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tv   Closing Bell  CNBC  March 3, 2022 3:00pm-5:00pm EST

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while, in prior economy, companies weren't always willing to spend money on reskilling they're doing a fair amount of reskilling, training people. >> susan, we have to leave it there. thank you very much. susan arthur of careerbuilder. watching for the job numbers tomorrow >> thanks for watching "power lunch. >> "closing bell" starts now hello, and welcome to "closing bell. i'm sara eisen stocks are struggling to pick a direction today, but losing steam in the last few minutes as investors are watching the fed, oil prices, and the latest out of ukraine nasdaq leading the declines as we head into this final hour of trading. >> i'm mike santoli. let's look at what's driving the action fed chair powell delivering testimony for a second day on capitol hill, telling senators the fed will do what it takes to bring down inflation, but higher energy prices could weigh on growth chip stocks are weighing on the nasdaq
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morgan stanley downgrading intel and a number of other names this morning. we're seeing more big individual stock moves on earnings. snowflake and okta are sinking while best buy and kroger get a boost. >> coming up on today's show, we'll talk to box ceo aaron levie. plus, commerce secretary gina raimondo will join us fresh off your cabinet meeting with the president to discuss the latest sanctions on russia and how inflation is complicating the picture in america nasdaq is down more than 1.5%. what are you focused on? >> indecisive, inconclusive action, plus and minus, a little less than 1% on the s&p 500. yesterday, remember, we closed basically at friday's highs. 4400 thereabouts about 50 points above there is where people are looking to have this sense that in fact the index is clearing this down trend. yes, the weight of the big growth stocks has been the main issue today. not just semi-conductors but
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really in general, just money coming out of areas. aside from things like apple, but there you go, there's the 4400 type level. it still looks like you have a couple higher lows here. nothing that's really jeopardizing the idea we found a decent low end of the range for now that was retested last week, but obviously, all remains to be seen sentiment is sour enough to support further bounce here. take a look at inflation expectations embedded in the bond market. five-year break even inflation rate is back up roughly to where its highs were late last year in october. so that was before, of course, the fed pivoted and people got convinced that the fed was going to move hard against inflation mostly, this is an energy story. remember, this is based on headline inflation over the next five years we're back close to the highs. clearly, that's why the fed is very much in let's get started on tightening mode, wherever it does end up. talking about interest rate and inflation sensitiving sectors.
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home builders and real estate. over the last 18 months point to point, they have been more or less neck and neck, but real estate which is mostly commercial, has started to outperform home builders roughly holding up but clearly, the issue of supply and demand as well as the possibility of mortgage rates going up is an issue inflation, embedded inflation in real estate is becoming a bit of a calling card >> i feel like we're grappling with this question of whether u.s. stocks are going to be sensitive to what's happening in russia/ukraine in terms of the sanctions, the spillover on europe if you look at the german daxs, germany had another 2% down day, down 6% so far this yeek and a lot of safe havens are working this week. gold, the yen, dollar, and treasuries market is trying to figure it out. >> defensive without a doubt it's sort of withholding judgment when that happens, you sort of back off to the sidelines. i'm watching money market, signs
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of money market stress it doesn't seem like it's anything critical, but it's migrating higher and yes, there is outperformance by the defensive sectors. crude oil interestingly has softened up here that's become very stretched and i don't think equities know what do with that energy stocks have not matched the rise in crude in this last little spurt higher. >> let's get to washington for the latest on the crisis in ukraine. kayla tausche has that for us. what do we know at this hour >> the white house this afternoon outlining a batch of new sanctions against russian oligarchs. continually increasing the pressure on those in vladimir putin's inner circle including on the kremlin's spokesman. here's president biden at a cabinet meeting just moments ago. >> severe economic sanctions on putin and all those folks around him, choking off access to technology as well as cutting off access to the global financial system it's had a profound impact already. and the goal was to maximum the impact on putin and russia
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and to minimize the harm on us and our allies and friends around the world >> negotiations at the belarusian border ended with no cease-fire deal, but the two sides did agree to keep some roads open for civilian evacuations. russian troops have seized small towns across the country even as a convoy headed toward kyiv remains stalled outside the capital. president putin said his so-called special military operation is going to plan the kremlin saying russia still seeks the whole of ukraine western officials expect the violence to worsen in the coming days, as president putin seeks to strengthen his negotiating hand going into another round of talks early next week. today, press secretary jen psaki asked about a possible diplomatic off ramp said it's hard to envision one when there's still an invasion going on sara >> kayla, i'll take it thank you very much. appreciate that. meantime, elsewhere in d.c., fed
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chair powell wrapping up a second day of testimony to congress steve liesman has the big takeaways from his day in the senate steve. >> powell's day in the senate, mike, not mine just want to be clear about that the hearing focused on the economic impact of the ukrainian war, inflation, and the way it all combined to impact the u.s. monetary policy. so here's powell's answer, fed chair jay powell's answers when asked the question directly. >> before the invasion, we were planning to raise rates this year, we were planning to make a series of interest rate increases. that is still the case i think right now in this very sensitive time where uncertainty is highly elevated and we really don't know which way things are going to go, we need to move carefully. >> powell also said the fed would shrink the balance sheet in a predictable way the ukraine invasion will worsen supply chain problems, a big
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problem because the fed's looking for supply chain problems to improve and help the inflation story. and he said he's ready to go as far as volker went in the inflation fight. his comments came after cleveland fed president loretta mester said it's possible the fed may have to raise rate above the neutral rate of 2 to 2.5% to combat inflation this could mean more rate hikes while powell said the higher inflation from the war could reduce growth. mike, i couldn't sit for that long to do a testimony like that >> yeah, you and me both, for sure it's an impressive act of stamina. steve, also, just absorbing the questions from different directions you mentioned the volker question which is sort of fascinating because implicitly, that means are you willing to throw the economy into recession if inflation remains persistent i guess there's a lot of assumptions built in, in fact, there will be this multi-year battle with inflation, which presumably is not the fed's
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premise. >> no, it's not. you're right the fed believes a series of factors will combine to bring down inflation including those supply chain problems easing. running off some of that fiscal stimulus, some kind of decline in demand, as well as the tightening in the market, and to come, you want to take that with a grain of salt because the fed had that prediction for last year and early this year, and it's turned out to be wrong. talking with some people, mike, and they're adding several full percentage points to their headline cpi numbers because of what's happening now with oil and i'll have more on that i think on monday when i do a better round-up. >> that's going to be a doozy. steve, thank you steve liesman. >> want to show you what's happening with the market. session lows on the nasdaq, down 230. 1.75%. lows of the day, we have seen this deterioration just past 3:00 p.m. eastern time s&p 500 is down about .7%. got down as low as 1% earlier
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today. you have groups getting hit particularly hard like consumer discretionary, information technology communication services if you look at the ark etf, cathie wood favorites, they're getting hit hard draftkings down 11%, and the ark etf down 6.3%. we'll keep an eye on all of it as we head to the close. also up next, oil's sharp rally takes a pause, but plenty of action in other commodities. we'll ask an expert whether he recommends putting money to work in this space. >> plus, we have seen huge stock moves on earnings and more results after the bell broad com, gap, costco we'll bring you that information as soon as it crosses. you're watching "closing bell. the dow is down about 150 points right now.
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the choice is clear: make your business future ready with the network from the most innovative company. comcast business. powering possibilities™. it's a rare sight of late. red on the screen for oil. prices ticking just a bit lower today on hopes of an iran deal for more supply. earlier, prices reached their highest level since 2008 wti crude had moved above $116 a barrel present hit nearly $120. this morning, exxon's ceo told "squawk on the street" that prices could be heading even higher >> i think it's very difficult to know exactly where this ends up and frankly, if there is a significant supply disruption with respect to russian crude, which is about 6% of the market today, that will be very difficult for the market to take, to make up, and therefore, that will lead to, i think, significantly higher prices.
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>> beyond oil, gold and natural gas have seen sizable gains. all sorts of commodities are going haywire. rbc predicting gold in particular could rise higher and reach as far as $2057 an ounce on the back of further escalation in ukraine. joining us is the man behind that call. chris. gold in particular is particular interesting. it's given this safe haven bid there's also questions what vladimir putin is doing with gold holdings and potentially buying more gold how does that stack up for gold's sprauprospects? >> we had seen gold rally on a the back of a lot of these concerns when we look at the market, we saw flows into e terx fs, stronger sentiment, higher prices as investors began the realize the risk that ukraine and russia's invasion of ukraine would pose what we have seen recently is a strong example of gold
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fulfilling that sort of classic safe haven bid as we recognize and as you mentioned, our high scenario reflects some of the worst case scenarios where we could see gold prices go as the crisis continues to escalate. >> what about the role of gold for russia and an alternative to sanctions? also talk of bitcoin for instance as a way to circumnavigate that. how do you see the usefulness, the use case there >> yeah, we have seen central banks broadly, in an attempt to dedollarize their holdings buy gold we have seen a number of countries who are subject to sanctions focus on gold, and now people are talking about cryptocurrencies as well as one of these ways to circumvent sanctions. we don't have a ton of insight on that yet, but what we have seen is russia prior to the last few years had been building up quite aggressively it is a substantial part of their holding. they're a top ten holder as far as central banks are concerned so there's certainly a gold stockpile at russia's disposal
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what we're seeing more broadly to bring it back to the investor space is investors are really layering into gold as a sort of perceived safe haven to smooth out their holdings, to smooth out the sort of volatility that we're seeing expressed in equity markets. as equities have gyrated, so has gold we think we'll continue to see that as long as the crisis continues. >> wanted to hit natural gas somewhat less global commodity than crude oil, but it moves together there are implications here from russia where do you see the price right now? does it seem to be in tune with what the message from crude is >> yeah, oil tends to take the limelight, and we have certainly seen that in how markets have traded and how media has talked about the crisis gas in particular, and for europe, russia is a major supplier of natural gas. 38% of gas, of europe's energy imports come from russia in the
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gas space. and that is obviously a very significant portion. that goes to power, that goes to residential and consumer demand. that drives industrial demand. gas is a very key story. when we're talking about the potential for sanctions, which thus far have excluded energy, potentially being extended to energy, the white house said that energy sanctions are not off the table. that's very important for gas markets and one of the more difficult things to see. european gas prices we have seen rally significantly in recent days as the crisis has continued to escalate. when it comes to united states because exports are capped by the capacity, the name plate capacity of export facilities, it's a bit more insulated in u.s., but europe in particular is facing an increasing inflationary pressure from the gas price environment as well as some more substantial concerns as well. >> and finally, chris, just on the gold call, just a challenge might be we're about to go into a fed hiking cycle that's usually not good for precious metals.
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i think we saw the last cycle low for gold when the fed began hiking rates could that stand in the way of your rally call? >> that's exactly what -- so we haven't moved our base case, which is much lower an 1749. reflective of the scenario if there weren't these issues we're talking about our high scenario, that's tied to the crisis, the potential concerns for global growth. what we mentioned is gold tentdz to perform in the short term, regardless of the krcrisis, as a perceived safe haven i think this gets at what you're asking, that comes to economic and financial fallout. if the economic and financial fallout from the crisis is more long term, that's when the high scenario is more in play otherwise, we're contending with longer term macro factors, exactly what you mentioned the fed raising rates is one of the key longer term sort of macro headwinds that gold faces, but right nowas it stands, the crisis is certainly in the
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driver's seat. >> yeah. we'll see how that gets tested with the rate path and the rest of the year. chris, thank you very much >> thank you all right, we have just about 41 minutes left before the bell the dow is now down just under 60 points. just kind of waffling around this area. the s&p 500 is down more than half a percent or just about .5% at this point. nasdaq and russell 2000, though, are giving back the better part of their weekly upside russia focused etfs have been decimated since the start of the ukraine invasion we'll ask an etf expert if those funds can survive in light of punishing sanctions from the left check out some of today's top searched tickers on there ten-year note yield is first, snowflake down 17% is second the wti crude, simon property group, and tesla round out the top five
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the russian stock market staying closed for a fourth straight day, as fighting continues in ukraine the rsx, another russian etf, have gotten slammed amid the crisis they remained actively traded, all down 50% this week some retail investors reportedly see the recent moves as a buying opportunity. let's bring in the head of etf and mutual fund research for a bit of a reality check what should investors know about the etfs you have, in some cases the underlying stocks not trading. index providers eliminating russian stocks from their benchmarks what are the hazards and maybe opportunities? >> this is a highly risky situation. the underlying stock market in russia is closed, the adrs and london stocks behind some of these securities are closed. the etfs are not allowed to create new shares, which means the price that investors are paying is often going to be different than the reality of the value of the portfolio
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you could have a premium, which we have seen in recent days. you could have a notable discount where you're paying much more or mess less than what the value of the supreme court justice is we think investors need to be very careful if they're owning this and deciding if it's worth keeping these in their portfolios because these etfs could also close, be shut down in the near term, based on the decision to reclassify russia as part of an emerging market and removed from the underlying index that these are behind. >> so just to be clear, todd, if you own a broad market etf, with some of this exposure and holdings, what do you do >> so if you own the i-shares core, emerging markets iemg, or vwo, which is van guard's emerging market etf, your exposure is about 1% of the portfolio. it's much more dominated by
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china, taiwan, india, countries that are in much more stable geopolitical situations. if you own those, you likely shouldn't do anything different because it's a very small part and the stocks will ultimately get removed or the etf might trade different than the benchmark itself if you're targeted towards russia with the single country etfs, that's where the risk is much greater if you're in a broad etf, it's likely something that's negligible impact and you should own these for the right reasons and not make a short term call >> if you're in a russia etf, it was like one of the best performing markets last year what if you're holding that? >> now one of the worst performing markets because what happened in 2021 and what's now in 2022 is not we have a negative view on russia etfs. we think there is concerns about these going forward. especially because the etf is trading at a notable difference between the net asset value. but investors need to make their own decisions knowing the facts
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behind the underlying etfs >> well, we thank you for bringing some clarity to it. it's a confusing situation todd, thank you. >> thank you still ahead, box ceo aaron levie will join us to break down his company's earnings report. plus the big themes thee thinks are driving the tech sector. >> as ewe head to break, a check on bonds yields are little changed. a little buying after a wild week in the treasury market. a big drop in yields and then a bit of a rebound 1.85% is your yield on the ten-year a lot of technicians say the bear market for bonds is still intact even after that move. "closing bell" back in a moment.
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market's coming back a little bit s&p only .3% let's check on market movers shares of peloton are falling. a new filing showing the company's founder and former ceo, john foley, sold about $50 million of stock to an investment firm backed by michael dell peloton's spokesperson said it was based on foley's own financial planning stock down 8%. kroger is soaring after posting a beat on the top and bottom line, issuing strong guidance as well the grocer citing strength in digital has been ramping up its online presence with new loyalty programs and delivery services the stock is up more than 10% today. tomorrow, we will talk to kroger's ceo, rodney mcmullen,
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about the quarter and the impact of inflation it's an exclusive here on "closing bell," what they did say today on the call with analysts is it's cheaper to eat at home than in restaurants so people are preparing more food at home, and yes, food prices have been rising at the grocery store, but he said they're seeing more coupons being used, a trade down to the more value brands >> private label, things like that >> so people can save more money buying food and preparing it at home versus the restaurants. >> there's a whole generation of investor whose have no experience with a strong consumer tight labor market sort of supermarket economy with pricing power. there's never been wiggle room in 20 or 30 years for supermarkets on pricing and now they have it >> now they have it in a big way. i think there was lot of expectation for a beat and raise quarter, a lot of analysts raised the stock, and they still managed to outperform wrg. >> a full update tomorrow. time for a cnbc news update with rahel solomon. hi, rahel. >> hi, mike.
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here's what's happening at this hour the only officer charged in connection with the botched raid that killed breonna taylor has been found not guilty. former officer breng hakkenson was just cleared of charges after firing ten shots in a drug raid that ended taylor's life. he was found not guilty. >> gas that is $5 gallon is now part of life in some of california near san francisco, one station already charging $5.50 for regular gasoline he says that san francisco has become the first city ever where gas is averaging more than $5 a gallon and also says the national average for gas could top $4 a gallon latter this month. >> the largest pension fund in america is haultding new investments in russia because of the invasion of ukraine. it will also reassess its real estate holdings in russia. >> one of the world's top s sopranos will be not be appearing at the metropolitan opera for two seasons. one of the greatest singers in
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the operahouse's history, but her failure to criticize putin makes it impossible for her to perform there. sara >> thank you roussel solomon. >> got about 28 minutes to go before the bell. s&p down about .5% you still have strength in groups like utilities, real estate, consumer staples technology, consumer names that's what's getting hit the hardest. financials are down today. the nasdaq underperforming. >> when we back, box ceo aaron levie weighing in on his company's plans for growth, and gearing up for more earnings broadcom, gap, costco, we'll talk to an analyst who has a bubu rating on broadcom
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. technology broadly under pressure, but shares of cloud management firm box are an exception, in the green. the company reporting fourth quarter earnings after the bell yesterday. it was a beat on both the top and bottom line. the stock turning positive on the year still down about 5% from the all time high hit back in june 2018. joining us for a first on cnbc interview, box ceo, aaron levie. welcome back to the show, good to have you. >> thanks. good to be here. >> so earnings were good the stock has seen some real momentum it looks like investor appetite has changed. what are you doing differently >> well, there's three really big trends that are driving our growth the first is obviously the future of work, we believe, is going to be hybrid the second is that every business process has to be digitized, and third, cyber security remains at the forefront of every i.t.
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strategy when you think of those changes to work content, and the business information that powers businesses are really at the center of those mega trends. so companies want to be able to manage their contracts, their financial data, their marketing assets, their project files, their cad designs, in a very secure way and be able to automate work flows across their business and make sure that their content can be extended to any of the applications that they use and that's really the power of our content cloud and what box has been building for the past certainly decade and a half, but especially in recent years, the introduction of e-signature built on box, advanced data security, work flow information, all of those have helped propel our growth >> good repeat numbers in terms of customer repeat business. what about the ability to close the big deals with corporations? what are you seeing from your clients in terms of appetite for spending is it as strong as it was during the pandemic when everything went fully digital >> yeah, at least in our case,
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it's stronger than the start of the pandemic you know, i think there was a time when companies were really in triage mode they needed to figure out what were the near term versus long term i.t. trends to invest in. today, when we look at our big deal growth, which is sort of the metric of $100,000 or $1 million plus deals, we saw a tremendous year of growth across those metrics our last fiscal year and we see the demand is only continuing to increase, which is why we raised our guidance for the full year in fy '23, the fiscal year we're in now, which will be the second year in a row of reaccelerating our top line growth rates at the same tie as delivering improved bottom line results as well, where we guided up on our operating margin >> aaron, the news today in the broad sector is snowflake, slight disappointment on revenue growth, the stock had an amazing run last year. is down 16% today. can you explain where you and
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your products exist in relation to what snowflake is offering, whether you're feeding off the same client base, where there's layers where you're integrated how does it all fit together >> i would say we're pretty different than snowflake snowflake helps you with your structured and semistructured data a lot of the data coming out of your business systems, erp systems, applications. so fantastic platform for that data what we focus on is your content. your financial documents, your contracts you want to manage, your media assets that you want to be able to organize really your most important digital content, and we built a platform that lets you secure, manage, govern, automate, get e-signatures on, collaborate on the content in one central platform so what we're trying to solve is the problem of most enterprises today have all of that content fragmented across dozens and dozens of different technologies, so we have built a single platform that customers can leverage a single content cloud where you can manage the content in one place and extend
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it and integrate it into all of your apps. >> aaron, separately, i follow you on twitter and i notice you tweet on all sorts of different topics, but you did compliment president biden on the state of the union address, which i was curious about, just as far as the business takeaways because to me, it seemed like some of the messages were more technology crackdowns, seemed to embrace price controls for drug companies. partly blamed inflation on some of corporate america needing to manage their costs what was it that you liked in there? >> well, you know, obviously, in an hour of content, there's a variety of topics that you won't agree with each individual item, but i think the focus on immigration reform, you know, our country has a tremendous need for talent from all around the world to be able to build amazing companies. the focus on building more and more manufacturing in the u.s. is certainly an exciting trend child care, making that more
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affordable i think there's a lot of topics that hopefully are very nonpartisan and we can all collectively get around to shape the future of both our social infrastructure in america as well as our business and economic basis that we can build off of >> and aaron, just to finish up on this general state of the business, we have had so much pain felt by younger software companies. whether private or public, in this sort of revaluation we have had. does it change anything in terms of you, whether the acquisition front or the competitive front that you feel as if you could be opportunistic about it we are very disciplined in our m&a strategy in terms of the kinds of technologies we acquire or tuck into our platform. so that will remain an ongoing focus of ours. overall, i think our business model is built for being a sort of durable long-term business.
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we're driving profitable growth. so this year, we guided to 22% operating margin and 14% top line growth. so i think a healthy balance of both growth and cash flow generation so we believe that our model is a really good balance for really any kind of market but certainly especially right now, but we will be opportunistic in terms of folding in technology we think accelerates our road map, but probably won't be sort of sizable enough to really have an impact in terms of any of our kind of main metrics we focus on other than anything that can drive accelerated growth so don't expect kind of major giant m&a from us on that front. >> sure. thanks a lot, aaron. putting it all together for us >> appreciate it >> aaron levie of box. >> straight ahead, the highlights from citi's investor day and new comments from the ceo of bex buy on inflation. that's in the market zone.
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welcome back we have a great lineup coming your way in the second hour of "closing bell. we'll get earnings results from broadcom, gap, costco, and analyze the broader read-throughs for chip and retail chart expert katie stockton will tell us why the financial sector in particular could be headed for a rough sector we'll talk to commerce secretary gina raimondo about the sanctions on russia, and tomorrow's jobs report, one of the last big data points for the fed to consider ahead of its march meeting. first, under 13 minutes to go in the trading day and we're going into the "closing bell" market zone joining us today, stephanie
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link wel welcome back, ste. stocks are giving back gains the dow was up 288 points at session highs. the nasdaq is the worst performer, sitting right now at session lows, down 2% or 274 points steph, what do you read into the weakness in particular in technology some of the software names in sympathy with snowflake, there's an effect there. data dog getting hit especially hard, some of the others, but all of tech is feeling it today. >> yeah, because tech is still overowned. we have talked about tech and com services being about 38% of the s&p 500. so if your market weight, you're almost like a quarter, you're over a quarter of a percent, a quarter of your portfolio is in technology i think snowflake has a lot to do with it it's also rederisking. we keep getting whipsawed between the macro headlines, russia, inflation, and the fed being behind the curve so what i try to do in times of
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uncer uncertainty, you know about about me, i try to focus on the fundamentals, balance sheets, free cash flow, market share positioning, number one or number two in their industries, and they have beaten on earnings, they have raised guidance, and the stocks are down, and i feel good about the long term stories, well then i'm going to be buying what i am also doing and it's a change for me, i'm getting less cyclical and actually getting less value i have been overweight cyclicals and value for a very long time and i think in periods of uncertainty here, we don't know what the fed is going to do, does it work, does it not work we don't know what inflation is going to do, so i don't want to get over my skis on sectors and be too overweight or too underweight. i'm leaning on the cyclical side, and that's more reopening, quite frankly, which are getting destroyed here today but i like that area but i'm also starting to nibble at some technology into the weakness and also into some discretionary
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names. >> all right, well, outside of those areas, into flss shares of citi under pressure today following the firm's first investor day with ceo jane fraser at the helm citi has underperforming the broader banking sector over the last year, and fraser joined cnbc to discuss her long term plans for the firm >> we have taken a number of bold moves already in terms of the divestitures of a number of our historically iconic franchises to really focus citi around our core strengths. we have taken strategic bets in businesses that we have got a high confidence and excitement about around growth. but this is an organic growth strategy it will take time. i think there's tremendous upside in our stock and i'm looking forward to doing the job that's needed to get the execution done so it gets realized >> steph, we can dial back if we're talking about top five banks that are undergoing a restructuring after a long
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period of underperformance with a relatively new ceo that would be wells fargo. lots of different issues at play, but how do you think about citi right here given the fact that, yes, its returns have lagged and so has its valuation? >> yeah, i know it's really cheap, mike. it's .6 times book value and actually yields about 3.5% the problem is it's a value trap right now. it's early innings in the restructur restructuring. i was in wells fargo early, but the ceo is even telling you it's going to take years. they need better execution that's always been the beef with this company poor execution and now they have got to make investments they should have been making years and years ago, and so as a result, you're looking at $6 in earnings versus $7.50 where the street was at. you're looking at an rotce target of 11% to 12% in the next three to five years. even wells fargo was saying they can get to 15 in the next five years and it's a lot better in
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terms of the storstory, they're making more progress than citi it's going to take time. i would avoid it >> are the prospects for the entire bank group changing it looked like a good bet in the beginning of the year, but now there are questions about what's happening with the credit cycle, what's happening with contagious from russia to european banks to u.s. banks yield curve flattening none of that bodes well for banks. >> no, it doesn't. that's actually one of the areas where i have been paring back. i sold out of prudential and i trimmed some of my morgan stanley. still like morgan stanley for the long term, still like american express and wells fargo and bank of america, too, but they're smaller positions at this point in time because you nailed it, the flattening of the yield curve. we can't have the flattening of the yield curve, not for these companies. and also, capital markets is actually going to be a struggle, i think, and also with difficult comparisons year over year
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they're cheap. they have a lot of capital they're returning that capital, so i want to stay involved in some of these names, but not to the extent of which i was at last year or the beginning of this year. so i did take profits. >> good to know. best buy shares, take a look bucking the overall market trend, soaring despite missing wall street's revenue estimates. courtney reagan is here with the details. >> yeah, so shares really much stronger it's the longer term forecast that has best buy investors looking at this name pretty positively the retailer missed sales expectations and gave below consensus guidance for the year, but in the investor day, laid out stronger profitability in the years to come than wall street was modeling. best buy's higher margins will be driven by the $199 annual total tech membership program that has 4.6 million members since launching in october, and i spoke with the ceo corie barry exclusively, and while inflation is at 40-year highs for americans it's not as big of an
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issue at best buy. >> on the whole, when i look across all of our product categories, we're seeing much lower inflationary pressure than you're seeing across most of the other sections of goods. >> some categories of course are seeing higher prices major appliances is one barry listed as an example sara >> courtney reagan, thank you very much. >> steph, best buy up 9%. does it tell you something about the consumer or is it sort of best buy or category specific? >> i think this was very, very low expectations they had a horrible quarter last quarter. the stock fell almost 30%. this stock was down 29% from its highs of last year still it does often a nice yield at 3.2% i think the buy back is big, i think the dividend increase is big. that's what's saving it because i went through the quarter and everything was kind of disappointing. earnings, revenues, comps, guide
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was down maybe a little less bad than we thought, and now they have tough comps ahead of them. to me, it's cheap. it's going to stay cheap but i don't think you have a lot of downside, i just don't know if you have a lot of upside. >> really been some divergent responses in the market to some of the retail numbers. i'm looking at burlington stores today, down 13%. i don't know if you looked at this one in particular but they're talking about in just various friction points they have in terms of customer demand and things like that. i wonder right now, it's a more expensive concept than best buy. 1.5 times sales, but is this a chance to own this one lower or no >> i think the off pricers are market share takers. i think they benefit from the problems the department stores are having that's been a trend that's been happening for years. but they also have supply chain issues and higher inflationary cost pressures so even the best of the business, tjx, they missed although their guidance was not
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nearly as bad as some of the other off pricers. so if i'm going to pick and choose, i want the best in the business and i would take tj, and full disclosure, i own tj and it's been very disappointing, but i think they're continuing to take market share they have pricing power, believe it or not, and they talk about that so we just have to get through the supply chain issues, but these are reopen names, mike like people want the treasure hunt so we need to get full on reopen, and we're right there. we're very close >> yeah, we all do hope that is true >> analysts still like the off price retailers. we love that model it has worked in recent years. >> one of the issues is energy prices do hit lower end consumers more not that they're lowerer end, b it pinches budgets meanwhile, chip stocks are underperforming the broad tech sector after morgan stanley downgraded a number of stocks in the group. the firm says it's looking for more conviction that intel, tear adine, and covero can execute,
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and they lack catalyst in the near term. morgan stanley isn't downbeat on the entire chip sector, global foundries is surging, calling it the only pure u.s. foundry with significant room for margin improvement. steph, how are you positioned and thinking about the semis right here there's also, of course, been this overhang of sort of russia components that are crucial to manufacturing chips that maybe people are worried about not getting to the companies that need them. >> yeah, and i had owned intel in the past. i haven't in a while i don't think the downgrade today was anything new they have to be aggressive in investment spend they're way behind amd, amd is like three years ahead of them on processors. this stock, if you go back to 2018, february of 2018, it's the same price it's been a value trap forever cheap, cheap for a reason. i like broadcom, and i like nxpi, those are the two names i
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own. i recently sold lam research, trying to reduce my exposure to the semi-conductors, but they're doing a great job in terms of capital allocation nxpi is autos and contactless payments and they have done a great job outgrowing the market. >> just want to point out the broader market right now it looks like we're lower and near session lows for the nasdaq tech getting hit the hardest today. a few different cross trends bonds are getting bought today oil prices have stopped spiking. taking a little bit of a pause you had weaker data on services. >> the energy sector had dipped lower, too >> energy negative, along with a lot of the cyclicals and also technology and powell out continuing to re-enforce the message they're continuing to fight inflation. >> you're fighting on both fronts you have to figure out exactly how much tightening is going to happen at the same time where
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there are these global growth concerns and then the tech trade, we just don't know where the valuation compression is going to be done or if it's ever really declared done amazon is the biggest single drag on the nasdaq 100 today the stock is down almost 3%. you have to believe just general concerns about cloud spending is part of that it's nall rhey a retail thing, and tesla continues to have the premium come out that's the second biggest drags. the market has been skewed to the weak side all day, if you look at the new york stock exchange advancing versus declining volume you're looking at, there you go, about 2 to 1 to the downside so it's not necessarily a wash-out you have a fair number of stocks higher, but definitely skewed lower after a strong day yesterday. sara mentioned the defensive stocks holding up better look at about three-month look back to november 30th, the low volatility etf, it's positive, outperforming the s&p by almost seven percentage points. that's classic defensive action.
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volatility index, no real relief tie high for the market to get footing above 30 and the vix futures are showing some anxiety. the s&p 500 closing at 4361. a few points above the first ticks of monday, even though it is a little down from friday's close at this point. it dow down a little under 100 at the finish. >> selling today is taking us back into the red for the week heading into a friday. welcome back to "closing bell. i'm sara eisen here with mike santoli. coming up this hour, commerce secretary gina raimondo on the u.s.'s new sanctions against russian oligarchs. plus we'll have instant analysis of earnings from broadcom, gap, and costco first up, stephanie link from hightower is still with us and steph, we have waffled between gains and losses for the week for the s&p 500
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we're lower, which is actually quite impressive given we came into this week facing the raft of pretty aggressive and significant sanctions on russia's market, its economy, its banking system big declines in europe the german dax down 6% this week overall, it's somewhat resilient, given some of those factors. as powell continues to make the case for higher interest rates >> well, yeah, you're right. look, the market doesn't like uncertainty. that's kind of why we're waffling we're getting whipsawed every other day. on the russia/ukraine thing, if you look at other instances and other issues, 60% of the time after the incident had occurred, one month later the market was up 80% of the time, one year later the market was up. and the average total return was 9% so basically, the markets are telling you in terms of looking at history, we can get through
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this the problem is if we get through this, which i think we will eventually, you have to deal with inflation and those unit labor cost numbers were terrible. i mean, 7.5% was a really big number on top of the core pci at 5.2% year over year. the only, i guess the own labright side was productivity was 6.6%, so that's helping offset some of the inflationary pressures. the fed is behind the curve. they're going to start with 25, do more than four, but i think it sounds like the fed is going to do four and then become data dependent and i think the market is pricing in six now, six rate hikes. so we have to deal with all of this, and we have to figure out how to engineer a soft landing, so there's a lot of moving parts, and that's why the markets are all over the place i think we will be for quite some time. >> higher rates is typically meant to sell off for tech, which we did go back to that pattern even though we saw yields lower today a lot of payment technology. i think you said you're looking
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to buy some of these beaten down names. did you say that and where are you looking? >> yeah, actually, for the first time in probably a year, i'm overweight apple that's not cheap by any means it is a defensive tech and i want to own it and be bigger in it because i think you're going to see the capital allocation plans come out next quarter, meaning buyback. 2% to 3% of their shares outstanding for the next three years easily, and i want something like that. i added to broadcom. i know they're going to report tonight and i might look foolish, but i like the long term story when a company announces a 14% increase in the buyback program, to me that's a big deal. they increased their dividend. it's a data center play. and i still like it. and i view it as a growth stock, and it has lagged the other semi-conductor companies as well but i'm also looking at a salesforce, too. we have talked about this. i owned it in the past that stock has been terrible but they have growth for the long
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term i'm not there on salesforce yet, but to your point, if rates go higher, long duration assets will suffer. you have to be mindful of that >> yeah, salesforce down by a third from its share price high. citi turning more bullish despite the recent volatility, we have seen the firm upgraded the equities to overweight, also skewing toward growth stocks our next guest takes the opposing view saying this is a sell the rally market. let's bring in peter chukeeny, exonic director of research. good to have you here. the market is acting as if the dip buyers are a lot slower. the burden of proof perhaps more on the bulls are you not confident that last week's lows are going to hold here >> you know, it is a very tricky market and it's possible that the situation and the invasion of ukraine pulled forward quite a bit of bearishness
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but as i said the last time i was on the show with you guys, i believe that there's been a paradigm shift and that really comes from the fact that the goldilocks setup, which has lasted for quite some time, is now in the rear-view mirror there's a cyclical problem, that is inflation there's more of a secular problem, which is that the fed is now at the zero bound, and there's quite a bit of fiscal policy inertia in washington and i think that those three things combined make policy saving the day a lot les likely than investors have become a accustomed to in recent years. >> what about the fundamental story, that the economy is in pretty good shape once it rebounds from the omicron slump and that it can handle higher rates and in fact that it's necessary and we're fairly insulated from things like russia what about that case and that things have already gotten pretty cheap because they have sold off in response to all
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the factors you just laid out. >> right, whether or not things are cheap is obviously a relative assessment. and the s&p is still trading around three times revenue so relative to history, the s&p is still quite expensive so i don't buy that argument i would also say one of the reasons why the geopolitical situation in ukraine matters is because the transmission mechanism to the united states and other developed economies comes from the energy market it has been very unusual for oil shocks like the one we're seeing right now not to result in significant slowdowns. and i haven't thus far, even though you know starting last year, late last year, and even a bit earlier as you pointed out, i have been cautious on u.s. equities i haven't used the word recession or stagflation, but i think that's on the table because of the transmission mechanism through the energy market, and quite frankly, because ukraine is also the bread basket for europe, and impacts other areas of the global supply chain like
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semi-conductors through the supply of neon, the lasers that etch chips and so forth. and those mechanisms lead to even more persistent inflation than we have already >> peter, one of the lines about excluding food and energy from the measures of core inflation to get the underlying trend, people ridicule that idea because they say, just because it's volatile doesn't mean you have to pay it, but the other reason to exclude it is because there's demand for the necessities of food and energy, so the more we have to pay for those things, the less spending power arguably there is to drive inflation in the rest of the consumer basket. is that not something that in itself is going to act ultimately as a little bit of a break on the core inflation trend as we get a few months out? >> that's an excellent point, mike, and in fact, i think there are two ways that inflation eventually abates. either the central bank acts as it finally is, it's way behind the curve, or inflation kills
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itself off, and i have been writing that consistently for the past six months. and in fact, that's precisely the problem with not acting on inflation, because it will eventually kill itself off, and it is always eventually transitory, and the fact that inflation is abating because demand is lower for other things because more money has to go to necessities like food and energy, is not necessarily a good thing for the real economy. >> steph, take the other side of the market view. i know you want to >> well, i do. i think there's still a lot of momentum in the economy. we're not going to have the monetary stimulus or the fiscal as much, but there's still a lot in the system. we have the consumer that's still okay for now and i would agree, you have to watch oil prices and inflation in general, but excess savings of $2.6 trillion is 10% of gdp we just printed a number of 7% in gdp for the fourth quarter,
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and i know we're going city a slowdown, but i think you're going to see above trend 3% to 4%, some time this year, and inflation is going to come down. it's still going to be above trend, unfortunately, but again, i think the fed is acting. they will go quicker if they can. if we see some sort of a resolve in russia/ukraine, they probably go faster. i think going back to four times in terms of rate hikes is just normalizing policy and so i think the economy can handle this. 4% earnings growth is good enough for earnings to go higher and in fact, this year, earnings have been going higher on average, 6%. multiples that have been coming down from 21.4 times to 19 times. could they go lower? of course they could go lower. because there's so much uncertainty, but the earnings picture is still solid and that's what i lean on because eventually stocks follow profits. >> you heard the bull and bear case peter, thank you for joining us.
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always good to have you on the show >> thank you and steph, before we let you go, we want to zone in on your top pick right now what is it >> it is target. in full disclosure, i have been adding to it it's the best in class retailer at a discount to its peers down 16% from its highs. still down 3% year to date trades at 15.6 times their long term algorithm is what i like, mid-single op income, high single digit earnings and they just reiterated that at their analyst day. i like the mix in this environment, kind of the defensive side 43% is consumables, there's discretionary, as well they're doing a good job in terms of supply chain. four dcs going to be built this year aloin, and still remodeling opportunities and new store growth i think it's sort of defensive
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in the consumer world, and so it's my favorite idea right now. >> yeah, and the valuation certainly has come down quite a bit in the last several months steph, thanks very much. appreciate it. we'll see you next week. >> thanks. all right, we're just getting started on the second hour of "closing bell. oil prices surging nearly 20% since russia invaded ukraine last week. but up next, a technical strategist explains why she thinks investors should not be chasing the rally. plus, awaiting earns from broadcom, gap, and costco. "closing bell" returns in two minutes. what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq
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as a small business owner, your bottom line is always top of mind. so start saving with comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts. saving you up to $500 a year. so boost your bottom line by switching today. get the new samsung galaxy s22 series on comcast business mobile and for a limited time save up to $750 on a new samsung device with eligible trade-in. with all of the major averages finishing lower for the day so far. energy is the best performing sector this week higher by 6%, while financials, the worst performing group, down by 3%. for what she's watching, let's bring in kata stockton, founder and managing partner
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good to see you. >> you too >> let's talk about crude oil first. we have a pause in this rally. it's obviously been a very aggressive move. do you take significance from the fact oil couldn't make more headway today? there were some what would have seemed bullish headlines around banning russian imports. good. >> it has strong positive momentum behind it it's not something we necessarily want to fight. the fear here with this very, very steep uptrend is you come in the next day and it's down like 20% i don't know what would be the driver of that but it does feel a little bit tenuous here, just by the steep nature of the up move. this move, this month in march, is very strong already and it follows two very strong months i looked up the sector returns for the s&p 500 today, and it shows energy in the s&p 500 up 31%. and the second runner-up was
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consumer staples and it was in negative territory, so it really goes to show how strong this sector has been aligned with the rally in crude oil. it starts to feel like at a certain point it's a bit too stretched. we do have overbought readings really across the board. and in some cases, those overbought readings are affirmed by the indicators, but we don't have that momentum down tech yet. >> speaking of momentum downticks, let's talk about financials a very favored group coming into this year. made some new highs as a sector and now has had a stiff pullback how are you viewing it at this point? do you still think this uptrend is in tact or not? >> it's a little tenuous here, too. this is an uptrend that's definitely lost intermediate term upside momentum we have been trading sideways to lower for the broader market if you look at xlf, and that etf is
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now essentially testing key support on the chart and also the 200-day moving average for one has been taken out so those are not good things, of course, for the financials we're seeing some great downs from a bottom up perspective too. like so many stocks, we have a short term, so i think we'll see a loss of short term downside momentum at a minimum, especially as ten-year treasury yields kind of try to find their footing within their consolidation phase. i think it's all about pretreasy yields and ten-year yields have come into potential support around 1.7%. we have been looking for them to plateau, go sideways to lower, but after that, we look for treasury yields to work their way higher again, and that could be a positive catalyst for the financials which of course have underperformed for a couple weeks but really overall year to date, they have done better than average. so it's not a broken story, but i really think we need the treasury yield to kick back in on the upside to get the
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relative strength to improve as it stands, the xlf is very much range bound versus the s&p 500, so we really want to see a break-out from the range as a nice positive catalyst supporting outperformance there. >> and you do think treasury yields will eventually go back higher i wanted to ask you about the nasdaq in light of underperformance today this is still 16.5% off the intraday highs it has done worse than the s&p 500, but showed signs that things were getting better for technology, so do you buy the dips on tech or sell the rallies? . it's a hard question in our weekly reports to our subscribers, we published a chart of qqq, which is nasdaq 100 proxy, and it has an oversold buy signal. we were somewhat prized to see it, but the buy signal comes near support on the chart and it does suggest the short term low that's becomcome evident should
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turn into an intermediate low with chef life of two to three lives and we're getting interested in the faang stocks and of course, they're a big driver of that nasdaq 100, so i feel like we have a little out of consensus view, and we will see this relief rally resume there's been a lot of intraday noise right here right now and yet the short term gauges even with the noise are still pointing higher. we're looking for upside follow through, but because of the loss of longer term momentum, we would be pretty noncommittal to long positions meaning as soon as they really stop working in earnest, we would be pretty quick to reduce that exposure. >> and katie, we'll getyou a two for one on a final question. gold or bitcoin, which one seems better positioned right now if you wanted alternative money >> you know, it's funny, the commodities are really been on a tear that isn't limited to crude oil
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as it comes into the resistance. but rather than going down the energy complex and the commodity arena, we much prefer gold, and also today, we highlighted copper as having a similar triangle formation breakout like gold, so we prefer the metals in general, both precious and industrial metals. bitcoin has a short term breakout, an intermediate term reversal that did preserve key support around $37,400, but the setup is higher risk, a countertrend setup as opposed to gold and copper which are resuming their uptrends. >> thank you for joining us. >> we're just getting gap earnings it looks like on earnings the bottom line, it was a lot better than expected. a loss of only 2 cents analysts were expecting a loss of 14 cents. much smaller than expected loss, and it looks like revenue was a slight beat or in line $4.5 billion
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expectation, 4.49. comps were 3%, expectation was around there as well this was well telegraphed as some of the pain in old navy sales hurt there by the supply chain as they have warned. looks like they're giving guidance as well full years earning per share guidance comes in line with expectations $185 to $205 adjusts revenue growth in the low single digit range for the full year. so that's a pretty good outlook. i would note that on the first quarter, which is their next quarter, they are guiding growth down mid to high single digits versus down 3.8% estimates they're pretty much coming in better or in line with expected. and i have color on it i did have a chance to speak to the ceo, as well as the cfo. here's what i can tell you single says that first of all she's happy with where the company is they have been restructuring,
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shedding unprofitable parts of the business she did talk about the supply chain because that was a factor here she said they have some visibility and the outlook is stabilizing but will continue to be volatile. and they have been making moves to address it. they have booked productursier, diversified the ports away from the very difficult los angeles ports. digitized product development and other issues to try to deal with it. as far as the overall beat on the quarter, they said that the bottom line beat had to do with the fact they were able to trim expenses and be really prudent there, because some of the higher costs related to air freight, that was certainly a weight on that as far as what else single said is that the negative sales in the first quarter come from the fact we're lapping stimulus in the first half so we're impacted by that. the cfo, mike, did say that they consider that a 5 percentage point benefit, stimulus in particular so they're able to quantify that they also, she said, see some lateness in spring product, and old navy having trouble catching
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up with style changes. people went from comfy clothes to going out clothes but all of these things will not be issued in q2 and that's why the overall full year guidance looks better you know i asked her about kanye west and yeezy, which is a huge partnership for them, i would say. there was a release, a drop last week balenciaga, yeezy, gap, a line, a very expensive t-shirt and sweatshirts. it sold out. 200,000 people went online to buy tin the first hour, and many of the items sold out in minutes. there's more to come on the gap story, and overall on the strategy last year, she said, was about making partnerships. they have one with alicia keys, with simone biles, and this year, it's about scaling those partnerships so they're feeling good about the outlook and about the turnaround after being punished for a few quarters the stock obviously reflects that, up 16% >> also one of those retailers benefitting from the fact it had been discarded, the stock.
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it's up huge, only back to where it was a month ago very cheap looking and has been for a while. >> i think they felt the supply issues a little earlier, maybe, and caught some people off guard with that, but they're clearly painting a picture here that they can deal with it and it's going to get better. >> market thinks so. at least initially take a look at broadcom results. they have also come in looks like a solid beat across the board. earnings per share on an adjusted basis, 839. the estimate was for 808 a share. revenue for the past quarter, 7.7 billion. that's ahead of the 7.59 billion that was the consensus, and guidance on revenue for the current quarter, 7.9 billion, prior guidance was 7.4 billion or the forecast consensus was 7.4. so clearly, the street likes this this stock has also suffered along with the overall group, although results were good another tidbit, the company bought back just about $3.1 billion of its own shares.
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it announced a $10 billion incremental buyback last quarter. a lot done in the past three months >> guidance strong, see the stock price up 3.5%. >> costco earnings also out. let's get to courtney with those numbers. >> hi, there yeah, it looks like a beat for costco on the top and bottom line earnings per share at $2.92. on revenues of 51.9 billion. the street was looking for $51.47 billion you can see the shares bouncing around a little bit after hours in response. total company comparable sales at 14.4% remember, gasoline is in that number, and we know there's been a lot of inflation in the price of gasoline. excluding gasoline, comparable sales for the total company for the quarter were up a little more than 11%. online comparable sales for costco up 12.5% for the quarter. the company does note a little bit of a negative impact on sales from international for the shift of the date for the lunar
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new year total month of february's comps about 14%. the quarter, however, ended in about mid-february, so the total number does encompass part of the number they're giving us isolating just february, but shares for costco down about 1% after hours in response. back over to you >> courtney, thank you >> up next, a bullish broadcom analyst will be here to tell us what he wants to hear in the conference call. and later, commerce secretary gina raimondo just wrapping up a cabinet meeting with president bi biden. we'll discuss how inflation and the economy are being impacted by the wave of sanctions hitting ssia we'll be right back.
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shares of broadcom getting a pop up almost 3% after hours trading on the back of earnings. the chip maker beating on the top and bottom lines and forecasting better than expected revenue for the second quarter joining us now, stacey raskin of bernstein research to break down the quarter. what jumps out to you here aside from just apparently better than expected numbers across the board on the headline? >> you know, these days, lots of companies are giving better than expected numbers and in many cases it's not enough. you need a really solid beat and raise, and we got that from them
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this dwquarter. this looks pretty good on the quarter as well as the guide top line revenue, gross marges are really good. i think you said earlier, they did a $2.7 billion buyback there's not a lot to like as far as i can tell on first glance. >> what are you listening for on the call >> a few things. first, the demand environment, particularly backlog and lead times and how much visibility does that give them kaungsquently. anything they have to say on enterprise and hyperscale spending they noted an inflation on some of the last quarter, so is that continuing although from the guidance, it looks like it's continuing on the revenue side, wireless, the apple cycle looks pretty strong now, and what is seasonality look like for wireless, and finally, i would love to get more color on gross margins because they did 75.5% in that, and they may be guiding them up again. i would love to know how high they think the gross margins can
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go >> the company repurchased about $3 billion in stock in the quarter. is it still going to be a focus mostly on capital return as opposed to incremental acquisitions like in the software area like in the past >> it probably will. broadcom's strategy is to give cash flow to acquisitions and if they can't find anything to acquire, they put it in buy backs. they have enough dry powder if they find a deal, they have enough fire power in terms of cash to execute on that. personally, i would love to see them buy something they're good at it i like their acquisition strategy i'll take the buyback, too that's fine. >> they had a long history of it thanks >> you bet thank you. >> a big change could soon be coming to disney plus to help turn around slowing subscriber growth the reporter who broke that story straight ahead i am here because they revolutionized immunotherapy.
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welcome back time for a cnbc news update with shep smith >> thanks. here's what's happening. i should say the ukrainian pred,
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vladolodymyr zelenskyy, he had a direct appeal to vladimir putin this morning, urging the russian leader to sit down with him directly and talk peace. >> it's not about i want to talk with putin i think i have to talk with putin. the world has to talk with putin. because there are no other ways to stop this war >> the effort around the cease-fire talks today the ukrainian negotiators told reuters that both sides had reached an understanding to create a human itarian corridor to evacuate civilians. hopes of reviving the iran nuclear deal the state department said there has been significant progress in talks with iran and other world powers but they're warning there are still difficult issues still unresolved and numbers of the billionaire slacker family and their drug company purdue pharma have reached a new settlement deal for the role they played in
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america's opioid epidemic. with eight states and the district of columbia, they would pay up to $6 billion in cash to end all current lawsuits in exchange it would also shield them from future lawsuits. a judge rejected an earlier smaller settlement in which the sacklers agreed to pay $4.5 billion. tonight, as more than a million refugees have escaped the violence in ukraine, we're live on the polish border with several ukrainians preparing to return home to fight on the news, 7:00 eastern, right after jim cramer, cnbc mike, back to you. >> shep, thank you very much disney moving higher after hours after the information reported that the media giant is weighing whether to launch a cheaper ad supported tier of disney plus. joining us is the senior reporter at the information. for more on this potential move, jessica, what's being contemplated here. disney controls hulu hulu has an ad-supported tier of its own service.
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what price point do you think they might have an ad-supporter option >> if you look at the competitors it's been around the $5 range, which would be cheaper than the $8 disney plus costs now. how they're going to weigh it with hulu and the live product, these are things they're probably still discussing right now. >> so just the move to do it is notable, as you reported, jessica. who does this and who does not and what works with consumers? >> so it's really funny, if you think about it not that long ago, the idea of having ads on a streaming service was unheard of ned netflix was the first streaming service, didn't have ads, they say they won'thave ads but in the last few years, each streaming service has an ad-supported tier. so even amazon has its imdb tv
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ad-supported channel i think it's just this recognition that people are only going to pay for so many services, and people are willing to pay less if they have to watch -- willing to watch ads if they're going to pay less. >> yeah, and not to mention, of course, peacock owned by our parent company as well >> so sorry, of course >> no, no, i wasn't holding you to it, i was just mentioning it's normal. i'm old enough to remember when cable came around, the initial selling point was no commercials, and then of course, most cable networks did end up with commercials what i think is an interesting way to look at it is, not only are they trying to find more eyeballs at a lower price point, but there's also among marketers a shortage of ad inventory for digital viewers. in other words, there is a market where you want to go to the advertisers and say we can find you another group of viewers. >> absolutely. and you also have advertisers that are digital looking for what they call premium spots
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so those advertising on streaming services is kind of like the golden goose. these are people who are paying for streaming services these tend to be middle to high-end families, and they're willing to -- they're the best customers you can get. there's definitely a market. >> well, jessica, an interestin scoop. thanks for jumping on with us to talk about it. >> up next, commerce secretary gina raimondo on the potential impact of new sanctions targeting russian oligarchs and how the u.s. economy is faring ploong of this geopolitical uncertainty, and later, what tomorrow's jobs report can mean for the market and the fed's plans when we come back.
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president biden announcing a new round of sanctions following a cabinet meeting earlier today. the new order targeting russian oligarchs and their families including president putin's press secretary. those sanctions also imposing visa restrictions plus full blocking sanctions on disinformation targets joining us now for an exclusive interview about that and some of the other administration plans is commerce secretary gina raimondo who was in that cabinet meeting. madam secretary, thank you for joining us >> thank you for having me good evening >> good evening. what is your sense that the president is leaning toward doing even more after the meeting you just had this afternoon, including potentially
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banning energy imports from russia putting sanctions on oil >> so the president has been clear that that is not on the table. our entire focus is to ratchet up the pressure and sanctions and pain on putin and the oligarchs and his funders, his backers, people who have benefitted from his corrupt government, people who are funding his immoral mission. but not the russian people the president was clear on tuesday night, he was clear in the cabinet meeting that we just had, which is that america is standing with our allies we have a united front across the world standing with nato, standing with europe, standing on the side of freedom and against putin. and we are going to continue to bring the pressure to him until this conflict ends >> what is the ultimate goal of the sanctions? and a lot of people are asking, is there an off ramp for putin
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because it doesn't look like so far it's changing his direction of what he's doing >> the goal is to bring this conflict to an end this is putin's war. he started this war. it was an unprovoked aggression to bring in tanks and go after a sovereign nation and it's time for this to end. and i think he is getting a message from the world that it is time to end and president biden, this, on behalf of the united states of america, this is the strongest package of sanctions and export controls, which is the area that i am managing in the commerce department, that we have ever leveled against another economy. and most important, we're doing it in unison with our allies, and so putin is starting to feel the pressure, and he ought to bring the conflict to an end >> secretary, in addition to the formal sanctions, it's been a
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remarkable display among companies to essentially take the initiative to withdraw and sever ties with russian business and disengage from that economy. does that complicate the job hopefully down the road of trying to provide this type of off ramp and essentially say we will ease official sanctions if putin does x, y, or z, if in fact it's a lot of the effect is because of companies doing what they have decided to do? >> i don't think it complicates it i have been talking to many business leaders in the past days and weeks, and many american business leaders realize this is not time to be timid. it's not time to stay on the sidelines. everything is on the line. this is about protecting our freedom and our democracy. and they in many cays are choosing on their own to cut off every angle putin has to business or to capital or to goods. and i applaud them for doing that it takes courage
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>> and we have been reporting on every move secretary raymondo, i wanted to talk to you about an area you have been knee deep in, which is semi-conductors and we heard president biden talk about this in the state of the union. i know you went to tour an m.i.t. lab there was a suggestion from the president that onshoring semi-conductor manufacturing would help deal with supply chain issues and inflation, which are very much issues we're dealing with now, but it takes years if not decades, doesn't it, to build out infrastructure where semiconductors can be made in this country, doesn't it? >> yes, i wouldn't say decades, but years. although it's already beginning. i was with the president recently i was in ohio, intel made a $20 billion announcement they're beginning to build a new facility in ohio tsmc is building a new facility in arizona so you know, just because it will take time, all the more
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reason we have to begin today. the reality is much of inflation is being driven by car prices. the reason car prices are so high is because car manufacturers aren't making enough cars simply because they haven't had access to the semi-conductor chips that they need so making more in america, whether it's chips or electronics or other supply chains is essential. it creates jobs in america as the president said, it's building an economy from the middle out but also it very directly will alleviate inflation by increasing the supply of critical goods in america. supply will go up, prices will come down. >> as the administration looks for areas where perhaps price pressures can be eased, is there any attention on the tariffs that the biden administration inherited from the trump administration at this point >> it is an excellent question, and we are reviewing that. as you correctly say, there are
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certain products which we are importing which we need to manufacture batteries and the like which have been tariffed, so the president has asked me, has asked members of his cabinet, look at every possible tool in our toolbox to deal with inflation. and go industry by industry to figure out how can we ease the pressure, and so yes, we are looking carefully to see if it would make sense to provide any exclusions from tariffs to bring down prices. >> and finally, just on the chip issue in particular. there's a debate now about whether the u.s. should subsidize semi-conductors here in this country. we actually had steven mnuchin out this morning on "squawk box" coming out and saying he supports that, the subsidies for that industry. we're going to have this debate now on funding it looks like it's happening on its own. intel you mentioned and others are trying to build out factories here in the u.s. should we be adding subsidies
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and incentives for companies to be doing this? >> yes, it's necessary look, the demand for semi-conductors is through the roof globally. so these companies are going to build more facilities to make more chips we want them to build those facilities in the united states of america the reality is if we want them to be in america and not in malaysia or asia or taiwan or other places, we are going to have to work with the private sector to provide an incentive to make those investments in america. i want to be clear about this. when i mentioned intel as making a $20 billion investment, that is their money the vast majority of the money that will be invested in new semi-conductor facilities is private capital. we are going to provide a relatively small amount of private capital to un -- excuse me -- public capital to unlike
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the rest of it the truth of it is this, this is a national security risk the united states of america used to lead the world in semi-conductor production. now, we buy 70% of our leading edge chips from taiwan that is a national security risk, and it is time to make these investments in american competitiveness so we can get back into the business of making chips in america and protecting the american people and create thousands of jobs at the same time >> what if china were to invade taiwan is there a plan for that what would happen to u.s. chips? >> make more chips in america. that is exactly what i'm saying. silicon valley is called silicon valley because we were the country that invented semi-conductors. we used to lead in the production, and it's time to lead again we can't, you know, control what china's going to do. we can invest in america to have a stronger, more vibrant, resilient america and create manufacturing jobs in the process, and that's exactly what
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the president is calling on congress to do >> secretary gina raimondo, thank you very much for joining us today >> thank you >> commerce secretary of the united states. >> up next, we will look at why the recent spike in oil prices may not hurt consumer spending as much as some people fear. plus, shares of restaurant chain tweetgreen are soaring after reporting a big revenue beat and strong sales guidance don't miss the interview with sweetgreen's ceo tomorrow on "closing bell.
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you just have to stand up for a kid who isn't fluent in bureaucracy, or maybe not in their own emotions. so show up, however you can, for the foster kids who need it most— at stocks closing lower today, technology in particular getting hit hard let's go to mike with a look at recent spike in energy prices from a historical perspective. it has felt pretty large. >> absolutely. one of the biggest currently underway however this is the history kind of the blended average history event-driven oil shocks. davis research puts is this together this is the number of months before and after that event-driven spike of oil prices and you see within couple months when the event began it moderates a bit and recover from there. obviously it's going to be different. this is things like the two iraq
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wars and hurricanes and saudi drone strike things may work out differently this time but usually there's a huge spurt and consolidation after. in terms of energy prices long-term chart how much u.s. consumers spend on utilities, natural gas, oil. this back to 1960s here's the 70s early 80s. oil shock right there. it's obviously trending lower. picked up here still the argument is we can somehow better absorb the cost increases even if uncomfortable. >> this is key because people say every supply shock in energy led to recession but we're less on energy. >> that's what is being tested now. >> after the break we're counting down to the all-important february jobs report whaitou mt cldean for the market and feds plan after the break.
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♪ want to show you some big earnings movers after-hours. gap shares up 9% reporting smaller than expected loss and revenue beat and good guidance broadcom shares popping after
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top and bottom line beat, strong sales guidance and buy backs suite sweetgreen surging more than 20% on much better than expected sales outlook the ceo will be on the show tomorrow >> that stock getting relief after a rough run. investors gearing up for tomorrow's jobs reports, steve here with a preview. >> after week of miserable news at least tomorrow jobs report could be moment airy distraction or reassurance the economy is in decent shape, what happens next a of the impacts of the terrible war happening. looking at unemployment rate tic ticking -- other indicators, we've had that
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make us pretty confident adp payroll doing well up 475,000. challenger job cuts plunging 20%. ukg workforce activity up 6.6% is the highest gain of the paniked on a month to month basis. there's then home base on their february jobs report they said nearly every top 50 msa saw month to month increases in employees working and hours worked okay higher inflation numbers, slower growth is likely impact on the u.s. from the war. one question, u.s. needs to ramp up oil production. big unknown. will businesses find the workers to pump more oil in the u.s. we're down 20 or 30,000 workers in the oil patch sarah. >> really, really quick is there any sign wage growth is peaking or are we heading higher here? >> i don't think so. we will have an equilibrium in
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the jobs market, i don't think tomorrow will be the day we find that equilibrium. >> steve, thank you. not to be too nerdy i read that there's some districts saying there's uncertainty about the pace of wage growth something to watch for sure, it's a big feeder into inflation. >> post-omicron see if that effects takes hold. >> that's going to do it on "closing bell. "fast money" begins now. >> live from the nasdaq marketsite in time square this is "fast money" i'm melissa lee. tonight's trader lineup guy adami has made it back into the house. tim seymour, dan nathan, brian kelly. tonight on fast traders are sounding alarm on wti and sharing gap and broadcom rallying after-hours earnings and we'll bring the latest on the quarters and riffian making a huge u turn on pricing


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