because in the end, donna palomba knows it's hope that heals. ♪ welcome to "street signs." happy friday. it has been a pleasure being with you this week. >> happy friday to you. >> we have a show to do. let's get a look at the headlines. iea cuts demand this year and expanding ev fleet as a drag on crude demand. we will speak to the iea's toni busoni next. and trade delivers more stimulus to beijing. and uk's ftse 100 hovering

near the 8,000 mark with traders trimming the rate cut bets for the bank of england. morgan stanley shares are sinking as u.s. banks prepare to kick off the first quarter earnings season. welcome to "street signs." breaking news. iea cuts the growth forecast this year. mandy mentioned efficiencies and expanding ev fleet as a drag on the crude demand. in q1, they see falling 7% from the previous forecast. the united states driving the growth with supply changing the forecast there and increasing it significantly by 770,000 barrels

be per day now. they say non-opec plus production expands by 1.6 million barrels a day. we are looking at the oil market. we are continuing to see the oil market rise. brent crude is up .75%. wti right now up over .75%. joining us now to speak about this is the head of oil markets division at iea. thank you very much for being here. >> good morning. nice to be here. >> we heard about evs in the united states and some of the demand slipping a bit. you are saying globally will have a significant impact on th. >> yes. we are seeing the surging sales in china and in europe really taking into gasoline demand and

also in the united states with a lot of talk about sales not increasing as much as expected. ev sales increased efficiencies in the car fleet is lowering gasoline demand at least in advanced economies. particularly in china. >> you mentioned china in the report. you have said demand is still tepid. a lot of talk about overcapacity in china and at the same time, consumer demand is weak. give us a sense, how do you see china impacting the oil market? >> chinese demand is slowing clearly. last year, in 2023 when china emerged from the covid lockdowns, oil demand grew 1.7 million barrels a day. that is very strong and driving the oil market last year. china was the largest source of

growth in 2024 and 2025. growing from 1.7 the million barrels a day to 1.6 million this year. we are seeing the petrol chemical sector and transportation fuels increasing last year as people got back to traveling after the lockdown of 2022. >> circling back to the growing demand for the evs, do you think long term it will keep a lid on crude prices or not necessary renecessary? we may see a scarcity of crude? >> the prices for oil will depend not just on demand, but balance with demand and supply. it depends how the supply picture would evolve in the coming years. we are seeing the evs will eat into demand for gasoline, but

for other sectors such as aviation, up don't have clear alternatives today. for the petrol chemicals, we see strong issues with plastics and bunker fuels and the marine. this will drive growth for years to come. we are looking on the supply side and as you noted, we are seeing the non-opec plus group producers driving growth for the third year running led by the united states. for now, the growth from non-opec plus is exceeding oil he demand expectations. the geopolitical risk factors are impacting oil prices at the moment. >> i'll pick up on what you are saying about the non-opec plus supply gains leading the opec plus supply. you put a caveat there only if the curbs stay in place. would those stay in place longer

given i captn't see opec plus seeing share gains with non-opec plus? >> we see that decline over the past years with the group which has reduced oil production by 2 million barrels a day since the end of 2022 and the non-opec plus increased production by the same amount over that time. the gap has increased by 4 million barrels a day in less than two years. moving forward, we're seeing that we don't know what opec plus will do. for now, they have will keep the cuts in place until june and through the second quarter. we suggest they have room to increase production into the second half of the year. in 2025, we are seeing non-opec supply growth exceeding ex

expectations for demand growth. there may be some pressure on opec to balance the market once again. >> it is important to note that we have seen oil prices rise since the release of the report. another part of the report i want to touch on is the escalating oil supply security concerns. can you elaborate more on that and what is the concern with the security? >> this is something that is very important to the iea. we are watching it closely with the continued attacks in the red sea as a concern and escalating tensions with iran and israel. then tensions between russia and ukraine continue with the attacks on the russian refineries. there are several tension points in the oil markets today that we are watching closely that could have major impacts on the oil market if there would be any

significant outages. >> it is always difficult to work out exactly to quantify the risk premium is. perhaps you can weigh in on that. out of the scenario with the widening conflicts with israel and iran or proxies and the attacks on russian refineries, which of those or maybe something else would push crude prices to $100 a barrel and how would the suppliers respond? >> that's very difficult to say, obviously. the middle east as being the main exporter of oil to the markets with the red sea counting for significant portion of global crude trade today although more and more oil is going around the cape of good hope in africa to avoid those areas. obviously, it depends at the

size of the outage and if there is an outage and depends on the duration to be expected as well as the size of our inventories. today, onshore global inventories are be low historic averages which is a concern at the time of rising geopolitical tensions. >> thank you for joining us. head of oil markets division with iea. thank you for the breaking news. coming up on the show, more fed officials are pushing back on the need for rate cuts in the near term. we will have the very latest right after the break.

shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and it's ready to go our cost for shipping, were cut in half

just like that go to shipstation/tv and get 2 months free what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com.

welcome back to "street signs." chinese trade data missed ex-pk ta peculiar takes in march. exports fell 7% on the annual

basis. imports on 2% decline despite expectations for growth. let's look at what is going on in the europe markets today with a lot of green on the screen behind me. i wore the wrong color. the stoxx 600 is up 1% today after the european markets fell yesterday. by the close of yesterday, we saw the stoxx 600 was on pace for its second negative week in a row for the first time since october. you know what? with this gain today, we have to tally this up all over again. you see over the past three months, we have been up nearly 8%. let's take a look at the sectors here. there is a great story to tell. the european markets, ftse 100 moving to the upside there by 1%. bp is one of the stocks that is helping that market. as there was a report that adnoc had considered bp as a potential takeover target.

they decided not for us. not the right fit. that is helping the stock today. the cac 40 is moving to the upside by over 1%. soc gen once again helping to keep that market afloat as it continues to divest in morocco. let's look at what's going on here. oil and gas is where we focus today in light of the fact we got the iea numbers. they do see world demand for crude waning or losing momentum over the course of 2024 and 2025. you know what? there is a lot of geopolitical jitters with israel and iran and proxies and that is keeping some of the oil and gas names to the upside. oil and gas sector is at the highest since 2008. we see basic resources moving up

2.6% because of the late commodities on a tear with the manufacturing sector bottoming out and hoping to creep to the upside. to are honest, the chinese numbers this morning were discouraging. two steps forward and one step back. one step back as far as the chinese trade data is concerned. i think that's it for me right now. i was getting excited about the boards. frank, over to you. you mentioned commodities and the rise. that is a factor fuelling inflation. imf managing director warned central bankers against cutting too soon. premature easing could cause spikes. the downward trend on inflation is expected to continue this year, but price pressure the still remain. she warned apprfresh measures warning the global economy could

face a decade of weak growth. speaking to cnbc, she said the u.s. economy is in a strong position adding the fed will be cautious on interest rates. >> the fed is going to be watchful and it will not be in a hurry. let's be more optimistic around the future because the u.s. is not effected by what is happening in some other economies. pressure for increase of labor costs is mostly due to the fact that the labor supply in the u.s. has been quite strong and also the u.s. government is in a position to play somewhat bigger role in making sure the economy doesn't overheat. from where i sit, the fact that the u.s. economy is strong is good news for the u.s. and good news for the world economy, but

if interest rates were to be prolonged at the high level much more than we initially anticipated, that can create risks for financial stability for the rest of the world. >> meanwhile, weaker growth in developed countries could negatively develop prospects. >> slow trade growth has the impact on the developing countries. that worsens the economic prospect. what you are seeing is that we have major crises around the world from ukraine to gaza and the world is last concentrated on the developing countries. where the world bank is, we like to really focus on that because this is where also our commitment is, but where we see the international community

shoot and concentrate to support the developing countries, particularly the developing countries. u.s. ppi data came in softer than expected in march rising 0.2% on the month. smallest gain since december. wholesale prices rose 2.1%. that comes offeafter wednesday t which saw the market get into the tizzy with the timing of the first rate cut this cycle the. lef let's see what the u.s. futures look like right now. a mixed picture so far. the dow just finished flat, but the s&p gained. guess what? a record close for the nasdaq. gaining 1.7%. the magnificent seven really out in the front which is helping the tech names in our neck of the woods. asml and micro. all of the chips moving to the upside today with the european

tech sector up 1.5%. let's bring in kiran from the ubs global asset management. what a week we had with the fed and, of course, changing fed expectations on the back of the cpi and ecb reiterating the likes to start cutting as well. how have you shifted your ideas? >> described it as a tornado with the shift with investors now expecting the fed to cut by one wor two times. the september cut is the most likely to start with the fed. in terms of what it means for the markets, equity markets have proven to be resilient. we are continuing to advocate investors to seek long-term opportunities in technology and areas beyond tech and energy and healthcare. in the bond space, we revised up

our expectations a little bit with the inflation data. we still see bonds as an attractive investment right now looking for mid to upper single digit returns. >> we saw the two-year yield hit the 5% mark overnight before falling back. the ten-year yield at the highest since november. if we are close to the peak, is there an argument to say i'll lock in the yields. these are as good as it gets. >> absolutely. think cash rates are high at the moment, but it is important for the investors to remember those rates will come down and for investors thinking the next two or three years, locking in the yields is important. we think the ten-year yield is ending at 3.75. we think that is attractive. >> the ten-year yield ends at 3.75? if part of the forecast and you believe the diversified

portfolio outside of mega cap tech is where you should be, but investors going there for safety. what is the argument to lead mega cap tech with the magnificent seven in the near term? >> it is about concentration. we are not saying people should be wholesale leaving mega cap t tech. many investors had high exposure to the companies because they have done so well and now have a concentration risk. as we enter earnings season, let's look more broadly and when you look at the earnings trends, mega cap tech should see earnings growth and broadening earnings growth which is one of the key trends broadening out beyond mega cap tech and 493 names in the s&p. >> is there a sector you see more growth? we see small caps hit with the higher for longer and the rate cuts may be pushed out. your data is over 80% chance of

the first cut in september. are there certain areas you think should focus on at least long term? >> we say small caps as you mentioned because of the low valuation relative to the larger caps. it has been hit by higher rates. as those rates come down, and just pure valuations should mean that looks good. >> that is dependent on the forecast on the ten-year below ? >> if rates stay higher for longer, they will perform well. we are talking about building a portfolio for the longer term. adding those is a good thing. we talk about areas like he healthcare which has a nice bhix the growth stories in there. many of our clients are asking where is the next tech story.

we highlight areas of health tech. >> we had a chat with the iea director talking about the oil slowing for the next year. growing ev fleets is causing that demand. you recently upgraded the brent target to $87 a barrel. we surpassed that with the $90 mark. inflation is stubborn in the u.s. and oil is a hedge. >> demand growth is slowing. we don't think it makes sense to look for higher prices. oil is an investment right now. if you look at the futures curve, it is pricing oil to come down by the end of the year. if investors are looking further out on the futures curve, they can buy oil at $80 or below and then benefit if oil prices stay

close to the forecast. >> you say gold is a safe haven investors should look at right now. is the action on gold trading close to the record high spurred by central bank purchases like china? will china continue buying gold? >> you normally expect the high interest rate expectations meaning gold is falling, but it is moving up. we are cautious of moving in gold right now. if you are holding, it can make sense to continue to run. we suggest waiting for a pull back to $2,100 before adding exposure here. you shouldn't be seeing gold as high as this. >> we are starting to see divergence with the rate expectations with the ecb and fed. you know, you could begin the banking earnings season. with we will talk more in detail later on in the show.

i like to talk about the net interest margins which have been improved by higher rates in the u.s. yesterday, after the ecb signalled its keenness to get going with the rate cutting party, we saw the biggest the fall in european banks in about eight months. what would you be doing with regards do banks in the different countries? >> i think margins have been coming under pressure lately with the deposits and starting to see those getting squeezed. the u.s. banks should get additional support if rates stay higher for longer there. european banks will come under pressure if we start to see rate cuts coming through. it is important to differentiate by bank and country with the mixes they he have and the different paces of which rates are cut in different regions n. the uk, rates will not get cut as quickly as other parts of europe. >> boe? >> we think maybe closer to where the fed is. june is less likely with the

stronger data we have seen there. >> kiran from ubs. thank you very much for being here. >> thank you. speaking of the ecb, we will switch gears. ecb kept rates on hold for the thing fifth straight meeting, but policymakers say cuts are on the way. they will look to ease policy if inflation is converging to the 2% price target. inflation across the eurozone has eased with the march print copp coming up in at 2%. speaking in frankfurt, the ecb's stournaras said it is rather moving by wages. coming up on the show, ben

bernancke's review comes out you later today. we will walk you through what to expect after this break. switch to shopify and sell smarter at every stage of your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the next stage when you switch to shopify.

when we started our business we were paying an arm and a leg for postage. i remember setting up shipstation. one or two clicks and everything was up and running. i was printing out labels and saving money. shipstation saves us so much time. it makes it really easy and seamless. pick an order, print everything you need, slap the label onto the box, and it's ready to go. our costs for shipping were cut in half. just like that. shipstation. the #1 choice of online sellers. go to shipstation.com/tv and get 2 months free. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com.

what is cirkul? cirkul is the fuel you need to take flight. cirkul is your frosted treat with a sweet kick of confidence. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul is your gateway back home. so what is cirkul? it's your water, your way. cirkul, available at walmart and drinkcirkul.com.

welcome back to "street signs." i'm frank holland with mandy drury. these are your headlines. the iea cuts the demand growth forecast for the year citing an increased auto efficiencies and expanding ev fleet as a drag on crude demand. >> ev sales and increased fuel efficiencies in the car fleet is lowering gas demand in advanced economies and particularly in china. chinese trade data misses forecast by a wide margin in march ramping up the pressure for beijing to deliver more stimulus. the ftse 100 breaking through the key the 8,000 mark after the competeconomy posts m

growth. morgan stanley shares sink on the report that the wealth management unit is probed by regulators as u.s. banks prepare to kickoff the first quarter earnings season stateside. we just mentioned the growth numbers from the uk. we have the ftse 100 in the headlines because it is headline worthy. it is back above the 8,000 mark and cracking 8,022. we have weakness in sterling which is helping some of the export companies. cac 40 with a nice gain of 1.1% along with the dax and ftse mib. all in the 1% or more camp. let's look at the forex.

sterling at a 2024 low. it is right now at 125.10. we were at the 126 mark yesterday. you see how much it has fallen. euro/dollar dropped below 107. that happened after the ecb decision yesterday. no surprises in tefrrms of the decisions. it does look increasing like like they are accepting the fact they will diverge from the fed and will cut in june. the euro/dollar is 107. dollar/yen weakened. 152 yesterday. now it has pushed up to above 153. do you hear that? nothing. crickets. nothing from the boj. no intervention yet. let's look at the european yields. we have yields slightly sitting on the back foot.

gilt at 4.14% over in the bund with 2.38%. we saw an interesting and mixed picture as far as yields go in u.s. trade. a lot calmer than the previous session with the cpi print on the hot side. ppi was a little more comforting. we saw last night that the t two-year yield fell. we will keep on watching what happens with yields. it is all very exciting with a lot of change this week. frank. mandy, touurning to the uk economy. a modest 0.1% increase from the month before driven by the services sector. the bank of england is publishing the review by former fed chairman ben bernancke

today. we have taken a look at what investors can expect. silvia is joining us with more. >> that's right, frank. an important day. it has been an important week for monetary policy. we are going to hear from ben bernancke. we have big plans and that is what governor andrew bailey said about the upcoming review from ben bernancke. it comes down to two different types of forecasting. inflation and policy. let's look at inflation first. the bank has come under heavy criticism. we know it has missed on predicting inflation and they are estimates the pace of price hikes and failing to catch how fast they would abate. at the worst, bank predictions on inflation were as much as five percentage points which was out of sync of the data. there is the telegraphing rate of expectations. there is some expectations that

ben bernancke would introduce the dot plot. one argument in favor is the bank of england forecasts on market expectations which have mistaken smoke for fire. the school of economics shows markets have overpredicted the bank's policy rate by a percentage point every year over the last decade and a half. since 2022, they have only predicted by three percentage points a year. the report is a growing number of officials in favor of alternative scenario models. that is currently used by the risk bank where the policymakers look at the external factors altering the rate path. it is important to take a step back and see what happens from

the review because it could have implications of the way the bank of england communicates. i had a chance to speak to the former bank of england. >> i think it will partly because it shows the transparency with which the bank of england and governor speaks to all of us, media and the public, admitting that the forecast did not work well. i think they probably took a lesson from what happened about 18 months ago when they produced a forecast that showed a two-year recession caused by the rapid rise in interest rates. now that was headlines in the financial times and it was on radio and television. that itself conditions expectations in the country. they have to be careful of what they say and how they say it.

i suspect not only the governor, but other mpc members are more careful and they just need to rehearse a little bit more. >> they have a communication problem more than a forecasting problem. >> they have a communication problem, but it is closely linked to forecasting. they use the forecast as the bedrock of their communication and i think it doesn't deserve to be used that strongly. >> so it is interesting because when you take a step back and look at the communication from the bank of england, i can't stop recalling the moment when the governor was telling people that they should not ask for pay increases because inflation was such a problem here. that also goes to show that the communication is so important. it is not just about the forecasting and numbers, but the bank of england communicate indicommunicates that. >> in the u.s., we have every fed governor wheeling out with

their forecast and on the same day, bullard saying i'm comfortable with three and bostic saying i'm okay with one. my question is whether bernancke will go down the route of the dot plot formula where each rate set puts out the forecast for inflation rates for inflation and growth. he may do that because he is home bias. it works for the united states, so it works for the boe. the boe rejected that dot plot scenario in 2013. >> it doesn't look like he will take that direction. maybe a 50% chance he will recommend that. analysts from goldman and deutsche bank say that could happen, but it is not the best tool for the bank of england to assess this. the way the fed works and bank of england works are different. you look at the united states economy. they have data from all of the states. here, you have one economy to look at and it will be harder for the bank of england to apply

and use dot plots as a useful tool. that is the purpose. >> here in the uk, they use the fan chart. is there talk about trying to tweak that or find a way to make it more accurate. the question is about communication, but the accuracy of the fan kachart. >> expectation is a change in that. perhaps it will be less used by the bank of england. what we could see is the change of having alternative scenarios to look at what is happening in the economy. when i spoke to the director, she said the bank of england is transparent when it comes to the way they vote. you can tell three members will vote for a hike or cut or a hold. there is transparency when they are thinking about time to announce a cut or not. >> while this report is naturally really interesting for

economic nerds like us, but is this market moving or a game changer? >> that is the key question. it is important to focus on that. from the notes i read from the analyst, they do not expect the policy to change in the short-term with the review. if you look at the current market expectations for rate cuts this year, they are likely to change as a result of the review. however, it is important to monitor because it could change the way the bank of england operates next year. this is only likely to be implemented in 2025 in the sense that it is the incoming deputy of the bank of england in charge of that. she is starting the mandate in july. let's see how this will be applied, but in the short-term, it should not lead to the significant changes to the rate cutting cycle. >> mandy, i don't think the regular person in the pub is arguing a dot plot orp fan char.

>> what do you think about the fan chart? >> you can read more on cnbc's web site. switching gears. the summit with the u.s. and japan and the philippines afte the disputed region and they sought to bolster ties as a deterrent to chinese asse assertiveness in recent years. >> the united states defense commits to japan and philippines are iron clad. iron clad. as i said before, any attack on philippine aircraft or vessels or armed forces in the south china sea would invoke our treaty. coming up on the show, first quarter earnings season is kicking off with the slew of

u.s. banks set to report today. we will look at what to expect next. shipstation saves us so much time it makes it really easy and seamless pick an order print everything you need slap the label on ito the box and it's ready to go our cost for shipping, were cut in half just like that go to shipstation/tv and get 2 months free

what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. you've got xfinity wifi at home. take it on the go with xfinity mobile. customers now get exclusive access to wifi speed up to a gig in millions of locations. plus, buy one unlimited line and get one free. that's like getting two unlimited lines for twenty dollars a month each for a year. so, ditch the other guys and switch today. buy one line of unlimited, get one free for a year

with xfinity mobile! plus, save even more and get an eligible 5g phone on us! visit xfinitymobile.com today. life's daily battles are not meant to be fought alone. - we're not powerless. so long as we don't lose sight of what's important. don't be afraid to seize that moment to talk to your friends. - cloud, you okay? because checking in on a friend can create a safe space. - the first step on our new journey. you coming? reach out to a friend about their mental health. seize the awkward. it's totally worth it.

let's look at what's going on with the ftse 100. let's bring up the board and let that chart do the talking. we are sitting at 8,008 right now. if we get to 8,012 by the close, that would be the record-high close. 8,012 is what we theyneed to ge new closing high. we got good news earlier today which is giving some cheer to punters where the economy which has been tepid of late. it looks to exit a shallow recession after output growing for the second month in a row in february. january's reading was revised higher as well. it keeps on getting better. turning to the banking sector. shares of morgan stanley closed

l lower after the wealth management arm is investigated by several regulators. s.e.c. and office of comptroller and treasury department is probing the unit over whether it reviews clients over money laundering risk. the bank's international clients are reviewed. first quarter is set to kickoff today with three reports happening. arabile has the latest. >> the modest start to the earnings season and really one must note to kick things off is the counters are significant than across the year. according to ubs, tech is still going to be dominant, but forecast to decelerate. mag seven is still the big player, but a little bit less than before. we are gearing up for the first quarterly earnings season of 2024 with analyst more

optimistic than they were heading into last year. for the full year, earnings per share across the s&p is expected to grow 9.8%. that would be more than double the 4.1% expected according to the lseg data. earnings growth is expected to be positive in the first quarter, but analysts think we will see the weakest quarter of 2024. you can tell it is progressively getting higher. it kicks off with the banking names on wall street. jpmorgan chase and citi and wells fargo will report before results from goldman sachs and morgan stanley. that comes out next week as well as bank of america. all three of the major banks reporting today are expected to see an earnings slide. jpmorgan chase will have nearly 4% slide on the earnings front. larger declines are expected from citi with 34% and wells

fargo going down 10%. trading weakness is expected to weigh on lenders and increase loan provisioning with interest rates remaining high. there is one source of optimism. this could be in the form of net interest income. we are expecting a mixed picture. citi expected to see an uptick there. all eyes on the guidance with falling expectations for fed rate cuts boosting the outlook for the rest of the year, frank. >> arabile, thank you very much. we want to welcome our next guest. carl from finema. >> thank you. >> what do you expect when it comes to bank earnings? one of the metrics is net interest income. >> absolutely. the important thing to focus on is guidance. if i rewind a couple of years, what the big banks were able to

do is increase the amount of interest they charge on the loans, but not necessarily increase the amount paying s savers. the difference between the two rates increased. coming into the year with the expectations for interest rate cuts, that margin would get squeezed. as we have seen in the first quarter and actually including this month, data suggesting later or smaller interest rate cuts. that margin could be higher for longer and an earnings tailwind. >> one of the things i stress on the u.s. banking sector, we are about a year away from the s silicon valley bank collapse. we are looking at a 20 basis point jump here in the u.s. and uk. how does this impact the ability of the banks to forecast ahead and impacting commercial real estate? >> that is a really good question. in terms of forecasting ahead,

the banks tend to be conservative in the forecasting. moves don't change the calculus too much. i think commercial real estate is still an area of weakness. we will see that particularly in wells fargo numbers which is an area of concern. i think what is more meaningful about the movements is there are a lot of moving parts to give us a strength of the u.s. economy. >> the strength of the bank stocks. does that give them the ability to be conservative? citi is up 16%. wells fargo with a similar number. does this give them room to be conservative? eight months ago, there were concerns with the banking sector and possible consolidaconsolida. >> it is a rare thing to say u.s. banks out performed anything, let alone the s&p with

the mag seven. if you look at valuation, they are 12 times earnings on the forward basis. history has them around ten times. there is a fair bit of optimism with the interest rate picture. i think there is a lot of optimism baked in. hopefully there is more to come. it is within the banks control how much optimism. >> most of that is baked in up until the end of march. if you look at the financial etf which includes more than just the banks, it has rgotten reall strong at the end of march. is there an argument going into the earnings season to go long? >> potentially. there is a lot going on beneath the surface. if i look at financials, there is an estimate of around 1% earnings growth. within that, banks are down 18%. insurance is up.

potentially, yes, but below the surface has a lot going on. >> do you feel broadening out beyond the banks that the current profit estimates and arabile laid it out for us. do you think the current profit estimates justify the above average valuations broader than the s&p? >> there is a general argument it does. if you strip out magnificent seven, you are going to have negative earnings growth for the s&p 500. taking all of the a.i. hype out of it, what you are starting to see is companies using the benefits from a.i. to improve profitability and earnings growth. if you get the 10% earnings growth this year is what people are forecasting for next and that justifies yies earnings. >> we have seen a lot of talk in a.i. one thing a.i. cannot fix is money on the sidelines. is there a deposit risk with interest rates so high that

people turn to bonds or keep their money in the money market accounts? >> absolutely. i think it is one of the things that gives one hand and takes with the other in that interest rates being where they are for an extended period is good for net interest margins. on the other hand, it doesn't necessarily attract cash off the sidelines or when rates are eventually cut, if they are, you have that deposit risk coming into play. you have an opportunity for the inn theh the integrated banks coming back to investors to get them thinking about the money market funds and ee tfs. >> the regional banks have struggled in comparison to the bigger counterparts. what is the case for any investment in the regional

banks? >> look, you acknowledge they are idiosyncratic. >> localized. >> if you can identify the right banks and also a risk if you are buying them as a basket. it requires more security and analysis and local research. >> in other words, the under performance is justified? >> i think when we look from the top-down approach, it makes sense to spend less time on them. >> ipo market. how do you see that impacting the earnings for the rest of the year? i'm looking at the performance. how do you think that impacts not only the banks, but investor confidence in the banks? several get a significant amount of money from the ipos. >> i think, overall, investment

banking and capital raising has been an okay area for the big banks. we had decent momentum listing. what we need for the rest of the year is a stable market. as long as companies and management teams and investors know what to expect, they can manage a good or bad ipo. it is the volatility and geopolitical issues and the uncertainty that makes capital raising tough. >> that's what they get paid to sort out. >> and get paid handsomely. >> carl, thank you. great to see you. >> thank you. >> on a programming note, u.s. colleagues will speak to larry fink later today. that is coming up at 15:00 cet. frank, it is sad that our time together has now come to an end. >> you are going back to australia. >> you are going to be in the lucky position of hosting

"street signs" with silvia. then you will be king of your own show. >> what? >> i thought as a welcome to the united kingdom, you might benefit from a bobblehead king charles. >> what amn amazing gift. i don't want to say my secret ambition on tv. to be knighted. if anybody can, i can. mandy, you have a doll to work with. you are amazing and dynamic. thank you for everything. i'll see you the rest of the month. that is it for today's show. i'm here with mandy drury. "worldwide exchange" is coming up next. hi. i'm wolfgang puck when i started my online store wolfgang puck home i knew there would be a lot of orders to fill and i wanted them to ship out fast that's why i chose shipstation

shipstation helps manage orders reduce shipping costs and print out shipping labels it's my secret ingredient shipstation the number 1 choice of online sellers and wolfgang puck go to shipstation.com/tv and get 2 months free what is cirkul? cirkul is the fuel you need to take flight. cirkul is the energy that gets you to the next level. cirkul is what you hope for when life tosses lemons your way. cirkul, available at walmart and drinkcirkul.com. ah, these bills are crazy. she has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or

visit coventrydirect.com. switch to shopify and sell smarter at every stage of your business. take full control of your brand with your own custom store. scale faster with tools that let you manage every sale from every channel. and sell more with the best converting checkout on the planet. a lot more. take your business to the next stage when you switch to shopify.

it is 5:00 a.m. here at cnbc global headquarters. it's 10:00 a.m. in london. i'm frank holland and here is your "five@5." wall street has the nasdaq back at the all-time highs, but futures are fighting for gains at the open. a big part of the rebound tied to apple with the best day in more than a year. today is all about the kickoff to the first quarter earnings and the big banks. we have the numbers you need to know and the one name reeling from regulatory pressure. and if