SHOCK REVERSAL: Investors DUMP tech despite strong expectations

THE MARKET AROUND? LET'S GET TO THE FLOOR SHOW AND RESEARCH CHIEF INVESTMENT STRATEGIST SAM, TACKLE IRAN IN A SECOND BUT WHAT IS BEHIND INVESTORS COMPLETE REJECTION OF ALPHABET AND TESLA EARNINGS? >> TO TALK TO YOU AGAIN. I THINK THE CONCERN IS MAYBE EARNINGS BAR WAS SET HIGH FOR THE SECOND QUARTER. THE S&P 23% THE TECHNOLOGY UP 61%. SEMICONDUCTORS EXPECTED TO CLOSE 140% INCREASE IN YOUR ON YOUR EARNINGS AND AT THE SAME TIME INVESTORS WERE WORRIED THESE COMPANIES WOULD GET AHEAD OF THEMSELVES AND PLAYING POKER AND UP IN TERMS OF UP NEXT SPENDING SO INVESTORS ARE GETTING ANTSY AND WANT TO KNOW WHEN THEY ARE ABLE TO SHOW RETURN ON THAT INVESTMENT. >> ARE YOU SAYING BECAUSE THEY JUMPED ABOVE THE 200 DAY MOVING AVERAGE THAT SUDDENLY INVESTORS SAID MAYBE WE ARE OVER OUR SKIS, LET'S TAKE SOME PROFITS? >> I THINK THAT CONTRIBUTED LIKE AN ARMY THAT GETS TOO FAR AHEAD OF ITS SUPPLY LINES, SEMICONDUCTOR EQUIPMENT INDEX, 80% ABOVE 200 DAY MOVING AVERAGE, THE CHIP AND ASK 35% ABOVE MOVING AVERAGE AND NORMALLY TRADES AT 6% ABOVE ITS MOVING AVERAGE SO I GOT WELL AHEAD OF EXPECTATIONS AND TRADITIONAL TRAINING SO I THINK INVESTORS THOUGHT WITH ANY BAD NEWS, LET'S TAKE THE MONEY AND RUN. >> NOT THAT WE WANT TO TURN IMMEDIATELY TO NEXT WEEK BECAUSE WE HAVE UNTIL AFTER THE BELL, INTEL HAS HAD A PRETTY GANGBUSTERS THE LAST COUPLE OF MONTHS, POSSIBLY THE OPPORTUNITY TO CHANGE THE NARRATIVE FOR THE REST OF THE MARKETS HERE, BUT THAT ASIDE, WE HAVE BIG NAMES NEXT WEEK, AMONG THEM, APPLE, MICROSOFT, MEDIC, HUGE TECH NAMES THAT COULD CHANGE THE TONE OF THE MARKETS WE SEE RIGHT NOW BUT MAYBE ALL BETS ARE OFF IF THE RAN FOR RAMPS UP. >> FOUR OF THE FIVE LARGEST CAP STOCKS THAT WILL REPORT EARNINGS NEXT WEEK ARE FROM THE TECH BASE. YOU COULD ALMOST SAY VISA IS ALSO TECHNOLOGY RELATED. 40% MARKET CAP REPORTING NEXT WEEK FROM THE S&P 500 WILL COME FROM THE TECH SPACE SO THERE'S NOT A LOT OF NEWS DRIVING SHARE PRICES SO EXPECTATIONS FROM 15% FOR FEES UP TO 75% EXPECTED FOR THESE TECH LAYERS SO GOOD EARNINGS EXPECTATIONS BUT WE SAW WITH ALPHABET IF YOU DON'T HAVE TEMPERED UP NEXT PENDING EXPECTATIONS AND THOSE STOCKS COULD BE HIT. >> AMD IS GETTING HIT RIGHT NOW, DOWN ABOUT THREE AND A QUARTER%, IT HAD COME OUT WITH HEADLINES TODAY, SAYING THE TOTAL ADDRESSABLE MARKET WORDS CHIPS WILL REACH $2 TRILLION BY THE 30. I ABSOLUTELY BELIEVE THE CEO, WHEN SHE SAYS, SHE WOULD NEVER SAY THAT IF SHE DIDN'T FEEL HAD CUSTOMERS WAITING FOR THOSE CHIPS. CORRECT? >> SURE AND I THINK MOST OF THE MANAGEMENT WOULD TELL YOU THE REASON THEY ARE SPENDING AS MUCH ON CAPITAL IMPROVEMENTS AND ETC. IS TO EXPAND THEIR BUSINESS AND SATISFY THE NEEDS OF THESE HYPER SCALER'S AND OTHER COMPANIES THAT DEMAND THEIR PRODUCTS AND IT IS AN INVESTMENT TODAY INTO THEIR LONG-TERM GROWTH AND WHY THERE STILL IS LIKELY SEVERAL YEARS LEFT IN THIS TECHNOLOGY TRADE, BUT SOMETIMES LIKE WAVES IN THE OCEAN, SOMETIMES THEY MOVE TOO FAR AFIELD AND THEN HAVE TO BACK OFF. >> I LIKE YOUR ANALOGIES. HE SAID WHEN THE MILITARY OR ARMIES GET TOO FAR FROM THERE SUPPLY LINES, IMPRESSIVE. I WILL TELL YOU, KEEPING AN EYE ON TREASURIES, THIS GOES BACK TO THE OIL ISSUE, WE HAVE THE TENURE BUILT MOVING MARKEDLY HIGHER THAN YESTERDAY AND SAME WITH THE TWO YEAR WHEN THESE TREASURIES ARE MOVING HIGHER, AT LEAST, THAT YIELD, BUT THE SIGN THE MARKET BELIEVES PERHAPS THE FED, KEVIN WARSH IS GOING TO BE FORCED TO TIGHTEN RATES, SAVING UP NEXT WEEK BECAUSE THAT'S WHEN WE FIND OUT, AT LEAST FOR THE MONTH OF JULY MEETING WEDNESDAY BUT PERHAPS SEPTEMBER. >> THAT'S RIGHT. THE FED WALKED RIGHT NOW IS GREATER THAN 80% LIKELIHOOD THAT WE WILL SEE RATE HIKE IN SEPTEMBER AND MORE THAN 90% POSSIBILITY RATE HIKE BEFORE YEAR END. LOOKING BACK OVER THE LAST 50 YEARS, EVERY ONE OF THE NEW SET OF CHAIRS, THEIR FIRST RATE CHANGE WAS A HIKE, NOT A CUT SO IT LOOKS AS IF WE MIGHT SEE THAT CARRIED THROUGH EVEN GOING BACK TO WORLD WAR II, EIGHT OF THE NINE NEW BED CHAIRS RAISED INTEREST RATES AS THEIR FIRST MOVE SO WITH HIGHER OIL PRICES, CPI AND OTHER INFLATION MEASURES, AS WELL AS YIELDS THEMSELVES INDICATING THE LIKELIHOOD OF HIGHER RATES. UNFORTUNATELY, IT COULD BE A FOREGONE CONCLUSION. >> FOREGONE CONCLUSION. IT'S NOT WHAT THE MARKET WOULD WANT, BUT IT ALSO MEANS, IN PART