tv Closing Bell CNBC May 11, 2022 3:00pm-4:00pm EDT
the whole cryptospace is until pressure as well a lot of pain points to watch. there's the nasdaq in fact, down 2.5%. >> bitcoin down below $30,000. thanks for watching "power lunch." >> "closing bell" starts right now. thank you, kelly and tyler another failed rally attempt on wall street today. stocks move lower as we head into the close, with the nasdaq feeling the most pain. the most important hour of trading start now. welcome to "closing bell." here's where we stand now, another intense day of selling for technology in particular the s&p broader, down 1% you do have some pockets of strength in the market everybody else is down, consumer discretionary at the bottom of the pack today, the dow down
about 0.5% today another down up and fade day today. some of the most actively listed names right here, roblox, which had an epic turnaround, and thinking of results now higher nio. palantir continues to give back. ford and amc, which is down almost 13% it had earnings yesterday, a milder sell-off on that news. coming up today, the white house reacting to yesterday another hot inflation present, cecilia rouse will be here with her first take. and cathy wood's ark innovation funds and we'll talk to simon barnett, who cathie wood herself called one of the most brilliant analysts in the healthcare
space. we'll begin with apple it's dragging down the whole nasdaq kristina partsinevelos has the latest >> let's start with the fact that maybe a 75 basis-point fed hike is back on the table given the inflation numbers for april. it's weighs on high growth stocks, which is what we're seeing here at the nasdaq, swinging into the red, led by apple, already apple trading below the mid march low. that would be something we haven't seen since mid november 2021 other big weights bringing down the nasdaq, microsoft as well as meta, but i want to focus on tesla for a second elon musk spoke yesterday at a "financial times" event and tried to convince everyone in the crowd the twitter deal would not sacrifice tesla's focus.
>> including around these behemoth stocks, if you take the data at face value, it's not really moderating the way you would like to see, so the bond market continue to say slowly pull forward to get the fed funds rate up more than 2%, and then you get stocks like appear get hit, because it's actually a really good company, but really is an environment of having to go through restrictive policy in the reserve. >> is that what's going on it is notable that the ten-year yield is actually lower today. >> yeah, well, interestingly enough, my view is that, you know, ten-year yields were going to be capped because of what we're seeing here, when equities sell off, normally speaking in the absence, you would have a flight of capital into safety, and we saw that in 2018, in
fact i think we're going to get a very similar dynamic on a go-forward basis, which is to say the fed will not get to 3%, which is the 2023 terminal rate that most big banks are talking about, precisely because equities and the real economy will see the tightening that happens. that equity tightening is going to do most of the work for the fed. for example, if the fed gets to 2% and the ten-year is at 1.35%, that's going to send a strong signal to the fed that it needs to slow the pace of hikes. i don't think the cpi changed fed very much at all the fed at some point will have to realize it was late to the party and will to leave early. >> if that's the case, wouldn't you want to own big-cap tech look an apple or tesla, which is
growth stocks that typically do well >> i think at a certain point you'll want to do a lot of these things pes still need to adjust. we're at 21 sometimes very aggressive forward earnings. earnings for next year are going to suffer. we will see a growth slowdown as you know, i think it's a sell the rally market >> i think we're still on the defensive, but to your point you're getting this high with energy prices continues ton an upward pressure, you know, there's actually capacity being
cut around airlines globally now, because i guess there's not enough personnel, not enough airplanes available, but you think if you look at the s&p index outperforming the s&p index 15% year to date, i think that still shows us the reopening is still here as you see tykening there, as peter says, it's about the domestic economy slowing down to get inflation under control. >> they're down today, again up next, we will talk much more about the inflation situation in america, get the white house plans to fight it when we're joined by the cecilia rouse. you're watching "closing bell" on cnbc. dow is down, and it's nasdaq
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wendy's getting hit hard while they missed profit and revenue estimates s the stock is down 11%, lost a third of its value in the last three months. speaking of fast took, kate roger with the details on mcdonald's. >> we got a look at the new grading system for performance and customer excellence that mcdonald's is rolling out with training started this summer it notes the business climate is changing in the overview of the system, saying it needs a new approach supporting our growth plan objective the program has frustratedsome franchisees, calling for between six and ten visits a year per location, on top of other inspections. now, from some are not happy with the changes, which they call lobe collaborative and harsher, in terms of grading we talked to two owners with decades of experience, saying their concerns are over hiring
and retention in this environment, not actually with the grading itself mcdonald's said we must remain laser focused on our world classes. that is a lots to keep up with, many of these companies, all of them included, are trying to hang on to workers in this very competitive environment. this is one thing they're not happy about. >> something i'm sureyou'll continue to dig into indicate rogers, thank you will, can real more on one of the. nasdaq seeing the steepest decline, down more than 2.7%, coming after april's inflation report came in hotter than expected, 8.3% fueled by price gains across the -- joining us in and out in a first on cnbc
interview, cecilia rouse chair rouse, good to have you back >> thank you nice to be here. >> the headline number suggests ma i want some moderation, but if you go through the internals, cores, services, it doesn't lookic that way. >> well, that's right, we're pleased to see that headline inflation and core inflation seem to have moderated, but re recognize that inflation is unacceptably high. i will also emphasize that we don't put stock in any one month, but we know even core inflation, on average it was close to where it's been over several months, but look, we understand that inflation is unacceptably high. that's why the president is laser focused on this. he understands the challenges.
first and foremost, inflation is the purview of the fed we're pleased to see the nominees have been confirmed we need to get them all confirmed. they know they have a tough job ahead, but the position is doing what he can as well. he's got a plan to address energy prizes, to lower everyday costs for families, to redue the def deficit. he contrast that is with republicans that really don't have a plan that's workable for working families >> i think the criticism is no question he's made it a priority, but obvious blamed other factors, which is fair, the pandemic, the war in ukraine like the 2 trillion spending bill , so, look, let's go back a
year, actually more than a year, and we had 20 million people on unemployment insurance benefits. we had just been through a month where we lost job growth over the prior three months we didn't know how the pandemic -- the rescue plan got shots in the arm, provided support for the vaccine roll-out, for tests, for masks, for therapeutics. gentlemen, it supported our economy through the last year and a half it generated the growth we had last year, which puts us in a good place, where we have some resilience, but look, we understand that demand is high supply has not kept up, and inflation is unacceptably high
>> i'm looking at the market, again, down some 3% on the nasdaq, which is 30% off the highs, the s&p 500 is almost 20% off the highs. are you concerned about the market reaction and sentiment for consumers? >> again, the fed has a difficult job. there's a lot of uncertainty we have the invasion of ukraine. we've got the -- china's responsible to the latest wave of covid with the shutdown it looks like there's still shipments are moving around, but we're anticipating that may have some impact on supply chains going forward.
the president is focused on policies that generate sustainable growth >> part of the way we get through this is by increasing labor supply it's really important, in addition, investments such as in child care to allow families to balance work and family are going to be very critical. >> agreed -- >> the president has put forward policies to help us generate this kind of growth.
prescription drugs, for instance, that's not really a hot spoke right now. so, look, these are costs that american families are wrestling with these are costs that families have to wrestle with every day they take a bite out of the family budget. so that they can have a sustainable budget, a sustainable living for their family. >> what about on food prices it particular 10.8%, food at home for americans, and that was a step
up from what we saw in march i know we can't plant more wheat in ukraine with the war going on the fed can't do anything about it, so what is the respond >> the president is in illinois today to try to work with our farmers to see ways we can increase production here at home for example, he's imposing to increase the kind of insurance farmers can receive to do something what is known as double profit, which can be risky. provide insurance to go ahead and plant wheat right after soybeans, so we can increase that production. he is also focused on ensuring that farmer have access to the best technology some of the increase in food prices is due to the energy. so the president is also trying to address the food prices by
seeing what we can do here at home we have a vibrant agricultural sector >> where do you think it is a year from now? >> well, that's a tough call there's a lot of uncertainly, but forecasters really do expect prices will moderate over the coming year. it won't necessarily be lynn yard, but i do think it will be lower than it is today >> cecilia rouse, thank you for joining us showing you where we are in the market now, the dow down, but faring better than the nasdaq, for instance a lot of the megacap stocks are getting slammed. we're talking apple, microsoft and tesla. that's at the bottom of the qqq. energy is doing well today
other groups, not community indication services and consumer discretionary, they're at the bottom of the pack. mike santoli is next we'll be right back. what if you were a gigantic snack food maker? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo? so you partner with ibm consulting to bring together data and workflows so that every driver and merchandiser can serve up jalapeño, sesame, and chocolate-covered goodness with real-time, data-driven precision. let's create supply chains that have an appetite for performance. ibm. let's create.
more pandemic winners plunging today on quarterly results. this follows upstart holding yesterday's nose dive and teladoc last week. mike santoli has a closer look do you call these names crud officially >> that's a polite name for how they have behaved, absolutely. i think in general, almost no area of the growth universe has been spared increase pullback, but there's been separation. it shows that maybe this gap has to close a bit more.
here's quality growth. it's an etf. not all tech, but basically a little more fundamentally sound larger cap growth, as against this future tech etf, which very much tracks it shows you, that's been the down side leadership. the big question is if we have a rerun of what we saw, where the junkie stocks got slammed, but take a look at microsoft and alphabet relative to the cloud software etf it's a very similar story, the stocks arguably look much cheaper than they did back then. i don't think they are nearly as overvalued, but the market is attempting to make these distinction. >> it was thought a lot of these peeped winner was seg heart winners, too >> just not hundreds of them
there were hundreds that were valued -- >> thank you, mike we'll see you in the market zone teladoc is one ofs largest holdings, cathie wood doubling down two weeks ago wood says investors are missing out on a very undervalued stock. >> simon barnett, one of the most brilliant analysts out there in this space. >> well, simon will join us next to defend his bullish call we'll be right back.
sneakily -- automation, and other sciences to extend and enhance life. >> i think a major benefit is that it frees us up to spend a lot of time with the underlying science. i bring people back to the time horizon. in the healthcare space, uk cure disease on launch a new groundbreaking test every quarter. >> it all sounds good, except the etfs have been trading on momentum a lot of these companies don't have anything tangible.
so it's just not working that's actually a misperception that people have if you break it apart, many companies are generating revenue, right? a lot of them had been growing through the pandemic so if i get into more specific here, as well as companies we don't have in the fund, as well as the associated picks and -- like illumina or twist, they have
raised their annual guidance at growth rates far conspiracy to gdp. think in the 20%, 30%, 40% ranges we think these will continue to stabilize. >> what about teladoc. it's sort of like the peloton, in that it was a great pandemic winner, and now there's serious questions about what the future looks like. >> so i think a lot of people may have had their first experience with virtual care during the pandemic. the utilization rates are roughly 40 times higher, so the think the first introduction to the name might have been that
experience, and we've been following it for much longer than that. so to -- at these levels, in 2018 they had one sixth of visit volumes, half of the paid members, one fifth of the annual run rate and cash flow negative. now one out of six members is a full paid members, they increased their ebitda by 615% and this adds, to the roughly 900 million they have on the balance sheets so we view that profitable as a real strength and assets for the company moving forward to focus on the investment case, we're not as fixated on this direct-to-consumer channels, right? you can think of it as an evolution -- >> there's competition there.
>> it's a lot easier to start a company and go direct to consumer, much more difficult to go business to business. we thought about teladoc that's transitioning something more like a b 2 b enteinenterprise pr don't look at the increases members. we mentioned tens of mill on, but when you look at utilization ra rates. that's a misper ception, zoom for doctors, absolutely not. it's integrated with the hospital all the way into the surgical suite it's continues to work with the system the last thing i will say on that is utilization rates, and
we're also hearing a lot more about really competitive wins that the company is having, like taking away the northwell health account over an bandy because of the fact they have integrated so deeply, leveraged that data science to scale to really improve outcomes. >> simon, we have to leave you there. thank you for sciencing us we appreciate it. >> thanks a lot. here's where we stand right now into the market, 257, so down 1.3% on the s&p 500, just to give you a sense of what is getting hit the harders, names like tesla, appearing, microsoft, energy utilities and materials are the breathers staying positive it's meant to maintain a $1 peg to the u.s. dollar, but a controversial stable coin
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last week, several thousand shoppers talking to them constantly last week talking specifically about inflation, and the overwhelming number of them think it's the government that's the source of the problem here ed view is, we asked the question more deeply, what is the cause? i think they recognize that the excess demands being driven by all of the money in the marketplace it is important as we understand the policy prescriptions. we see it as demand driven inflation, and so as we think about the right kinds of
solutions going forward, obviously the federal reserve is going to do what it does it's going to impact demand, but how do we help consumer, especially at the lower incomes? >> yeah, dana, what matt just said and bank of america spending data, it looks like the consumer is holding up remarkably well, giving the inflationary forces. some of these names, tapestry, other names, 50% off the recent highs. where is the disconnect? >> i think every company is impacted by inflation. a lot with increase in gas prices, increases in raw materials cost there's no magic bullet, it can't be avoided i think pricing power is the key. these stocks, when you look at the s&p indices, you have
consumer discretionaries, which is off, while you look at staples, hanging in much better, i think it's pricing power that will make a difference until we see stability in the top line, that's what everyone is looking for, it's almost as if the whites in the company's eyes need to be shone, in terms of if it does stop, what is -- >> what is your your top two favorites now? >> i'm about pricing power, who has pricing power to offset, estee lauder, ulta, lululemon. i want to be in luxury where the margins are there. >> matt, what about online retail etsy is down again another 8%. this stock has been slammed so much even amazon lose ago bulk of its pandemic gains what happens to the stocks, as people have shifted back to in
store, and there are questions just how much growth lies ahead. >> well, one of the things we certainly saw over the course of the last year, in 2021 in particular was growth in wrong line sales was matched by growth in stores. it was divided pretty evenly between the online side and the bricks-and-mortar side so certainly the companies that have gotten much more sophisticated about the way they combine those services, how they use the stores to create engagement opportunities, how they use online to drive foot traffic, vice versa. those companies, you know, we have thousands of members, and every big name is a member i would say in serum of those
winners and loser, the sophisticated operators that move seamlessly, i think they have an opportunity. >> thank you, we'll left it there. we are near session lows, but these stocks continues to shine brightly despite weaker than expected revenue. and then roblox is staging a comeback shares of unity are plunging steve kovach joins us. what happened between last night and this morning to boost this whole group? >> it's the earnings call, really positive comments from the ceo and cfo on the earnings call about how they want to monetize these users they
gained they're adamant that growth may be slowing do you think, but we retained ought these user. 50 million are playing every single day, now we're ramping up advertising plans, ramping up the digital items we sell, so these monetization efforts remind me of when we heard facebook talking, saying we're losing money, but we have tons of people and we're going to turn the dial and start monetizing them. also, the pandemic hawks will get easier, because they've had this cycle of hyper growth, so comps will look better >> i just wonder they're distinguishing themselves here, this group, the video game stocks, pandemic winners that actually are able to maintain the growth
we've seen so many incidences, and unions, where it's falling apart. >> you have to keep in mind these are sticky gains, sticky experiences they're going after, and it's not just kids, what they're called aging up. they're getting more and more people on roblox in ea's instance, they gave a launch date for a mobile game, and the idea that it's coming to mobile will juice revenue there. it's a super popular game. >> steve, thank you. disney is coming after the bell we'll be specifically interested in new details about the streaming service. julia boorstin joins us. what should we be watching >> well, sara, the big question
is whether the streaming business is on track to hit the 2024 targets, or whether the company is concerned about a contraction, which is what netflix is predicting. the number to watch for disney is 5 million that's how much disney plus subscribers, analysts are looking for the company to add average earnings per shire are expected to grow that growth is driven by a rebound in the park. now, commentary about the parks, bookings for the usually busy summer season and spending trends will be very much in focus and seen as an indicator of consumer confidence in light of inflation and other recessionary pressures. >> thank you, julia. rivian is the other flame we'll watch. it's now down 70% from the ipo phil lebeau joins us
what would reassure investors. >> some reassuring numbers three things we'll be looking f for. first of all, what is happening with the cash burn reservation was about 83,000 reservations last time we heard. and the production rate. if they don't change any of that, that might provide some relief, but all the ev stocks are getting hit. mike i'm looking at the continued deterioration here there's still a few groups positive, but not as many. and barely material, everything else down, just another drubbing for these tech stocks. >> yeah.
basically the biggest names, trillion dollar club is coming under a lot of pressure today, so apple in particular really lose support that it's had for a while. the stock had traded, you know, arguably it's a good thing if investors sort of give up and feel like there's no place to high, at least trying to have a culmination of this process. the breadth of the market is negative, but not as bad as you might think. you've got about a 2 to 1 negative to positive volume on the day. so there's almost 1,000 stocks up look at a one-year chart for apple to get a picture that's been an issue for a while. you're gin of losing that. am con basically unwiding all of the pandemic gains the no whether to hide kind of
sentiment is kind of a face we have to go through here. volatility index, very, very conspicuous. it's been very unresponsive to the new lows people are very hedged up, or resigned we're in a slow slide perhaps we need another spike. look at the dow, home the s&p 500 is now down -- so for the week already, it's down about 4.5%
consumer lower, that is why the nasdaq is down 3.25% right now [ bell ringing ] >> sara, thanks so much. welcome to "overtime in sdwlus a few minutes, di disney's earnings will cross the table, and of course the instant top reaction whether stocks are getting closer to the bottom that's our talk of the tape, though, this hunt for the end. it's caused so much for your money. are we g
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