taiwan or taiwan semi. every one of the big fabs needs more from lamb research. at the same time, lamb did not raise numbers. supply chain problems. >> that's what yellen meant when she said we need a little good luck, right? as carb said, it is like whack a mole the supply chain problems. >> that's i didn't suggested rich strike that is correct 80- shot if that horse can win, nvidia can make it. i have papa john's on tonight. they are doing a good job relative to domino's but that's the bull case relative to a company that's not doing well we have got to come up with positive right now let me say something >> although the breadth is severely negative, we have a few
more components the green than we did at the open almost eight on the ndx. and bob pisani. >> i wish i could say optimistic things i am a glass half guy but the fundamentals and tech knickcals aren't improving that much that's a problem we are right near the 52-week low. 4601 was the old may low closing low. technicians use closing day lows not opening lows looking at the sectors, oil down, energy was at a new high on friday. metals and mining, 20% off the tie. another one of the big two that i watch, because of the china slowdowns. tech stocks down with the s&p 500. nvidia notably week today. staples and defensive sectors doing better but still down. downside leaders, you look and you can see the energy stocks down big, big moves up for them
recently nvidia is down, 11 on month low, not quite a 52-week low but nvidia has to be close mosaic has been down free point mcmoran down 20% from its highst is anything getting better on the fundamental front? i wish i could say they were, but i don't see that number one, the hope for inflation peaking. i know everybody is saying that. we saw this on friday, used car prices down a little bit we had some reports on that. people are hanging their hat on that in hopes that the cpi is going to top but i think it is going to be close to 8%. i think we are months away from declaring some imminent down trend. powell already said we want clear signs of annin imminent down trend that's not going to happen in the next couple of weeks the fundamentals aren't strong here people are looking at the technicals here you still don't see a lot of improvement look at the s&p 500, we are close to 10% below the 200-day
moving average that's a pretty big number here. most of the last two years, we have been 10% above the 200 day moving average my friend at cfra, an expert on this, notes this morning only 35% of the s&p is above the 200 day moving average it flipped around the last couple of years it was 60 or 70% above the 200 day moving average. now only 35% subsectors slicing and dicing things, basically only one third of the s&p and the sectors are above their 200 day moving average. that's real reversal so the technicals are not really moving that much look at the other stuff. is anybody doing risk on the s&p growth sector. a new 52 week low. no signs of a lot of buying. no signs of improved -- people coming in and buying this to add to the shares outstanding. that would be called inflows we are not seeing that another risk on that i like to
look at is the ipo one this is basically a good sign for risk out no signs of people adding to positions here or adding to the shares outstanding this tends to trade very much in line with kathywood's arc etf as well both of these no particular sign on the fundamentals, not really. on the technicals, not real. on the risk on, risk off kind of stuff you want to look at, not really i wish i could be more optimistic i see two things number one, tremendous churning around the qqqs, the nasdaq 100, people going in -- i noted this last week, three times leverage qqqs, if you are up 1%, you get 3% three times inverse here put those inverge leverage etfs up there is tremendous volume going on around these sets here. the first two, look at carefullily. the other thing i see, active
interest in trying to manage flows and manage momentum funds. one of the big ones out there is the cam brieia momentum etf, a basket of 17 etf, all momentum oriented we will have the ceo on carl at 1:00 eastern time at etf edge to talk about that. that's how difficult it is people are turning to any kind of thing, momentum, trend following neck nekes because the fundamentals and tech knickcalses aren't working. >> bob's report was excellent. everything is bad. what happens if something goes right. think about the cpi number if something goes right, everyone is leaning in the wrong direction. you do make so much money on the two-year it can't be everything going wrong. something can go right it is a weak earnings week but when i listen to everything
being bad, you have to find something. because if one thing goes well, that litany, supply chain, lockdown, russ-ukraine, cpi, federal reserve. they are not all going to go negative i am saying i can pick which one. >> by the way, you can get a lot of jim's insights like this one by joining the cnbc investing club find out more at cnbc.com/jointheclub bonds, we did get close to 320 backing off to 311 still fewer than 50 points above s&p 4k
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jim, what's on mad tonight >> papa john's, i liked it but relative to dominos. don't give up. we could get another wave of selling before europe closes >> not our first rodeo >> no. it could be a little 2011. >> we'll see you 6:00. when we come back, former goldman chair. the dow down 361 my joints for the long term.
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form dramatically weak dow down 407 we got the ten year close to 320. we're set for a big week of macro with cpi the star event on wednesday, morning. >> right and then ppi on thursday we're 30 minutes into the trading session. three big movers we're watching. results missing on earnings. a kumpt quarter revenue forecast a very similar dynamic to what we have seen in the defense stock. with it more demand for product. shares are down 21% now. down almost 60%. 59% just since the start of this year a bright spot this morning shares moving higher after topping expectations and raising employer outlook for strong demand on its product driven by luxury product i mentioned it was higher. it's not higher anymore.
we'll end with virgin galactic getting another downgrade. additional delays for return space flight expecting the second quarter of 2023 or later. even later than what the company is kpkting with free cash flow burn trending high r alongside that as well slashing price target to $8 on the stock. it's trading in the sixes. the price target still higher. >> indeed. stocks in a grinding four month correction, attention is gauging further decline. our senior market commentator joins us onset with more when you're down five weeks, are returns all that great >> no. eventually mean reversion helps you out. it's meant the market, you can less accurately call it a trading range. we have softened up the floor.
i think it makes sense to see where a lot of different methodologies are converging in terms of suggesting what further downside might look like where some levels that you might have a bit of a firm base in and a will the of different things are coming around this 3800 to 3900 ban, the s&p 500. technically, there's some levels in there that represent volume weighted supply and demand since the march 2020 slow. it's a bunch of different disciplines point in that direction as maybe a destination. valuation, it's like 16.5 times forward earnings assuming the earnings sufficiently hold up and relatively what treasury yields are, it gets it back into a normal valuation range and it's the minus 20% level is in that range i do point out over the weekend, that there's been an unusual
number of 19% peak to trough closing gain another 4 to 7% down side. >> for the school of thought this cpi will be healing on wednesday, we did get a down tick that didn't get celebrated over the weekend. >> it didn't i think it has to be a little more decisive than that. you have to show there's going to be real demand for the megacaps that are bleeding out the valuation premium. we could get it with cpi we're getting over sold. a lot of the issue with the market calling it prime and it's prime for a bounce for too long is that you've had the one day rallies that 3% pop last wednesday has kept the market from really, it's not been this real headlong rush for the exit. it's been really orderly that's not always a good thing when looking for the market to
get washed oit. >> every person is saying do i need to get out of the way i think that's what's going on they curled lower in dramatic way. they are still elevated. that takes time for that piece of it to come into play. >> that's a good set up, mike. thank you. let's brichk in asset minister and uk minister. it's great to have you back. thanks for time this morning >> you're welcome. nice to be with you even though things are a bit of a mess >> yes we have been talking a lot about
that i don't mean to be pollyanna about it but when you think about things that can go right or things that have been going wrong for long enough, what comes the miepds now >> i think the last couple of times times i've been on the show, even before the russian invasion, i've never come across on environment in my 40 years of so many big issues that i didn't have any confidence about where i would end ups settling. aids say to first part of your question, what is the concern i it's some weird reason it was any of surprise settlements of
russian invasion of ukraine, out of the blue or even better is if something happened with putin to run with russia, i think that would be a huge positive surprise. it continues to intrigue me the long term measures of inflation expectations it seems flip from trying to tell us this is transit street for to years now making out the more hawkish
than paul volker, et cetera. all that tells you is the developments is the same as the rest of us if inflation started to come back down then the central bank changed again. >> i do wonder one thing talked about over weekend was okay, maybe you get some relief in the data that leads to an inflationary point of view but is there some human element at the fed that feels no matter how much the data turns, they have to prove their point and regain credibility for those that think they lost it >> i was worried you might ask me that one. that where i'm struggling with my own view about anything other than the bounce. we can really get too carried away for a while it's sort of made them realize
if we're seeing evidence of inflation starting to turn, that will give it a big bounce. i'm not sure it would be the start of some permanent new bull market >> it's morgan i want to get your -- >> please call me jim. >> i do want to get your thoughts on what weer're seeingi the currency market. we are seeing the dollar strengthen against other may sk - major currencies has the script flipped and how does it speak to what we're seeing if terms of global economic growth acnd how that's playing out in general >> i don't know. i have to say the dollar strength is completely taken me out of the blue. some of it was predictable but the way the dollar strength is accelerated, it's a surprise to
me. the dollar had some sort of this weird safe haven argument. en even with all of that, it doesn't make sense to me i was saying about a piece i'm writing. those have been around since time remember the asian crisis and if the end keeps weakening like this a and the chinese get worried about their asian competitive business on top of their own significant problems then that just unleashes a whole new angle to this mess
do we really want this on top of everything else. the fed might temporarily quite like it. there's increased talk of s stagflation. i realize you start to see inflation begin to ebb if that doesn't happen, we haven't talked about sanctions there's more sanctions going into place on russia and we haven't necessarily seen the full impact of that too. how do you think the stagflation piece manifest, if it does
>> i'm not sure the scale of it in the u.s even middle class reasonably high income or reasonably well off income people are seeing the most enormous increase in their energy bills both for driving and heating their houses for low income people, this is a colossal burden. maybe also affecting elsewhere, including the u.s. things we experience in the 1970s where you have these sort of very ugly period of years where you get, at best, very weak growth and reoccurring inflation. the only way to curtail them is
to have a policy which weakens the economy further. that's the current situation that's facing the uk and much of europe, i'm afraid the only real solution to that is for an end to this really worrying situation involving russia and europe which is, you know, obviously a dramatic problem by the standards of the past few decades >> that brings me to my last question are you surprised at what the seeming level of commitment to a russian energy ban from the eu despite hungary, slovakia and despite what we know it would do to prices over there >> the end of the day, if you try to put a price on long term security and not being held to a hostage in the way that putin effectively appears to have done here, it is quite impressive
if you look at hoi those have failed to be collective and cohesive in the past the issue remains, however, in the spirit of your question, just how long will each of the different parts of the eu stick to this. looking for positives, if they did, then it obviously means that accelerated efforts to diversify energy resources as well as, probably, accelerated efforts to do something stronger about climate change and
alternative energy it's goicng to be a very soft period for the people of those countries and their real incomes taking advance of what i was saying about the evidence we already see signs of here in the uk >> we don't get to hear from you often enough but we're glad to here from you on this one. >> i like to be cheerful but i'm struggling for the inflation now. >> we'll see you soon. >> thanks for having me on still to come, crypto continues to get crushed after a rough weekend. bitcoin is now at its lowest level so far this year it's basically half from highs last fall. we'll take a look at the ongoing carnage there. let's get another check on the markets. the major averages kicking off the week lower the s&p is down 6%1.
52-week high how should investors play the sector thanks for joining us today. you cover quite a number of names throughout the sector. just given the fak ct it's beena ugly couple of months for tech, in general are there opportunities within this environment or more broadly do these sectors have further default? >> so, first, morgan, thank you for having me again. we're down now 33% within the overall environment
or universe it's clear that the ones that continue to do well are just the large mega caps we're about two-thirds into our earning season for q1. the numbers reflect that reality, that big, getting bigger, google or alphabet those has crazy balance sheet. facebook with growth per spspece this quarter we remain cautiously opt mitsic. >> why are you still so cautious
on e-commerce? there's something nor dangerous for investors to keep this mind. >> there's something more structural although structural means multiple years we think it will be multiple quarters. fishlt say had gone through the gloor. they will need three quarters to work through that excess cap capacity we really like it and going into 2023 but for the second half of the year, we continue to think
back. >> thanks for joining us >> thank you mpblt another big mover today in tech is uber announcing cuts for spending >> i obtained the e-mail the ceo sent to workers last night he says the company needs to react accordingly. focus on free cash flow. treat highering as a privilege do more with less. he's saying that the market has lost patience with unprofitable companies and creditive accounting uber and others in the gig economy have approached profitability with more imaginative, non-gap measures of performance with adjusted
ebitda this can be a helpful metric he was brought in as ceo taking over for founder after another culturally rocky period for the company and ahead of the ipo to do the things he laid out in the letter last night. door dash already free cash flow positive and shares not off from record lows. he does have his work cut out. the thing the e-mail lacked was specifics. remember that uber already did a bunch of layoff and sold off part of its business amid the pandemic he didn't really lay out what further levers can he pull back over to you >> all right that's is the question
thank you. ticker ita is lower today like so much of the market flat nor the year. lockheed and its partner anticipates the need to replenish stockpiles for the thousands of anti-tank missiles. >> right noi our capacity is 2,100. we are trying to get that up to 4,000 a year that will take a couple of years to get that because we have to
get our supply chain to crank up we think we can duouble the capacity in a reasonable amount of time. in general, increased defense spending, depressed valuation coming into 2022 help fuel stock gains this year. the biggest loser is boeing which is down another 5% today and nasdaq down 30% on the year. >> a very difficult dow stock. we'll look at the carnage in crypto bitcoin trading at its lowest level of the year down 50% from the high we're back in a couple of
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welcome back here is your cnbc news update at this hour. russian president vladmir putin is defending his invasion of ukraine as what he called a preemptive response to aggression the victory day parade celebrating the end of world war ii, putin said the danger was rising by the day. it forced him to take the only correct decision by a sovereign, powerful and independent country. he did not use the occasion to announce an expansion of the war. as russia's ambassador to poland attempted to mark victory day, protesters chanting,
splattered him with red paint. they performed a freedom concert for an audience of around 100 people. in new york, the pulitzer prize winning, a strange loop led the tony award nominations back to you. jon, thanks. about an hour into trading dow is down almost 500 points. close to session lows and 30 points or so between us and a sub-four k print on the s&p. it's great to have you, art. >> there are several things that they're watching
we're back in the special relationship between the yeed and the embassies. yield up above 315 for today we put some pressure on the marks. right now wii down in neutral territory. they break that 4,000 area, it will be key. that will change a lot of charts the professionals will be looking at the next support levels are and they are down around 38.50 or so if i can see this right we're in a very key testing area one other thing john fort said people were surprised with putin speech not being more direct
it was also so airplane flyover in the parade. that could have some interesting meaning about security and other things another key lefl would -- level would be apple at 150. >> what happened to the view that 90% down days are constructive does that hold today and one of the things we talked about with kramer this morning was the vxx going above 35 why so much carnage now? >> that is the key those 9-1 sell days could be
copitulation but you got to get that vxx to get in some of those opg ption playersy this is a enough unless you can get the two together, you'll be somewhat suspect here >> some investors are coming in on and hanging their hats on this idea of peak inflation and a stabilization in terms of inflation data and how important cpi this wednesday, do you buy into that or there are bigger factors into play. it doesn't matter whether 8.5% is the top or not? >> no, i think it will be critical it may not be flipping a switch
here pipeline influence inflation is still out there so people are wondering, there are many of us who bought into the pipeline inflation thing who sought that after the lunar new yoear that china would ease up and we had the covid outbreak and that came out. it's not going to be flipping a switch but people will watch the inflation data that we get in middle of the woke and so data after ward it will tell people more importantly than what the stock market is doing. it may allow the fed to go maybe one more 50 but not promised two 50s in a row
>> you talked about the key level for apple. given the fact the megacap tech stocks were so key to the markets moving higher over the last couple of years in general, without them participating, is this market that can begin to move higher at some point. >> it can happen apple is so heavily weighted in so much of this stuff and is sufficient an influence. people are talking of it as an object in a fight to safety. how secure can you believe your stock is going to be if people are talking about it
people begin to question their business model with the apple anonymity things the cloud is carrying them through. i would stake a great deal on apple and pray that it doesn't break below 150. if it does or the indices break below the levels i was discussing with carl then i think we have more to do on the downside, but if those two things happen then that would tell me it might be good deal more to do >> finally, to the degree that we're watching crypto and bit coin, new lows for the year, a lot of the usual suspects and that's down, marketedly today,
do we think that needs to be unwound in the way stay at home n names were unwound and media names were unwound >> i do believe that i think that's got some more work to do on the downside in it's coincidental with pressure on stocks as it seems to be right now and if bit coin would break 30,000 at the same time the s&p broke 4,000, that might go across a broad psychology and do real damage here in trying to get things back together. in the long answer to your question, yes. i do think that has to be unwound a bit. >> well, we're getting closer to
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it's by higher fees. inv investors are not willing to wait around. we're also seeing outflow. that's the only bitcoin available. products see pretty strong inflows since november that's reversed significantly. we talked about the derivative markets and being a big driver analysts say it's notvatives lin before they arenoticing a lack of
de demand it's weaker now than we saw in february and march it's causing a lot more financial stress for bit coin investors. in the past month, another 15% of bitcoin fell to an unrealized loss that total about 40% of bitcoin investors are under water. bitcoin still very much tightly correlated to the broader economic condition out there risk assets as well as the qqq, the tech stocks across most time frames if you look at the correlation it's pretty much a one. fund strike that is starting to look at its equity research for signs of where bitcoin is going. in the nearby term they are seeing more rockininess ahead.
: welcome back stocks are lower across the board with 10 out of 11 sectors flashing red consumer staple turned fraction that willy in the green. energy sector is tumbling. down more than 5% this morning on pace for its worst day in around two months. crude is tracking for its first negative day in the past four. oil and gas exploration and production sharply lower on pace for its worst day since november clean energy fuels, northern oil p and gas, cosmos energy 000 now back over to you welcome to the show. jill, i'll start with you. we had a number of guests to come on throughout the morning and really just in recent days
suggesting that perhaps we got further to fall when you look at something like the s&p in the near term. how do ythe you see the market now? >> thank you for having me i think the volatility may not be over. typically when you see regime leadership shifts in the market this leads to a lot of volatility we have seen multiple shifts within the market now going from fed and zero interest rate policy to tightening we're seeing globalization to deglobalization. we're seeing a lot of regime shifts within the market we do expect for it to be a volatile year. that said, valuations have grown more attractive as the market has sold off we're looking for upside equities through year end. we're looking for 4500 on the s&p 500. the yield curve tends to be a
pretty good signal of the vxx. the flattening and inverted yield curve suggesting volatility could be here we're looking for upside, the market could be recession based it declined so far relative to how much it tip which he declines our base case is that the risks have risen we are expect nothing recession next year, still a positive year for gdp growth but obviously if those recession risks rise could be more downside. >> bob, we have seen incredible gyrations and moves in the bond market before we started to see this broader starker downdraft in equities. >> i would say what art cashin said earlier i hang my hat on that, the technicals in these sloofs are hugely important the fundamentals will come out
at some point. until we have a new low risk, an increase in the vix, the stocks moving towards their average it is hard to have a durable or tradeable bottom our guess is stocks will have a down year but close higher than where we are for that to happen we need not to have a recession weechlt need earnings growth to remain reasonably good. and we need inflation to peak sometime this quarter, albeit not fall back to tolerable levels we are still in shaky territory. we are going frustrate the bulls and the bears with lots of volatility in both directions. >> speaking bulls, they have been counting on at least an in-line cpi print for weeks now. i wonder if you think the power of a print that matches expectations has lost some steam. or would it still give us something that's tradeable on the upside >> i mean, i think inflation has been obviously continuing to surprise to the upside we are expecting that inflation
should peak out and decelerate through year end you know, i think that this earnings season, we've seen that companies have, you know, to some extent continued to have some pricing power but obviously, there are only so many times that companies can raise prices so we have been, you know, concerned about margin risks for corporations, especially the more labor intensive areas of the market you know, consensus. you know, that's one of the reasons we have been below consensus expectations on our earnings outlook given that consensus are expecting markets to reach new highs in see consequent quarters. i think inflation is still a big concern. if we get confirmation that we do see decelerating trends in the inflation backdrop that could be some comfort to the markets. that is our base case for this year. >> bob, you talked about shaky down from. how does an investor play this
market right now >> with care and make sure you own not real high duration stocks the stock market cannot handle ten-year treasury yields moving up 20 basis points every day we have seen some of that. like you don't want to be in long duration bonds, you don't want to be in long duration stocks in these environments the higher growth stocks, the names that did well this the last decade are the ones to be careful of quality in the balance sheet, quality in management, measurable lots of different ways that where you have to hang out in the this kind of equity market. >> guy, thank you for joining us today. bob call, and jill carry hall. during the month of may we are celebrating asian american and pacific islander heritage featuring some of our cnbc teammates and contributors here's our cnbc corresponds end dominic chu. >> one of the things i
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just look at the dow right now, which is down more than 500 points 515 points, 1.6%, led lower by boeing, chevron, visa and caterpillar right now. following six straight weekly losses for the dow we are kicking off this monday poised for a seventh week of losses of course, the week, as we know, given all the volatility as of late is still very, very early meantime, it is a tough time for new home buyers with mortgage rates at their highest levels in over a decade? rates took a sizable jump higher at the end of last week adding insult to injury in the heart of the spring market. the average on the 30 year fixed
hit 5.64%, two percentage points higher than a year ago mortgage rates alsoly follow the yield on the ten-year tress re, which spiked to over 3%. rates are also taking a hit on the fed unloading its balance sheet of mortgage backed bonds it was the increased purchasing of those bonds during the first years of the pandemic that kept rates hilting a dozen record lows home surprises are 34% higher than the start of the pandemic and they keep moving up due to high demand and still low supply if the 30-year fixed hits 5.75%, which it could this week, that will mean the average month mortgage payment for the average home is $1867 higher than it was at the start of the pandemic that's if you are putting 20% down
it would be over $2,000 more a month if you can only put 10% down, which is lo of the of first-time buyers using fha mortgages and they have the least wiggle room in their walts. we are seeing sales stall and bidding wars are cooling off this summer should be telling on home prices because they lag rates. >> that being said, we are talking about mortgage rates that spiked as dramatically as they have, i think about millennials and gen zers that are starting to come into the market, first time home buyers, hims who sort of sat out buying into homes when they were younger and are starting to do it later in life as they close in on middle age have these generations see mortgage rates at these levels if so, how much of a chilling effect does it have. >> a very chilling effect. because we haven't seen rates at these levels and we are seeing
home buyer sentiment at the lowest on record since a lot of those that study said it home buyers are feeling down on the market they have every right to >> dianne olick, thank you. a final check on the market. the s&p is down 2.5%, 4019, moving closer to the 4,000 level, a key level that so many strategists and analysts are watching root now. that's going to do it for us here on "squawk on the street. "techcheck" starts now >> good monday morning, welcome to "techcheck," i'm carl quintanilla with deirdre bosa and john fort. the third day of a massive sell-off is under way. the nasdaq last a fourth of its gains since the record high. another 52 week low and session lows for stocks overall. is the climate investable? where is the bottom? which investments are the safest our first guest says this is not th