>> josh brown? >> amazon. the trade on the breakout is now over, but the investment for me continues. i think the stock's worth hanging on to. >> number of price target reductions after amazon earnings we are going to see what happens next week. take a look at the market here dow is down triple digits at this moment. that's a loss of 120 we'll see you on the other side of the weekend "the exchange" begins now. thank you, scott hi everybody here's what's ahead as we close out the week howard marks of oak tree capital is with us, his take on the economy, markets and inflation oil giant chevron is having a stellar year as the energy sector outperforms we'll speak exclusively about today's earnings, the esg movement and the return of buy backs. and should china be considered a separate asset class from the rest of the world? a look at what's at stake. we begin with today's

markets. kristina partsinevelos with those numbers. >> thank you we got equities across the board, but we are heading toward small declines for the week. but for the month, we're seeing strong gains s&p 500 will have six straight months of gains if it hits that gain, which is more of a buy the dip trend across the board we also have energy. we'll bring that up just in terms of sectors energy a little bit weaker as well because of earnings that came out but i want to move on to talk about why there's a few reasons for this selloff first you got amazon's latest earnings that have tech investors jittery. throw in renewed weakness in china shares and the cdc warning that the delta variant is as contagious as chickenpox. and you've got talk about peak domestic and global economic growth and then finally some end of month portfolio rejigging and you've got yourself some weakness across the board. the delta variant is definitely

a big wrench or throwing a wrench into future plans and that is bringing down some of the reopening stocks bike p/e g. along with crews and airlines that we're seeing red all across the screen but we want to end on a positive note, some of the biggest movers for the week ups -- well, they're not all positive the worst week since 2020. activision blizzard similar story. and dedoe had similar earnings out. tilray still inching down. we're matching today we did it again. >> it's called the tulip sleeve. announcing plans to resume its share buy back program pretty good macro sign, everyone has been tallying up these buy backs in the markets for chevron, capital is spending down 32% from this time last

year shares have doubled pandemic low. let's bring in our very own ryan sullivan he's at sullivan hq in california today alongside michael worth, chevron ceo brian? >> yeah, kelly, thanks and by the way in a little tv serendipity, on the board is howard mark's vice president of oak tree i had no idea. mike, thanks for having us at your shop, by the way. your stock is down a bit, free cash flow is up, eps beat. what are investors missing in the numbers today? >> brian, we had a very strong quarter. really strong cash flow enabled us to meet our organic capital needs, reduce $2.5 billion of debt, pay out $2.5 billion in dividends and announce $2 billion to $3 billion annual share program. so, our portfolio is performing very well. and we didn't come off as hard as other companies in our industry during the pandemic because we came into it with a strong balance sheet

we had a flexible response with capital. we brought spending down while we didn't come off as far, we've come back. and i think we're focused on delivering higher returns and lower carbon, which is what our investors are looking for. >> there is a lot of people in the texas oil fields, mike, that were really hoping you were going to increase capital spending it's down 30% from the same period last year you guys are the big dogs. when you spend more money, the smaller services companies, they make more money. they can drill why are dividends and buy backs, the new buy backs program, why is that the best use of investor capital right now rather than new wells, more production >> well, we are drilling new wells. we've had a capital efficient program. the activity per unit of p ka tal spend has never been higher in our company so, we can deliver strong production performance and strong cash flow at the same time brian, we're in a market that is still seeking equilibrium. demand is recovering we've got concerns about the pandemic that are still with us.

and we have opec, which has gradually been bringing production back into the market. so, we want to be sure that we see things settle out and we really get to a more stable market environment here as we move forward so, we've had a very prudent posture for our company and one that we will -- >> by the way i think opec would agree. on the opec now monthly meetings, the last one lasted about three weeks, by the way when they had that spat, which they've solved, they talk about the same thing abdul abdulaziz bin salman is very careful to say we don't know where demand will be where do you see that? we've got delta variant. you work remotely at your headquarters, a couple thousand people work remotely what demand do you see do you see another slowdown coming >> we've seen strong demand recovery over this year, and

that really continues. it's a global phenomenon, stronger in some markets than in others the softness is in international air travel, but domestic air travel within the united states, within china is at or above pre-pandemic levels. the roads are full of cars now so, demand has been very strong. there are uncertainties relative to responses to surges of the pandemic and policies that may be enacted we've seen some countries in asia, for instance, that look like they were in very good shape reinstitute some of these policies, which have slowed down economic recovery. it's an uncertain and difficult to predict environment, which is why we're maintaining flexibility and strength in the balance sheet, and really looking to the long term as opposed to the next quarter or two. >> kelly has a question. kelly? >> brian, i appreciate it. i want to ask a question that connects a few different things. one is the fact that capital spending is down and you guys are a huge part of the capital spending in the economy, chevron, exexxon, and the

others is part of the reason that spending remains low the esg movement there is a sense out there that u.s. producers could put more product into the market but are less interested in doing so in a world in which the investor base, the public, you name it, is not really rewarding that can you explain the linkage between your capital spending plans, the esg moves that are out there, and your vision which you said by 2040 won't be an oil-first company? >> yeah, kelly it's great to see you. and, look, our capital spending is really driven at creating a value for our shareholders and i said earlier we intend to deliver higher returns and lower carbon our core business will be healthy for many years to come it's a low growth business, but it's a high margin business. it generates the cash that pays for shareholder distributions and investments into both our traditional and new businesses just this week we announced the creation of chevron new energies, which will accelerate

our investments in renewable fuels, in hydrogen, in carbon capture, which is responsive to some of the concerns that you're referencing. so, we will allocate capital to good opportunities in that space and keep our core business healthy. and i think that's really what investors are looking for. so, there is an influence of esg thinking, but it's not what drives the absolute level of capital spending it really is our view of good opportunities and the way we intend to create value for our shareholders >> i love kelly's question because a perfect segue for this -- i hope this doesn't get me thrown out of your headquarters we were tuesday at a mine -- a mine you used to own -- talk about the electrification movement so, we rented a car, electric car, all electric, and drove from las vegas to san francisco. and that's a different story, which we'll have later on. but when i looked at the infrastructure of the electric driving experience, okay, every stop was a chevron, chevron,

chevron gas station. what's your role in the push for electric cars? you can't sell a gas powered car through 2045 in california based on what the governor said last year what is the role in the push for electrification and the infrastructure buildout? what happens to the chevron gas stations >> well, brian, chevron gas stations are likely to be around for a long time to come. >> you think so? >> in california the governor has asked the air resources board, the regulator, to evaluate the phase out of internal combustion engines. there's a lot of work to be done in that process, a public consultation it's not necessarily as it's been reported that it's a man made it's a study, it's an ambition, it's a request broadly speaking around the world demand for our products by virtually every forecast you look at will increase over the next two decades, not decrease i think what you'll see is an

evolution in different markets where electrification is making more strides you'll see electric charges at our stations we have electric charges at stations in california, maybe not the ones you encounter but those are coming into the mix. we respond to what customers are looking for. i think you'll see an evolution in our retail offering it'll be different in different parts of the world based on the needs of each country. >> transportation fuel is still the number one demand. i know you've got to deal with cummins, hydrogen. there's compressed natural gas what is the future of transportation is it all electric is it compressed is it hydrogen is it gasoline is it all the above? what's the future -- and i say 15 years from now? >> i think the short answer is yes. light duty vehicles are more easily electrified than heavy duty vehicles. we're producing diesel in california and that can go into the heavy duty fleet from that

we're working on hydrogen which can be used in shipping and heavy duty transportation. we'll be making sustainable aviation fuel. so, i think you'll see a diversification of the transport system but there will be a significant portion of that in oil and gas. >> we're not all electric next year, mike >> not all electric next year, brian. >> really appreciate your time and having us here look forward to seeing employees back at your campus. kelly, i just want to let viewers know we're doing a new model. we're going to do about another 10 or 15 minutes with mike, talk about push to renewables, climate change, diversity and inclusion in the law force that's going to be on cnbc.com in a bit if you want to hear more from mike, go there later today we'll push it out as well. thanks for having us on "the exchange." back to you. >> i'm looking forward to seeing him drive that electric car all the way to las vegas howard marks joins us coming up. we're going to talk about

valuations, the fed's next move, the delta impact on business plus losing pinterest. shares of the social media i can't company flirting with their worst day ever they're down 19% we'll tell you what they're pointing to as the culprit after this >> announcer: this is "the exchange" on cnbc. that building you're trying to sell,

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welcome back to "the exchange." stocks are sitting near record highs despite uncertainty over inflation rates and delta variant of covid siffal ceo warned us about the inflation in the market. he thinks a sizable correction is coming, so you might expect my next guest to agree and sounding caution bells as well but maybe not this time. joining me is howard marks, co-chair of oak tree capital management you're known for your incisive view on the market tell me your own -- i don't want to call it a dilemma -- but reflection on what's going on with stock prices and interest rates here >> well, kelly, it's great to be here with you today. you know, look, stock prices are high relative to earnings, relative to history.

and we see signs of risky behavior in the marketplace on the part of people who are trying to get a good return in today's low return world so, there are negatives. but that's not enough reason to take defensive action. there are also positives and the greatest positive is the strength of the u.s. economy at this time and strength that will probably last for at least another year so, i think that the two things are in balance the other thing is that a bubble is an irrational lift in the stock market today's levels are not irrational they're ultrahigh because interest rates are the lowest they've ever been. interest rates do a great deal to determine the pricing of assets and when interest rates are low, the returns on assets prospectively should be low, in line, which means that the prices will be high. so, i think this is not a time

to be aggressive but neither is it, in my opinion, a time to be highly cautious >> has your own thinking in this market evolved because we've been in a period of very low interest rates for a long time and it just keeps sinking. i was just reading research about how the rates are low and they're likely to stay that way. you know, is there a new playbook now >> well, you know, kelly, for months, if not a few years, the mantra has been lower for longer the fed wants to be supportive of the economy, and the main way they do that in addition to injecting a lot of liquidity, is by keeping rates low the real question is how long will they be able to do that for. number one, if they keep rates low, they risk the economy

overheating. number two, if it overheats, we risk having inflation, higher inflation. number three, if we get higher inflation, rates have to go up because people will not buy instruments, dead instruments, to give them negative real yields and number four, if the economy overheats, then the fed will have to raise interest rates to cool it off. so, there are lots of -- there are lots of risks. it's not sufficient to say, well, the fed wants to keep rates low. we know it does. but, you know, on the other hand, we've done this here as they're thinking about thinking about raising rates a little >> so, let me ask you, i often ask about stock price. but really you guys invest in credit we've seen a lot of headlines over the past month where yields on junk or high yield debt was

below inflation rate for the first time ever and that kind of thing. many people point to how strong credit markets have been as a source of support for equities, whether it's engineering, share buy backs, you name it, that that's kind of what contributes to the bullishness out there are these prices rational to you, the levels at which companies are able to borrow >> rational relative to the level of interest rates, you know let's say high yield bonds high yield bonds today yield around 4%. and the 10-year treasury yields 1.2. so, that's a spread of 2.8%, and that's low but not absurdly low. and so i think that most assets are selling at prices which are farre fair relative to each other and relative to interest rates, just low in the absolute because interest rates are so low in the absolute

i should say prices of assets are high in the absolute because interest rates are so low in the absolute so, i don't see anything specific -- any large asset classes that are -- that seem ridiculously overpriced relative to other asset classes and relative to interest rates it's just that everything -- everything -- is elevated today. >> let me ask you about this related question number one, it sounds like everything is at risk if interest rates rise potentially. no one reasonably thinks that's going to happen. but if that is a giant risk out there, what happens ifpeople don't want to be part of that risk number two, on that very question you think that the fed needs to return to more of a free market in money with rates that are naturally occurring how would you bring this all together >> well, look, if you have more money than you need to live on, then the first purpose -- i'm talking mainly to individual investors.

then the first purpose of your investing, in my opinion, should be to make you comfortable if you're uncomfortable with your current level of investing, you should reduce it you should sell -- there's an old saying sell down to your comfort level. so, you know, there's nothing wrong with taking money out of the market if you want to increase your comfort and as long as you're willing to be on the sidelines and watch other people make money if the market goes up. we don't know if it's going to go up or not, but it's attention. how important is it to you to eliminate future losses by getting out, and how important is it to you to participate in future gains by staying in you can't have both. that's the key to investing. there's always the one hand and the other hand so, you know, as i say, if people want to reduce their holdings level, let them but they have to realize that the market could be very healthy

for a long time. look look at this year. some people were saying bubble six, nine months ago and if you took your money out and you sat on the sidelines, you missed out on 20% gains or something like that. so, there's no -- there's no -- there's nothing in investing, there's nothing magical. so, there's nothing you can do which will give you the gains if the market goes up but not the losses if it goes down each individual investor has to decide what's most important to them >> i have time for one last question i'm torn between asking if you have a point of view on robinhood and what it's done for this investing and psychology we've been discussing. do you think it's a force for good that's the one question i have and the other is for you to expain how the fed will get to naturally occurring rates. i'll let you pick. >> i'll pick the latter because i can come back another time and

talk about robinhood let's talk about what you said you took two phrases that are among my favorite phrases from the memo that went out last night. one is that we don't havea fre market in money. the free market is the best al kay tor of resources if there's labor, the free market -- what adam smith called the invisible hand -- takes it where it will do the most good, will be the most profitable. so, you know, most of us trust the free market system to allocate resources we don't have a free market in money. the fed has held its interest rates, in my opinion, artificially low for well over a decade the global financialcrisis ended in '09 and rates have been low despite the recovery and so i would like to see what i call naturally occurring interest rates, the rates that the economy and the invisible

hand would move us to if rates were free to do their thing, which they're not. i think that we'll all be better off if we get there. >> well, now since i teased it i just have to know what's your take on robinhood? >> well, robinhood brought a lot of people into the market, as i understand it, in let's say the march-april period of 2020 it's healthy to introduce people to investing investing is an important thing, and everybody who has some extra money should invest consistent with their own psyches the only question is, you know, if people came in on march 23rd and here we are july 20 -- 30th -- that's 16 months in which everybody's made a ton of money. so, i don't want investors to have the wrong expectation that it's always going to be like this because it's not. we will have ups and downs

we always have ups and downs in the long run, investing is profitable in the long run, people should have investments and they should make investments and not interfere with the process by getting in and out and in and out. most people can't do that right. so, get in, stay in. i think that's part of the lesson of robinhood. but have realistic expectations about the future you'll have to live through >> howard, i appreciate you talking about all these things and joining us today really good to see you thank you. >> great seeing you, kelly >> howard marks. coming up we'll speak with the ceo of texas frost bank, getting a big boom they used ppp loans in the lone star state we'll talk thio m about the pandemic response and the delta variant spreading now. "the exchange" is back in two minutes.

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citi. welcome back to the exchange, everybody. dow's down 135 points as we look to close out the week. and in fact the dow and s&p have dipped negative, putting all the major indices on pace to close lower with the nasdaq the biggest laggard since monday we've been treading water since then even though we've been near record highs this week, we're also getting a little top heavy. let's get to jon fortt for a cnbc news update here's what is happening at this hour. the senate has voted to begin

debate on a $1 trillion bipartisan infrastructure p package. majority leader schumer says the senate could be finished with the bill in a matter of days flash flooding is being blamed for one death in eastern kentucky as fast rising waters swept a trailer home off its foundation health officials looking at new ways to fight the coronavirus as cdc warned congress the delta variant is as contagious as chickenpox in a confidential document reviewed by cnbc, cnbc officials write the war has changed. and on "the news" shep will speak to an expert that helped with data that led to the new warnings a hit and miss, wood buys hood and businesses about to get more casual. it's all in rapid fire in just a moment first it's friday and that means it's time to look ahead to next

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welcome back everybody let's catch you up on a couple

stories that should be on your radar. it is time for rapid fire. joining me michael santoli, joined by "wall street journal" columnist joanna stern and matt has joined the fray today. welcome everybody. first up it wasn't just amazon that reported a leveling off of demand last night. we'll get to amazon in a moment. first let's talk pinterest the shares are plunging as the user base declined just over 450 million monthly active users, 30 million short of estimates and a 5% drop from q1 they're saying usage dropped as people returned to socializing in person. facebook fell shy of estimates for monthly users. twitter missed daily user forecasts. matt daly, one of the topics we've been debating is whether the faang trade is over. what does this tell you? >> it definitely is a concern. i've never been a huge fan of

pinterest but a lot of people have been. but the thing is a lot of these stocks that have been dead money for a while but a lot of tech stock, facebook broke out, apple broke out, even microsoft, they all broke out. but pinterest has been dead money continually since february and it's been on a downward slope and this takes it down to the lower end of that. and my concern is that on a technical basis you break the low $55.50 people are going to start dumping the stock. >> although, jo anna, this is one of those -- the stocks are going to -- they're going to overly -- what am i trying to say? they're going to go up too much and come down too much on the way down pinterest is making a lot more money on the users it does have. so, you know, it's introducing new ways to buy things now if it ultimately comes out of this as making more money for the users it does have, isn't

that in the interest of investors in the long run? >> first i was hoping matt was going to promote his meeting pinterest board, so i'll have to come back for that next time i think what we're seeing across the board is it was unsustainable for any of these services or social media companies to keep that level of active user time, right? we had a lot of time during the pandemic it went toward these services, and now we're going to pull back that time. so, as you bring up, kelly, i think there's an interesting product perspective of how when you're on the product, what are you doing there then and is there a way that the company gets you to spend more time there or spend more money or engage more with advertising or whatever it may be, the business model but the idea that we're going to now come back at any point really to that kind of pandemic time, engagement and active user time, we're seeing it across at twitter, pinterest, amazon that's just not real u.s.ic. >> mike it was interesting we'll have more on this next hour but morgan stanley does a survey of interns every summer to try

to figure out what the kids order and use and do and all this stuff in the case of social media, pinterest had 1% of people in term of responding saying they had anything to do with it we all know this is not like snapchat but if it's popular with the dare i suggest boomer crowd, those millennials, whoever it is, us old people who have a little bit more disposable income, is that still a decent model in the long run? >> it could be a decent business model. it's a matter of how big the company is going to be it's got a lbl of a twitter issue where intense engagement among those who use it but only a minority of people use it. it's not a universal app we're seeing the separation between social media that is compatible with finding stuff to do out in the real world like snap and google and those that are much more about eyeball time on the screen while you're killing times for doing other things and pinterest might have a link to the cooling off in the home

innovation trend probably peaked early this year. >> if that's the case, everyone should be snapping to attention what pinterest shares are doing. pivoting to amazon, let's talk about what's going on with gross stocks and faang more broadly. amazon chairs are having their worst days in some time. they had their first revenue miss in three years. they're warning of slowdowns ahead. the company is blaming trips going out versus oinl shopping and lockdown behaviors shares are down less than 7% right now. so, matt, put this one in kind of the broader context you know, there's overlap between the ecommerce things that did well during the pandemic and the faang trade that has been dominating for a decade where is this pointing you to next >> well, you know, there's no question this is a concern if it had just been their margins that disappointed, just say, well, this is just, you know, amazon once again investing in their own business, so they're cutting back on their profits. but when the revenues come down,

that's a concern especially when you have these new situations coming down when people are talking about peak growth, peak earnings is that going to be a problem? i will say, however, people need to realize this is really an overshoot on the down side for technical reasons. and the reason is that the stock had broken out of this sideways range it had been in for ten months a lot of momentum when it went piling into the stock the last couple weeks now that it's fallen back into the sideways range, a bunch of the fast money momentum players dumped the stock so, it's a great long term company, a great long term play. and a little bit -- the outsize move today has more to do with that than the real results >> jo anna, what would you add about amazon's performance >> this is another situation too where i'm interested to see where we've got holiday, a lot of other spending times coming up, right? so, looking forward, it seems like this is probably not that big of a hit but i'm also really looking to see these companies. this is a moment for them i think to innovate on product and thinking about, k o, during the pandemic we saw these crazy

levels, we saw these record highs. how are there places where we can squeeze that out what did they learn from that? every time i talk to a tech executive right now, my biggest question is what did you learn from the future from the pandemic i hear a lot of marketing talk but i also hear some real product talk as well >> mike, this might be totally will a side note, but i think i've been an amazon prime member since 2005 just the past couple weeks we were looking at home to see do we really need to be amazon prime members. we just pay for the yearly memberships but we don't watch a lot of the videos. this question for you is more about the trade. i was asking matt about. where is the faang trade going from here? >> well, i mean, i do think that if you want to look at the way amazon, facebook, apple, microsoft reacted in a negative way to what are generally on objectively pretty good results, it's only dialled you back a week or a month in terms of where these stock prices were before

so, we're taking back some of this last little burst of upside i do think that there's -- we're losing a little bit of specialness at least when it comes to how much they can grow year-over-year, this sense that they need to grow into the premium valuations that's fair. when it comes to amazon, what's interesting is if you talk to an investor that loves the amazon investment thesis, it's about aws, the cloud services. it's about prime, which is just a stickiness of the subscription model and even advertising as a growth factor. those three things were fine in the latest quarter so, the question is, if it can keep growing at 20% top line, which it did this time, it probably is okay in longer term even if it comes off the boil a little bit in terms of excitement level >> very well said. those growth rates are quick skilled. we did learn that kathy wood was buying up about 1.3 million shares of robinhood. even though it had a rough debut, it's snapping back up today.

she's on the record saying arc innovation includes her highest names. why do you think she sees value for robinhood? >> i think it's just buy the disrupter. the big question is not whether robinhood is retail and trading services, it is has the investment already happened? what's the value of the loyalty and new coming investor base they've collected here it's a big head start, lots of small accounts, as we've discussed. it's very consistent i think with the arc approach in general, which is buy the disruptive name and the fast-growing market and worry about the profitability some time later >> exactly matt, a quick word on this one >> yeah, i just think the ipo wasn't priced correctly. so, don't worry about the immediate reaction of the stock right now. my point is, you know, mr. wonderful was on cnbc this morning talking about they're here to stay, robinhood is here to stay. i agree. i guess my point is build a

position over a eerd approximate of time, over several months and give it time to find its true value because it's going to take a little bit of time >> very sensible advice. you go, yeah, that sounds like what you should do with the stock. as you're thinking about what howard marks said early on before we go, most important issue of the day is the fact that according to lauren thomas on cnbc people are going to be wearing athleisure for return to the office which may not be happening because of delta we thought the whole point was going to be when people go back to work they're going back to heels and business suits her piece suggests not so much >> it's all shaping up to be a pretty good time for pants it seems. seems like everyone's going to buy pants. you had the ceo of levi saying at least 35% of people's waistlines changed you added the waistline changing -- i can't believe i'm talking about this -- people's sizing changing, plus the style of these pants changing. i'm just really here to tell you, pants >> i'm here to tell you

athleisure trade is doing pretty well this year under armor is up 20%. maybe that's why the stretchy pants are more attractive than ever thank you all very much on this friday for rapid fire. coming up we're going to follow the funds, where the hedges got in and the sectors they bailed out of we'll have details next. and you can catch the show any time anywhere by listening to and following "the exchange" podcast. we're back in a moment

♪♪ ♪♪ ♪♪ return to rugged.

the all-new ruggedly redesigned 2022 nissan pathfinder. ♪♪ welcome back let's take a look at where the hedge fund money has been flowing lately growth stocks is the largest overweight in the group since april of 2020. pretty incredible. and ton if flip side they exited sensitive areas like cyclicals and fan shls jeffries also looked at the top holdings versus 13f. the top four most popular positions were amazon, facebook, alphabet and microsoft might be hurting a little bit this week.

but investors started to take positions in consumer names like nike head to cnbc.com/pro for more. shares are lower today half a percent despite earnings peak rng vinmt.hecomments about t eainenroen we're going to talk to the ceo phillip green next that takes you further. at the lexus golden opportunity sales event. get 0.9% apr financing on the all 2021 lexus hybrid models. experience amazing. ♪ when i was young ♪ no-no-no-no-no please please no. ♪ i never needed anyone. ♪ front desk. yes, hello... i'm so... please hold. ♪ those days are done. ♪ i got you. ♪ all by yourself. ♪ go with us and find millions of flexible options. all in our app.

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welcome back shares of regional bank is slightly lower today despite strong second quarter earnings the texas-based bank has $46 billion in far this year th record interest in loans and new checking accounts. even with the threat of delta does that tell us it could be full steam ahead for the recovery joining me is phil green, the chairman and ceo of frost bank it's great to have you welcome. talking sort of as up to date as possible, are you seeing improving trends in terms of loan demand? >> well, thanks for having me, kelly. yes, we are. we saw an inflection point in our loan volumes in june and we've seen follow-on for that in july i was particularly interested to

see that commercial and industrial loans as opposed to commercial real estate and consumer loans saw an inflection point in june. that means to us that businesses are starting to borrow and are starting to use funds in order to move their businesses forward. >> i want to ask you about some surprising new entrants to the competitive landscape in banking which is about to get even more complex and interesting on the crypto front put that go aside even the entry of someone like walmart, which is trying to do innovative things with overdraft protection, are they -- and this is just starting to get under way, but are these competing away for traditional deposits for your core customer or is it kind of business as usual as far as you're concerned with basically, i'm sure down there, higher checking balances than we've seen thanks to the pandemic payments? >> first of all, you're right about the higher balances. we've seen deposit growth in excess of 20% over the last couple of years. with regard to new entrants, it

could be walmart, it could be finteches, it could be neobanks. everyone is competing in our space. what they're doing is challenging the constraints that have been there in the banking industry the last several years and one of the things we're doing i think banks should be doing is responding to those because i think there's no reason why us, for example, can respond to a lot of the changes and changing expectations brought on in some cases by the banks. in our case we introduced what we call early payday just a couple weeks ago you can get your paycheck a couple days early. we'll spot that money to our customers and, also, back in april overdraft grace so if you have an overdraft of $100 or less we'll pay it for you. we won't charge anything we have the ability to compete with the banks but a hybrid banking model.

we also bring physical locations to the customer and someone who when you call will actually answer the phone and take care of you with customer service. >> that's my number one criteria my pediatrician has a person who actually answers the phone that was really important. question on the crypto space which you mentioned ach payments and one of the things i think crypto is trying to innovate is the traditional settlement times involved in banking, by making it immediate, by making it nonrefundable, that sort of thing. obviously there's a lot of concern about being exposed to the crypto world in general, but are you guys looking at any elements of payments and innovation there as ways to improve upon the current infrastructure especially if you're a regional bank you have to be looking to the future, what are we going to offer vis-a-vis the big banking giants and the massive finteches? >> well, absolutely. and, kelly, you have to keep your eye on where the puck is

going, where it is i would say, first of all, with regard to payments the banking system has gone a good job, i believe, with functionality, let's say, like zell where you do get immediate payments or they're final in terms of the transaction. crypto will be interesting to watch. bitcoin gets the most press. i think it's generally held. it's not a very good, efficient way of exchanging today. there will be changes to that over time. and we are exploring and understanding better what that market means i think there's a lot of regulation and regulatory environment decided on it. it will be one that we keep up with >> interest rates and the fed and all the traditional stuff but, like you said, keeping an eye on where the money is going is very good to get your point

of view. thank you for joining us we do appreciate it. phil green of frost bank down in texas. the government crackdown on companies in china is pushing markets lower across asia for the month now. it's creating concerns about how to handle chinese equities here 'lha t dinhe.s wel veheetails next. trip. fifteen minutes until we board. oh yeah, we gotta take off. you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪ (♪ ♪) whether it's a technology first, (♪ ♪) a fashion first, (♪ ♪) a science first, (♪ ♪)

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welcome back, everybody. markets across asia are falling significantly in the month of july as china cracks down on its companies. those government actions have sparked serious debate about chinese equities over here bob pisani joins me now with that story bob? >> reporter: hello, kelly. we're closing out a great month for u.s. stocks. it's been a disastrous month for china socks. investors in asia in general, just take a look, the big cap china stocks are down. they're down again by ali gbaja-biamila, pinduoduo, a month intefrom hell in the casef ten cent music japan was down, korea down, thailand, the philippines. they were all down so far this month. the concern is that the regulatory risks are much greater than investors had anticipated. in fact, risk from both china

regulators seeking to rein in everything from tech to education to food delivery andrieand risk from u.s. regulators calling for more disclosure from chinese firms regarding their ownership structure. after a decade where u.s. investors have increased their exposure to china, a lot of people are debating whether china should be considered a completely separate asset class from the u.s. and from the rest of the world, that owning china on an equal cap weighted basis is not going to be feasible due to the very, very high regulatory risk. one final problem here for international investors, the united states has consistently outperformed markets overseas for more than a decade and i don't mean just china. i mean including developed countries like japan, for example, but dramatically outperformed in china. you can see the differences here, one more reason international investors have been on the defensive. kelly, the real fault line here is between the people who

believe china is still investable, particularly the chinese consumer is an investable asset class and those who say essentially no matter whether you're a private enterprise or a state-owned enterprise, they're all government owned enterprises at this point and there is really big, big risks in owning them kelly? >> that's a potentially massive change that does it for "the exchange." "power lunch" with frank holland in for tyler the delta variant changing the war against the virus according to cdc internal documents. we're going to break down what could be a real game changer for businesses if they try to bring workers back to the office upwork weighs in the future of banking. the banks 20-somethings trust with their money it may not be what you expect. disney fires back at scarlett johansson calling her lawsuit against the company sad an