it is turning around >> farmer jim? >> jpmorgan, we talked about it earlier. i don't think it's worth 5% today than it was yesterday. so this could be an opportunity to add to it >> i'll see you on the "closing bell." everything now in the red, as we talked about a while ago by the russell. i'll see you then. "the exchange" is now. hi, everybody. i'm kelly evans. here's what's ahead today on "the exchange. powell says what happens next is data dependant but today's latest data suggests the market might be cooling. where does it all lead the financial system and your money? plus, higher rates were supposed to help the banks this year. that was the whole point about net interest margins but instead the opposite has happened

the fed's fast rate hikes are causing major losses at treasury we'll talk more about the widening fallout from that, that is crushing the financial sector and the crypto exposure causing problems plus, unique insight on labor trends recruiter.com ceo evan stone is here with the trends he's seeing and what we should expect tomorrow before all of that, let's start with the markets and dom chu has the numbers. >> solid green earlier this morning, but now solidly in the red. it's right across the board for the major indices. the dow down about 80 points similar percentage decline for the s&p 500. it's now below 4,000, 3983 the highs of the decision, we were up 25 points. so, again, modest move higher, but we were down 12 at the low so the nasdaq down about 24 points again one quarter of 1

hernhern1% you the financials, the bank stocks overall interest rates, the deeper the inversion gets, the more that the shorter term interest rates go above longer term rates, what does it do to the profit margin? and we have some headlines about a bank perhaps unwinding operations there, not in the s&p 500. if you look at the ticker here, what are the big proxies down 2.8% today that is very easily the worst performing sector of the day big banks like jpmorgan to the downside again, watch these moving averages we are just about there right now. the last time we traded below it was the beginning of the year. so watch the longer term trend lines right now especially the 200 day moving average then the stock of the day, what's happening right now, one of the banks out there that is

not tied to crypto is sbv financial, a s&p 500 bank. remember, it's not often you see them losing anything in the s&p. 46% of their value after a more disappointing earnings report after yesterday's close, and the news it will spend $1.75 billion of fresh capital, a lot in common stock, that's the worst performer today. i know that you will talk much more about this later on >> it's the fed's own fault in some ways. they're causing losses on treasuries, on mortgage backed securities we'll have a whole lot more on that two case of jay powell's testimony which brought big moves in stocks and bonds. it pushed the two-year yield to the highest level since 2007 but we're still not at peak and could go higher. we're just under the 5% mark right now. dom mentioned this, the curve

more deeply inverted and we could stay inverted through 2026 what does it mean for the markets? let's bring in allen boomer, and gila back to you both we are looking at the banking system and what's going to happen with all of these losses accumulating on treasury and mortgage holdings. i guess if it stops here, then the pain stops here. but if the hikes keep going, there will be more fallout >> in 99 out of 100 cases in the banking system, there's not going to be significant problems the reason is that banks, by and large, there will always be exceptions, are very well managed. it's been years since i was an interest manager, and i have the experience and i know the process that's been in place to understand the degree of interest rate risk taking with

the vast majority of banks -- >> but some of these regional banks were buying huge amounts of these bonds last year are you so confident that the bigger players weren't doing that, too? how do we even know where the bank's exposures might be? >> so bank interest rates management is a really complex subject. a lot of banks that lend to commercial and industrial companies tend to be asset sensitive. meaning as interest rates rise, they earn more on their traditional lending. so one thing that the banks can do is they can buy bonds between 10% to 20% of their balance sheet as a hedge >> right >> so in case interest rates fall again and they make less money, they have a place where they make more so in 99 out of 100 cases, the interest rate risk management and the nature of a bond

portfolio is an interest rate hedge to a broader bank's interest >> but you look at this, down 6%, 7% we have regional banks down 18% today after what happened at sbv. what are the steps they will have to take now, these banks facing losses. they have to raise equity, don't they and don't you think regulators will say, hey, you better make sure that you can cover -- and that doesn't even count the maturities portfolio >> both banks have a small maturity portfolio we have a great bank and research group, they are the experts on details such as that

broaden it rick, yesterday's ten-year didn't go over that well >> today was a little better than yesterday's ten-year, and there was a lot of moguls for this auction rates were falling rather precipitously the last half hour or so, especially on the longer maturities that did affect some of the concessions to this auction. it's $18 billion, the trifecta supply, which was $90 billion in threes, tens and now 30s the dutch auction yield, 3.877 when issue market was at 3.871, this auction had a higher yield, which means a lower price, so it tailed about -- not much, about a half basis point, but that takes off the grade. the grade was charlie plus, a little better than average the negative side was that pricing. if you look at the other metrics, they're in line with averages, with a couple of

notables on the direct bidders, it was a little better than the average those are mutual funds and pension funds. if you look at the dealer activity, it was under 10% all in all, it was mediocre. i think it would have gone much better if the rates were steady in the last half hour or so. you'll see the ultimate rates here take their cue from what's going on, on the short end so we're down a dozen basis points we have seen some of the inversion come out yes, we had a high of minus 110. and finally, the yield on that 30-year bond in the fall on the october 24th was 4.38. so we're trading at 3.85 you get the picture here we're well below the fall extremes that's significant when you study how the long end has a completely different view of the world than the short end back to you.

>> thank you, rick allen, i'll have you walk us off the ledge here i see jobless claims up today. we've got a full point curve inversion. we have some saying we might not even be in recession until 2025. walk us off the ledge here, allen. >> i'm on the ledge with you, guys i'm concerned about the fed being more aggressive. we came into this year with the view that if the fed were to raise interest rates, maybe 50 to 75 basis points, all will be well but it's not looking like that, right? the data are still very strong i know today's numbers, something the markets should be cheering, but i don't see the fed backing down so i'm very concerned. i'm also looking at these bond yields say thing is some competition for stocks today with yields being so high on the short end. >> so where do you think at this point -- you heard the comments,

maybe the top still isn't in place. this is from yesterday, so that was after the big move that we saw. how much higher do we go, and what is the recent action on the 10 and 30 tell you that we're starting to price in a slowdown around the corner. >> i'll take the second question first. i think the response to jay powell's fairly hawkish comments on tuesday was very telling. so short-term interest rates certainly rose but the curve inverted, which tells us the bond markets believe that the faster and further the federal reserve hikes interest rates, the worse the downturn is going to be. and the bigger and faster they'll have to cut them so the ten-year and 30-year treasury yield care more about that the two-year treasury yield -- we don't know with very much confidence how far the fed at this point is going to have to

raise or choose to raise interest rates to slow economic activity and inflation so far, inflation has been pretty unresponsive to what's happened so far. grant it, there's a lot of lags in there but thus far, the lack of response means that powell and company really have no choice but to move further, if not faster the next data point we have to care about is tomorrow's monthly payrolls report. typically, at this portion of the cycle, it's hard to predict when, but there's one monthly payroll report that is very poor a great example is november of 2007 everyone was optimistic, payroll came out negative, and treasury yields fell about 80 basis points >> and the recession began the next month allen, quick final record -- >> it happens fast >> absolutely. allen, you're looking at low valuation parts of the market, where you feel a little more comfort. walk us through your thinking

for what could be a very rocky, you know, spring/summer period here >> sure. i look at bonds again as competition with stocks today. we just talked about the 30-year treasury yield in just under 4%. what if you could buy a stock with a 4% dividend yield that trades at four or five times next year's earnings there's a lot of stocks in the emergency market that are really trading at very, very low valuations i'm not going to say 30 years, but over the next few years we'll do better with super low valuation stocks that pay good dividends. phillips 66 only paid out about 16% of its profits >> wonderful well, not wonderful. you know what i mean thank you both very much today we really appreciate it. the dow is down about 89 points tomorrow's jobs numbers holds a lot of weight for the fed's next

decision, but is powell placing too much emphasis on it. jeremy siegel seems to think so. >> it is not the job of the fed to offset a supply side shift. they control demand. so i think they're focused on just how tight the labor suddenly a maniacal type of focus is the wrong way >> moby dickesque there. is a cooling labor market on the horizon? let's ask evan stone great to have you here do you see any slowing yet what are you picking up on >> thanks for having me on your show, kelly. i completely agree, it's complicated. you look at the report that came out this morning, and there were fewer -- we went below 4 million quits in january we haven't seen below 4 million

in all of '22. year over year, that's 9% fewer quits in january of '23 than in january of '22 there is less than 1% difference between january hires of '23 than january of '22. so people are quitting, looking for different jobs but we saw recruiter sentiment was 3.1. at the end of the month, it went up to 3.2. we see applications like particular roles increasing. maybe it's increasing because there are fewer recruiters, as we talked about last month, an overwhelming percentage of the people getting laid off are recruiters themselves. really incredible, as you show on the screen, one of the things, 41% of the jobs did not

require a college degree that is huge we haven't seen over 40%, we're looking at numbers as low as 24%, and that's looking at those roles that are obviously not the college graduate roles for iq roles. >> and it's fascinating what you said, that some of the layoffs have been recruiters themselves, so what about sectors? this is the big question, everyone is wondering if this is spreading from tech to elsewhere. maybe that has to do with infrastructure just speak to the kind of spreadening of this, or the lack of spreadening, if you will. >> thanks to our parternership,w looked at layoffs, and i.t. represented 24% of those

manufacturing, 22% professional scientific services, 12%. finance, 6.7%. so you're seeing other sectors, not just i.t., getting hit by layoffs. i k-- i.t. is down by around 6% yet retail is up by 4% so really interesting to watch where the job listings are, and really trying to extrapolate all this data into what things will look like. health care is a hot sector. >> sure. if you had to guess which way is it going to go tomorrow morning, what does your instinct tell you? >> tight it's tight >> is it strong? >> i think there's increase. applications run only 10% of the recruiters are working on no new jobs

90% are working on actual new jobs open jobs in retail, health care, and obviously looking at removing the need for a college degree is making it easier for employers to make those hires, given the tightness of the labor market >> fascinating maybe we're not going to be in for that negative surprise evan, thank you for your time today. >> thank you, kelly. have a great day >> you, too. coming up, joe biden about to unveil his budget plan, setting up a bitter battle on capitol hill and most importantly, how will he address the death sbt ceiling deadline and is it time to buy ahead of results we'll ask about that and docusign ahead and let's get a look back at the markets. the dow down a third of a

percent. the worst performer is the russell 2,000 because of bank exposure jpmorgan down 5% "the exchange" is back after this

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welcome back to "the exchange." joe biden unveiling his budget today, focusing on reducing the deficit by $3 trillion over the next decade. he plans to shore up social security and medicare with tax hikes on corporations, small businesses and high earners. with a divided congress, is his proposal dead on arrival join us is libby cantrell. great to see you again, libby. please, cut through all the noise and everything and tell me what do you think investors most need to focus on here? >> the short answer is yes, this is dead on arrival president budgets are mostly a political document, not a serious policy statement and that's what this should be taken as so my of those proposals around increasing taxes on capital gains or wealthy individuals or what have you, all are dead on arrival and will go nowhere.

lots of increases very similar in many ways to his build back better agenda, spending for day care, for health care, for paid family leave again, it might sound good to voters, but they are effectively doa. >> you say there are some key points here. we've got to mention the china one. debt ceiling is top of mind for investors. we're getting into this period where we are see thing risk priced into the treasury bills any kind of insight on the approach here? anything that you can say to reassure markets >> this is an opening salvo in terms of joe biden's shot across the bow to republicans, effectively showing them that he does have a plan to reduce deficits importantly, this budget would increase deficits next year beyond what is in the baseline

after that, would decrease deficits by $3 trillion over the next ten years he's going to point to that, kelly, saying my plan decreases deficits but increases defense spending and maintains social security and medicare payments, as you mentioned at the top. and then he'll say, what is your plan that is what he is focused on. really trying to hold republican's feet to the fire. >> to be able to say i'm going to reduce the deficit and keep medicare and social security and cut deficits, call it a wish list, but there has to be a way to respond circling back around to china, you think we will have some nuggets of information how they will clarify what are you hearing about this, what else can this document do to give us clarity on the issue? i don't mean to take you off topic, libby, but the way which the relationship with china has soured over the past six weeks,

what are you hearing in washington about this? >> so i think this is important, and from an investor and market perspective, and we're talking about this to our clients a lot. this is an executive order in the works for a year plus, honestly it's gone through quite a number of iterations. the bottom line here, this is a process on outbound investment flows from the united states to china on very particular industries i think that is -- where this is it rated to, it is narrowed and looks like it a es going to start out as a disclosure program, meaning investors, semi conductors, ai, will have to go through a disclosure process that could lead to a review and prohibition at some point. so in some ways they're trying

to put some guard rails around the outbound investment in industries that are perceived to be vital to our national security we should view this as an opening, a beginning in many ways, not an ending. we saw the export controls we are now seeing this outbound investment, and we should expect more over the coming months, if not years, just depending on the trajectory of the u.s./china relationship >> we talked about this yesterday with robert frank, what we're talking about taking the top marginal rate back up to 40% for those over 400-k, increase the stock buyback fee to 4%. corporate tax rate would go to 28%. this would have a big impact if this came to fruition, perhaps with a friendlier congress >> but just to reiterate, kelly, none of those that you just

referred to are happening over the next two years i would argue, this is really important, that just looking at the united congress that we saw, we also didn't see these significant tax increases. so this is where the rhetoric is quite different from the reality. increasing taxes on people is politically difficult, and we should sort of go with that assumption even if we saw a democratically controlled congress in 2025, still very difficult to do all these things easy to talk about but, again, difficult to get the votes. >> libby, thank you so much. coming up, silver gate's collapse dragging down shares of this bank. as we head to break, here is a look at the sectors. you can see what's playing out today.

on the bottom right, you will see the financial sector, down 3%, including the large caps the smaller players down 6% to 7% we have three sectors in the green. utilities, staples, health care. ckft ts. - in the last two years, we quadrupled our team and the pace we're growing, i couldn't keep up without ziprecruiter. they do the legwork and they get my job posting in front of the right candidates. i love invite to apply. i instantly see great candidates and i can invite them to apply. we have hired across all departments, engineering, marketing, hardware, field techs. you can basically tell ziprecruiter who you need, when you need it, and they deliver. - [narrator] ziprecruiter. rated the number one hiring site. try it for free at ziprecruiter.com try it for free at ziprecruiter.com the first time your sales reached 100k

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welcome back, everybody. we're sitting at new session lows the dow down 180 points, nasdaq three quarterse percent we want to mention some of the other movers ge is leading the way today. after reaffirming their guidance for 2023, the ceo expects to

double earnings this year. this stock is at the highest levels going all the way back to about 2018 etsy moving from buy to underperformer they slashed their price to 85 from 150 it just fell below its 200 moving day average for the first time since november, as well and speaking of 200 days, this is about to breach this, as well we like to watch these for long-term inflection points. and jd.com down today. the ceo said rebuilding the chinese consumer confidence will take some time to make a full recovery shares down 25% to start the year lowest level since november. eli lily, still higher the company has two other

treatments that are in late-state trials. stock is down 13% to start the year, having the worst quarter since 2019 today, a high of relief, up 1.5% and a news alert on jpmorgan amonld, what's happening >> learning more now about why the u.s. virgin islands want information about jpmorgan's ceo jamie dimon in its lawsuit over jpmorgan's relationship with jeffrey epstein. a judge has granted a motion to compel jpmorgan to produce jamie dimon documents. here's where they want those documents in the first place in the filings, they say that jamie dimon is a key player who likely knows where jpmorgan kept doing business with epstein and knows why, even after they kicked him out of the bank in 2013, they continued to have a business development relationship with epstein from 2013 to as late as his death,

apparently by "suicide" in 2019. they say jamie dimon has decision making authority over epstein accounts and was in discussions involving the referrals of prominent and high-wealth potential clients. the document refers to three court exhibits establishing evidence of such referrals of prominent people, but those are redacted from the public word. so we don't know who epstein referred to jpmorgan as clients. but the usvi believes that his evidence is crucial here >> and face nating to see the bank concerned it may have to be on the hook for something, and trying to help cover that. >> that was the big news yesterday. the banks saying we're filing a lawsuit against our own former executive saying we don't agree we did anything wrong or that we have liability

but if a court finds we do, we'll get that money from jess staley who headed up the asset management division who worked there from 1979 to 2013, saying we'll get him on the hook to pay any damages we have to pay in this case, because he was a rogue employee and did this without our knowledge. the essence of the debate now about these jamie dimon documents and information is whether or not that's true did other people inside jpmorgan have the knowledge of the epstein situation and make decisions outside of jeff staly who had a deep, personal relationship with jeffrey epstein, traveled to his private islands, exchanged emails with jeffrey epstein about young women, according to one of the filings today. apparently, witnessed jeffrey epstein with young women you know, the allegations here go on and on but the question is, who else

knew about this, when did they know and what did they know? >> okay, thank you coming up, with three names reporting earnings today, we'll tell you which one dow is down 200 points "the exchange" is back after "the exchange" is back after this lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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welcome back, everybody. earning season might be winding down, but we have some key names on tap we have the ction, the story, and the trade right now. we'll start with ulta. it's up 13% this year, trading near all-time highs. unbelievable the way this juggernaut keeps going any guidance on proposal activity, you name it. steve grasso is here with our trades today steve, it's wonderful to see you. you know, ulta, i used to feel this by about chipotle this one -- lulu legamon, by th way, had a horrible quarter. >> i'm glad you led that way, because the first thing that comes to mind is, there are certain stocks so bad they're

good, and certain stocks that are so good, could they be great going forward? ulta is in the latter. do we think -- they're right now on the precipice of having -- or they're on a seven quarter streak of better earnings and revenue, kelly so does it stand to reason that maybe you should see a little bit of flattening out on the stock chart? and maybe on the earnings? >> so you're not a buyer >> yeah. so this one would be -- i always liked to classify it as buy, sell, hold my grand father used to say if i can't describe or explain it to people in 15 seconds, i probably don't understand it myself so this one is probably a hold for me the reason why i gave you is, above all, it's moving averages. it looks -- it looks like it's climbing some sort of mt. everest here how long can things do that?

stocks don't grow to the sky dot, dot, dot, any more. so you would think there has to be some leveling off let's hold it and see how it reacts to earnings >> we have the 50 and 200 day lines on the charts and now i see what you're pointing out let's turn to gap, much more challenged story expected to report a loss today, dealing with management turnover, inventory bloat, falling comps and 16% short interest what do you do here? >> yeah. so this one is also a wait this is going to trade like a biotech stock, kelly you have to see how they deal with inventories i think this one -- i don't know if i would classify it as so bad it's good. but the bar is really low that they could probably crawl over it look at what they are selling.

the athletic brand and people are tired of being stuck at home, they want to go out and buy different things, going on vacation. it's a little more formal. i bought a couple of blazers in the last month i didn't buy it from gap stores, but this is something where -- >> my producer said, why aren't you wearing them [ laughter ] >> that's my formal wear for the evening. i can't wear it so close to high noon if the sun is glaring in my face, i can't be wearing a blazer they're doing all the right things think about the catch phrases. job cuts, hiring freeze, spending pause >> yeah. >> all of those statements have been greeted by buyers in the market let's see how far along they are in the process of so bad it's good after we see earnings >> they just need to do a meta let's turn then to docusign.

we'll pivot away from retail docusign such a tough tech stop, up 20% this year after a dismal couple of years. a 13% move up or down, watching guidance for revenue growth, cost management. would you sign up for this one >> yeah. i think this was the ultimate pandemic stock it should be the ultimate post pandemic stock, as well. obviously, with rates increasing, you're paying for those future earnings. the multiple is obviously decreased. but this one has been a declining trend line since september 2021 it broke that in september of 2022 it also, for point of reference, had a huge gap lower december 2021, if you go back that far, that was on earnings now it's climbing that wall of worry, it's climbing rates moving higher. if they can right-side the ship, they have already had job cuts

or job cuts in september they announced the second round in february. so i think they're getting to the point where they can hurdle whatever their guidance is roughly eps and revenues, i think they're looking for, you know, up 10% or thereabouts. maybe just a shade lighter one last thing, kelly, a stock like this is about faced on expectations, the chart tells me it wants to move higher. >> steve grasso, thank you so much great to see you that does it for this edition of "earnings exchange. still ahead, uber reportedly weighs spinning off part of its business we have the details next and don't miss the newest show "last call with brian sullivan." great show last night. weeknights 7:00 p.m. eastern we'll be right back after this

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welcome back, everybody. time for today's tech check. uber is looking to spin off one of its businesses. the whole point of this spinoff is to get your stock up. let's get out to diedra for the latest on this one >> the talks may be extremely early, and the other point, they may not get that much for it uber potentially looking atdy vo vesting its business something that has been a corner stone here up for consideration, a spinoff or sale, uber freight was created in 2017 bolstered by an acquisition in 2021. this unit is all about logistics, connecting truckers with shippers, acting as a middleman in the long-haul trucking sector, which has been

under pressure the last few years. so now uber looking to monetize that investment as it refocuses on its core businesses of ride hailing and food delivery. i hear this is a long shot in the current environment. it tells the story of tech over the last few years in 2017, uber was synonymous with disruption, selling its vision of being the future of moving things, of people, cars, food, bicycles, helicopters, even self-driving cars now, however, investors want cash flow, margin, cost cuts, not those moon shots and the ceo is a lot more tuned into that wall street sentiment that the former ceo and founder, he was all about disruption and moon shots he was one of the first leaders within tech to see this shift coming months before other ceos found their religion the said the market is experiencing a seismic shift and we need to react accordingly

that said, uber is still deeply, deeply unprofitable on a gap basis. selling or spinning off freight, kelly, that would help pay down some $12 billion in debt and stem losses that freight is contributing to the bottom line, because even on that unit of economics that adjusted basis, that unit is still losing money. >> obviously, if you run uber, you're looking around at zuckerberg's efficiency, what musk is doing, you're getting the memo here. so the markets want them to go further. does that mean raising prices or are they just going to try to wait it out for a softer labor market they are seeing more drivers come into their labor force, and it was maybe inflation driven but if that helps bring the cost down >> in terms of that supply and getting drivers back to the app, uber has had success they saw that coming, versus say a lyft which was shocking.

some call it the worst earnings call they heard of it caught them by surprise so uber has achieved better efficiency this those unit economics. but quite frankly, there's not a lot left to spin off it's self-driving car units, scooters and e-bikes so straight is one of those things that is left. but i'm looking at a note here from the street, bank of america thinks it could tell at one times revenue, implying a value of less than $8 billion. they have taken investment in this unit, so unsure how much they would get for it, especially in this market environment, especially with the trucking backdrop. >> deadra, thank you appreciate it very much. still ahead, a lot of carnage in the financial sector. including this stock having its worst week in two years. my next guest is saying it's a buy. he tells us why, next.

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banks are the big story today. the broad xlf tracking for the worst week of the year so far, down 3.5%. the regional bank etf down almost 8% and hitting new multi-year lows. two stocks in it are making news for two different reasons but both highlighting concerns about the banking system silicon valley bank down more than 50% now on its $1.75 billion share sale according to the "wall street journal," it faced losses on mortgages and treasury securities this is not crypto related this is losses because of the fed's rate hike. it triggers their sale and it's not the only name under pressure for that today first republic bank down about 16%. separately, crypto exposure is weighing on signature bank it's down 10% and on track for its worst week since april 2020. my next guest has a take on

stocks let's bring in jarrad shaw, he joins us now it is good to see you. welcome, and thank you for joining me today >> thanks for having me. >> how big are these -- your colleague mike mayo wrote banks are getting powelled, in other words, that the fed's own rate hikes are leading to these mega losses was silicone valley bank the worst or the tip of the iceberg. >> that's indecorative of the pressure a lot of these banks are feeling after chairman powell spoke over the last few days and the expectation for the short end staying higher for longer, i think really triggered the move that we saw at silicon valley where they realized the losses on a portion of their securities and then announced a subsequent equity raise from that there are liquidity concerns on the parts of investors as deposits continue to see higher costs and deposit outflows is

putting pressure on the banks to make sure they have enough liquidity on the asset side to fund that or to reinvest at higher rates so it's a little bit of a spiral right now. >> this might be a dumb question, but why did they buy so mortgages and bonds last year >> in 2021, they were seeing a lot of inflows from their clients. their depaositors are the beneficiaries of massive amounts of investment on the parts of investment capital and private equity so silicon valley had to do something with those funds. in 2021, they started to invest in treasuries, in hindsight, really at the worst possible time and they had a chunk or they have a chunk of securities that were yielding about 1.7% with a five-year plus duration. that's putting pressure on the earnings stream. >> so were they a unique and extreme case because of that tech effect that caused that ballooning effect you're talking about and then they bought things at the highs? or are other banks across the

banking system in the same situation, because plentsy of people will go it doesn't take a genius to say if you own treasuries and mortgage backed securities and the fed jacks rates up, of course you're facing losses. >> i think what's been especially difficult for silicon valley is they're a depositor base not able to raise money from venture capital we have seen it dry up there the cash fund rate among those clients is significantly higher than other banks they're seeing more pressure on the liability side to cover those. all of the banks are in a similar position in terms of having securities at lower yields, but they're not facing the same level of pressure on funding. i would say that silicon valley has a lot of options there's a lot of levers for them to pull before they have to worry about the securities valuation. they have the opportunity to borrow against those securities from the fhlb. they have off balance sheet client funds so a lot of the excess fund that came in, they rolled off so they can bring

them back on for silicon valley, for me it's more of an earnings pressure but the market is looking at it like a capital issue >> let me ask what i oswas going to talk to you about with the crypto issues. it seems these portfolio problems are broader and more worrisome than crypto in some ways we saw how quickly silver gate, what happened there. why do you think signature bank might actually benefit from their demise, very quickly >> silver bank was a monoline bank they were tied to crypto signature has a component of their business tied to crypto, only on the deposits, and they have self-limited themselves saying they'll have no more than 15% of their deposits in crypto. so with silver gate now out of the picture, that gives them more leverage and more pricing power, so for all these entities, institutional entities that are still involved in crypto, they need to do something, signature is really

one of the only games in town now. that gives them more pricing power. >> are today's declines overdone or not >> for sure, for both companies i would be a buyer here. there's a lot of opportunity, capital and credit still pretty strong >> jarrad shaw, thank you very much today we really appreciate it, with wells fargo. >> coming up, "power lunch." there's tyler getting ready. president biden speaking on his budget we'll bring it to you live when it begins. don't go anywhere. seriously we d a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

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