tv Worldwide Exchange CNBC April 26, 2022 5:00am-6:00am EDT
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sell your policy. don't cancel or let your policy lapse without finding out what it's worth. visit coventrydirect.com to find out if your policy qualifies. or call the number on your screen. coventry direct, redefining insurance. it is 5:00 a.m. at cnbc. here is your top five at 5:00. tesla, spacex and the boring company and now twitter. w elon musk with another company and china with a concern over a stealth covid beijing. they are to avoid a shanghai style lockdown. big day for big tech peak earnings season under way google and microsoft kicking off today. 30% of the s&p 500 reports this
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week. cut down to side big oil beatdown the majors lose 6% in a session. our next guest says more pain is likely to come. and florida governor ron desantis says he is just getting warmed up with his fight with disney round two could be weeks away. it is tuesday, april 26th. this is "worldwide exchange. well good morning, good afternoon or good evening. welcome from wherever in the world you may be watch wiing. i'm brian sullivan let's dive in on this tuesday and see how stocks are shaping up futures are lower right now. good news is they are not lower are by that much all off less than .20% of 1%. we are not seeing follow through buying after monday's reversal
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all of the major averages were down much of the day some big before buyers stepped in and we witended higher acros the board. dow up 1.3%. if the selling is not over and the markets overall keep going down, we need to watch key technical levels matt malley saying if the s&p goes below the march low, the next would be 10% lower than it is right now bonds getting a bid. 10-year yield holding steady at 2.81%. if you were hoping for a fed to the rescue this week, it is not going to happen. there are no fed speakers all week long because the blackout period ahead of next week's fed meeting. to crude oil it is lower this morning
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oil got absolutely walloped monday it reversed. crude is above $97. crude oil $130 oil stocks still ended down big. in fact, no etfs, big names, down 3% or 6% on monday. in crypto, bitcoin and ethereum higher. bitcoin at $40,500 around the world, more covid lockdown concerns in china after the central bank pledged to keep the monetary policy loose. a lot more green on the screen in london. julianna tatelbaum is in london with both. good morning, julianna >> brian, good morning here in europe, it feels we're one step behind wall street. yesterday, european markets closed before the late stage rally. european equities closed lower
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we have green an across the boa. the gains are broad based. as for asian markets, we had a rebound overnight. perhaps that positive sentiment is the reason we see the rally in european stocks let's take you to the chinese market a rally in china overnight is that the central bank will step up monetary policy support to the economy. including small companies at risk of covid impact pboc will keep liquidity ample here is the picture for you. it was a mixed trading session we have some green on the board for the hang seng up 0.3%. one banking stock in focus in the asian session and european session. the bank reporting a 27% fall in first quarter profit which came in at $4.2 billion the europe large lender maintained the outlook
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hong kong, the bank's biggest market, is a crucial factor for earnsin earnings now the uk listing is down 3.5%. brian, back over to you. >> julianna, thank you very much. now let's get to the top global story and one dominating in the conversation on wall street and here in the media that is twitter's board accepting elon musk's $44 billion buyout offer a lot of questions remain. silvana henao is here with more on what we know and the story that everybody in the media loves to talk about. the media loves to talk about nothing more than the media. >> reporter: that's right, brian. twitter's board agreeing to sell the social media company to elon musk after initially gearing up to fight the takeover attempt. the deal values twitter at $54.20 a share that is a 38% premium on the april 1st closing price which
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was the final trading day before musk disclosed a 9% stake in the company. musk says he lined up $25.5 billion from morgan stanley and other lenders and is prepared to kick in $21 billion from his pocket jack dorsey praising musk and the board for the decision in a series of tweets, twitter has always been my sole issue and biggest regret it has been owned by wall street taking it back from wall street is the correct first step. dorsey adding elon is the singular person i trust to extend the light of consciousness. others are critical. including jeff bezos posing a question over china's outside influence on tesla success and elon musk's bottom line.
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quote, did the chinese government get a bit of leverage over the town square bezos said musk is good at navigating this kind of complexity for its part, china's foreign ministry said it could not use leverage over the content on twitter. br brian, results come in this thursday >> a lot the people think the first quarter numbers could be ugly thens silvana henao, thank you. and now concerns of more covid cases in beijing and the possibility of more crippling lockdowns. people at the capital begin to hoard food we have eunice yoon with more. what is the status of the capital city right now >> reporter: brian, a pop-up
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covid center like the one behind me is on every block here in the chinese capital. this is after beijing announced expanding mass covid testing program to include 90% of the 21million population the plan is to test nearly everyone near three times by the end of the week. the authorities have said the omicron variant has been stealthily spreading for the past week in the city. they have been able to confirm 32 cases and 1 asymptomatic case from yesterday outside of one locked down area as well as a couple of closed off buildings, the city has closed non-essential venues. entertainment, theaters and sports venues and after school training most schools remain open even so, beijing is urging people not to travel over the upcoming holiday this weekend
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and take precauprecautions. state media says those are needed to make sure beijing doesn't suffer a shanghai-style lockdown the latest from shanghai, the city imposed hard isolation. that is building up fences around buildings as well as other streets that have one positive case to ensure that people do not leave those areas. there are lessons, as you imagine, learned from shanghai here in beijing. you mentioned one, brian people are preparing for a lockdown hoarding a lot of food the supermarket shelves have been empty the past several days i weren't to the supermarket in the past hour. they said the eggs sold out right when they opened the doors at 9:00 in the morning within an hour people are nervous the food supply here and medicine supply will be better than shanghai. >> eunice, i have about 100
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questions. i wish we had an hour on this story. it is a humanitarian and economic story let's think about people first a couple of things how does the testing work? if it is mandatory testing, they are tracking people. what if you don't get tested does somebody come and knock on your door? >> reporter: actually, all of that right now, it is not very clear which is adding to the fear factor because in theory, the test is compulsory people have to go. when the announcement came over the weekend, everyone thought you have to go three times this week it looks like it is going district by district and building by building it is not very clear if you hav to go and when also, there are situations where people are getting knocks on the door late at night yesterday told they have to go right away
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other people haven't been informed at all. it is not consistent >> we are trying to manage more than 20 million people in beijing. 26 million in shanghai it is happening in other mid-sized cities around china. you talked about the quote hard lockdown that's an interesting term i know there are things you cannot say, eunice if somebody puts a fence around your building and locks your door from the outside, many people in the western world call that imprisonment. >> reporter: yeah. there are people in shanghai who also used similar language to describe their situation a lot of people have been asking the question as to whether or not this is a fire hazard. there have been videos popping up online of people shouting at workers setting up the fencing from the balconies other people who have actually
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pushed back and torn dow fencing because they have been so angry at being penned in. especially because there are not that many cases in the building. even if there are cases. it is a dramatic situation in shanghai at the moment >> i know we have to go. i want our viewers to understand what's going on. eunice yoon is showing us video of fences built around apartment buildings because one person on the street tested positive eunice, i got the numbers from the china daily. a state-owned paper. they show 1,923 confirmed cases. that is basically zero if you factor the population. and then 16,000 being asymptomatic if these numbers are believed, 1 in 8 cases is actually symptomatic. d deaths are low hospitalizations are zero. is there something we are not
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being told or you are not being told about the version of covid? you called it omicron earlier. the questions i get is why are the lockdowns to tough when the numbers are good as far as outcomes is this a new variant we don't know about that is more dangerous? it doesn't appear to be. the response does not seem lined up with what we know medically >> reporter: yeah. i agree with you a lot of people asking similar questions because there is more of a fear at this point of being locked down than there is of catching the omicron variant what we are worried about here in beijing is the numbers that i had cited. the 31 cases and 1 asymptomatic case that was before the mass testing had begun.
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we're expecting that the asymptomatic cases could be higher based on the fact so many more people are now being tested so that's really going to determine just how stringent the lockdowns become over the next several days. >> it is not just there. if you test 1,000 people on the treats here in new york or new jersey randomly, you will get people that test positive that aren't aware that they have the virus. we just know that now from testing. eunice yoon, we are glad to see you outside. we hope to see you continuously outside. best to you. we love you. we're thinking about you eunice, thank you very much. think about that somebody puts up a barrier around your apartment because one person on the street tested positive asymptomatically. we have a lot to do when we come back. maybe good news and why one ceo says inflation relief could be months away.
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uhs says salaries and wages rising 13% from a year ago whirlpool is starting to see supply chain easing a bit. the ceo telling jim on "mad money" the company has been able to navigate inflation, but shortages will last through the rest of the year whirlpool shares are higher desk pi despite a first quarter miss and then neuberger berman will vote against the berkshire hathaway management. this marks the third year it is pre-announcing its votes wow. back to the broader markets and busy day including the kickoff of the results. microsoft and alphabet after the
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bell and u.p.s. and general motors today and more outlook as more growing worries as we move ahead for the year we have greg hahn with us now. greg, how closely are you watching earnings and guidance >> we are watching them close. we are actually looking at a couple of names. microsoft and google which are both in our portfolios >> what do you want to hear them say about the future valuations have come down. t have they come down enough to reduce expectation >> we will never been able to c the bottom microsoft and google both fit that factor. the answer is yes. we will continue to add to them. we have room in the portfolio to
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add to those positions brian, you can pick up microsoft at $10 a share on earnings, that's down from 32 or 33 times earnings last year we have some value there for a stock that's growing the same with google >> just because it comes down doesn't mean good value. the valuation comes down five points business is slowing more than that valuation will come back in line you still see some traps and things to be wary of out there, greg. >> there are pertraps. we are not in retail we are very, very careful in health care. we still have defense for obvious reasons. lockheed is in the portfolio in the real estate, reits, we narrowed it down for two holdings one of data storage and the
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other is multifamily we are not bredloadly invested cash is the biggest invest in the allocation. until we get through the summer, it will be a bigger part of the asset allocation >> what's wrong with cash? you are down 12 or more this year if you own cash? you are down zero, a little more with inflation, it eats the value of cash. do we need to start talking about things like tips, treasury protected securities or municipal bonds? is this where we are >> yes, in part. we are not in tips we do not think tips aren't working the way they should. they are not adjusting with the rate of inflation. return on the tips portfolio at 8.5%, tsiprips are not there.
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on the income side, municipal bonds are part of the portfolio. we are moving out the curve at 10-year corporate. you can earn 4.5%. if investors are income oriented consider shifting the portfolio and moving out the curve, you will pick up yield it is meaningful it is not like the 2.50 last year >> yeah. it feels like 4.5% go ahead >> stay away from leverage a trap with closed-end funds they use leverage. it works on the way when markets are vrallying be careful with using vehicles in portfolios that have some leverage to them right now they're going to get hurt. >> well said even if they are below the net asset value. it is below the nab. let's buy it be careful closing funds are a different
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beast or show. it feels like 4.5% is the new 20%. greg hahn, thank you very much take care. still on deck, could your company retirement plan soon be stocks, bonds, cash and bitcoin? how some of you may soon be able to add crypto to your 401(k) that and other top trending stories enwh "wex" returns we're back after this. ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
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welcome back let's step outside money and business and check out other headlines. frances rivera is in new york with those good morning, frances. >> brian, good morning russia's war on ukraine enters day 62, attacks have intensified. the british government believes 15,000 russian troops have been killed since moscow launched the invasion two months ago the u.s. will hold talks today. bipartisan group of senators will meet to talk about measures about stolen elections the measure is about changing the 1887 count act which is what president trump used to overturn the election in 2020.
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and the jazz is playing all the wrong notes during game five the mavs get the win 102-102-77 raptors clawed back. the 76ers could not respond. raptors live to play another day. winning 103-88 celtics sweep in brooklyn despite the 39 point game by kevin durant boston won 116-112 for tuesday morning, those are your headlines, brian. >> and dismal era for new york city basketball rolls on frances, thank you very much at least the nets made the playoffs ahead, if stocks volatility is not enough to make you sea sick, don't worry. we have optimism we have tom liesee's five reaso
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the other social and tech stocks and florida governor keeping his campaign against disney. suggesting he is just getting sta started. it is tuesday, april 26th. this is "worldwide exchange" here on cnbc welcome or welcome back. good tuesday morning it is 5:31 on the east coast thanks for joining us. here is how the markets and your money is looking futures are not following through the buying yesterday afternoon. we are seeing futures lower across the board not by much. dow futures off 100. nasdaq futures off .20%. that red on on the screen all comes after the monday reversal where the major averages were down much of the day before a bundle of buyers stepped in and we ended higher. a big turn around. as stocks did that, bonds good a
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bid. ten-year yields down right where they were yesterday at 2.8%. oil got levelled most of monday before plowing back up crude oil down to $97.50 stocks ended better, but still down 5% or 6% from the biggest majors it is clear there is a lot of negativity and worry in the markets right now. just wait to hear what we have in the rbi we have to balance out some of the bad with some optimism here you go. tom lee laying out a note for a possible bull case for stocks. here is tom's five-point bull case for optimism. he said number one, thursday to friday selloffs like last week, end up bouncing on tuesday tuesday turn around? may not look like it now, but it
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is early is inflation peaking you are hearing comments about that we have the pce inflation data out on friday. that will be widely watched. stock buy-back window. the companies right now, because of earnings, cannot buy back their own stock. not the organic buyer from the corporations in the market that window reopens april 29th this friday. so could corporate buybacks be that buyer that sends stocks higher the jpmorgan chase bond be team says they are near max hawkish the fifth point. faang stocks valuations have come down. maybe they get put in the value index. that is the five-point case for stocks do you agree disagree tom has been bullish for a while and has been wrong about some of
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the market calls he'll admit that he has been right on with the call on energy he is way up with the recent slides since recommending oih. five-point reason to be optimistic then you hear my rbi coming up and realize i'll take the other side now to key headlines happening now. florida governor ron desantis is suggesting he may take more action against disney. during a briefing yesterday, desantis calling the bill to dissolve the special district a first step to make sure the company does not run its own government the governor rejecting the idea that disney is on the hook for $1 billion of outstanding and president biden allowing the government to lease more than 2/3 of the 23 million acre
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petroleum reserve in alaska for drilling the white house instituting the environmental protections. the administration faced criticism from environmental groups and lawing drilling on federal land and brainard is moving closer to being the second in command. clearing a procedural vote with several republicans crossing party lines to super nomination. the chamber is on track to approve her at the end of the week congrats. to the big money mover this morning. twitter. the board accepting elon musk's offer for $44 billion or $54.20 per share of that is a roughly closing rate from april 1st before musk disclosed he bought a 9% stake in twitter
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musk lined up $25 billion from morgan stanley and others and he is kicking in 21 billion from his pocket we have senior analyst richard kramer richard, this punches greatly above its weight in our industry a media darling. it is a bull horn megaphone platform is this story getting too much attention? >> in terms of its position as a digital advertising play, absolutely if you look at the past three years, snap added $3 billion of sales and twitter added $2 billion. in that similar time frame, facebook added over $50 billion of digital ad sales. it gets a lot of attention
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one thing that was missed out in the u.s. over the weekend, ureurope pass the digital access bill. one with of the things, brian, we talked about a few weeks ago was the notion of content moderation on twitter which doesn't happen as much as it should a lot of the type of behavior that you see the mob rule on twitter is in europe going to be against the law. they have under invested in content moderation which you journalistis are on the wrong side of often. >> depends some would argue the content moderation is heavier on one side than the other. people are talking about new platforms. let's get back to the stock. we can argue that all day, richard. does the deal have any implications for thedigital ad
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businesses of amazon or google to your point are ex-ponentiall larger than twitter? >> one is there is $44 billion of equity value of twitter that will go somewhere else that would be other social media names like snap or pinterest or facebook it could go into google. it could go into smaller ad tech players. second, you have the staff at twitter who are likely to cashed out options on the deal and be picked apart by rivals which are an d aggressively hiring. twitter is not the number one platform for advertisers this opens up the budgets to go to newer platforms which could
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become competition like reddit or tiktok. >> we got a tweet from one of the private equity guys. i'm reading my computer. the hysteria around elon musk buying twitter is unsettling give him a chance to remove the bots this is a big point. if you are not on twitter, so many accounts are fake they look real sometimes, but they are bots. they can amplify voices. not just twitter does the tech world need a cleansing of these artificial, you know, manipulators for lack of a better term, that impact things >> 100%. if you compare what twitter is spending, it is a drop in the
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ocean compared to the people working on this at facebook or meta, sorry, or the tremendous engineering talent at google there is just no escaping if you want to get rid of the bots, it will cost money. if you want to open source the algorithm, it will be a free-for-all for all of the malicious actors who have been gaining that algorithm >> let's move on to earnings this is a fun fact i heard this yesterday on network called cnbc. you might have heard about them. this is the first week in a long time where apple, amazon -- cue the music. wow. earnings central richard, it shocked me this is the first week we've got all of the biggest names reporting in the same week in a long time, if not ever
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that's amazing what is the one or two key things that will stand out to you the most >> look, i think when you look at that roster of companies up there and think about what happened last week to netflix, you will see a difference between the companies that are effectively running quasi monopolies you think about netflix. they are competing against hbo and apple and amazon and disney and others for your time think about apple whose stock is relatively tremendous out performer this year. it has a coke-pepsi duopoly. it is a company with a big moat around the business. there used to be a dozen players in smart phones. now just two you see a difference with the companies that have those monopolies or duopoly
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competitions i think investors are looking at this for the companies that have the real barriers to injury around the business models >> they don't just have a moat they have a moat and castle and cross bows and dragons and alligators in the moat richard kramer, thank you very much welcome to earnings central. grab a cup of coffee find a seat. coming up, your morning rbi and why a tough month for markets may not be letting up soon scary signals coming from fund managers that's ahead. as we head to break oracle of omaha set to auction off one final lunch. raising money for charity. it takes place in june after a two-year hiatus.
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this is the last time buffett will take part in the auction. and 401(k)s may go into the 21st session a big deal for cryptocurrency. that option may come to your 401(k) later this year we're backft ts. aerhi growing up in a little red house, on the edge of a forest in norway, there were three things my family encouraged: kindness, honesty and hard work. over time, i've come to add a fourth: be curious. be curious about the world around us, and then go. go with an open heart, and you will find inspiration anew. viking. exploring the world in comfort. is it some magical number? something we just achieve at the end? or is it a feeling?
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jeff bezos weighing in on the elon musk deal to buy twitter. bezos tweeting suggesting that china may gain influence over twitter once the deal is done. did the chinese government gain leverage over the town square? bezos appearing to hint it ties the business to tesla in china 40% of american small businesses plan to raise prices by 10% going forward that according to a survey for the national federation of independent businesses apple has hired an anti-union law firm as part of the growing fight with the retail workers in atlanta. they filed for the union election the law firm is known for high-profile clients like starbucks and mcdonald's and ni nissan time now for the rbi once again, let us stay focused on stocks and money. with the monday market comeback, it has been a tough year for
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investors. april has seen nearly every part of the market drop from tech to mid-cap to small-cap and now oil and gas. all down in what is historically the best month for stocks. remember that. maybe it is because everybody was negative coming into april we referenced it yesterday we need to look closely at bank of america survey. fund manager sentiment of global growth at the all-time low financial market risks near all-time high. that biggest risk is not putin's war in ukraine that is ranked fourth now by fund managers surveyed by bank of america a global recession is the biggest risk with overly hawkish central banks a close second this could mean more tough times for stocks look at this bank of america chart. goes back to 2008.
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when investors get negative on global growth, they have a lower net allocation your a fund manager. you think things get worse around the world you own fewer assets exposed to the global economy bank of america notes if we are going into recession camp, there are two trades to consider go long bonds, but short commodities. or two, long on utilities and you shortbanks and big tech. always be careful if you are betting against something. if you are short, your losses are unlimited. things can go up forever just because the survey lines up with the with the twitter poll, it doesn't mean it will happen.
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they can turn dovish it is an election year anything is possible the gardening saying goes. april showers bring may flowers. let's see he if it is true for stocks random, but interesting. on deck, grace capital's cate faddis with the latest on banks. in six days, we have a special event coming your way. on monday, we will have live for one hour strategy session with four great guests. heads of state of hawaii and teacher retirement system of texas and chief global strategist this market, global chaos and uncertainty is the perfect time to hear from those four folks. that is at 11:30 a.m. eastern time it is monday live in los angeles.
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welcome back it is a very busy day. let's provide you with a clean menu of what is happening today. 8:30 a.m., the march durable goods numbers. economists are expecting a rebound from the 2.1% decline. later on, 9:00 a.m., new home sales index. a lunchtime treat of consumer confidence out this morning. bank of america and citigroup and wells fargo with the annual meeting today. the top issues on the table is executive pay and then with the bundle of big time earnings. let's bring in cate faddis
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cate, i don't know where to begin. i just want to give up what are you watching? >> i'm looking at the banks, brian. i'm looking at what they're saying and our companies and what they are saying about the economy. if you look at the earnings picture, it is not that bad. whether we have a recession or not, we'll find out, but the companies reporting have been beating their numbers. i'll stay optimistic >> optimistic about the banks. you know, there are the companies that have names, cate, you can't tell what they do because they're so boring. you are bringing one of them to us this may be the most generic company name i heard city holding company city holding company could do anything they could make trains, they could be a private equity firm as you call it, a very boring
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bank in west virginia, but you like it. >> i like this bank so much. you know i really love the ceo because he is super smart. my buddy turned me on to this one. there are so many things i like about this bank. first of all, the thinking among banking is bigger is better. big, big, big. mr. ceo told me you don't have to be big. if you look at this bank's stock chart. they have gone up 5x versus less they are insulated from the economy. things don't go too great and things don't go too badly. they're in west virginia, they're in kentucky, they're in virginia they are a conventional bank they stick to the knitting they have a 3% yield $1 billion market cap. this is the place you can hide
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this is a place that will not get you in trouble >> based in the wall street hotbed of charleston, west virginia at chuck yeager international airport. this is bigger out west silicon valley bank. sve. bit of a different model trying to grow a little faster are there similarities between the two? >> again, what i like about silicon volley u valley is it ie from a typical bank. you don't want to own a bank going into the recession you have bad loans you have non paypayables these guys are insulated they are in silicon valley they don't do the traditional banking. they make loans to private equity and firms when they have been funded. bridge loans primarily what they do
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they make loans for wine growers. they make loans to new startups. early stage and mid stage. they get warrants for some of the start-up loans in lieu of interest they think they loan money to hundreds of unicorns when the loans come due, 99% fail a couple that will hit, you can get $300 million in fees this bank has 45% of revenue from fees. for a typical bank, they make money on the spread business and 25% from fees. this bank is unique. it's different if you think tech is the future, which i do, this is what you have to own. >> you have to hope, cate, that some of the bets they placed payoff >> 99% go to zero. all they need are one or two or three. over the history, they make
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hundreds of millions of dollars. it is lumpy. they make a lot of money there are lots of others >> cate, you gave the dirty secret about every venture capitalist invest in 100 companies and one or two hit and they buy a $10 million home in tahoe. cate faddis, thank you very much have a terrific day. most go down one or two hit you got the boat that does it for us on "worldwide exchange. i'll see you same time tomorrow. a lot going on futures lower. oil down a touch "squawk" and the gang picking it up next. have a great day, everybody. wo , there has to be someone here making sure everything is safe. secure. consistent. so log in from here. or here. assured that someone is here ready to fix anything. anytime. anywhere. even here. that's because nobody... and i mean nobody...
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for earnings we hear from pepsi and 3m and general electric and u.p.s. and more all before the opening bell china stocks sinking again overnight as beijing begins mass covid testing to try to avon vod lockdowns like the ones in shanghai. and elon musk taking twitter private? the reaction from different sides of the aisle comments from mark cuban and jeff bezos and even donald t trump. it's tuesday, april 26th and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market sit
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