Skip to main content

tv   Worldwide Exchange  CNBC  September 14, 2022 5:00am-6:00am EDT

5:00 am
it is 5:00 a.m. at cnbc global headquarters and here's your top five @ 5. stocks looking to recover after their worst day in more than two years as futures point to at least some relief. technology stocks get walloped as some of the biggest names in the market lose more than half a trillion with a "t" dollars in a single day all of this after yesterday's hotter than expected inflation report but president biden says he's not concerned about rising prices or the stockmarket.
5:01 am
plus, a rocky few hours for crypto ahead of that long-awaited ethereum network merge, a possible game-changer for the second largest crypto asset out there. and then later on, getting technical. fairleads katie stockton is here with a closer look at yesterday's historic selloff and if the worst is yet to come. it is wednesday, september 14th, 2022 you are watching "worldwide exchange" right here on cnbc ♪ good morning i am dominic chu in for brian sullivan right now let's kick off your m wednesday morning with a check on u.s. futuresvery much in focus. the dow up by 150 points, the s&p 500 up by 22, and the nasdaq
5:02 am
up by 80 it doesn't seem like a lot, but it's a historic green. the dow falling more than 1,200 points or nearly 4% for a single worst session since june of 2020 by the way, it's the seventh largest point loss ever. worse still for the broader s&p 500, falling more than 4% on the day, snapping a four-session win streak and seeing its fifth largest point drop in history. it gets even worse and uglier for the nasdaq, coming offer more than 5% in terms of losses, its worst day since june of 2020 and then the russell 2000 small caps also coming off a sharply lower session, closing down nearly 4% for the worst day since -- you'll get a theme here -- june of 2020. all of this ahead of the open, right?
5:03 am
all 11 s&p sectors are more than, by the way, 10% below their 52-week-high closes with the exception of utilities, consumer discretionary, and technology leading the losses, all more than 20% below their most recent 52-week highs. watching treasuries now as well, the yields very much in focus. you can see here 2-year treasury note yields below 7.7% the benchmark 10-year yield, 3.437% now, the 2-year note yield is currently trading in its highest levels since 2007. in the u.s. markets wti is showing up with some losses today, seven cents on the downside, world benchmark ice
5:04 am
brent crude, 0.12% i mentioned cryptos earlier. we're seeing bitcoin and ether prices on the move sharp selloff yesterday tied to the broader risk aversion trade. bitcoin prices now currently 20,358 ether prices a hair above 1,600 per token, up about one quarter of 1%. now, around the world red arrows in asia overnight and europe has a rough early start going on let's send it out to our julianna tatelbaum standing by in our lunar newsroom with the latest good morning. >> hey, dom, good morning. as for asian trade, the invests are taking their trade from it the hong kong hdown 2.2%.
5:05 am
the bank of japan could be preparing for currency intervention in china, the mainland, some resilience dropping just 0.8% so a more resilient performance than we saw elsewhere. as for europe, you're absolutely right. we got off to a rocky start, but a bit of a stabilization you've got the ftse over in italy. a bit of green for the spanish market as well the xetra dax down 0 fountain 2% we've been listening to ursula von der leyen who delivered the state of the union she said the european union will more aggressively tackle the european crisis including low cost electricity providers and asks for contributions from the fossil fuel producers who have been making huge gaines. they didn't go any farther on
5:06 am
natural gas, but that's under discussion we've got ftse trading lower swiss market also trading in the red, down about 0.4% dom, back over to you. >> julianna tatelbaum with the latest on the market moves there. thank you very much. let's try to make sense of what we saw on the moves yesterday. we bring in craig hodges, chief investment officer craig, you manage money for a living and you do so, tilted a lot toward some of those smaller cap companies out here just take us through what your thoughts were as you watched that "closing bell" come to fruition how many fears and anxieties as a small cap manager really came to fruition given what we saw yesterday with the inflation numbers? >> i wouldn't say it was overly, you know, dramatic yesterday i've been in -- in 35 years, i've been through several of
5:07 am
those types of selloffs. i think kind of what happened is people are looking for that pivot from the fed they're looking for some sort of sign that this aggressive interest rate rising is going to come to an end i think people had the position that maybe we were going to get something from cpi yesterday obviously it's not appearing yet. obviously there's a lag in the data so, you know, we're going to stay invested. that's our job we still see tremendous opportunities. any time you see this big of a selloff, there are opportunities. you know, these are the markets where we make our big money. it's just you don't realize it yet. so like i said, we've been through this before. we're a half glass full type of investor here at hodges capital, so we're going to stay the course. >> craig, you mentioned these are opportunities. so if these are opportunities, where would then -- first of all, are you deploying capital
5:08 am
excess cash, and if so, where is it going >> yeah. our favorite area is the energy space. obviously with what you're seeing in energy, you know, the high prices and the inflationary things, energy's very, very underinvested, and there's a new kind of attitude with, you know, the companies that are allocating capital they're not investing as much. they're bringing most of that money to shareholders. so energy would be our favorite. but in inflationary environments you want to own things like energy, materials, commodity-type, industrial-type names. that's the area that we see that have the opportunity you know, let's not forget, everything looked very trajing like yesterday, but we still have full employment, wages are going up you know, you rarely see
5:09 am
catastrophe-type markets when you have this strong of a backdrop so i would just kind of remind investors that, you know -- if you stay fully invested since world war ii, the rate of return you would have gotten would be in the upper 9%. if you missed the best ten days in that time period, your rate of return would be cut in half it would be about 5.4% over that time period annually the key is staying invested and taking the good with the bad and there's more good than bad. >> all right if there's more good than bad -- if you were a stockmarket investor, you have to be somewhat optimistic. you have to believe in some point in the coming days, weeks, months, years, it will be better than it is today that's the whole idea of being in the stockmarket and the whole idea of growing an economy as a country. if that optimism is in play right now, there have to be
5:10 am
specific spots in the market that seem more attractive than others you mentioned energy as one. are there specific company stocks that you think stand out in this kind of environmental that are on your shopping list >> yeah. chesapeake energy would probably be our favorite. chesapeake's got a terrible reputation long term they used to have the worst balance sheet in the industry. now they have one of the best. of course, they're in the natural gas business, which we feel like natural gas will be the best part of -- you know, i think both sides of the aisle realize natural gas is going to be a great bridge fuel, and as we come into the midterms, i think you'll probably hear a lot about gas. here's chesapeake with only about a 12 billion dollar market cap. over the next five years, they're going to return $14 billion in free cash flow. that's tremendous. the stock trade's about three times ebitda insiders are buying stock. so i think chesapeake's very
5:11 am
misunderstood, but i think we're in the very, very endings of a substantial move there in chesapeake. >> craig hodges, thank you very much we appreciate it when we come back on the show, more on the market selloff and the trading day ahead. plus twitter shareholders having their say on the elon musk $44 billion takeover bid amid his trying to scrap the deal and cathie wood sounding the alarm on deflation yes, not inflation deflation. her comments straight ahead. and coming up later on, the white house putting together a emergency plan over the looming eventual railroad strike we a busy morning when "worldwide exchange" returns after this break options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated.
5:12 am
custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market. go. go green. go wind turbines. go gorgeous reliable grid. go emerson software. go science people. go breakthrough meds and safe science. go space age welds for super silent cars. go big. or go home. from software that delivers new cures at warp speed, to technology that makes clean energy reliable, emerson innovation helps make the world healthier, safer, smarter and more sustainable. go boldly. emerson. an xfinity rewards special offer. go boldly. xfinity customers join xfinity rewards
5:13 am
and get an early access code to play the open beta. early access begins september 16th, first on playstation. visit
5:14 am
welcome back to "worldwide exchange." it was not all doom and gloom for stocks yesterday agricultural chemical names like coritibia, cm industries, and mosaic were among five s&p stocks that finished in positive territory. all three, by the way, are some of the best performers in the s&p 500 this year, up at least 30% a piece. and albemarle up 0.38% this
5:15 am
quarter. let's get a check on stories this morning with silvana henao. good morning. >> good morning, dom shareholders voting overwhelmingly in favor of musk's offer, the voting coming days after musk's latest effort to scrap the deal citing several issues with the whistle-blower the case between musk and twitter is scheduled to go on trial on october 17th. cathie wood is reiterating her view that deflation is on the horizon. speaking in a webcast, the ark invest ceo is warning the fed reserve is making a mistake with its fed rate hike policy, which is suggesting a number of caters signaling inflation may have already peaked and the likes of elon musk and jeffly gundlach appear with her on the inflation call and the average rate on a 30-year fixed rate mortgage
5:16 am
hovering on a high 6.28%. it comes after the jump on the back of tuesday's cpi number, dom. >> thanks so much, silvana henao. let's start now with the ten-year treasury note yield veil na just mentioned some of the mortgage rates right now a hair below 3.445%. we're about 0.03 of a% remember here it was around 3.48%. so as these moves have gone higher over the median term, you can see how much the markets have reacted to those. the investor point is the interest rate picture. now, if you take a look at how that interest rate picture is playing out in the stockmarket many of the biggest names that took the biggest hits in yesterday's market were growth oriented technology or communication services names, ones that tend to be more
5:17 am
sensitive from a valuation perspective to some of those interest rate hikes. remember the higher interest rate yield goes for the yield, the more money you get from risk-free returns, the less attractive some of these stocks become look at nvidia and meta platforms. they lost anywhere from a quarter to more than half their value. but it was like in the last couple of months here as interest rates started to play out that you saw moves by nvidia and meta toward within anywhere from 1% to 3%, 4% from their 52-week lows again, these three companies, a handful of the mega caps near their 52-week lows in yesterday's trade. and then, remember, let's put it in context stockmarket volatility was extreme yesterday. we took you through the superlatives the worst day in many cases since june of 2020 but it wasn't all that bad compared to where it has been, even this year remember, in the weeks just after russia's invasion of
5:18 am
ukraine, we got up toward near 40 on the vix overall on an intraday basis and back during the pandemic lows on an intraday, it was up above 80 so things, yes, were volatile yesterday, but they could be a heck of a lot worse. keep that in mind when you talk about the market volatility we saw. still on deck, more on the markets' latest selloff. richard kramer lays out why more pain may be ahead for that beleaguered sector "worldwide exchange" is back in a moment
5:19 am
i was having challenges with my old bank. lots of red flags. fees, penalties. so i broke up with bad banking and moved on with sofi checking and savings. now, i earn higher interest on all my money, and pay no account fees.
5:20 am
sofi. get your money right. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums] life is for living. let's partner for all of it. i'm so glad we did this. edward jones you'll always remember buying your first car. and buying your starter home. or whatever this is. but the things that last a lifetime like happiness, love and confidence... you can't buy those. but you can invest in them. we believe that your investments should work harder for the future you imagine. and that's where our strategic investing approach can help. t. rowe price.
5:21 am
invest with confidence. welcome back we've got a market flash on alphabet upholding the eu's biggest ever anti-trust fine they regulated a 4.4 billion dollar penalty over google over its software they determined they broke antitrust rules by requiring smartphone makers to require a bundle of google apps. the court reduced the fine slightly to $4.1 billion shares up after getting hit yesterday. now, the celebration for queen elizabeth ii set to continue today a silent procession featuring the queen's family members set to bring her coffin from buckingham palace to westminster
5:22 am
hall where she will lie in state ahead of monday's funeral service. thousands are expecting to line the streets to pay their respects to the late queen we have more on what to expect from today's proceedings. >> reporter: good morning, dom, that's right at 14:52 britain's summertime behind will be king charles iii supported by his sons prince william and prince harry and the rest of the royal family the queen consort camilla with the princess of wales catherine, meghan markle, tand sophie will
5:23 am
accompany them by car. a 38-minute walk behind the coffin will then arrive at westminster hall, the 1,000-year-old hall where the queen will lay in state for four days at 5 p.m. this afternoon the doors will open up to the public who are lining up in the thousands. approximately there's a ten-hour queue at the moment. for the next four days the public will go pay their respects to the late queen, elizabeth ii, and, of course, on monday will be the state funeral. >> all right tania bryer with the latest on the queen, thank you. nbc's frances rivera has the latest good morning, frances. >> good morning. we're following breaking news on the campus of northeast university in boston when police
5:24 am
say a 45-year-old man suffered injuries to his hand when a package was loaded it was detonated when he opened it the boston police bomb squad said they located a second package on the campus and found it to be safe. university police have declared the campus secure. an fbi spokesperson confirmed itself boston division is helping in the investigation. k firefighters are battling two infernos threatening the northeast of sacramento burning now more more than a week. the mosquito fire has forced thousands to flee their homes. more than 57,000 acres are torched with a quarter of the blaze contained. nearby they have reopened parts of i-80 after evacuations caused by the dutch flat fire which is now 30% contained. over night three states held their primaries. the most closely watched the republican showdown for the senate seat.
5:25 am
bolduc is leading in a contest against morse that's too close to call. bolduc has embraced the lie that the 2020 election was stolen chuck morse is the state senate president and has the backing of governor chris sununu. meanwhile president biden and first lady jill biden arrived. those are your headlines we send it back to you. still on deck for the show, much more on the training day ahead including new comments from president biden on why he's not worried about continued inflation or with the market reaction. and by the way, if you haven't already done so, please follow our podcast if you missed "worldwide exchange," check out apple, spotify, or podcast app of choice we'll be right back.
5:26 am
5:27 am
5:28 am
some ground after suffering their worst day in more than two years. futures right now looking at small gains. tech gets wrecked. once again amid the broad selloff with some of the biggest names, shedding half a trillion dollars in market value. richard kramer helps us make sense of the dramatic drops and whether more pain may be on the way. and cryptocurrency is not
5:29 am
immune to price pressures as ether takes a long-awaited merge to a new operating model it's wednesday, september 14th you're watching "worldwide exchange" right here on cnbc ♪ welcome back to "worldwide exchange." i'm dominic chu in for brian sullivan on this wednesday morning. let's kick off this half hour with u.s. stock futures pointing toward modest gains at the opening bell try to figure out what's going on with the dow jones implied higher by 70 points, the s&p higher by 25, and the nasdaq implied higher by roughly 90 points the investors are trying to pick up the pieces after yesterday's historic selloff the dow seeing its seventh largest sing le single day point loss in history. all of this on the heels of the
5:30 am
inflation report, all but one that guarantees the fed will raise the rate at 75 basis points at next week's meeting. and growing speculation of the possibility of a full 1% or 100-basis-point hike check out the odds right now, the latest ones courtesy of the cme group. it's roughly a 68% chance we'll see a target rate of 3 to 3 1/4 chance so the next fed rate move very much driven by that cpi print. now, yesterday investors were still pricing in a 12% chance of a 50 basis-point or half a percent hike but while investors appear to be worried about rising prices and falling stockmarkets, the white house appears unfazed. here's president biden speaking with reporters in delaware just yesterday evening. >> the stockmarket doesn't necessarily reflect the state of the economy as you well know, and the economy's still strong,
5:31 am
unemployment's low, jobs are up, manufacturing's good so i think we're going to be fine. >> what about the inflation nu number, sir? are you worried? >> no, i'm not thank you. a quick check on treasuries this morning, rates ticking slightly higher. the ten-year yield a little below 3.44%. the 2-year a little above 3 president 7% and the 30-year the long bond, 3.51%. turning now to technology, the sector coming off a crushing day with the six largest u.s. tech companies losing more than $524 billion in market value yesterday. now, the names that we are watching, apple falling 6% yesterday, its steepest drop since september of 2020. 155$155 billion in market value wiped out.
5:32 am
microsoft closing down at $9.5 billion gone and its steepest drop since nosh of 2020. alphabet, down 6% on the day, $85 billion in market value gone same stories for the likes of amazon, facebook parent meta company and nvidia as well can see here billions and billions shaved off the market values there so let's dig through all the rubble in tech and commerce services joining me now co-founder of arete and analyst richard kramer richard, the likes of this trade have been volatile now for years whenever there's a downturn, but they've also led to the upside technology is a favorite sector among investors, should it remain that way? >> well, i think technology broadly is going to remain a favorite sector among investors, but what we're seeing is a separation of the wheat from the
5:33 am
chaff. a lot of the companies are in better shape than people give them credit for, the likes of apple, microsoft, or google are all in a position where they have a large cash file and are buying back their own stock, and those are the companies that i think will take proactive action, will know how to restrict their clause phrases as we've seen through the pandemic, and they'll be fine. what i would be worried about is the long list of less able companies with less seasoned management, many of which were brought by the banks and ipos in the past two years, and a lot of those companies are going to get wiped out because of a huge increase in their cost of capital for companies that don't generate cash can turn out to be fatal. >> richard, is that the case that you're making, that balance sheet strength, the ability to weather a possible economic downturn is what should go on your factor list when you're shopping for tech stocks and communication services and if so, does that really just
5:34 am
then only include mega caps that are making money or are profitable or have a positive cash flow. >> look. i don't want to draw a line based on the market cap level, but -- and i wouldn't just look at these large tech stocks because you see other ones in software and tell con services look at a company like t-mobile u.s. which has taken a market share and announced a big buyback of its own i think there are managements all over the place that understand that it's not a hiring freeze that's needed. it's steep head count cuts they will have to contend with a range of rising costs, and what i'm saying is that we've seen is a rrk by markets, hundreds of companies pushed out by banks and potentially bullish analysts, and they haven't shown they can manage through downturns. a lot of the mega caps got to be
5:35 am
mega caps because they managed through turbulent times through multiple cycles. >> now, i mentioned before and i had tweeted out yesterday, we had run screens with regard to many of the mega cap and blue chip if you will well known technology media-type names that are sitting at or very near 52-week lows at the very least at this stage. is it maybe okay to start dipping your toe into buying some of these names, or could we see even more downside ahead given the rate outlook for the fed? >> look. i think right now it's a gain with the mega caps of relative performance, and i think i came on cnbc a couple of months ago and i told you, you know, we're only halfway through this bear market we had a huge rally in the summer, but typically they last 700, 800 days. back to november last year, we're only part the way through this effort.
5:36 am
i think the difficult thing is to take all of these other noisy companies out of the market and allow the ones that are going to make it through to become good investments again. i wouldn't suggest people start buying blindly after a huge dip like this because i think there's still a lot of estimate downside anding remember, you've got all of those banks out there with all of the buy ratings on all the companies, and they're going to have to start rethinking their perpetual bullishness when the companies start admitting their estimates are going to come down and you start to see profit warnings from some of the weaker profit companies. >> richard, before we let you go, you cover a lot of grown with regard to your work at arete research and what kind of companies or stocks would you stay away from? >> look, the ones you stay away from are fairly easy we have a long list of sell
5:37 am
recommendations which we're not ashamed to put out there we don't mind if we have a negative relationship with the company or they get upset because we're calling out where we think there's material weakness in a business we like a stock like t-mobile u.s. there's a number of names we like because of entries. all roads still lead through tsme globally. we hosted a call yesterday with analogue devices that's a very stable company you can look at it owned through cy cycles in the internet and consumer space we like apple and google they're buying back huge amounts of their stock and there are some even higher flying companies in software space that we like because of how strong the technology is, whether it's a company like snowflake. we think those companies will be fine in the end alongside microsoft because, let's face itting they're not going to get torn out of the millions and
5:38 am
millions of enterprises they're embedded in over the next few years. >> top picks from richard kramer, arete. thank you very much. it was a wild day of trading yesterday with bitcoin falling to its lowest level since june ether seeing its lowest. you have the ethereum network knowned a the so-called merge. the energy it takes to mine those coins and tokens 20678 hours before it goes live. joining me now, cnbc technology analyst, ma ckenzie. mac, i'd like to start with you
5:39 am
first. i'm looking for still a simple layman's term way of understanding what the merge is in the ee theorem network. can you take us through why it's important? >> good morning, dom, and what's happening tonight is that roughly a at midnight on the coast they're going to way its sew keirs its network and verifies its assets. it's called proof of work an it uses a ton of nerm after tonight's upgrade, ee theorem will migrate to a system known as proof of stake. it swaps out miners for validaters, and the validaters are not running large banks of
5:40 am
computers. they're staking their ether tokens, locking them up, and by doing that is correct it gives them the right to validate blocking lots of tractions the blockchain is expected to drop more than 99% i will say this, if the merge is a wild success, i'm told the users won't be able to tell anything has changed ethereum will not change. >> mac, i'm not asking which is better, which blockchain is better, bitcoin or toke season better but what does this do for ethereum as a network for blockchain transactions in the future does it make it relative literature more or less attraction tissue than others out there? >> it certainly pucks to rest the ethereum killers
5:41 am
even though we won't see p cheaper tractions or a blockchain that moves faster than it does now, it sets the path it sets ethereum on the path for upgrades it's set itself apart from what's an operating system the vast majority of apps are built on top of ethethereum >> so for the sector overall, that's where we bring in devin ryan here. devin, this is something that has been talked about for quite some time. there's been a lot of enthusiasm built into it, and for that reason, ethereum prices over the median term have outperformed bitcoin price. i wonder, though, given what we saw yesterday, in terms of the massive risk aversion trade that hit not just stocks but crypto as well, is this enough to reignite some of the, i guess, enthusiasm for cryptocurrencies, enough so that the industry stands to benefit?
5:42 am
>> good morning, dom first off, i think mackenzie hit the nail on the head this is a process, so this is critical to getting foundation right for ethereum and i think over the long term is a very big deal in the near term, there's a lot of things that still don't change and we'll need to over the coming years to really, we think, propel ethereum to what it's expected to be. you look at coinbase and robinhood. they're correlated to growth and adoption and asset prices, right? so over the long term, if this makes ethereum a better platform, base layer to build off of, there's going to be more development, more applications, and, therefore, a greater market value in the ecosystem that's good over the bigger
5:43 am
picture. over the more intermediate term, as you move to proof of stake, firms offer staking services, and so, you know, they have about $25 billion of ethereum on their platform today that's 12% of the market cap that's our esty machlt that's a large percentage of ethereum's market value sitting on coinbase sore for coinbase users interested in generating awards, coinbase will get a spread on that that will equal hundreds of millionsover the median term we're talking about it doesn't all happen on day one. this is a process we're looking at over the next year or two years, but to take a step back, you have to get the foundation right before you can build a house that's going to stand for 100 years, and so that's the way we're thinking about this critical step, but it's one step above what will have to happen in the industry. >> devin, let's play a scenario,
5:44 am
hypothetical analysis here let's say, let's just assume that crypto prices hypothetically go lower from here are these companies, coinbase and robinhood, companies that have a strong enough balance sheet or the ability to raise capital effectively enough to weather downturns when there is possibly a downturn in the overall crypto market? >> it's a great question, i think a question every investor should be asking about, all fintech and tech stocks. when i look at those two specifically, wouch the reasons we like them not just the near term because it's very uncertain but long term is because we think they will be winners because of the capacity and strength of their balance sheets, and we don't see the need to raise capital. if anything, your robinhood is right on the verge if not already cash flow positive they took some hard steps, made head count reductions over the
5:45 am
last few months here on the flip side, they're going to benefit from higher interest rates some of they have $6 billion in cash, but are moving into cash flow positive. that's going to be a catalyst for them i think coinbase has 5, $6 billion in cash as well with a lot of liquidity, and so they're operating at a modest lorks almost intentionally to grow their business we think that they can tighten that even further if the price point takes another drop from here so no doubt it's a difficult operating environmental here at the moment, but those are two firms that we're not worried about in terms of balance sheet strength and the ability to weather what could be still an extended period of choppy backdrop. >> deven ryan and cnbc's own mackenzie sigalos. the biden administration is preparing for a massive potential strike by the railroad system in this country
5:46 am
they're looking to keep goods moving and transportation lines moving if unions representing their workers and employees are not able to reach a labor deal by friday with the employers. amazon set to face its latest test in the push by unions and -- employees to unionize, rather an election is set to be held at a giant facility in upstate new york next month. this would follow the successful union bid in one of amazon sthees new york facilities earlier this year. apple is planning to put ads in its app store in the coming months according to developers by cnbc. the plan is expected as soon as the holiday season to move for a significant expansion of apple's advertising arm. "worldwide exchange" is back in a mold moment being felt everywhere. that's why at chevron, we're increasing production in the permian basin by 15%.
5:47 am
and we're projected to reach 1 million barrels of oil per day by 2025. all while staying on track to reduce our carbon emissions intensity in the area. because it's only human to tackle the challenges of today to help ensure a brighter tomorrow. power e*trade's easy-to-use tools like dynamic charting and risk-reward analysis help make trading feel effortless and its customizable scans with social sentiment help you find and unlock opportunities in the market with powerful, easy-to-use tools power e*trade makes complex trading easier react to fast-moving markets with dynamic charting and a futures ladder that lets you place, flatten, or reverse orders so you won't miss an opportunity want more from your vitamins? get more with nature's bounty. from the first-ever triple action sleep supplement. to daily digestive support. to more wellness solutions every day.
5:48 am
get more with nature's bounty.
5:49 am
right now futures pointing to gains at the opening bell, fractional, but maybe a little bit of it is fine at this point. also watch the mega cap technology trade remember, these stocks had billions and billions shaved off their market trade right now amazon, microsoft, alphabet, and tesla all up fract fractionally. on deck for the show, katie
5:50 am
stockton lays out what she sees and whether the stocks can pull out of this nosedive we'll be right back.
5:51 am
go. go scientist. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson. when hurting feet make you want to stop, it's dr. scholl's time. our custom fit orthotics use foot mapping technology to give you personalized support, for all-day pain relief. find your relief in store or online. i was having challenges with my old bank. lots of red flags. yellow ones, too. fees, penalties... unnecessary fees! playing dirty. so i broke up with bad banking and moved on with sofi checking and savings. now, i get up to 2.0% apy on all my money, and pay no account fees. feels good to get my money right. banker disqualified! break up with bad banking. get 2.00 percent interest, and earn up to $300 when you set up direct deposit. sofi. get your money right.
5:52 am
welcome back let's look at how the market is shaping up after tuesday's selloff. katy stie stockton, one of our regular technical experts here one of the broad questions right off the back, was there any technical damage so to speak done to the market >> honestly the damage was already done before yesterday's decline. we have negative long-term moe member tuchl behind the market weakened intermediate momentum and yesterday was a short-term event. there was no kind of breakdown yesterday, per se, but there was deterioration in the short-term trend following gauges, and that does increase the likelihood
5:53 am
we'll see support levels we've been watching in the near term as you know, the month of september does not hold at the best seasonal influences here we are with that kind of weakness and market psychology. >> katy, i guess, this is very elementary of me because i'm not a technical analyst, but i do follow a number of them like yourself is it simply saying we retest the lows we saw in june? is that what we see for the dow and the nasdaq >> you know, for me the june ones were a test those are common ways to try to understand where buying pressure might come in. it did actually happen in june the level that we're watching for, the s&p 500, is about 3815, just over 2.5% below for the nasdaq 100, it's just shy of 11,000 to 800
5:54 am
also around sort of 2, 2 1/2, 3% low. to catch it with these levels, secondary support levels based on that same methodology are closer to 10%, 11% below these are really key long-term levels we want to see hold, and by that, we're okay with them being penetrated on an intraday, even on an intraweek basis, but if you were to see a couple of weekly closes solidly below the support levels, that would be a major breakdown in our work. >> katie, do i have this correct? it wouldn't be shocking then in your mind if we fell another 10%, 11% from here and then you'd have to re-evaluate at this point if you go deeper past those support levels for the downside. >> that's right. we really have no way, of course, knowing where the bear market cycle culminates or ends. we just use our indicators to try to help guide us and suggest when momentum is shifting to the
5:55 am
upside we certainly do not have that. our assumption is we'll see a relative low versus june from the major indices as this down trend persists, and we also suspect that this down trend is going to not culminate in dramatic fashion meaning we won't get some kind of bottom but rather a series of retests of support i think patience is dictated by the price action here. we do think the 10%, 11% support level is certainly realistic for this bear market cycle again, we don't have that crystal ball unfortunately, but we will at least be able to keep an eye on our indicators, which at this time on an intermediate term basis is are not oversold yet. before taking any counter trend positions, we would want to see an oversold meeting from the market. >> speaking of, that's the setup that technical analysts look at,
5:56 am
right? they speak of the setups going into this. are there any favorable setups in your mind stock-wise? have you seen anything that looks good given what happened yesterday? >> you know, yesterday was obviously damaging to just about every sector of the market and yet we still fave energy and utilities as being the two sectors left that have upheld their long-term projections. we've seen long-term upside momentum behind the commodity complex. so we believe some of them may have already entered trading range environments but within that context, we are looking for events from commodity prices including crude oil, and that should occur to the benefit of energy stocks counter to the rest of the market. >> and just before we let you go really quickly here, anything you would stay away completely from >> oh, well, cryptocurrencies have to be up there. there's a lot we would stay away from in this market place broadly to the extent that we can and just to be hedging
5:57 am
exposure but cryptocurrencies on that risk spectrum run fairly high, and we saw that yesterday from bitcoin with its decline and, of course, the down trends there still have a hold. >> katie stockton, always great to get your insight. thank you. >> thank you. that does it for "worldwide exchange." "squawk box" continues next. we'll see you tomorrow fossil fuel heating for a cleaner, low carbon future. go blue skies go. go boldly. emerson. dad, we got this. we got this. we got this. we got this. life is for living. we got this. let's partner for all of it. edward jones another busy day. let's of course it is -f it. you're a cio in 2022. so what's on the agenda?
5:58 am
you guys have a look at that and see... morning security briefing - make that two. share that link. send that contract. see what's trending. check the traffic on your network. in real time. with the next generation in global secure networking from comcast business. lunch? - sure. you've got time. onboard 37 new people. with 74 new devices. does anybody have any questions? and just as many questions. shut down a storm of ddos attacks. protect headquarters. and the cloud. with all your data on the nation's largest ip converged network. whoa, that is big. ok. coffee time. double shot. deal with a potential breach. deal with your calendar. deal with your fantasy lineup. and then... that's it? we feeling good? looks like we're feeling good. bring on today with comcast business. powering possibilities.
5:59 am
good morning stocks coming off their worst day in more than two years remember yesterday we said, well, september 13th, clear sailing. nope october's next we'll see. inflation data and the fed in focus treasury yields jumping as investors bet the central bafring will be even more aggressive in raising rates.
6:00 am
plus a developing story out of the eu. the european commission president pledging overhaul energy markets with measures including a tax on fossil fuel profits. wednesday, september 14th, 2022, and "squawk box" begins right now. ♪ good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin, and we are live at the nasdaq market site this morning we're going to check out the futures right now. maybe the best thing we can tell you this morning is at least the beatings have stooped for now. yesterday was a brutal day we're talking about a decline of the dow of almost 4% it was a drop of 1276


info Stream Only

Uploaded by TV Archive on