Power Lunch - The market sell-off intensifies and the search for signs of a bottom. 5/9/22

Episode Date: May 9, 2022

The selling on Wall Street shows no signs of letting up. The S&P trading below 4100. The Nasdaq below 12,000. Kelly & Tyler talk to the market experts about stable stocks that can help you ride out the volatility. Plus, Tesla trades near $800 a share. A technician tells us whether the stock is about to breakout or break down. And, is inflation about to decelerate? A respected market watcher makes the case. Hosted by Simplecast, an AdsWizz company. See https://pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome everybody to Power Lunch. I'm Tyler Matheson, the selling on Wall Street. Not any letting up at all, not in any shape or form. The S&P 500 trading below 4,100 now. Who knows where it is headed. Nasdaq below 12,000 this hour. A look at some stable stops and help stocks that can help write out the volatility. The technicals on tech names and one of our guests makes the argument that inflation is about to decelerate. We are two hours to the close, Kelly. We've got a big first hour ahead. We certainly do, Tyler, thanks. So tech is once again getting hit the hardest.

If you look here a moment ago, the NASDAQ was down 3.9%. A 454 point decline. It only trails the Dow by six points right now. So incredibly heavy selling pressure in that NASDAQ, the S&P is down 2.5%. It's 17 points above 4,000 right now. Its last closed below 4,000, by the way, was March of 2021. Dow's down 440. Now, energy stocks are some of the worst performers today.

That's been a change from the recent past, obviously. Marathon leading the declines down 12%. APA, OxyDevin, down almost 10%. And the volatility extending to the Treasury market, obviously, or you could say this volatility is extending to stocks. But the 10-year this morning hit 3.2% before pulling back. We're now all the way back down to 308. And as investors look for ways to protect their portfolios,

Mike Santoli is at the NYSC with a look at the markets, downside risk. Mike? Yeah, Kelly, of course, nothing that could be pinpointed with any precision, but a lot of different approaches to try and figure out what plausible downside risk might look like from here. Now, we're four months into this in terms of the S&P 500 sliding. This new load today really does lose any look of a trading range that we had in place for a while, assuming we close in this area below 4,100. And a lot of the estimates, and again, coming from multiple different directions that I've come upon seem to be focusing on this area around 3,800 to 3,900. It takes you back to the early part of 2021.

Really, you first got above 3,800 in the first part of January, 2021. Remember what was going on there? That was the crescendo of excitement around meme trading, the beginnings of it, the peak in the archetype funds, and you really had this rush of enthusiasm. Those things started to correct shortly after that, but now the big cap-driven indexes are there, too. Also, some of these trend lines coming all the way from the March 2020 low intersect there. Valuation-wise gets the S&P down toward 16 times forward earnings, rebuilding a little bit of evaluation cushion relative to Treasury.

So a lot of this stuff seems to coalesce in that area. Again, it keeps saying today, doesn't mean we get there. Doesn't mean we stop there. If we do get there, we could absolutely kind of have a pretty good bounce even before those numbers come into play. But it seems a good way to kind of stress test your mind for what could be to come, Cal. Well, in that case, Mike, we often talk about, you know, some of these levels are technical, some are more psychological. But, I mean, things like breaking below 4,000 on the S&P, that gets everybody's attention. It should, to the extent that people anchor on the S&P, as I believe they ought to.

Yeah, essentially undoing more than a year's worth of gains is the way to think about it. Because you go down in price, you go back in time. You know, before the pandemic, we were, we peaked a little above 3,500. You've seen a lot of major stocks and sectors double back to pre-pandemic levels. I don't think there's any reason to say that the overall market has to do that, but you have to recognize that a lot of components of the market are already revisiting the pre-pandemic levels. All right, Michael, thank you. Mike Sandholing. All right, as the market volatility continues, our next guest says investors are unfairly treating all companies the same. And there are some names with strong fundamentals that aren't being reflected in the same.

the share price. So let's bring in Jim Tierney, A, B, CIO of U.S. concentrated growth. Jim, welcome. Good to have you with it. So we've got a baby and bathwater kind of approach here. You seem to be saying, where are the babies and what's in the bathwater? Absolutely. When we look at when we look at the earnings season that we've just gone through, there were some really good reports, some great beats, some great raises. And in aggregate, earnings estimates went up, not down. And so, that tells you that some of the things, that that's not widely being credited in the market right now. And you also

say that there are some signs of an abating inflation and other signs that suggest that, well, I guess we've just lost Jim Tierney, but his case, Kelly, is, as we try and get him back, is that there is some air coming out of the wage

bubble. Wage growth is slowing just a bit. It's not that it's going away, but it's retreating, and that there are some signs and some sectors like freight where, like lumber and other areas where the inflation rate is dissipating just a bit, we can all hope. It's going to be interesting. So we have the stock pickers like him on the one hand. We have the chartis on the other hand, tie. And you know what, anytime we have a day like today where things start crashing through these levels and we start talking about, you know, whether the S&P is going to break 4,000 or how much the NASDAQ is down, it's going to trigger a whole new wave of people looking at that and saying, our next stop is such and such.

Just like Kate Rooney just said in Bitcoin, you know, now people talk about 29. They just keep ratcheting those expectations down and down. Jim Tierney has rejoined us or we've rejoined him, I'm sure, whatever. So you also point out that there are some signs of wage growth abating and some signs of inflation abating in specific categories. And that these are good signs overlooked. Absolutely. Look at housing. Mortgage rates have gone from under 3% to over 5%. that has to have implications on the asset class, the cost of housing, on labor, and on the commodities. I think that's a great thing. You look at Amazon. Amazon came out and said,

we overbuilt. We also overhire. So as they pull back, and they were probably the biggest incremental employer in the market, as they pull back and absorb that capacity, that means less pressure on the housing market. I don't think we're going to stay at eight and a half percent inflation for a long period of time. As that starts to come down, I think people, get more comfortable with the equity market and the prices available right now. Let's get to the three stocks that you say are sort of underloved, given where they are. The first one was one that was mentioned by another one of our market pickers last week, and that's Zoedis, or Zoetis, the Animal Health Company.

So great company. They're all about companion animals, dogs and cats. You're going to have your pets for years and years. You're going to give them their medicine. It's a very stable business. their winning market share, great R&D pipeline. That's a stock that's off more than 30% year to date, and the business is completely intact. And another one is MasterCard.

In some quarters, unloved, in others, has been attracting money as other payment stocks are unloved, the PayPal's and so forth. There's a massive shift going on right now from people who were buying too much stuff when they were stuck at home. Now they want experiences. And part of that experience is travel. And when you travel, you generally use credit. And if you're crossing borders, that's a very profitable transaction for MasterCard. I think this is a great reopening play and a great travel resumption play. And the stock's an okay year-to-date on a relative basis.

But I think there's a heck of a lot more to go. And earnings estimates are going up, not down. Of course, it's not a good day for the market. And today that stock is down about 5%. And the final one is Amphanol. I'm not familiar with the company. You'll have to explain what they do and why you like it. Amphanol makes sensors and connectors and more intelligence is going into every product we buy. And as supply chains become unplugged and you produce more cars and planes and phones, Amphanol's business is going to really do well here. And again, a company that's down more than 20% year to date and trades at a pretty reasonable multiple in our view.

Jim, thank you very much. you're indulging our little glitch there. We're glad to have you with us. See you soon. Thank you. You bet. Let's get over to Frank Holland now for a market flash on some midday turnarounds, Frank. Well, Kelly, that's right. We've seen a turnaround in a couple of e-commerce stocks. That includes Etsy up over a half a percent. Also, eBay up over 2%. eBay just announcing it will now become the official secondary market of the Funko Toy brand. Both those names well off their lows of this session. Etsy have been down as much as 4 percent earlier today, but as we mentioned now, in positive territory, up over a half a percent. However, those stocks have not avoided the sell off

entirely. Etsy still down 10 percent over the last week. And looking more broadly, at some of the ETFs that track online shopping. They're still firmly in negative territory today. Right here, we're seeing the pro shares ETF down more than 5 percent. The Amplify ETF also down nearly 6 percent and off more than 25 percent in the past four weeks as the market volatility continues. Tyler, back over to you. Frank, thank you very much. And coming up, shares of Tesla down 20% over the past month. So is the stock on the verge of breaking down further or breaking out? We'll tell you what the charts say, plus inflation deceleration. Copper price is down about 12% over the past month. That's just one of the reasons why our guests later this hour says

inflation could fall from current levels potentially quite quickly. And Rivian shares plummet to a new low as Ford unloads 8 million of those shares. Details on what's ahead for the start up, which is dragging down other EV names like Plug Power, Nicola, and Lucid. We'll be right back. Welcome back to Power Lunch, everybody. The tech stocks are that I was going to say the eye of the storm. That's the wrong analogy. Tech stocks are the worst hit part of this market again today with the NASDAQ down 3.8%.

We've got Microsoft trading at 265. Amazon's down almost 5%. Tesla was below 800 a moment ago. Our next guest has a pair of tech names that he says are poised for a breakout and also a name that could break down. Carter Worth is a market strategist at Worth charting. Carter, before we get into that, just reaction please to the trading today. It's pretty ugly out there. It sure is. And I think it's a testament to the things that lead and drive the market higher when they unwind are the things that take it apart. We're seeing that. Tech is the winner

on the way up and it's so inflated, loved, overowned, if you will, it's now the thing that's taking it down. The point decline in the NASDAQ right now is higher than the point decline in the Dow, which is remarkable because the Dow is almost triple the size in point terms. All right, let's get through some of your charts. As we've talked about how bad tech is, you actually think a name like Broadcom could be poised for a breakout here? Well, let's see. Not so much a breakout, but favoring it because of how well it acts.

So if you were to really step back and think of all of the various approaches to investing, one of the most robust factors and some of the biggest quant models is relative strength and momentum. And so what we know is the tech sector has broken down. But if you look at Avago, for instance, Broadcom, it is down much less in the market and is still holding trend. You could see it there on the chart versus the tech sector, the NASDAQ and other areas, which have clearly broken trend. And so that kind of data and that kind of data action is impressive. It means that it's garnering less selling than other names. HPQ is another one that you say is, is not just holding in there. It's up 15.

15% over the past six months. Well, that's right. So, and both of these stocks are up versus, of course, the NASDAQ down 20 and 30, depending with the NASDAQ 100, where you want to look at the tech sector. But the point is that they're holding trend and they are exhibiting those characteristics relative strength and momentum. And let me just say that the only way a stock can go down, to be clear, right, is someone has to sell it.

So if no one sells any given day, it cannot go down. Meaning this is not attracting the fear, the selling pressure, the margin calls, whatever it might be that other stocks are attracting. a very positive data point here and now. We're happy to hear them because the flip side of the picture, I mentioned in a moment ago, Tesla trading below $800 a share and you think there could be more downside? Well, that's right. So one, we know that Tesla is a breaking trend, which is the case with so many others, but it's just starting, whereas the sector itself and many names have broken

weeks and weeks ago. At one, Tesla is down just as much as the market and more, and yet it's only just now breaking the point being it was such a high flyer and then there's this it's a darling widely owned widely believed in highly priced if you will however you want to get into the valuation metrics and not many people have really abandoned it yet is there a fundamental problem with tesla's business or is it just that it was so high up there in the 1200 zone that now it it sort of inevitably must decline Sure. I mean, look, they're operating their business well by all accounts, and yet it's not so much that as it is money flow. This attracted a lot of non-believers, people who had price targets much lower.

Everyone's finally in. In fact, the street targets are now double, in many cases what it is when many of them were one-fifth. So when the stock was way up, no one believed. Now they're believing in the stock's starting to go the other way. It's kind of how it works. It's nobody's fault. We all get wrong-footed once in a while. I think the market's wrong-footed here, downside.

Where, to what extent, do you see that downside risk? I, you know, a lot. I mean, that's the risk. So does it have to have the loss of an Etsy, which you just referred to? Actually, up on the day, there's a case down 75%. Or a Zoom or Peloton or Facebook or Netflix? No, but it looks like it's more than what it's had. You know, Carter, I pointed out Friday on fast money that we could melt down whatever it is behind you and probably get good money for.

Is that tungsten? I got it all. It's all stored right there. stored right there. It's all there. It's a commodity play behind Carter. Carter Worth. Thank you. All righty. Let's move on now. Shall we? Yes. Shares of Rivian, they are down about 10, nearly 20% today. Ford has unloaded 8 million of its shares, and we'll tell you the real reason Ford is selling. Plus, Coinbase getting crushed in the crypto carnage, down 30% in one week. Does that represent an opportunity? Should you bet on a Bitcoin bounce back? Hmm. We'll get a trader's take on that.

And during May, we celebrate Asian, American, and Pacific Islander heritage and feature some of our CNBC teammates and contributors here is Wall Street Journal reporter Gunjan Banerjee. One thing that both my mom and my dad really emphasized while I was growing up was education. I know that was one of the big reasons that they moved to America was to give me and my sister access to the best education possible. And I watched them, you know, while I was growing up, moved to a total. new country, not knowing the language, not knowing anyone, and kind of having to build up their lives from scratch. And I've carried those lessons with me throughout my life. All right, folks, welcome back to Power Launch. One of the biggest laggards today is Rivian. That stock hitting a new low, dragging down other EV names. And Phil LeBoe has the details.

Hey, Phil. Hey, Tyler, the pressure on Rivian comes from the fact that Ford, along with other early investors, have taken advantage of the fact that the lockup period expired yesterday. And Ford, according to our David Faber, wasted no time in selling 8 million shares. It had 102 million, so it still has 94 million shares. By the way, David Faber also reporting that there is an unnamed seller, unloading or sellers, unloading between 13 and 15 million shares of Rivian as well. Unclear if all of those sales have gone through.

Not a surprise when it comes to Ford. that company, sources have told us, they've told David, they've told other people for many months now that likely when the lockup period expired, they were going to sell some or all of their stake in Rivian. Now I want to take you in the way back machine. Go back to a couple of days after Rivian's IPO back in November. Remember when it was flying high, hit as high as $175 a share? Well, that's also when you saw a number of the EV startups also hit a high. and look at what's happened since then. Rivian obviously is the most dramatic example, but Fisker, Lucid, you name any of these stocks.

They are down from where they were in November, and why? Because they're increasingly running into higher production costs. That was the story today when Lourdes Town Motors reported its first quarter results. The company is dealing with higher production costs, and it doesn't have a lot of cash. It's burning through it quickly. In fact, they are trying to finalize a sale of the Lourdes Town plant in Northeast Ohio to Foxcon.

They've got until May 18th to do that, a four-day extension. And if they don't come up with that, then they've got to repay Foxcon $200 million. So even if they get that deal, guys, they're going to need additional capital later on this year as they try to move towards production of their electric pickup starting in the third quarter, maybe with deliveries in the fourth quarter. And finally, take a look at 52-week lows, Lucid Fisker, Workhorse, Electric Last Mile, canoe. You name it, guys. It's a bloodbath when you come to the EV startups right now. ultimately comes down to this. It's going to be a while until you see cash flow positive, let alone production beginning on a meaningful basis for any of these companies. Do they have the

capital needed to go from here to when they actually start up production, meaningful production, let alone get the cash flow positive? They're going to need more capital. Most people are betting, and that's the question now for investors. Do you give more capital of these companies, many of which went public through SPACs? Phil, what role could Amazon play? Don't they have a big stake with Rivian? I thought they even took a hit on it last quarter. They do. They do have a big stake. Look, Rivian is probably in the best shape of all the EV startups in terms of capital.

It has enough capital as it ramps up production. And that's the electric delivery van that they're building for Amazon. We were at the plant a couple of weeks ago. We saw them. They're building them. They're going to start going into use with Amazon. They've got the capital not only for production in central Illinois, but a new plant down in Georgia. That is not the case with the number of these other EV startups.

They're either working with contract manufacturers or they are working on limited production of their own. You guys, we've talked about this from the beginning. The auto business, heavy, heavy capital intensive business. And this is the period here before you start to see these vehicles roll out in large numbers where you have to have a real gut check if you're an investor. Do you think these guys are going to make it? That's the question for a lot of investors right now. All right, Phil, thank you very much.

Phil LeBoe reporting. Let's go to Simomodi now for a CNBC News. News update. Hey, Seema. Hey, Tyler, here's the first story at and out. For the first time in 59 years, Queen Elizabeth will not attend the annual state opening of Parliament. In the last hour, Buckingham Palace said the 96-year-old monarch continues to experience what it calls episodic mobility problems. Her son, Prince Charles, will fill in tomorrow, reading the speech prepared for the Queen by Boris Johnson's Conservative Party government on its plans for new legislation. Also this hour, President Biden was in the Rose Garden. He was talking about his plan to use bipartisan infrastructure funds to lower the cost of broadband for low-income Americans who are not connected to the Internet. AT&T, Verizon, and CNBC parent Comcast are among the companies participating in the administration's program. And in Manila, supporters of Ferdinnell Marcos Jr. are celebrating his early lead in voting to be president of the Philippines. Marcos is the son of the dictator who was ousted in that country's 1986 people power uprising. He's running against a candidate who emphasized reforms and human rights in her campaign.

Back to you guys. Seema, thank you very much, Sima Modi. Still ahead on Power Lunch, we'll get you updated on all areas of the market being hit in this latest leg of the sell-off. Dow's back down to a 500-point decline. Oil had been holding up all year, but it's lower today and the energy stocks are sliding along with it. Crudes now down more than 6%. Does that mean the run is done for the energy names? We will get a trader's take after this.

Welcome back, everybody. 90 minutes left in the trading day. Another rough session for the market. Let's get you caught up across stocks, bonds, the dollar commodities, and the potential for inflation deceleration. Let's begin with Bob Bassani down at the NYSE. Bob. And it's new lows everywhere. We broke decisively through that important level on the S&P 500. So that joins the NASDAQ and the Dow Industrials for New Loz. Dowen, big names, broad diverse groups at new lows on the Dow Industrial's. Intel, for example, Salesforce and the growth areas, they're under pressure more than anything else, of course. But we also see Boeing at a new low. Disney's been a new low for a while in concerns in China and perhaps slowdown in the streaming service. Cisco's at a new low. Nike as well, those are China issues for them.

So a fairly broad swath. We're also seeing software stocks besides service now. Paycom and Salesforce, Adobe has been on a new low list for, for quite a while on top of that. One thing that's very interesting to me is trading stocks, and I'm talking about the exchanges like Intercontinental Exchange, which owns the NYSE, New Lowe, NASDAQ New Low, Charles Schwab New Low, and even indexing companies who specialize in setting up in indexes and selling through the ETFs like MSCI, for example, S&P Global, 52-week lows. Some concerns that down the road, trading activity may slow down a little bit. We've already seen

this potentially with retail traders actually happening. Volume is still very, very high, but they're trying to remember, guess what's going on down the road? Finally, we talked a little while ago, Kelly, last week about peak everything. We talked about Netflix and, of course, peak streaming. We talked about Zillow and Peak Real Estate, maybe peak travel. Have you noticed Avis the last four days since Wednesday? Avis was 290 at the close on Wednesday, 2.30 today. That's a 20% drop in four days. And all the airlines, I mean, not down as much, but United American also had tops just a short while ago and also were down rather notably. So keep a I'm not that overall meme about peak travel, even though everybody's paying a fortune to travel this summer.

Kelly, back to you. All right, Bob, thank you very much, Bob Bassani. Let's turn now to the bond market. All the talk is the 10-year yield hit 3.2 earlier today. We're well off those levels. We're back to 3.08 or so right now, the 30-year for what it's worth, up at 321. And we want to show you the dollar index as well. This hit almost a 20-year high today.

currently trading just below 104. We were over that level a little bit earlier on. But as you can see on this chart here, that's a 20-year time horizon we're showing you. Strong Dollar could be a headwind for especially multinational companies as we move throughout the year. We've already seen a few pulling back their guidance as a result of it. Now the Strong Dollar also acting as a headwind for commodities today. Energy's been a place to hide in this market, but not today. Pippa Stevens has the latest for us.

Pippa? Hey, Kelly. Heavy declines across commodities today. oil giving back all of last week's gains. Several factors to watch here. The EU proposal to ban Russian oil is receiving pushback notably from Hungary. The country's prime minister said that banning imports would be like an atomic bomb on the nation's economy. China demand and global growth concerns also hitting prices.

But TD securities saying that these are transitory and energy supply risk remains significantly mispriced. With that, WTI is down nearly 6% at 10333. Brent crude down 5.5% at 106.11. And the roller coaster ride for Nat Gas continues down another 12.5% today. It's now down 20% from Friday morning's high. Amid this, energy stocks are getting hit hard. By far, the worst sector down more than 8%. EOG, APA and Marathon Oil, Kelly, all down double digits. Back to here. All right, Pippa, thank you very much. Now, just as we're talking about these contributing to inflation, the possibility of a recession, the big war. for investors. But my next guest says some of the indicators are starting to look better. Maybe inflation could decelerate. Let's welcome in Tavis McCourt. He's Raymond James institutional equity strategist. Tavis, welcome. And this is going to be a big theme this week with CPI,

PPI, you know, is inflation peaking into what extent is it falling? What is your message to investors? Yeah, well, hey, Tyler. I think the big picture is, this is not all bad news. The economy has has shifted reasonably quickly here from consumers purchasing goods to consumers purchasing services. And that appears to be having a reasonably good impact on a lot of inflation indicators. Well, that said, there's the sort of second-tier worry is that it just means there's going to be more inflationary pressure in services, maybe not to the same degree as we saw in goods, but a stickier, possibly longer-lasting kind. Yeah, you know, I think it will be stickier, but the first leg of it is going to be, we should

We should see inflation much lower than 8 or 9% year over year, as we have seen. The comps get easier. Wage growth appears to be decelerating. Commodities are pure to be rolling over. Trucking spot rates are down. Use car prices are down. So none of these things you could have said in January. So obviously since late February, investors have really just been looking at the bad side of everything.

Just want to point out there's actually a lot of reasonably good news on the inflation front of the last couple of months. Well, let me persist with the looking on the bad side, because that's what I do. I'm a glass, half-empty kind of guy, Tavis. But all of those things you cited, whether it's wage growth decelerating, a commodity deceleration, use cars, and so on and so forth. I guess that's good from an inflation standpoint, but could it be the sign that more than that the economy is meaningfully slowing, and that both globally and domestically, and that the result of that will be lower corporate profits and almost by definition lower stock prices.

Yeah, so I think there's a lot there, too, on. I think without a doubt, the economy is slowing very quickly when you look globally. So in Asia and Europe, in the U.S., I suspect it's far more sustainable. And so we'll just have to see. A lot of this, what we're seeing now is this transition from goods to services. So if you're in the goods producing, side of the economy, it may feel somewhat recessionary right now, like a mild recession. You're seeing that in trucking spot rates and a lot of retailers. But in the services economy, it just doesn't, it doesn't seem like good. It seems like literally it's never been better.

So there's a very bifurcation in a big bifurcation economic trends right now. And because of the state of the market, I think investors are really just focused on. So when you say services in many ways have never been better, you're talking about what kinds of businesses exactly? We're talking about restaurants and airlines. Restaurants and airlines is probably the easiest in the public markets. Mm-hmm, mm-hmm. Airlines and travel, hotels, restaurants, and so forth.

Yeah. How about the labor shortages? Are they, I mean, there's some signs that companies aren't hiring as quickly, but golly, the jobs added last month was well above estimates, 400 and some thousand. Yeah, again, I think we're going to start seeing some improvement here. So annualized wage growth over the last three months has been running. about 3.7%. Back in December, that was 6%. And so if that continues, you'll start seeing real year-over-year wage growth come down very materially as the year progresses. And again, this is

also due to that transition from goods to services. You'd be amazed how much easier it is going to be to staff a restaurant when Amazon's not hiring half a million people at $40 an hour. Yeah, very good point. Tavis McCourt, as always, thank you very much. Thanks, Tyler. Appreciate it. All right, coming up, Uber down. Big today, down more than 50% from its high, and the CEO warning employees help isn't on the way.

We'll have those details. Plus, the NASDAQ down 25% so far this year. You ride this out and wait for the rebound, or should you sit this one out? What should you do? Our next guest says cash is king. We'll hear from that individual next. And welcome back to Power Lunch.

I'm Frank Collum. want to take a look at the so-called safety or defensive plays that really tend to hold up during ballots of volatility. We're going to start off with utilities. Names like CMS Energy up 2% WEC and Excel Energy both up almost a percent and a half. Exile Energy, one of the better performing stocks in the NASDAQ today. Those names come with also above average dividend yields relative to the SMP. Staples and other area working today. Food stocks like Campbell Soup, J.M. Smucker, General Mills, Kellogg, Kellogg, one of the better performers here, up to almost 3% I have to take that back. Campbell's Soup up 4%. Campbell and Kellogg are also up more than 10%

in the past week. Also at grocery store stocks like Sprouts farmers, Weiss and Kroger, also holding on to their gains today. Tyler, someone who I know likes to supermarket shop. Back over to you. I do indeed. Thank you very much. Frank Holland. All right, investors are looking for signs of a bottom. Our next guest says he went to all cash in early April. What has to happen for him to get back in and start buying equities. Let's probe that with Phil Taze, who is CEO and portfolio manager at Taze Asset Management. Phil, welcome. Good to have you with us. Let me make sure I'm understanding what you do and how you manage your portfolios. You talk about getting in and out of the market following algorithms. So are you a classic market timer? Well, I wouldn't call us a

market timer. And the reason I wouldn't is that we don't try to predict what's going to happen to the markets. What we do instead is we attempt to react in the early stages of trends. And this trend actually began in January, where we exited initially out of U.S. stocks on January the 13th, we came in briefly in March and left in early April. And the whole point of what we're trying to do, Tyler, is attempt to be in markets when they're rising, but also attempt to get out of the way of big train wrecks. And so when you look at this market right now, this is starting to look not great, you know, down 15 percent on the way. And the S&P, 25% on the NASDAQ. And there's a shift in perspective, I believe, which is that people are

used to buying the dip. Now there could be these bare market rallies and people could be the dip that's buying, unfortunately. So we think now is the time to be on the sidelines. And yes, we're largely in cash. Largely in cash. If I want to do something a little more exotic than just be in cash, what kinds of products would you suggest? suggest? Is cash just a money market fund, or is it tips? Is it what? Yeah. So inside of our funds and ETFs, a majority of them, we're just in cash instruments, which looks like money markets. But there are things out there where you could be. You just saw some looked at, like energy or commodities is a place where you could potentially go. But here's

what's interesting, Tyler, is that we're so used to having parts of the market do well and have such quick rebounds as we saw during a pandemic. But what if the opportunity lies just ahead? So, for example, even though things don't look great today and maybe not the next week or month, if you are on the sidelines or largely on the sidelines, what that may do is set you up for great opportunities later. And we all saw the rebound in 2020. It will happen again. So I think the key is patience with this market, waiting for it to find a bottom. And we don't know when or where that'll happen, and then once you do come into potentially really bargain prices. So how do you distinguish, or how do the algorithms distinguish, between a short-lived bare market

rally that peters out only to take you down lower, and that that final flushing moment where you can confidently feel like, okay, now I'm going to lag into the market. And when you do get back in, How do you do it? What products do you use? Okay. So within our funds in ETS, we have just standard indices that we're buying, and typically we're buying blend indices. But the answer to your question is we don't know. So if there's a bear market rally and it moves up enough for us to trigger back in, we can come back in temporarily. In fact, if you look at 2008 when we were managing through that really horrible equity market, we came back in twice briefly earlier in the year and then ended up sitting out for the entire fourth quarter. So what you need to do is you need to have

a system that be agile. When you come back in, you need to come back into things that have gotten beat up the most and just react to the markets rather than trying to predict what's going to happen ahead. I love your line. The Fed put is kaput. I think that is quite apt. Do you have a viewpoint on whether this market looks like, feels like it could be as stressful as the 2008-9 market was? Do you have an opinion there? Well, that's a high bar. But I think the one thing that one needs to look at is just zoom out and look at history more carefully. You know, if you go from 1900 forward, virtually every decade had bear market, two and a half bare markets. And on average, those bare markets were 40%. So even if you don't get to the point of a 50% decline like we saw in 2008,

it's really a standard course of the way markets work. And we've forgotten that because the Fed has been able to pivot dovish so effectively and for so long. And so now we're in a situation where I think we all agree, as you mentioned, the Fed put is kaput. And not only that, but the Fed could be coming in and adding fuel to a downward market as they keep being hawkish as the market falls. So to us, it doesn't look great, Tyler. we would expect that we would go into bear market territory in the S&P. That's not saying a lot, considering how far we are down right now. But I think at least investors should build in contingencies for the possibility that we

move down further when you look at all the pressures that are in the market right now. All right, Phil, thank you for your perspective today. We appreciate it. Phil Taze. Thanks. Crypto getting crushed today. Bitcoin fell below 31,000 moments ago. Energy, which had been hot, cooling off big time. but consumer staples, just about the only thing eking out again.

You just saw Frank highlighting those grocery stocks. We're going to look at other opportunities in the group amid the selloff. Stay with us here on Power Lunch. Welcome back to Power Lunch. Let's drill down on three outsized movers today, starting with Coinbase. Shares are down 18% right now. They're below 85 as the whole crypto space sells off. Exxon Mobile dropping as oil plunges.

Exxon's down 7%. And Clorox bucking the market downtrown. up almost 4% right now. Let's bring in Craig Johnson, the chief market technician at Piper Sandler. Craig, welcome. Let's start with Coinbase. What do you say about the stock? Well, there's no question that the stay at home bubble here for Coinbase has popped. But I don't think cryptocurrencies are going away. And clearly we're seeing shares of Coinbase that are very oversold. You're down over 70% since the IPO. And at this point in time, with it being as oversold as it is, earnings coming tomorrow. I think a lot of the bad news is pretty well priced into this stock. And I'd be looking

for some sort of indication that the lows have been set. You'd be looking for an indication that the lows have been set. And typically, what does that take a number of days or a certain type of rebound in the stock? I would like to see some sort of downtrend reversal in the stock, at least shorter term, to say that the lows are for sure in. And again, we're so oversold that when the earnings numbers come out tomorrow, things would have to really be very bad for this stock. I think to take a whole other leg lower again, because so much has already priced into this. I think there's been seven street downgrades on this stock just in the last month. So again, another evidence that a lot has been priced in, at least fundamentally. And technically, it's too early to say that the lows are in.

You want to see some sort of indication that you're getting a change in the chart to start to turn higher. Your thoughts on Exxon Mobil down today, but obviously the beneficiary. this year of rising energy markets? Energy is where it's at at this point in time. It continues to be the best performing sector, along with basic materials, and these are areas that were overweight at this point in time and recommending to clients.

When I look at the chart of Exxon Mobile, I've got great relative strength. I've got the downtrend reversal happening on the chart, and I continue to like what I see with Exxon in here. I would also just note that any sort of move from here, well, I should say the next move from here it really sets the stock up for a move back to 104, which is your 14 highs. So I think at this point in time, Exxon is one you want to hang on to.

And I think you've got a nice dividend of 4% to get paid while you wait here for the stock. And again, with nice cash flow. So Exxon is one definitely to own and buy. Before we get to your final name, do you have any perspective on why as a group energy is suffering so much today? I think it's suffering today because we're seeing some profit taking coming into this. When you talk to a lot of investors, they have not wanted to move away from some of their growth holdings. And you had seen energy move up. They were hoping for some sort of quick sell off.

They're getting it at this point in time. But I think it's just purely profit taking. You know, Ty, when I go back and I look at the longer term charts and energy, we're literally reversing downtrends. We have not seen since 2014, big long-term downtrend reversals and a little shorter term setbacks like this. I think it'll be opportunities to buy energy and not sell it. So on that note, as people still are trying to stick with what's working, Chlorox was a name that was initially struggling post-pandemic. It's working today.

What do you say about the stock? Well, when I look at the chart of Corlocks and I put up a very long-term chart going all the back to 2009, we've broken the long-term up trend in that particular stock. We have also seen over the last, what, 18 months, we've been in this sort of downward trending price channel making a series of lower lows and lower highs, the relative of strength versus the S&P has also turned lower. It's up today. But for me, this is not a stock that I want to be buying in this market. This is a stock for me that I would like to be selling on any sort of break below the 145, 150 range. And it's going to take a big move above 173

to reverse a longer term downtrend. This is, again, one of these sort of stay-at-home stocks that I think where it's already burst. And it looks like we're going to get more downside in this. So even though it's up, I'd be using this strength to be selling Clarex shares. Very interesting. A counter-trend move on that one. We'll definitely call it. Craig, thanks so much for your time today. We appreciate it.

Thank you. Craig Johnson. Already up next, Uber shares falling about 7% today off 42% so far this year. So will its cost-cutting strategy help turn the stock around? That is next. And don't forget, Power Lunch is now a podcast. You can listen to the whole show. Past episodes as well.

by subscribing on your favorite podcast platform. Do it. You will be pleased you did. Shares of Uber down about 10% as the company hosts its annual shareholder meeting. It comes one day after Uber's CEO says the company will become laser focused on costs. The change is first reported by Deirdre Bosa and she joins us now. Deirdre? Well, Tyler, C. O'Darke, he spent most of his short remarks during that shareholder meeting talking about how Uber has become more profitable on that. that adjusted EB-Dab basis, how they're a position to keep growing. There was only really a passing mention on the changing market climate and that increasing focus on free cash flow. The letter you mentioned, Tyler, that he sent to employees last night that I got a hold of,

that was a lot more direct in confronting the current market, which has really lost patience with unprofitable companies in creative accounting. In that email, he said they need to treat hiring as a privilege, be hardcore on costs, do more with less and look to better measures of profitability. Here's the thing, though, Khazra Shahi took over for co-founder Travis Kalanick as CEO after another rocky period for the company and ahead of the IPO to do the things that he laid out in the letter. And he still has his work cut out. Major competitor, Doordash, has already been free cash flow positive for the last two years. And Uber shares hitting new 52-week lows today.

The thing that the email did lack was specifics. Uber has already done a bunch of layoffs, sold off parts of the business amid the pandemic. So leaves the question that I think investors are asking, which is why you're seeing this, stock down so much, along with the broader market, is what further levers can he really pull? Back over to you guys. Well, it looks like he's trying to pull costs. That's one, right? He does, but we didn't get specifics. A lot of people commented saying, does this mean we're going to see more layoffs? He didn't really say that. He's cutting back on some excessive

marketing costs. Isn't that something that he was already supposed to be doing? So beyond that, where does he really have room? He wants freight. He wants Uber eats to grow faster. But that's going to take some investment, right? They've already sold off their autonomous driving business, scooters and bikes. So that's why we ask. Where and how is DoorDash eating Uber's lunch, so to speak? Well, if you look at a chart of market share over the last few years, you can see that DoorDash just came in and dominated the market. And the way that they were able to do that is their CEO, Tony Shoe, he had a little bit of a different strategy. He started in the suburbs and then went into the major cities. And that allowed them to just really dominate.

And at the time, too, Uber was undergoing some really turbulent management changes. So they didn't put as much into Eats as they are now. All righty. Thank you very much. We appreciate it. Deirdre. Checking on stocks as we head out the door here. We are off session lows.

The Dow is down only 430 points, about the same as the NASDAQ right now. And Tesla was trading below 800 earlier this hour. It's climbed a little bit back above that level now. And there you look at sort of the other four horsemen of the NASDAQ, Alphabet, Apple, meta and Amazon all down but by varying amounts Amazon the biggest loser or laggard there down 4%. Yeah, we'll see what the next hour brings. Thanks for watching Power Lunch everybody.