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tv   Closing Bell  CNBC  March 11, 2022 3:00pm-5:00pm EST

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summer vacation plans and 42% of those people who have plans, guys, will not change those plans given fuel costs >> especially post-pandemic. i think it would take a lot for people to change them at this point. >> they'll just bake it into the costs. >> or do whatever they have to do >> dom, have a great weekend thanks for watching "power lunch," everybody. >> "closing bell" starts right now. >> hello, and welcome to "closing bell. i'm sara eisen here at the new york stock exchange. choppy day to end what has been a downbeat week here on wall street major averages all lower and pacing for weekly losses >> i'm mike santoli. let's look at what's driving the action futures gault a bid after headlines crossed saying there were certain positive shifts in talks between russia and ukraine. that boost quickly faded meantime, president biden called on congress to suspend normal trade relations with russia, and announced a ban of russian alcohol, seafood, and caviar and oil prices are ticking higher again today energy is the only sector pacing
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for weekly gains. 59 minutes to go and the dow could turn in the fifth losing week in a row. >> on today's show, oil expert weighs in on the wild moves in crude and how the u.s. is make up in the loss of supply from russia long time executive at aramco. >> plus, we'll talk to the head of the consumerficial protection bureau >> first up, let's focus on the big stories we're watching mike tracking the action as always kayla tausche with the latest from washington, and new measures against russia. mike, start us off what are you offing today? not as big of a sell-off as we have been seeing >> no, not too much in magnitude. as a matter of fact, one of the things to take away from the last couple days is a little bit of a dialing down of the intensity of the market moves. it's a little bit of calm, but it's happening really at this low end of this range, and it's not showing a whole lot of confidence on buyers, even though we're at these low
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levels i want to point out, the one-year chart of the s&p is starting to take on a very mixed feel we're back to levels that were first reached in june of last year so no net progress in nine months or something like that. which is something that has happened, by the way, over the course of the prior decade as well 2015 on, and then again in early 2018 you had about 18 months where there was no net progress. not unusual, but certainly a grind. we still have this downtrend we have not shown signs of breaking out of just yet, even if the base is holding for the moment take a look at investment grade or corporate bond yields the fed is set to tighten next week the market itself starts to tighten in advance because it expects that and is responding to higher inflation. this is the ice bank of america corporate bond, u.s. corporate bond index yield it's not quite at 4%, but look at what it compares to here. this is when markets went completely cuflewy in the covid
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crash. this is much more what's interesting is 2018, as we had that kind of tightening. the fed was on the move, and you did have it get up toward 5% that's when stocks had a little bit of trouble you wouldn't say this is a critical absolute level, but it's clearly getting to that point where it's starting to be felt by companies even if we can still for now support equity valuations sentiment has turned negative. people are very defensive. there is anxiety in the markets. perhaps, though, not at an absolute extreme the bank of america bull/bear indicator, it combines a lot of those things and has rolled over, but it's not quite gotten down to what this threshold of what a contrarian buy signal is. we're basically right here again, i keep pointing to this area, back in 2015, 2016, when we had this rolling kind of waves of correction, some stress in the capital markets we had a global earnings recession, industrial recession, and that, to me, has some
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similar feels here we're not quite there, but it's moving in that direction >> it seems like the take away is there could be more pain for the stock market >> absolutely. >> credit usually leads. it feels likeit's lagging. >> it's not the main thing because default rates are so low, corporate profits are so low. if you look at the micro on corporate credit worthiness, it's not bad companies have a lot of cash it's much more about risk appetite that's flagging, and there could be more downside, but it always feels like that. i tell you, a correction looks exactly like the first stage of a bear market. >> it also is increasing recession risk goldman sachs says 35% they're usually pretty rosy as far as their economic outlook. >> they are. if you get above 40%, it's de facto somebody saying we pretty much think it's going to happen so they're just short of that and it's what the yield curve is telling them and they're just listening to it. >> let's get to kayla tausche now for the latest on the war in ukraine and washington's response with new moves today,
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kayla. >> that's right. we're going to start with the tactical movements on the ground in ukraine because that is going to be more important to the market and to the situation there than whatever vladimir putin says, which is what moved the market earlier today at this hour, a senior u.s. defense official says russian troops have in fact made advances in the last 24 hours. that offers a slightly different assessment than one from an aide to ukraine's president, when he said earlier today that troops had stayed put specifically this u.s. official says there's been movement north of kyiv, advancing near the capital city. the u.s. confirming air strikes in western ukraine interestingly, a part of the country previously not targeted. and second tier cities like mariupol in the south are under increasing pressure. in washington, president biden rolled out new economic penalties to isolate russia from global finance, and this afternoon told house democrats its market can never recover >> moscow stock exchange is
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closed for a simple reason i could ask why is the closed? because for the last two weeks, because the moment it opens it will be disbanded. you hear me? it will blow up. >> there are no signs of a cease-fire russia's foreign ministry tweeting about chemical weapons. president biden today said there would be a severe price if russia used them sara >> so what are the experts saying about where we go from here and just how much more is there that the u.s. can do to try to stop putin >> unfortunately, i just lost the connection in my ear so i wasn't able to hear what you were asking, but i believe i'll see you next hour, so perhaps we can take that up then. >> we'll fix it. thank you very much for that reporting. kayla tausche. >> when we come back, we'll break down another day of big moves in chinese internet stocks on delisting fears including a
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huge plunge for ddidi, down 46% we'll talk to a long time adviser to the chinese government about what's behind this dow is down 65 points. do you have a life insurance policy you no longer need? now you can sell your policy - even a term policy - for an immediate cash payment. we thought we had planned carefully for our retirement. but we quickly
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well as the chinese tech stocks. baidu still weak, and to the upside, really smaller compoem nlts regeneron pharmaceuticals, crowdstrike, and t-mobile. >> check out didi shares today plunging, down more than 45% after reports saying the company is suspending its plans for a hong kong listing. other chinese internet names getting crushed as well. adding to big losses on the week joining us is robert, the chairman of the kuhn foundation and a long time adviser to the chines ease government it's always good to have you what is going on apparently, the regulators are telling didi they can't go ahead with this listing. how do we interpret it >> didi is the poster child for president xi jinping's vision of what's called common prosperity, which has many elements. two of which probably the most important, are what's called the disorderly expansion of capital, which is a broad term. it can be utilized very much
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across the spectrum, but has as its focus the platform companies of which of course didi is a primary one. because it relates to the relative power in the economy and society of these companies versus the party, the communist party of china, there cpc, which is the perpetual ruling party of china. because of the expansion of so-called expansion of disorderly expansion of capital, these platform companies have had much more impact in society. so this is a reversal of that. the second point is how they treat their workers. the gig workers. because this has become a major factor in chinese society. how to balance the imbalances between urban and rural, ownership and workers. inland and coastal regions common prosperity was derived
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after china achieved what for almost ten years was a prime objective of xi jinping, which was to eliminate all extreme poverty. this common prosperity is a key to understand the situation with didi, which was viewed as not being particularly subject to the leadership of the party. >> i want to be clear. are you still in regular contact in advising the chinese government or is that a thing of the past >> i'm regular doing media and involved with a lot of people, not necessarily on the didi issue, but just last night, i was involved in doing commentaries on the latest political meetings, the two sessions of the national people's congress and their conference that ended yesterday. >> what did you learn there? >> well, a lot of things first of all, that china is most focused on stability
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they recognize the challenges, the obvious international challenges that we have seen and some of these tensions in society. it was mentioned in terms of how china has to deal with these gig workers. i think they mentioned 200 million people, workers who are those who had not kind of written new kinds of jobs, and china has to figure out how to regulate them. this is a very big deal in china and is a good prism to see the light that is coming in for the next period of time, as long as xi jinping is in power, and that is an undeterminable period of time this year, the end of this year is the 20th national congress of the communist party of china, which xi almost certainly will be given a third term, and basically an unlimited term. what his vision is is what's critical china is now -- has elevated what's called the two establishers which is to establish xi jinping as the core of the party and the party leads the country, and xi
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jinping thought is the guiding doctrine for the country, and common prosperity of which again didi is a poster child of what is not, is perhaps the prime domestic driver of common prosperity >> robert, aside from didi, and aside from china's efforts to try and restrain some of its companies, of course, we do have these stocks going down because of u.s. law that is going to make it more difficult for many to continue to list here in the states list their shares here is it right now the situation where china doesn't feel it has an interest in allowing these companies to find some way around this, in other words, having their auditors be subject to u.s. examination or whatever the standards might be to allow these companies to retain their listings >> it's a mistake to look at all of these questions as a yes or no simplistic. there are many different views
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that compete with each other an important factor that i should stress in common prosperity that china says, it is not to robinhood and take from the rich to give to the poor it's not to create a welfare state where everyone is equal. that's not the intent at all because china recognizes, xi in particular, that entrepreneurship, energy, the market allocating resources, is absolutely essential for china to achieve its great rejuvenation by mid-century. so that's a critical factor. each individual question needs to be evaluated by competing objectives and china does want to open up it does want its companies to be prominent in the world china has a global initiative for development that it wants. it wants its companies to do it, but it still has other issues. it wants to be absolutely
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sacrosanct in controlling data it doesn't want the data outside. given a choice, if one has to make a choice between market success and security as china would see it, they will always opt for security and security for the party to maintain its leadership is number one >> that is a good way to sum it up there robert, thank you very much for your thoughts today. robert kuhn. >> a pleasure. >> we have 43 minutes left before the bell. you have the dow down about 70 points a little more loss actually piling up here in the s&p 500. it's down 30 points, about .7% and the nasdaq still the underperformer, down 1.5%. after the break, we'll talk about the rising risk of a russian default in light of punishing sanctions from the west and the american stakeholders that are most exposed. as we head to break, check out some of today's top searched tickers. the ten-year yield retaking the top spot, followed by amazon, crude oil, rivn,ia and docusign.
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40 minutes left of trading for the week dow down about 40 points or so russia has a big interest payment due on its bonds next week, and their there are growing questions of what happens if the payment can't be made here's kristalina georgieva yesterday on "closing bell." >> as for default, no longer this is improbable event i would not speculate how probable because of course there are two factors there, how long the war is going to last, how long the sanctions are going to last and also, what would be decided around russia having some ability to possibly pay some of
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its debt and none of this is clear at this point >> even the imf speculating it is not improbable. it's a big statement and a big deal let's bring in leslie picker doing some reporting on what a default would mean for the country and its stakeholders and whether it can manage to pay, leslie is there any chance? >> yes, sara, i think the market, the key market indicators would suggest investors see a very high likelihood russia misses its interest payment due next week they have been surging, there's little confidence out there that putin will be willing or able to pay, given the war time financial sanctions on his country. that's already marked down performance for emerging markets funds and others with exposure to russia, although most funds we have seen have minimal amounts of investment in the region relative to their overall portfolios but some emerging markets investors say anyone holding
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russian debt right now can basically kiss that money good-bye unlike when places like argentina and puerto rico defaulted, there will not be -- it's unlikely there will be an orderly rustructuring process if russia is still under strict financial sangs and russia's contracts reveal unusually limited credit protections compared to other places if we look at venezuela and potentially a model after it was sanctioned, the bonds may trade at just pennies on the dollar. with u.s. investors only allowed to sell but not buy. you can imagine what that does to the prices, guys. >> for sure. leslie, we did also want to ask about news that deutsche bank is breaking from some other major firms by maintaining ties with russia of course, those ties are pretty long and deep for deutsche bank. what can you tell us there >> very long and deep indeed, and of course, we have seen the exodus across wall street.
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at least two major firms, jpmorgan and goldman sachs explicitly ly stating they pla unwind terms in russia of the large u.s. firms, citi has the biggest on the ground presence but announced plans to divest their bank well before the invasion, although it's having a difficult time, as you can imagine, selling that asset. for many firms it's not just as simple as turning the lights out in russia. deitch bank's cfo saying it's not practical from a client support standpoint to pull out of russia right now. >> it is our responsibility as managers of an important bank to steer our institution through the volatility that we have seen and the impact >> deutsche bank said earlier this week it's been reducing its exposure to russia and as of december 31st, its gross loan exposure in the region was .3% of its overall loan book guys >> leslie picker, stay on it for
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us thank you. >> also a surprise that some of the energy firms actually paid back bond holders. that was very unexpected, in dollars that they had the money. like $1 to $2 billion each when it comes - >> if you're a company that things you're going to down the road need access to global markets, it's good plus they have money coming in >> still ahead, oil experts join us to discuss the wild week for crude oil prices and whether he thinks we have seen the top as we head to break, here's a quick check on bonds yields are little changed. the ten-year hovering around the 2% level, but it's been a big week for sell-off in bonds especially the 30-year, break evens, expectations for inflation also moving up today we'll be right back.
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just about 30 minutes left of trading dow down almost 100 points let's check on individual market movers for you now hsbc upgrading adidas to buy from hold, saying they have renewed confidence in the stock given the strong sales guidance this week. adidas will have the opportunity to showcase new products at its upcometic innovation day which could convince skeptics to be more patient with the company. earlier this week, their ceo told us that innovation is what is leading them to have good pricing power inthis inflationary dynamic listen >> we do have pricer power, but of course, pricing power comes around with new core products, and that's our obligation to
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make sure that we would say feed the markets with cool products where the consumers say i really want to have that product. >> shares of adidas had a strong week, but again, are well off the highs. and have been cut by almost a third over the last year up again 3.5% today. >> check out docusign, it's plunging after reporting weak guidance yesterday baird downgrading it to neutral from outperform saying lighter margins are reducing the confidence in that stock, which is down almost 22% jim cramer talking about docusign today in his investing club newsletter. point your phone at the qr code on the screen. it's the double whammy for docusign, pandemic being over, which i don't want to jinx anything, but look at docusign and its guidance, and the high growth cathie wood style stocks being in the firing line when yields go up, and people didn't shake confidence that the fed is going to hike interest rates >> what's interesting is docusign was one of the pandemic names people said they have a
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much more durable franchise and growth opportunity, simply because why would anybody want to go back to using paper documents. but the growth deceleration was severe it has gone from 25 times forward sales down to about 5 times forward sales. >> you wonder when people step in to stocks like that >> i keep thinking about '01 and '02, the post bubble bear market and they kept rolling downhill until they were consolidated up. >> well, time now for a cnbc news update with rahel solomon >> here is your news update. disney says that its pausing all political donations in florida, after the state's legislature passed the so-called don't say gay bill disney says it will also increase support for advocacy groups opposing similar bills in other states >> president biden speaking to democrats gathering in philadelphia about topics where he says their party is leading the nation including opposing russian attacks on ukraine and inflation.
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he slammed republicans for saying that democrats are growing the budget too much. >> i'm sick of this stuff. we have to talk about it because the american people think the reason for inflation is government spending more money simply not true. i don't think we need any lectures from our friends on the other side about fiscal responsibility, for god's sake >> and from oklahoma to maine, late winter storms threaten to bring about heavy snow and also disrupt traffic. this morning in tulsa, emergency crews responding to about 30 accidents. parts of northern alabama expected to get 4 inches of snow and northern maine, some areas could get more than a foot of snow and here in the new york city area, we're also getting winter weather alerts about the same system back to you. >> what a tease with some of that spring weather lately rahel, thank you >> about 28 minutes to go before the closing bell here's where we stand in the markets. been choppy all day long we're lower across the board and
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actually losses are accelerating the nasdaq is down 1.75% s&p down a full percent and the dow down 150 we're looking at session lows right now. when we come back, an oil expert tells us how banning russian energy exports could hurt the global economy >> and later, rivian under pressure after cutting its outlook but a slew of analysts are still positive on the stock. we'll tell you why wn ce ckheweom happiness. or confidence. but you can invest in them. at t. rowe price our strategic investing approach can help you build the future you imagine. ♪ ♪
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oil prices are higher today, but still down 5% since the start of the week. on tuesday, president biden announced the u.s. will ban imports of russian oil and in order to contain the surge in
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energy prices, the white house is seeking some relief from countries under u.s. sanctions european union is also working on ends its reliance on russian oil and gas. earlier today, european commission president said european union leaders are drafting proposals on how to do so by 2027 >> joining us now is susod elhussainy, owner and founder of elhussainy energy. we talk about a lot of these countries and the eu deciding that longer term they need to reduce their reliance on russian oil. near term, i wonder where we might look even in the u.s., producers say we need six months to really make much of a gain in their production what about the opec states at this point theoretically, they could do more. should we expect something like that >> well, good evening, mike. look, russia is a big, big player they produce 10.5, 11 million barrels of oil, and even more,
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they produce 60 billion cubic feet of gas a day. they export about 4 billion barrels to europe and maybe 17 billion cubic feet of gas. that's a lot of gas and oil that need to be replaced. there isn't that kind of spare capacity in the world. even if you could add more oil production, you would have to deliver it, you would have to deliver it as refined product. so the markets in europe are not easy to get to they're quite complex. the gas is even more difficult because when you end up trying to sell lng in europe, lng is seven, eight times its normal prices it's running about $27, $28 a million btu, so the legacy users of russian gas aren't going to want gas at that price in the immediate term, i think the europeans have come to the conclusion that there isn't much they can do right now.
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now, 2027, okay. but that's five years from now so in the meantime, i think the strategy needs a solution. there must be some compromises at the end of the day. you know, what's the problem with being another sweden or another austria or another switzerland? all of those are neutral countries. maybe that is a short term solution >> right i mean, i guess the question then, if in fact we're going to be in this situation for some indefinite period of time, we just don't know, we have been talking so much about how there's been this self-sanctioning effect where typical buyers are not purchasing russian oil, even if they're able to. do you think that's a sustainable situation where russian oil and gas do not find their way onto the global marke in some fashion if prices persist in these ranges right now? >> well, at the end of the day, it's all about economics
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the russians will discount their oil. there are markets in the far east that are very happy to buy lower priced oil but as you say, the self-sanctioning isn't doing any good to the consumers. at the end of the day, these higher prices get passed on to the consumer so this is not going to penalize russia russia will find a market. as we were saying, this is not an easy solution for opec to fix. in any case, oil, frankly, and energy in general, should not be weaponized it's not a good, healthy way to treat commodities. it ends up spreading across the other markets into other commodities. so the best solution is a calm, sensible, slowdown of this railroad that's running off the track. try to save all the young people, you know, the tragedy of millions being displaced, this
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could get worse. you know, we are not seeing the end of it. and it should be stopped while it can be. but it's not penalizing russia in the long term russia will find markets >> so you have a unique window into the saudi government. your years of experience at aramco, as an executive, i believe you're there right now what is their position whose side are they on >> well, sara, this is a very important question it's a very delicate situation when you try to get both sides to talk to each other, to work together, you don't want to be appearing to be taking one side versus the other particularly if by taking sides you don't fix the problem. i think our management, our kingdom's leadership in general looks at the situation as one where we want to get both sides to work together, to talk and resolve the problem. and not to appear to be biased and in any case, as i say,
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there's hardly anything we can do we don't produce the kind of volumes of gas that is required. hardly anybody in the world has that, and europe needs that desperately. europe consumes almost 55 billion cubic feet of gas a day. their domestic production is only half that much. so these are bigger issues than even what opec can handle. i think being neutral is the best way to be a friend on both sides. >> well, it could be more of a friend to the world if it tapped the spare capacity to help plug the hole in the oil. why is it rebuffing u.s. pressure and ally pressure to do that >> it's not that it's rebuffing it right now, as we were saying before, some of these non-buying of oil, these so-called voluntary sanctions are self-inflicted it's not because there's no oil in the market. it's because they're trying to maybe push that oil that's available elsewhere, and then
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find an alternative solution we don't have those volumes. we can't deliver the millions that are required. as i say, europe consumes just from russia 4 million in total europe consumes 13 million barrels of oil that's a lot of oil. to use up spare capacity to try to leverage or do a kind of a weaponizing strategy of a commodity, i don't think it benefits the whole world it doesn't benefit certainly the europeans. >> something to think about. thank you very much for your thoughts today appreciate it. >> thank you all right, the tech sector big underperformer this week up next in the market zone, we'll look at the menas deutsche bank says should be on your radar. we'll be right back. will look back on our lives and think, "i wish i'd bought an even thinner tv,
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welcome back here's a look add what is ahead in the second hour of "closing bell." we will discuss the huge pullback in chinese tech stocks including a massive drop today for didi, down 45%, with an expert on chinese listings >> the director of the consumer financial protection bureau will join us to discuss inflation, gas prices and concerns over gouging. we'll look at what's next for pharma stocks as we mark two years since the start of the pandemic and we will discuss new data showing a big pullback in consumer sentiment, which just fell to its lowest level in more than a decade. but first, we have 13 minutes to go in the trading day. we're now in the "closing bell" market zone. joining us is veritas financial group founder, greg branch stocks under pressure and accelerating the losses into the close. all 11 sectors trading in the red. the dow was up more than 300
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points at session highs. we have given it all up and then some, down 176 the nasdaq also getting hit pretty hard right now. it's actually the worst of all of the major averages. down almost 2% it's been a tough week if you have been a bull, greg. down almost 3% on the s&p, and you seem more damage to come what is your expectation >> i do. i have long been a bear here, even before the geopolitical circumstances set in at the end of the day, i think there's only one outcome that will be acceptable to putin. the market keeps trying to latch on to any favorable body language or words coming from himself or zelenskyy, but there's but one outcome here he's committed too far and he's gone too far down the path what that means is we're going to have ever higher energy prices and ever higher commodity prices until this resolves itself when you look at the pricing on those things that have doubled in the year, that's exactly the type of price activity we had before recessions in 1980s,
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1990, 2000, and 2008, although to be fair, 2008 had other circumstances. so not only am i now looking for a significant deceleration in corporate earnings growth in the mid-to back end of this year, but i think we can now put recession firmly on the table as well i think the market has to dijust all of that in the context of a fed that is decreasing liquidity and reducing its balance sheet >> that's bearish. >> yeah, i was going to say, though, granted on the history of what happens when we have seen a doubling in oil prices and energy costs in terms of the potential for recession, but those times you mentioned, what we didn't see was oil doubling to a level that it had traded at eight years before when the economy was smaller and consumers weren't quite as able to absorb it i wonder if you think there's enough of a cushion in terms of wage growth, in terms of the savings that have been built up and the fact we have a tight labor market to maybe fend off
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outright recession >> i would be more optimistic about those characteristics if i didn't think they would be offset by a flattening yield curve which might disincentivize banks to loan. if i didn't see two percentage points of interest rate hikes this year, which will obviously take a bite out of consumer purchasing power and wage purchasing power, and if i didn't see a fed becoming much more hawkish both on monetary and fiscal policy. i think you're right to point those things out as possible cushions, but in the face of some of the other characteristics which are also unique, i think they'll be offset >> but wouldn't bond yields be lower then they're instead moving up, and in fact, had a pretty bad week we saw the opposite happen, yields shot up on the ten-year, if recession was really getting priced in, wouldn't it look different? >> so the direction of the yields is important. and you know, of course, like you said, we expected with the flight to safety for those
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yields to come in a little bit and it's been ebbing and flowing and rocking back and forlth but it's the trajectory of the curve that is more important at this point. banks borrow at the short end to loan at the long end when the curve is flat, they're disincentivized to do that if i'm worried about a recession, if i'm worried about gdp growth, which i think we saw goldman come in and take its estimate way down today and said there could be further downside risk, we're worried about the yield curve and banks pulling in their liquidity to help spur and offset some of the recessionary pressures. >> all right, well, tech is one of the worst performing sectors this week. down more than 3%. deutsche bank says investors should be bullish on some big tech names the firm initiating coverage of a number of internet stocks with favorable ratings and picking c chewy, amazon, uber, meta, match, and expedia as the top picks in the group deutsche also says investors have a prime opportunity to build positions in secular
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winners amid the recent tech-led sell-off they weren't as bullish on other names, initiating etsy, spotify, and twitter as holds those stocks are all sinking today. greg, you know, i guess in theory, not the worst time to start covering the faang type group, the internet names, after this trouncing that they have gotten is this an area that you think is worth shopping among? >> i do, actually. we have been keeping a strong eye out for it look, in an environment where i believe that we'll see multiple compressions really hard to get expansion in a rising rate possibly recessionary environment, you'll get performance where there is strong protected secular earnings growth. that's where you'll get performance, that's where you should lee frequent safety so as you know, i have been talking for months about finding safety in some of these high free cash flow generating category killing structural tech
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plays. i think although philosophically, i agree for the most part with what the analysts said and did, i make a simple distinction that i iddidn't seei that piece, which is there is some tech that is actually structural, whereas there is some tech that is more fashionable or in style. when you think about the companies that are building the cloud, whether it's the amazon web services or whether it's the nvidias of the world who are putting the chips into data centers, when you think about the companies that have created the digital advertising capacity, when you think about the companies creating the enterprise software platforms that businesses will run on, that struuff is structural. those tailwinds are demonstrated they continue to put up 30%, 40% top line growth. they continue to give us margin expansion. they have demonstrated pricing power and demonstrated protection from some of the macro factors. that's a far cry from tech that might be more stylish, more fashionable, that is not structural and there's two categories of
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that, applications that run on that structure, like a booking, or something like that, and then there's things like a snap or a peloton, that i might make the argument doesn't really have a moat might be more fashionable rather than structural. >> wonder what you think in terms of that spectrum of structural to fashionable about apple, which arguably has aspects of both. i wanted to point out, apple actually is making a new low today, relative to where it traded down to in late november. happens to also be below this previous high back in september. so that's their five-year chart of apple, along with the 200-day moving average which is right below it right now the stock is in the 154s, and it's about a dollar below where it's trading now as you can see, it's actually acted as a pretty good spot of support for apple. what are your thoughts on this name, greg >> so apple has always been a
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little bit of an odd stepchild for me when i think about the large cap safety zone. only because of its exposure to the consumer and when we talk about that consumer confidence number, the year ahead expectation coming in as a generational low. we hit a ten-year low last month. we hit a generational low this month. and so that does concern me to some degree. if we see much diminished consumer spending in the coming months, that obviously affects apple, which is more exposed to that, more than it affects microsoft or google or amazon. so i recognize that their moat is quite frankly their brand and the differentiation that they have with their product as well as mixed shift to the positive with the pro versions at the higher asps so while i look for continued growth, that's what i worry about with apple >> what's the level we're watching, 155? >> 153.50 or so is the 200-day,
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but actually under 156 is now the new low from november. >> want to talk about rivian shares are under pressure there as well. they reported a wider than expected loss. they also reported a revenue miss it looks like wall street analysts are still optimistic on the name, bank of america, piper sandler, rbc and others maintaining their overweight rating on the stock. the firm saying despite the supply constraints which is holding back production, rivian is still on the right track. i don't know if investors agree. shares are down 63% so far this year and a pretty strong reaction as well it's also, you know, hard to disappoint if you're in this area of the hot market that was so hot last year >> a substantial reduction in anticipated production for this year, relative to where the street was i think it doesn't really inspire a lot of confidence that this is one of the companies that's going to be able to overcome so many of the supply chain issues tesla talked about having
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workarounds to the nickel price spike. they have a ton of cash because of all of the capital raise they did, ipo, private raises they have like $18 billion in cash, they said. it's about half the market cap right now, so they'll make it. it's just a matter of how fast they can grow. greg, is this something that even though it's down a ton from where it traded a few months ago, is it representing any kind of value to you for a long term bet? >> nothing has confused me more than rivian over the last few months i was actually on november 10th when it came and i did some simple math then and i'll do some simple math now. employing a very generous five times multiple to gross profit to get to that $60 billion implied about $14 billion, five times of gross profit. and to get to $14 billion of gross profit, i estimated they had to produce about 800,000 cars by 2025
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well, they just announced they're going to put out 25,000 this year. and so that dream of a $60 billion valuation supported by a very generous five times gross profit multiple on an insane 800,000 cars, that's gone. so what we're left with is, can they get to 400,000? to justify $35 billion i think as we get closer and closer and see the trajectory come down further and further, so too will the valuation. >> you're either getting a call or you have a slot machine in your house i just want to point out as we head to the close, new 52-week lows across a lot of the multinationals starbucks, whirlpools, conagra, clorox, kimberly clark, they're facing higher costs and potential slowdown >> the market is clearly worrying that consumers getting to the end of their capacity to absorb some of those price increases. staples have been really pronounced weak spot in the
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market as we look to go out pretty much on the lows of the day, you see the s&p 500 there, it is now down 53 points internally also skewed to the downside, not really in a dramatic way, but more than 2 to 1 declining to advancing volume on the nyse. take a look, too, at the two-year note yield. this is obviously been the fed story. we're getting the fed meeting next week, with the anticipated quarter-point hike two-year note traded up to 1.75. it hasn't been that high embedded the expectation for several rate hikes that's been flattening out the yield curve. we know that pressure point as well volatility index actually has been kind of sluggish relative to how the overall market has acted today. it's been above 30 we're heading into the weekend i also think the overall market action reflects the preweekend nervousness. remember, sunday night opening of stock futures has been a downside stab by three of the last four weeks because you're kind of dealing with the
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weekend's war news so probably gun shy ahead of a weekend. still, though, around 4200 on the s&p. still in the zone. we first got down here in late january, sara. here we are still kicking around the same levels. >> closing at the lows another tough week for wall street i'm sara eisen welcome bab to "closing bell," here with mike santoli coming up, the director of the consumer protection bureau on how the white house is protecting consumers against price gouges as inflation hits multi-decade highs >> first up on the market, greg branch from veritas financial group still with us, mark lehmann joins the conversation mark, just a spill into the close. we were trying to rally for most of the day didn't happen. closed at the lows down 1.2% on the s&p, and for the week, down almost 3%
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one thing that experts are telling us the geopolitical experts watching this back and forth and putin and the lack of progress on negotiations is that this could be with us for a while. is that how it's going to be for the market >> well, as long as we're talking about that going into the weekend, i think we're going to have closes like this going forward. i talk to a bunch of portfolio managers this week and this morning, and the first half of every conversation is about the humanitarian devastation going on, we didn't even talk about stocks and the market. that tells you what's weighing on the investor psychology i think as this long, now longer war drags out, i think we haven't even mentioned for a lot of people, this is the two-year anniversary of covid started, friday the 13th, 2020, so we have two full years of that. we wondered what would take that off the front page of all the papers, and it's the war
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that's why we're closing in on lows today >> mark, you and your firm focus on the growth stock areas. that's another real story line here it's related to covid, but just the fact that we keep grinding lower in a lot of the hypergrowth names. they got inflated in the valuations you sort of think they have gotten discounted enough and then maybe not obviously, docusign is an example today. but in terms of talking to clients, are they yet sort of turning their back on this whole category and you know, how do you kind of counter all of this negativity there were probably just too many stocks that came public in retrospect >> that's a great point. and i think it's really hard to turn your back on technology we think technology more as a horizontal than a vertical because so much of technology overlays everything we do, whether it's in consumer or whether it's in financial services or financial technology but yes, the market had a lot of
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capacity, took in a lot of stocks last year, and now they're digesting that kind of valuation. hard to turn your back you see some things like we saw in crowdstrike this week, like we saw with investment that helman friedman made in splunk last week, and tech pessimism is kind of quick, but we have a short memory i still think that's going to ha happen, but when you have reminders like docusign and the performance on the downside, it's really painful for investors. that being said, i'm an optimist because i always say the alternative is foor far worse. innovation isn't slowing down, but right now, it seems kind of dire for people. when you see docusign's performance today, it doesn't sound good >> you sound like cathie wood today. the ark innovation etf is down more than 7% for the week. a big down day today, now 60%
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off its highs, vuss the nasdaq composite which is down 3.5% for the week where would you be looking then to buy if you still see these as big winners? >> well, saying i sound like cathie wood, i'll take that one through the weekend to digest myself, but listen, the bigger they are, the harder they fall i think if you look at the components of what was in the fund up until now, it's kind of a who's who of what's gone wrong in the market in 2022. i think there's ample opportunities here in technology because you see these things like we saw in crowdstrike this week that just have opportunities to the upside. i think people are going to take fresh looks at companies like snowflake, which had a bad performance in the last week or so and that move to the cloud, and they move to your own cloud has not slowed down. you look at c3 ai which has treaded water for a couple quarters and the move to ai has
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not slowed down at all investors have to dust off those names and find opportunities as quick as they have fallen and as far as they have fallen, as a part of our lives, that's not going to change. fintech payments, i mean, sure, these stocks had gotten to lofty valuations, but to think that part of our economy is going to just go away because stocks have fallen is just not going to happen so i think it gives people a fresh perspective. the capital markets are clearly shut down for some time, so they're not -- i talked to this portfolio manager this morning he's like, my calendar is clear. i haven't seen an ipo this quarter. that's not great for wall street rev noes but it's great for portfolio managers we saw 20 years ago, the cover of barrons that had amazon.com facebook went down 50% in the first couple quarters. innovation doesn't tdie. it just takes a time-out >> that's true, mark, although there are a couple hundred stocks that we never talk about because they're gone from that period, too. so we remember the comebacks >> that is very true
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but mike, with all due respect, i'm not talking pets.com these are companies with hundreds of millions of dollars of free cash flow that is going to be hitting the bottom line at some oint. this is a valuation correction this is a different time right now. we have to decide, when lemonade was trading for $190 a share and trading for a $20 billion market cap, which was approaching all state's, was that worth $20 billion a share? investors said no. at $2 billion market gap right now, it's super interesting to a fair amount of investors that's the conundrum right now facing investors >> sure is maybe other companies find them interesting at these levels too. and greg, just wanted to hit you on this conversation about the markets when you're saying you expect there essentially to be more of the same of this trend ratcheting of tensions of commodity prices, risk assets staying on the defensive do you not look at oil having not made a new high this week and some of the stress indicators easing out of commodities as a sign that maybe
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some of that has gotten priced in already >> i don't necessarily see that as a definitive sign we're going to have to take, you know, a several week perspective here because as we saw from this morning to now, if the body language becomes positive, the market reacts. if the body language and the whispers are negative emanating either from putin or zelenskyy, then the market reacts the market has not grasped one outcome with certainty at this juncture there are also whispers the uae, and i think you got into this before me, the uae and saudi arabia would bring on some of their spare capacity to smooth out the market a bit and provide some price stability whether they are going to choose to do that or not is uncertainty as of yet, but that might bring some relief as well. we're going to have ebbs and flows, but i believe the direction is higher because i do believe there's only one outcome in putin's mind for resolution of this. >> and keep buying energy stocks along the way, greg?
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or hold them >> so as you guys know, i like to divide things into very simplistic buckets energy is certainly opportune, all the commodity prices elevating and going higher i see that more as a cyclical trade that might have limited duration what i'm really looking for are those things that have secular tailwinds, and we hit on some of those a little bit a few mndinus ago in terms of tech stocks with protected top lines that are growing because of the secular t tailwinds behind them and the 30% to 40% margin expassion going on, the bottom line, google for example, before the last quarter because of hr ads, gave us 1500 basis points of margin expansion in12 months microsoft would have given us 300 if not for an accounting change but put up 100. you can look at some of these cyclical plays like energy what i prefer to do is look at something that has three and four and five-year secular
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tailwinds. >> all right, everybody stay with us. we're going to get back down to washington where kayla tausche has the latest on the war in ukraine and the white house response hi, kayla. >> hey, mike president biden and g7 allies today tightening the screws on russia and further decoupling the economy from the west, moving to limit funding from the imf and world bank, banning the import of diamonds, seafood, and vodka, and calling to revoke russia's ability to trade with the west on the best terms also treasury just moments ago putting out a detailed list of new individuals oligarchs, the kremlin spokesperson as well as the board of directors for the bank vtb, as included as new individuals who will be sanctioned these escalating economic sanctions are meant to correspond to those by russian forces in ukraine stepping up air strikes on the western part of the country, fighting ongoing in major cities. and now the administration has warned that russia could keep
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conducting so-called false flag operations, painting moscow or its allies to the victim to that end, missiles are been fired near ukraine's border with belarus, and suggesting ukraine was planning an attack using chemical weapons earlier today, president biden said if russia did use chemical weapons, there could be a severe price. to discuss that and more in detail on sanctions on monday, i'll be joined exclusively by the deputy treasury secretary, and you'll see that beginning in "squawk on the street. sara and mike. >> kayla, the market has been so headline focused on any potential diplomatic resolution, or just the idea of talks. is there anything that we know of on the schedule, on the agenda that we can be hopeful for? >> not on the diplomatic front involving russia it has generally followed a pattern that there have been at least one or two cease-fire
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negotiations every single week, but there has been nothing of substance that has come out of those negotiations next wednesday, we do have a meeting of the nato defense ministers. so we will see what comes out of that, but those meetings are usually just making sure that the force posture and military footprint of the allies aligns with what they're seeing happening tactically by the russians so that could potentially be a development to watch for next week, and we await more news on the diplomatic front >> kayla, thank you. kayla tausche. >> greg and mark, before we let you know, we want to zone in on your top picks greg, let's start with you what pick? >> so the segment that i'm highlighting right now is the cybersecurity segment. as we talked about, commodity prices are going higher, as we talked about the conflict has people focused on defense spending and maybe some of the contractors will benefit but a sector that is going to benefit both in the short term cyclical and the long term structural cybersecurity we were already experiencing a
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dramatic increase in attacks well before this geopolitical conflict, and as we know, one of the key measures and one of the key ways this war will be fought is in the cybersecurity realm as it's one of putin's most poignant retaliatory tactics suber security has along with everything else had multiples come in when you look at a company like zs, because it guided into consensus last quarter, came in a bit, down 36% for the year but it has strong secular top line growth characteristics. i expect 30% top line. yes, its billings came in from 71% growth to 59% growth in the last quarter, but again, that was free of conflict so i'm looking forward to a much more robust number next quarter these are the companies that have protected demand and protected bottom line characteristics that we can det the earnings growth and have performance in the face of multiple contraction >> making the case for z scaler.
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mark just made the case for crowdstrike. you also have another zone in pick for us. what is it >> it's also contrarian, and it's paypal, which obviously has been afflicted like a lot of financial technology names this year i look at that at 16, 17 times earnings you have a lot of consternation going on because of labor markets being so tight i think it's a contrarian play people are worried about credit, but the job market is so good now that i think there's an opportunity for people to get what is possibly the best digital payments platform allit at a price they didn't think they could bet it 6, 12 months ago. this is still the go-to name for digital payments, the pure play on that. if the consumer stays healthy like the labor market is supposed to, this would be a stock you want to own. >> that is contrarian. a lot of people think it's broken >> in the last several months, it's become contrarian we'll see where it goes from
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here mark and greg, thanks very much to you both. >> thanks. >> we are just getting started on the second hour of "closing bell." chinese tech stocks getting crushed again over ongoing regulatory fears we'll discuss whether more pain could be ahead for these names >> and later, the director of the consumer financial protection bureau on the white house's plan to regulate cryptocurrencies 'rba itwmites. (jane) we really expanded our family... for the wireless savings. then, my sister told me about visible. (sister) get unlimited data for as low as $25 a month. no family needed.
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gary, good to see you. >> how are you doing, mike >> all right you know, very, very sort of tumultuous moment for any chinese company listed here or hoping to list here. we have in addition to pressure from china on the likes of didi, you have got this law in the u.s., a lot of companies, young china among them, saying we may have to down the road delist from the u.s. exchange because of these auditing rules. what would you advise companies right now if they already have a listing or is there a way around that restriction >> so, a comthings one, didi is a unique situation because they're in this ongoing battle with the regulators and the chinese government so that's very unique. but the audit situation is really going to affect pretty much almost every chinese company that is listed in the u.s. and i can tell you, we're talking to a lot of oour clients and we talk to other companies and they're really scratching their heads about what to do because the two -- there's
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really two paths forward one is wait and see what happens. and certainly, young china in their press release said we hope that the law is changed, otherwise, we may have to delist and then others are trying to switch auditors, find a situation where a u.s. audit team could do the audit in china. that is -- there's a lot of difficulty around that, especially now with the borders being closed because of covid. the good things is these companies have three years to sort it out, and really, i actually should say that the governments of both countries have three years to sort it out because it's really a plolitical situation that's going to be decided at the national governmental level as opposed to farther down or with the companies individually >> as a practicate matter, how much value is there right now in having a u.s. listing? if you could do a hong kong listing or something like that as a substitute, since these
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stocks have already been hurt so much, i just wonder if it may not be that big a further blow if they happen to just be listed elsewhere. >> you know, that's a great point because a lot of the companies really don't need to be listed in the united states certainly, we have great capital markets. there are certain sectors where the investor knowledge is far better than anywhere else in the world. biotech is a great example and you saw beijing was one of the five on the list yesterday and they listed here a long time ago for that reason. having said that, most chinese companies probably would have more knowledgeable investors listing in hong kong, simply because of the local knowledge, you know, as they operate in china. so companies that are listed in the u.s., an initial move to a dual listing makes a lot of sense. and i would estimate probably the vast majority of u.s. listed companies are examining how they could do a hong kong listing or a shanghai listing at this time.
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so that move does make sense it's just obviously there's a lot of difficulty, a lot of cost around it. and this is the thing where didi factors in because most companies would assume if they want to list in hong kong, they could do it pretty easily. today was the first situation where you have a company that they're working on plan b. they're going to list in hong kong now they're not able to do that. so that injects a lot of uncertainty into what is probably the plan b for the vast majority of chinese companies traded here now. >> what do we know about the potential for a u.s. and china discussion or agreement between regulators on these auditing disclosures? what's the potential for that to happen, to prevent any more issues >> hi, sara. i think the odds are reasonably good and certainly, as we track the public statements being made by the regulators in china, they
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are fairly conciliatory about trying to meet halfway, i guess, if you want to put it that way you know, the u.s., i don't want to put it in adversarial terms we have the upper hand in the sense it is our market and it's hard to argue if you want to list in our market, you have to play by our rules. and certainly, chinese government does the same thing for companies operating in china. so apple, they want to sell iphones in china, they have to follow chinese law so we're in the right in the sense of saying hey, we have this set of rules that you want to list here, you have to play by our rules i think the chinese regulators understand that, and of course, they have their issues of how much do you allow foreign regulators to come into your markets and into your companies and what have you. there's going to have to be compromise on both sides my sense in talking to market participants and others, there is a willingness to find a way, and really, the difficulty is more at the higher geopolitical
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level because the trade tensions, everything we know going on between the two countries, this becomes a two-all in a higher level battle as opposed to addressing the issues directly. >> really good point so i guess you're not advising any chinese companies at this point when it comes to going public >> we have a lot two of five are clients and we have others. there's no ipos happening at all in the u.s that's a given but there's 200 plus companies, chinese companies traded in the u.s., and obviously, some of our clients. so it's a real issue for literally billions and billions and billions of market cap and those chinese companies have a lot of u.s. investors. u.s. pension funds and the like, so there's real money on the line in how this develops. >> well, keep us posted. i'm sure there will be news on that gary, thank you for joining us for now. >> by the way, didi closed down
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44%. ouch ceo of volkswagen issuing a dire warning about the economic fallout from russia's war with ukraine. he explains why, next. >> later, the director of the consumer financial protection bureau on what his agency is doing to prevent price gouging as inflation hits the highest level in more than 40 years.
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issuing a warning saying the economic damage from the war could be worst than the covid pandemic jon fortt just caught up with the vw group ceo in an episode of forte knox. he joins us with more on that conversation >> herbert diess is ceo of volkswagen group which includes audi, bentley, porsche, and others vok volkswagen this week unveiling the mick crobus and ev that goes on sale later this year. i spoke to diess earlier this afternoon. he said this tech infused week is something he's wanted to do for a long time. >> already before i joined volkswagen, i wanted to do this car. because you know, there were so many -- the microbus is probably
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one of the most iconic products in our industry. >> tough environment for it though the company also releasing financial results, saying the company operating 2021 well and would be more optimistic about 2022 if not for the effects as you mentioned of the war in ukraine. >> we have high exposure to russia we have about 7,000 people working for volkswagen there in two plants many customers and we seized our operations basically. we shut down operations a couple days ago we still are paying our salaries of all the people receiving their money, still supplying spare parts for customers but we fully support sanctions. we have, because only i think a strong reaction from the west. we can bring putin back to negotiations and try to solve the conflict >> but despite that, talking
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about if this continues to drag on for weeks and months, the impact on germany and the rest of europe significant as well as of course the need to deal with those refugees out of ukraine in the conflict he said that vw group and employees are sending some aid and help to poland, but as you heard, supporting sanctions. sara >> it really brings home the idea that the european companies are just so much more exposed than, say, the u.s. automakers are. and it's a more difficult and more economically impactful decision to pull out of russia did you guys also talk about, jon, the supply chain impact, which was already hard for automakers with the chips and now they're going to lose some key raw materials that also go into auto manufacturing? >> yeah, we did talk about that. and he talked about the importance of those raw materials. some of which do come out of that region. but we also talked about the ways he's shifted operationally and phil lebeau covers this so
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well clearly, i'm not the autos reporter on the semi-conductor side, there's so many companies across industries that are trying to figure out how to be more flexible in software,and their software stack in order to deal with what chips are available, and volkswagen among those >> jon, thanks very much look forward to hearing the rest of it. appreciate it. for more of this interview, check out jon's digital show, forttknox on youtube >>. >> from the news on cnbc, here's what's happening movement in that giant russian convoy north of kyiv today satellite images show some of the convoy members have moved off the road and into the tree line, sort of spread all about the pentagon reports they're likely trying to take cover as the ukrainian military keeps targeting them but u.s. officials say they do not believe the convoy is making any progress with resupply or in its ability to join other units.
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>> a critical fuel delivery today at chernobyl ukraine's nuclear power authority reports diesel fuel has been delivered to that plant. it's there to put the power generators back online to keep everything running safety for now. russian forces captured that site in the early days of the invasion they reportedly cut the power to the plant on wednesday add the time, ukrainian officials said there was enough fuel only to power the generators for 48 hours. and from the deep sadness in that region a rare moment of joy in the city of mariupol. this pregnant woman was injured on wednesday after russians bombed the maternity hospital there, but she gave birth to a healthy baby girl just last night. still wearing the same polka dot pajamas she was wearing during that attack, the mother and child reportedly doing just fine >> tonight, russian owned businesses in the u.s., some threatened now others getting incredible support. their stories right after our network special report, the fed decision, news time 7:00
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eastern, cnbc. sara, back to you. >> shep, appreciate it talk to you soon >> up next, the director of the consumer financial protection bureau on how credit card companies preparing to hike merchant fees will impact consumer spending. >> and later, a look at what's in store for pharma stocks as the covid pandemic enters its third year
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february inflation data hitting a 40-year high treasury secretary janet yellen on with us yesterday here's what she said about rising prices and how long they might last >> you know, we're likely to see another year in which 12-month inflation numbers remain very uncomfortably high you know, the federal reserve is looking very carefully at this they have indications that they intend to take actions to bring inflation down and i have confidence in their ability to make a meaningful difference going forward >> that's a big revision a whole year of higher prices. joining us now is cfpb director rohit chopra great to have you in person. what a treat thank you for joining us >> my pleasure
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>> fif we're living with very high inflation prices for several more months. even a year or more, what is your office doing and looking into how to protect consumers from getting gouged or getting tricked? >> we're looking at everything and one of the big places you see the inflation data is of course auto. and the russia/ukraine situation isability making that better auto building is going to build above $1.4 trillion because cars are more expensive and people need those to get to work. we're thinking this is going to put pressure on household balance sheets and income, but it's much broader than cars too. we really see that it could affect credit card balances and overall financial health of families it's one of the reasons why we're taking more attention when it comes to junk fees on all these banking products whether it's nsf fees, overdraft fees, return check fees. we want to make sure this is not a time where people are getting
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d nickelled and dimed. >> you mentioned autos, payments are going to go up where are you looking for any potential wrongdoing there >> a big place is making sure we're looking at repossession. so right now, so many people can resell their cars at above kelly blue book value. usually, auto lenders don't want to repossess they want to work things out if they can repossess cheaply and flip it at a profit, that could be trouble so we have issued some policies to sharpen our look at repossessions and make sure that no one's car is stolen from them >> we mentioned the credit card networks perhaps lifting merchant fees. there's so many layers of these payment processors and then the app that may feed into them. what is your role, and to try to pull it all apart and make sure that the fees don't get out of hand or they're not abusive? >> i don't think we have a competitive payment system in this country we're far behind, i think, many other countries.
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there are reports that visa and mastercard are going to hike fees at a time of inflation, that just seems like insult to injury to a lot of businesses out there. we don't have a competitive system and many businesses cannot survive if they stop accepting visa and mastercard, so it's something we're looking at carefully, and honestly, at a time of inflation, it just doesn't seem like the right time >> do you have the power to stop them from lifting fees >> there's lots of authorities that all of the regulators have, but i'll say this. if there is any -- when prices rise in tandem by dominant firms that always raises red flags for regulators >> if you're saying we don't have a competitive system, you would look for opportunities to introduce more competitors or somehow degrade their market power, visa and mastercard >> some of it is already happening. you do see new entrants trying to challenge the payment system, and many of them are getting more traction, and i think we're
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going to continue to see more people try to challenge that, because we need in our country a fast realtime payment system that is frictionless and low cost >> related note, buy now pay later, it's all the rage it has been on wall street before we saw this latest downturn a lot of excitement, a lot of adoption from consumers, especially younger consumers what are the red flags there >> we have issued a set of orders to all of the buy now pay later companies to really learn more about that business model what we saw happening in the uk and in other jurisdictions, the u.s. is clearly following that big, big numbers we're seeing when it comes to the holiday shopping season. i do expect it to continue to grow we're taking a look at the whole thing to see are there any regulatory gaps, but ultimately, we do want more choices, more competition, so we're going to issue a set of reports to say what we might do and where we can make sure it's safe for consumers and families >> we have talked about the
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executive order on cryptocurrencies this kind of approach to try to come up with a comprehensive plan to regulate these areas from your perspective on the consumer protection side, what are the types of crypto businesses, the pitches that consumers get about these, not the structural systemic stuff about currencies but the consumer financial products? >> what we're hearing the most now is really about hacks, theft, fraud, errors you know, when you swipe a prepaid card or a debit card, you have some protections. so we're trying to think about if it does really move into consumer use, how do we handle the fact that so many people are experiencing losses because of these hacks? so really security and thinking about fraud protections is a lot what we're talking about across the government >> so it seems like you're more focused on listing protections and talking to companies and engaging to try to protect consumers, not as much on the fines? >> you know, right now, it's
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still a nascent market growing very big, obviously. i think what we're tracking is how is this actually going to scale? right now, it's mostly for speculative trading purposes but if it ever rides the rails of a big player, maybe like a big tech company, consumer use could really dramatically grow, and that's where we need to look closely at the consumer protection pieces of this. we have asked and ordered apple, google, facebook, others to really give us more information about what their plans are, what their thinking was we all saw facebook's libra, you know, experiment and that obviously is not moving forward in its original form, but it was a warning that riding the rails of those big tech companies could mean very fast growth, and we have to be prepared >> director chopra, nice to see you in person. thank you for coming by. >> great to see you. >> up next, on the show, mike will look at what the plunge in consumer sentiment means for the
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market and the economy got a bad number on that front today. >> and don't miss a cnbc special, the fed decision, tonight on what investors need to know ahead of next week's very important and potentially historic rate hike decision. that's tonight, 6:00 p.m. eastern time on cnbc every big idea every game changer every "how'd they do that?" starts here, the blank page. artists and writers know the tyranny of it well but so do developers, data scientists, ctos. the new creators to them, we say let's create something that changes everything. ♪♪ ibm. let's create.
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another down day for wall street fifth down week in a row for the dow.
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let's go to mike taking a look at consumer sentiment. >> you said it before, a bad number that number and the university of michigan consumer sentiment survey was below 60. that's a level if you go even father back is typically associated with something like recessionary conditions which is a little bit against what you would expect when you have unemployment below 4%. obviously, inflation is a passive driver here, as well as just a general societal bad mood i keep coming back to it, the world does not seem like a stable place for the last couple years. i am also focused on that, 2011, it was not a time of u.s. recession. it was after the global financial crisis it still felt like we were stuck with a lot of those overhang issues and there was societal acrimony, political divisions. u.s. almost defaulted on its debt remember all that stuff? that could be one of the aftershock numbers where people feel as if things are not settled properly, but of course, we have to be on the lookout for the fact the consumer is really going to pull back or be forced to pull back take look at the equal weighted consumer discretionary stocks
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relative to the overweighted overall s&p, kind of tracked okay this is a three-year chard, and diverged over the last couple months clearly it's about being able to keep spending. >> that's the main overhang, is the price of everything. >> i wonder, we haven't really seen it show up in the spending data yet more in sentiment. >> if you look at the real time debit card data and things like that, it still seems like it's holding up on the other hand, that captures some inflation so people are spending more because stuff costs more in part >> what do you think would be a surprise to hear from the fed? they have to acknowledge the outlook on the economy is weaker while they still have to be very vigilant when it comes to fighting inflation >> i think the surprise would be if they didn't acknowledge it. the surprise would be if they said labor market is tight, massive number of job openings, we're fine i think they need to express
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flexibility, which they usually try to do after they make a move >> yeah, certainly fed chair powell has in the past >> it's been two years, hard to believe, since the coronavirus outbreak was declared a pandemic up next, we'll look at how the health crisis has impacted the pharma sector and how the major corporate players have performed. new projects means new project managers. you need to hire. i need indeed. indeed you do. when you sponsor a job, you immediately get your shortlist of quality candidates, whose resumes on indeed match your job criteria. visit indeed.com/hire and get started today. alright, so...cordless headphones, you can watch movies through your phone? and y'all got electric cars? yeah. the future is crunk! (laughs) anything else you wanna know? is the hype too much?
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it's been two years since the world health organization declared the coronavirus outbreak a pandemic. meg tirrell has a look at how pharma stocks have performed since and what's in store for the future of the sector meg. >> hey, mike we took a look at the stocks that were specifically involved in the coronavirus response, from developing vaccines to therapeutics and interestingly, while you might expect that because of the billions of dollars that these interventions have brought in for these companies, that all of them would have seen amazing outperformance over the past two years. that's not the case. take a look. we're going to start with the vaccine stocks there's a major dichotomy between the more established players and the ones that were more unestablished the smaller companies like moderna, biontech, novavax, up 300 to 600%.
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pfizer just slightly outperforming the s&p. j&j and astrazeneca looked flat. over to the therapeutic side, a similar story. you didn't have as many of the smaller less established companies in this space. it was bigger players like pfizer bigger players like pfizer and merck eli lilly and regeneron. i am hearing from oppenheimer, it's not because of the covid anti-body space but the other work that it's been doing. we did talk with rejen ron chief general officer about the work that's been done in this area. here's what he told us >> at some point a variant comes along, nature through natural selection and evolution defeats man's best attempts at fighting back that means that you know we have to keep fighting back as the veers evolves, we have to evolve >> so all of these companies are
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continuing the work, whether it's developing new anti-body drugs, developing next generation anti-viral drugs or keep continuing to update the vaccines you heard from fiez their mor -- pfizer, they're filing for a fourth dose. >> i can remember when pfizer was still in trials before we knew specifically what the vaccine prospects were i was among those kind of spouting the conventional wisdom, vaccines for the pharma industry, not much of a farm that center. we have learned obviously the power of it and obviously what they were able to earn off these things has it redirected the scientific priorities of other companies and where they're saying either mrna technology or something else presented itself as a big opportunity here that came out of that who, >> yeah. certainly mrna has established itself as a technology that many, if not most expansion feel they need to have a presence in. pfizer, in particular, had been
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developing a huge mrna strategy that really encompasses a lot more than vaccines it's been making acquisitions in these spaces so it really has changed the way the pharma companies think about this technology. vaccines, themselves, i think that's an open question. you know, you got now an established player in moderna showing it is going to continue working on public health vaccines also vaccines for other diseases it's gentleman to be an important area for them. whether vaccines truly become a much bigger area, it remains to be seen. >> well, stocks, investors rewarded or not, we are certainly grateful for the public good. meg, thank you, meg terrell. straight ahead, we got big changes for you in store for next week. details when we come right back. just an investor, n you're an owner with access to financial advice, tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner.
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a rough week for investors again, in fact, the worst week for the s&p and nasdaq since back in january. it was a tough close as well, the close of the sessions down 1.3% on the s&p. if nasdaq got hurt the hardest, down more than 2%. the russell index small caps was actually up going into today for the week actually it's down a percent,
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certainly domestic stocks have been faring a little better. the dow closing lower for the fifth week in a row. the largest stretch since i believe 2019. >> the nasdaq is back down to a 20% from its high at today's close. time for a wall street look ahead. we're gearing up for a pretty busy week to come. we will get earnings from lennar, fed-ex and war by parker on the data front. we got the producer index and housing starts and on wednesday wall street eagerly awaiting a key decision on interest rates expected to be the first rate hike since late 2018 >> it will be monumental we also got two new shows to cover that for you big changes coming in store next week a new show line, i'll be hosting a brand-new "closing bell" 3:00 p.m. eastern monday. at 4:00 p.m., scott wasn'tner will be hosting a new show
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called "closing bell overtime. we have a big lineup of guests, no "closing bell," we will be speaking to scott minerd and overtime, 4:00 p.m., we have investors double lines jeffrey gundlach, marc lasry, brad gerstner and nancy davis and ricky sandler. >> a lot of capital. you will be speaking that's what you want >> we hope to make sense of a difficult market we're in a difficult time. it's hard to predict if othe oi and geopolitics and a hope for a resolution and at the same time
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the fed will raise interest rates into all this market volatility it's uncomfortable for people. >> i would say three main streams of things that are hard to figure out are coming together at once two were in training, which is the complete growth stock meltdown, that whole valuation reckoning. the fed tightening that's a regular cyclical thing in a tricky spot and the complications of this conflict and the wide set of outcomes you have to imagine are out there that we have to try to handicap and the markets have to sort out. >> i should note you will be very big both hours. >> if i didn't have any presumptions it's >> it's an integral part of closing bell and "closing bell overtime." we are getting barometers which always coincides with the fed week. >> and housing >> and corporate earnings and economic data is a little murky. >> it is it's interesting, because of when the fiscal quarters fall, right, obviously, they finished
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in january so there was a little bit of a different feel to the economy there. you try to come out of omicron that's what the company ask reporting now pretty much had the quarters move up to. yes, we will get a little read on that everyone waiting to see if earnings estimates have come down yet they haven't yet it's that one glimmer of light not as much about corporate earnings falling away than what you are paying for them and the economics we can handle here. >> and the deterioration crowdstrike, some of the fundamentals of the stocks brutalized on interest rate fears or oil prices haven't changed all that much. >> they will grow, just not that fast for the nasdaq 100, earnings haven't been cut it's people deciding they were overpaying for those stocks six months ago >> you don't think we have seen a washout? >> well, if we're getting a thorough major lows, you don't always get it. thing don't always line up
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according to textbook. the market's kindof held in here i don't know if that's a good or bad thing. >> i know. i feel that way. >> we haven't seen a major low in over a week >> that's a good point it feels rough for a lot of people that will do it for us on "closing bell. this version of it have a great weekend "fast money" begins right now. >> live over the nasdaq site, this is "fast money", tonight's lineup, tonight on "fast" gas prices keep shocking a record high, russian sanctions seem leak they are here to say so what happens next to the consumer and consumer stocks plus charting, a major rising rate environment, will they nail the stocks to the floors now is a time to build a foundation mystery charge of the week hoarse a hint. this name harvested double-digit gains. we start off with a ri

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