valley bank until we get that news lots of worries and questions about that bank. >> you've got that weighing on equities, weighing on yields this morning across the board. right now, you'll see, down by about five points. s&p, up by nine, the nasdaq up by 61. this is what they're going to be talking about on "squawk on the street" and the rest of the day today. have a great weekend, everybody. we will see you back here on monday ♪ good morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer at post nine of the new york stock exchange we're going to hear from david fab ner just a moment. futures fairly steady. really only two big stories today, svb and of course february jobs, 311,000 with some relief in hourly earnings, workweek and labor force, some of the benchmark yields near a six-week low today we're going to begin with svb shares halted as we mentioned a

few moments ago, jim you were talking to andrew, you would rather wait than surmise what the news is >> who wants to be a part of the story? that's just a bad call what i do know is this it's big enough to change the narrative, because we found out both sides were bad. we found out if you went against securities that are not public yet, that's terrible and then you got to put more collateral the first is really generous silicon valley is the only one that did that kind of stuff. jpmorgan would never touch it. the second is difficult. if there's duration risk, meaning the sensitivity to what the fed does is a little bit greater than we thought, then the fed can't move with the alacrity and that's why i'm saying that barring some bad read of the numbers this morning, fed goes 25 >> 25 over 50? >> yeah. >> david faber off today, but as is common, david, calling in with news, especially with the

story we're watching today good morning >> good morning, guys. yeah, it's a typical day off, we're going get news we're keeping a close eye on silicon valley bank. a few things to share here at this point as the market already seems to be well aware, though, i don't believe the company has formally announced, and that might be why it is a halted, news pending that capital raise that goldman-sachs embarked on is a fail it's not going to happen there are plenty of reasons people can point to for why. they certainly didn't seem to time it particularly well in terms of crystallizing a loss. and then going out to the market as opposed to actually having the capital raised when they knew they were going to take that loss in that portfolio. but beyond that, i can also tell you that separately, the bank, silicon valley bank, has hired advisors, not goldman-sachs, has hired advisors to seek a sale. again, not unexpected. you would expect, given the inability to raise capital and the fact that the deposits are

fleeing this thing at an incredibly rapid rate, that they then would go to say, okay, can we get sold? i am told there are large financial institutions who have looked at this bank for some time who are at least considering taking a look. does it mean that anything will happen absolutely not in a situation like this, as you guys can well remember from the financial crisis, deposits can move very, very quickly, so by the end of the day, who knows where things stand but i can tell you that there is a separate advisor from goldman that has been brought in that is taking inquiries, that is reaching out got large financial institutions taking a look at silicon valley and you were just discussing, it is a franchise that is somewhat unique in negatives, perhaps, in some way, but also in positives, its connection to high net worth, the vc community. this is something that a number of banks have looked at at the in the past. if you could get in there quickly, stem the outflow of

deposits, you might actually be able to pick something up of great value. so, that's at least what i'm hearing right now. and as we all know, this is a very dynamic situation >> absolutely, david this is a formerly pristine enterprise in the sense that what they did was they had so much of whatever came public that they would be the envy of most banks, but david, you know, the window being closed for ipos is what's causing these guys to have a lot of pain, not recklessness i also didn't think they were that reckless in the way they invested, but because of the duration risk, and the fed's moving with such alacrity, that backfired, so this is not a reckless bank, david jpmorgan would never lend against those securities >> right i mean, no listen, you have all these venture capital companies, start-ups, whatever you want to call them, that had an expectation of going public at

some point that now are drawing down on the very deposits in terms of what they had at the bank, so you would that going on, and as you say, during the period of '20 and '21 that we know well, there was so much incoming that they had to go out, but they couldn't lend against it, so they went and bought bonds and yields that are far lower than we have now this was not necessarily bad actors it was just bad timing to a certain extent >> yes >> but i also do wonder, jim, you know, i can take you back to your goldman days, but what happened here? i mean, there's a way to do this there's a way to crystallize a loss they didn't need to announce it when they did. they could have set up the capital raise so that they could put a press release out that says, all right, we sold this bond portfolio of $21 billion. we're still 300 basis point above our minimum regulatory reserve cap of a reserves, excuse me, and we've raised another $2 billion just to be safe, and i think the market

would have been fine they really screwed it up in terms of how they went about announcing this. >> i agree they totally did when you think about it, how many times did powell say, longer, higher so, david, i mean, this whole period, what they should have been doing is try to figure out, how do they get out of a three-year piece of paper and doing itat the same time as saying, listen, we're not selling even the worst corporates we're selling some of the greatest treasuries. so, i agree with you i don't understand why the -- did a bank examiner come in and say, we don't like the way this looks? >> i don't know. but i mean, you know, if you're going to take a $1.8 billion loss but still be well above your minimums, in terms of your reserves, i don't understand you could have sold stock below book i don't know it just -- it didn't go well for them, and now they find themselves in this terrible position you tell me, jim i mean, you know the story how many deposits are going to

get pulled today what's this thing going to look like at the end of the day >> you have a lot. anything over 250. but david, they had bill ford. they had g.a. for 500. >> yes >> why didn't they have two or three other bill fords >> i know. they did, but they produciced io high and gave it too long. they could have set it up for when they were ready to announce the loss on the bond portfolio it should have all been one thing. that said, jim, what do you see as the -- there's no systemic risk here from this thing. they're obviously a number of other banks that we know traded down significantly yesterday, some that will today, but what do you see in terms of reverberations, given there was a unique franchise here that's not necessarily rep lilicated by many others? >> most do not have both sides' problems most do not have situations where you lend against

securities that may never be securities that was an aggressive stature they always had. no bank, i think, of any size wanted to do that kind of concentration. maybe they have some i haven't found many the other side, the duration risk, that's real, but the way to solve the duration risk is for jay powell to say, listen, we've got to go a little slower, and we have the leeway because the wages haven't gotten that much hotter. the duration risk is a real worry for the regional banks because they all -- they're all caught by how fast the fed moved. >> right and so, we should just point out, on paper, many of them have losses on their bond portfolios that are obviously -- that's the key here most of them are not going to have a run on their deposits they can just hold the things for the duration and it's just a paper loss >> i would go so far as to say, other than rumors of schwab -- i hate to say rumors -- none of these banks will have that risk. why would you pull from comerica >> only if you could get a

higher rate. people are pulling to get higher rates. >> the fed really controls that too. they all know -- they know what the cd rates are they know everything there's warehouse funding lines. i feel like we got to separate the two, but there is commercial real estate risk, david. and that's work-from-home, and there is bond portfolio risk but only if you force them so, i think that this is just enough to keep the fed from moving aggressively, which we like, and not so bad as to bring the system down. >> it will be a much different picture if some of the internals on this print of nfp had gone the other way, yes >> yes other than travel and leisure, which we know they have not hired as many people as 2019, you really don't have anything that's that high notice, by the way, transportation, warehouse, down. that's tech again. >> it was info tech and warehousing. >> dave, we have, as i have been saying from the beginning, the

weakness in this economy is tech it just turns out to be far bigger than those that came on air and said this wasn't important. >> this is, as you say, somewhat unique situation, although one that was not unaware the market was not unaware of this, jim. we knew they had an embedded loss in their bond portfolio for quite some time. it wasn't part of their earnings because there wasn't an expectation they would need to sell those bonds >> there's $600 billion, maybe more now, that banks are under water, but an under water treasury portfolio is different from an under water cal-fed portfolio. some of the banks we're talking about now, i have to be careful. it's easy to create a run on th banks. some people on twitter seem to be destined to create a run on the bank and that's not our job. you have to recognize what you said, which is that, where was svb, a very good bank, five days ago? >> yeah. >> why did they -- it didn't have to happen this way.

>> no. no i think -- i don't think it did. many market participants are saying the same. they scratched their heads in terms of at least why they did what they did the way they did it knowing what they did. if that makes any sense. >> you know, they have a lot of enterprise software companies having come public, dave how are those doing? >> yeah. that will be helpful at some point, maybe, jim. >> yeah. but you know what i would do, carl if i had to spend -- what would you think if i took a day off, it was my birthday, and i called in >> it's like doing a long workout at the gym on your birthday >> by the way, from california so, i was up at 4:00 in the morning. >> and he got up at 6:00 a.m >> just perfect. >> well, jim, to your larger point, i mean, the phrase of the morning is highly idiosyncratic. i think that's how morgan stanley referred to the bank >> banks trade in an etf, because we created a world where

we tdecided, forget about individual banks, let's do etf i hate that stuff, but boy, the money was so good. the promoters who did those things i know they couldn't resist, but the fact is, if you think all banks are created equal, take a look at some of the research this morning, say, from morgan stanley. the banks have all dicfferent portfolios, but the vast majority don't have the commercial real estate risk that i was worried about. that's s.o. green, boston properties >> we talked about it yesterday. >> yeah. so, i don't mind that. but look, schwab needs to say something. td needs to say something because there is a big block of stock for sale we would love to know whether -- what the policies are -- like, for instance, let's say jpmorgan, like jamie dimon i don't think he would even touch lending against securities that are not public. i think he would say, that's crypto in my world >> it's funny, because the title of denny's record today

is, "jamie's hurricane." >> jay mie has an umbrella. >> what he's referring to is the larger hurricane that jamie dimon said was possible in the banking system >> jamie just -- i interviewed jamie recently i think he regrets "hurricane. i think he was saying, if you go to 6%, i think that the likelihood it goes to 6% is less as of this very moment david, here's what i want to know without a guarantee of some loans, which did not happen in 2008, why would anyone want that portfolio that sivb has right now? >> well, you know, i think if you can stem the deposit outflow completely or very quickly, there is a connection to this community that is somewhat unique, jim, that gives you real access to high net worth individuals that other banks would want i mean, it is my understanding that -- >> well, that's true >> -- a number of these banks have taken a look at svb for that very reason that would be the reason you do it, but to your point, i mean, i

would -- you got to move incredibly fast, and you've got to be confident that you can just take control and everything stops. >> david's right if you've been -- you know, david, there's a lot of guys who said, boy, we really did badly in enterprise software last time the window was open. this is our way, boom, we can take them all. it's just that my problem is that a lot of those companies are not going to come public >> right bill ackman would say it's a long-term bridge to economic growth, right? in his call for essentially a floating of a government bailout. >> i don't like the word, "bailout," because that implies that there are no dpgas out there, that it's just a big fiasco, versus what david is saying, which it is a franchise. but david, you know you got to go in and look at the books and say, okay, this is a recent vc okay this is sequoia. that takes a little time you can't do it this weekend >> i know, but jim, as you know,

in these things, time is of the essence, and of course the government's also -- listen, i don't know who's in there or not at this point. that's speculation i can only tell you they're at least talking to large financial institutions about trying to sell themselves, but you got to assume the government is in there as well to make sure no deposits are going to get lost i don't know whether this thing opens again or not who knows. >> you take a very fine institution like first republic. you would say, well, hold on how could it be idiosyncratic when you have frc down really badly? it's a san francisco bank. again, collateral damage makes it so that if you're jay powell, you have to say to yourself, you know what? maybe 25 we caused a lot of these problems by moving so quickly. we're not getting a spike in wages, so why don't we just go back to the 25 thing now, does it mean he wishes he hadn't said what he had? did he know about silvergate >> he said the totality of the data >> he went totality, but if

totality includes the joke that is silvergate and the nonjoke that is silicon valley bank, i call them a joke because, to be seized this early in the cycle, it's pretty early. >> they didn't read the room >> they're penn square sivb may be continental. >> david, we appreciate it as always stay by the phone. >> okay, guys. have a great rest of the day see you monday >> happy birthday, buddy >> yes and happy birthday >> thank you >> david faber calling on vacation out west. by the way, as we mentioned the february jobs number was 311 that was above expectations, but negative revisions on the prior two months january's 517 goes back to 504 the real headline is labor force, three-year high, basically back to pre-pandemic, and the weakest month-on-month earnings print in terms of wages in almost a year >> again, like you said, totality does jay powell want to say, you know what, i've looked into silicon valley bank and i'm just

going to go 25 no but you look at this and say, maybe it's starting to go in the right direction. we only need to go 25. january was a red-hot month. february is a cooling month. the retailers that i talk to indicate that march, eh. we only thad ten days, but the end of february was weak the beginning was strong when we look at the second half of february, there may be a little deceleration, because i see it with all the companies i deal with. >> two-year this morning, 4.72%. this was 5.08% two days ago. >> that's people going back and saying, i'm going to do okay in the ten. i think that the two-year is saying, 25 once it sees cpi but you know, when you deal with, say, walmart and target, none of them are crazy about how the last half of february was. there are -- it is a bit of a

tale of two cities between months only if you look at what was up at the bank of america survey of spend, it's travel and leisure >> yep >> and that is -- remember what that is. that's too much money, too little time. >> yeah. and then not enough places for it to go life is short. that's your thesis >> that's the life is short. when you deal with retail, even ulta, which is one of my favorite, i didn't like their forecast i thought the forecast was a little too conservative. when you look at gap, no brand equity i read that and think, thank heavens they have a billion dollars in cash. i say that because that's the retail that's reported last, and i hated what they had to say really i mean, it's okay. i just hated it. but bonds are saying that february's weaker. and that's what the fed wants. does the fed say, you know what, let's jackboot it and find out whether first republic can handle it?

let's crush and see how schwab feels? no why? >> cpi is going to be a tug of war. we talked about goldman's above consensus call yesterday morgan stanley comes in a shade below and says they're holding their breath >> i know that professor segal was saying housing has been down the benchline is 2019. housing is still too strong. auto, very strong. don't want them strong used car, very strong. apparel, not as weak you don't have great ones in cpi. there is a bounceback, but it's only a bounceback because in this housing issue, that just has to do with mortgage rates, and mortgage rates are going to be down again. >> right yeah, that's going to be an interesting question on the second round, are buyers going to get interested again? any they are spring and there are not enough homes, and we haven't been able to convert tier two and tier three. but by the way, i have to hand it to the mayor of new york.

they're trying to accelerate these dead buildings, and that's what's needed. >> they're on the case at least. they're talking 800,000 units long-term. >> i think that the mayor demonstrated a level of vision about what has to happen that really does -- that makes it so that -- i don't want to mention which reets have bad commercial, but they could have very good residential, which is bad commercial >> we're going to stay on top of the fallout. we're thankful for david and his reporting. we'll see what happens when that gets lifted on news, if that happens today or in the near future futures, all over the place, pretty much in a 150-point range on the dow >> very exciting >> we mentioned yields coming n-aroteir highs in recent days teye g below 3.8%. more "squawk on the street" continues in just a moment don't go anywhere. e is a goat h! whaaa!

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all attention on the laggard list is going to turn to the banks. you'll see first republic. zions is in there as well. other names down 3 to 4% oracle, we'll get to on some of these other earnings like ulta and gps and doc. opening bell coming up in about six minutes. listen and floth"sawonolw e quk the street: opening bell" podcast.

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your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire we have a lot of business, a lot of new a.i. companies coming to oracle because we're the only ones that can run their workplace, and by the way, we are cheaper -- so, we're faster and we're cheaper. >> let's get cramer's "mad dash"

on oracle. >> don't look at the stock for a second look at the conference call. listen to larry, who is much more outspoken, larry ellison. listen to katz, whom i think is fabulous what you hear is a company that bought cerna, which was an okay medical records business, that is taking the industry by storm, winning big logos. i think we're going to start -- winning from epic, which is the king larry, we didn't have the stock, they had it on the 5:00 a.m., md anderson, they're lowering, people have to come back to the hospital which is very good against medicare the cloud stuff is very positive they bought back a lot of stock. it's very cheap. they're working with jensen. oracle was mentioned with nvidia i like the call so much, and so if the stock is down four, logical place to go. >> really? >> yes >> pretty much, cloud revenue, 48 fx neutral 25% div hike.

>> that's one of the top ten div hikes this year. bought back a lot of stock ellison is usually not so vocal, but he was talking about how great the deal was big gross margin at is this medical records company. this is one of the best quarters, and what it says to me is sometimes when you're really in a jam, larry's the guy to go to they know what they're doing >> yes does it still, though, have the sort of dark horse character that it had last fall? people sort of had counted it out. >> it didn't until i heard that nvidia said they're one of ours. nvidia shocked me when they said, listen, working with oracle, and then when larry said, listen, yeah, we talked to jensen jensen, being da vinci here, you want the glow of nvidia. it means that you really are in a.i. it means that you really are thinking -- i mean, larry had this great side about how kids are using, you know, a.i. to be able to, like, write papers, but they're using it to get people

out of the hospital faster this was a tour de force master class conference call and the stock was down four before they even started no no that's a buy >> obviously, being painted with a broad brush today because of the tape you're really interested in some of these west coast banks that don't share every characteristic with svb, right? >> yeah, first republic is really, really good bank i mean, you know, i always wanted to be a customer of first republic it means that you have made it, and the idea that they are somehow looking like silicon valley -- look, silicon valley, they bought moffet they just got sterling audi. they are an outstanding research bank they are outstanding when it comes to ipos. first republic is outstanding when you're rich it's good to be rich >> and as for some of the others we mentioned, zion

>> you know, zion, in 1990, i was worried about zion i was. but until today, it was, like, bob marley and a basketball player now it's back to being 1990. >> people are definitely looking back thinking about old times today let get the opening bell here, and the cnbc realtime exchange at the big board is bmo. at the nasdaq, american lithium co corp. we should mention gold if powell really is constrained because of event risk and inflation doesn't let up, then what >> that's no go. >> yeah. >> that's the nightmare bear scenario, and look, i look at the banks today, i look at signature, first republic. people are not saying it stops

at sivb. that cuts against the fed doing more, but it's funny you know what we should be talking about here why aren't we talk about eli lilly and procter & gamble and things like colgate. those are the wins you should be thinking about non-blast-zone consumer product companies that are doing very well if you feel that there could be a recession or you should go back to -- here's an odd one i saw a dramatic price target increase today for general electric, jpmorgan >> yeah. >> what the heck okay, that's because steve -- i love steve, but i'm just saying that some people are going to try to call a bottom in banks. my experience is this is when you go to quality nonbank stocks, being brought down by a contagion of a small bank that no one even knew except for, you know, michael nathanson. >> it is the 16th largest u.s. bank, is it not? >> it's absolutely major, which is why i want to go to procter

i'm just saying, i don't want to buy first republic without knowing more, but i do want to buy a soft goods company that is -- that did very well where the costs are coming down, but they haven't cut price >> right >> i just want to be away from the blast zone- >> you barbell, like, staples and cyclicals and keep cat >> i want to -- okay, so, the cat downgrade is focused on -- they do a lot of oil mining can't ramp. my contact at the company have always said the same thing 2024 is the year that the federal government is going to -- is going to make it so that every single -- anything cat makes is a buy that's not in the numbers yet because it hasn't been -- the money hasn't gone to jacobs yet. that money then goes to cat. you sell the now because oil is at $77 people want to downgrade cat, and i got to tell you, that's the wrong downgrade. appleby had managed this thing

dover, cummins, but don't go against cat here it's not the old cat management. >> ubs goes to sell, by the way. >> they're going to look bad >> cat's worst-performing down name this morning. baird cut to neutral last month. >> i have trouble. look at those. i have trouble with 3m i have happen to have -- i had clean harbors on tonight they know pfas is a nightmare but it's not a bad time to buy traditional blue chips if you can find them. but also, why don't we just talk for a second about blue chip technology stocks? has zuckerberg made a mistake lately he's frighteningly on his game, isn't he >> yes well, the tiktok story is gathering speed. they hired a big d.c. lobbying firm >> tiktok did? >> skdk. >> well, they've got -- they've got their work cut out for them.

>> yeah. and now reports today that actually a company spokesperson saying they're considering a decentralized social network that would exchange basically a twitter competitor >> they should move out of twitter and thailand, which they can't, because they're chinese >> watching svb. we talked to faber at the top of the hour, who's back david, is there more >> yeah, guys, thanks. you know, i just wanted to come back because obviously we did share with our viewers the headlines that we had in terms of potential for the company selling itself or trying to. but as we pointed out at the time, these things can move so quickly, and i just wanted to share that what i'm hearing is that, in fact, they are moving very quickly in terms of deposits moving out, making it very or more difficult for any buyers to really assess and consider a purchase of the bank. perhaps a bit too early to say, but nonetheless, it would already appear that those attempts to potentially sell this company, and, again, there were a lot of interested buyers

based on the franchise, but the attempts to potentially sell it certainly seem to be running into the reality of the moment, which is, it's hard to buy something when all the deposits are fleeing. you know, again, we have to -- i think the market has to prepare and are the possibility that there will not be a sale, and then you can leave it to your own imagination as to what that means. we have to assume the government regulators are already in there as well. so, it continues to develop, but you know, we certainly share the news as we get it. andthere's no doubt that it's factual that there were buyers that were looking and being talked to, but nonetheless, jim, as you well know, these situations move perhaps too quickly for any buyer to really be able to get something done in the time you need to >> right you look at, like, let's say, jpmorgan they could buy anybody that's how strong their balance sheet is

they don't like this kind of lending. they don't like the lending in stuff that may be chimerical they would never do it goldman, no. i mean, go down the list bank of america's such a conservative bank. so, look what people are buying today. numont, because of gold. you can buy it if you want to. i'd rather just go buy the yellow stuff eli lilly. that makes sense no balance sheet risk. mcdonald's makes sense, no balance sheet risk constellation energy makes sense, utility american tower makes sense, real estate investment trust. marathon, numbers too low. campbell's soup, numbers too low, great quarter electronic arts, please. but it's a good list of what i'm saying you should buy. that's what's rallying right now, and then if you really look -- you really want to stick your headed in lion's den, just go buy jpmorgan. i've never liked the lion's den. >> everybody's now scouring the assets, all of these regional

banks, many banks, just looking for duration risk. even though, frankly, you need to have deposit outflow to actually bring that into play in terms of crystallizing losses, which is still unlikely to happen, but nonetheless, you're going to see a lot of weakness in any of the banz that have some relation tosvb in the sense of that duration risk was really at the heart of the problem they're having >> yeah, there's $700 billion in treasuries that are called into question what's interesting is, if you want to solve duration risk, you let these -- you hope that these notes run off. so, david, if the fed keeps saying we may have to move aggressively, then those banks are going to keep going down, every time, because that's the weakness in the system, and that, by the way, is a very powerful weakness with very powerful constituents. pnc has constituencies, key constituencies these are, like, bedrock, small, medium-size business lenders

david, you know, everybody loves then >> yep yep. well, that's it for me, guys i don't want to keep bothering you. i did want to -- >> you're not bothering us give us a jingle around 9:50. >> i can't be away from you guys >> david, come back with comerica, will you >> it does actually -- thanks, david. it does remind me, jim, whether or not you think yesterday you posited that powell should have talked more about the other side >> well -- >> but we've not heard any of these fed officials talk about disintermediation, creating deposit outflow risk >> no, and he should have been more aware that he is hurting the very traditional banks that did the right thing and bought a lot of notes maybe they didn't move and say, well, the fed's going to go higher, so let's move. they didn't do that. these are very conservative banks that are being crushed by the fed, ask nd that's wrong. the fed doesn't want that. does the fed want to cause the

banking crisis do they want a 1982 banking crisis do they want a 1992 banking crisis after today, they're giving it to us and that's not right remember, they don't care about the stock market, but they don't want to be the reason why a regional bank that's been pretty conservative does stuff. look, watch mastercard and visa. those were the entities that you always bought when you felt there was credit risk because they don't have credit risk. watch those. >> speaking of the stock market, we just lost 3,900 the 50% retracement of october to february is 3,850-ish would you expect strong support there, 50 points below >> no, you got to solve this thing. you got to solve silicon valley. you can't -- because if it's seized, if it goes to zero, look, when you say these things, i've tried to be very hard to say, listen, don't pull your deposits out, because it's reckless on air to say, your money's not safe in that bank, which is what i said once and got misinterpreted, and you know, i'm not going to ever let

that happen in my career again i don't want anyone pulling their deposits out that's not right we shouldn't cause runs on bank. but i've got to tell you, what's going to happen if they decide -- if the fed gives -- it's not going to be that long if they break their silence, that would be incredible >> break the blackout window >> yeah, that would be incredible just saying, listen, we've got new information, which makes it so it's a little bit more in the middle that would be good but what's their goal? to save the stock market in absolutely not but the regional banking system is -- there isn't anyone in congress that's against regional banks. they're the most favored nation group of companies in the country. >> sure. this is -- you sound like you're denny today. given the chatter about -- >> is he hoarse? >> our advice is to go 25 in march and then give ate rest, actually give it a rest for a while

>> ed's good you know what ed is? he's got horse sense >> he knows the bond market. >> what we're calling for here is a common sense approach that would make it so very good banks like first republic are not pummelled as a contagion to a bank that, in retrospect, maybe should have been more thoughtful about the way it handled its bond portfolio and less aggressive about the way it lent against companies that have not been able to come public >> we haven't really mentioned crypto itself and the fallout there. bitcoin did fall below 20,000, lowest since mid-january jpmorgan yesterday, jim, said the size of the stablecoin universe is shrinking. >> right >> vc crypto funding, which was running $8 billion a month last summer is basically falling to nil. >> it's too early to buy solano. >> and ethereum? >> too early no, get out. that's the rabbit in the hat dave was very funny with the rabbit in the hat. he has no timing

someone has to get to him and talk about timing. rabbit in the hat. >> timing. >> yes because what would have happened is that that money -- this is the speculative money. he doesn't like speculative money. he would like to see these go much lower jsh, first republic just was halted on a trading pause, and i can tell you that there are banks that would buy first republic in a heartbeat. real banks real banks want that franchise real banks >> yeah. watch that you know, one thing we did not get to is the anniversary of the hanes bottom today march 10, 2009, coming off that historic low, and this is what mark told aaron at the time. take a listen. >> however, i'm going to step out on a limb here >> this is the big -- hold on,

everyone >> i don'tthink we're at a bott. i really do. >> he was referring to dow 200-day. it's amazing, 14 years later, we're still playing it >> one of the reasons is, as a great friend of mark, when we, as a company, decide you couldn't own stocks, and mark was furious and livid about that and mentioned many, many times, he always felt without skin in the game, you can't be good, so he stopped making predictions. so, for him to break his own restraint and rule made it even more so very, very potent. it's hard to -- look, obviously, i'm not going to -- now's the time you know things -- history kind of rhymes but sometimes it's -- and i'm not going for anything other than to remember how great that call was >> people love hearing about it, i'll tell you that >> he's great, man w i wish he hadn't be so restrained i have a travel trust, and i wish mark had created a travel trust where i can't keep any of

the gains. because mark, when he owns stocks -- and -- he was on his game i used to email him back and forth, because he would say, i like rowen drilling, and i would be like, mark has skin in the game that got obliterated, and i understand that, but if he had had a travel trust, oh -- again, i can't profit from my travel trust. i do have an investing club, and i do it to show people how to do it, but that haynes bottom was mark stepping out of his role that he stopped in 2000. that's how important that was. >> we know -- we have the ticker would have been m.a.r.d., i assume >> why not >> we miss him we're holding in here at 3,890, let's say. dow is down 170. >> watch abv high yield, made the quarter decent buy play. it's a bank. it's got an advantage of botox >> let's check in with bob

pisani >> good morning, guys. happy friday we moved up on the jobs report on the futures of course, lower hourly earnings than expected and that's good. we want job -- wage growth to be moderating, and yet, look how we opened here. we opened basically down and only a few defensive sectors were on the upside, and even that now down. utilities opened up. consumer staples opened up health care opened up. these are your three classic defensive sectors. they're holding in there everything else is generally weaker and of course the kbe, which is the subject of a lot of attention, down today. let look at some of the big, large regional banks silicon valley, still halted, news pending we're waiting for that to open right now, but zions down, m&t, first republic, huntington bank shares down, what, 16, 17% this week zions down close to 30% this

week these are rather breathtaking. these are not small. these are super regional banks of significant market capitalization take a look at the kbe, the bank index down about 16% this week that's the lowest close we've seen for that since, well, december 2020. so, this is quite a big move down and rather unexpected, i have to say. the question is deposit risk i have been joking about my mother for the last two weeks. she called he several weeks ago saying she was at her bank, and she was talking to the tellers, and she was going to withdraw money from her bank deposit account and put more into cds, and she had been interested in doing this, and they call her, tell her when things are lower, when the deposit rates might be better or higher, and the bottom line is, my mother's the leading guard about all this she's aware of this. so, treasury yields are competing with bank deposits my mother has been calling me. if that's not a yield pop, i

don't know what is when it gets out there into the level of your mother, that's when the public's really aware of things. deposit costs are going up, and that's pressuring things like net interest income, net interest margins, and that's a problem for the bank so, there is an additional issue out here on top of that, remember, and that is that quantitative tightening is also having the effect of withdrawing money from the banking system. that's also essentially putting pressure on deposits as well, so you've got yields going up, competing, and quantitative tightening at the same time. so, what you want to take a look here is the russell has been under some pressure right now, and very good reason, because the russell 2000, small banks are really the heart of the russell 2000 they're about one quarter of the size of the waiting in the russell 2000 everything else is really just small. believe it or not, technology's a very, very small part of that, as opposed to, for example, the

technology weighting in the s&p 500, where effectively it's over 30%. so, this is one of the reasons the russell 2000 has been underperforming, and you look at some of these small banks, there's a lot of banks out there, $2 billion to $4 billion in market capitalization that have been under a lot of pressure this week, down more than double digits at this point, down more than 20%. so, that's really where you want to look. the strength of the deposits in a lot of these smaller banks carl, back to you. >> all right, bob, we'll see you in a little while. busy day here, bob pisani. quick reminder, you can get in on the cnbc investing club, days like today more than ever sign up and fooind out more at cnbc.com or use the qr code on your screen. dow down 200, definitely a defensive tilt best performing names are like merck and mcdonald's two-year, awfully close to 4.6%, and the ten-year, 3.75%. back in a moment

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it's time for jim and stop trading. >> let's keep an eye on first republic stock down huge. keep in mind that 2.5 million share offering, at 140, one month ago. it's at 47 they have a page on the website that says they offer customized solutions, a private equity and venture capital firms. say you're a major bank, look at that portfolio, you buy the company because it's one of the best in the world. >> yeah.

we'll see. we were talking off camera, jpm went green. >> jpm, they don't do this stuff. we know they don't do this stuff. i'm not saying buy first republic that's where -- that's the line. not spb. the next one is first republic we have to see what happens. i don't know what they did with this customized portfolios they lend against companies that never came public. >> there's a look right there and we'll watch that one for sure. >> i'm not a canary. i don't buy that stuff if you reinvent this, these guys have to make it. they did 2.5 million what david did. they did raise money. >> i don't know. >> how will you do this tonight? >> [ inaudible ] all about pollution. realty income, reit contagion.

let's find out then i'm going to look at pictures from fishing. >> feels like a lifetime ago. >> oh, my. look i don't want to mock this. this is more like 1980-82, remember the largest principal in '82, told me not worry and i said oh, i'm worried that's the problem with the bank they can't say don't worry because that's worry that's why it's hard to be able to stand this. buy the drugs, buy campbell soup. >> that's what they're doing this morning. >> get goldfish. >> we'll see you tonight "mad money." 6:00 p.m important show tonight more on the turmoil involving svb, and its impact on the banking sector as the dow trying banking sector as the dow trying to find legs, down 90. but it also means cutting costs. because now clean energy is more affordable energy.

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at morgan stanley, old school hard work meets bold, new thinking, ♪ to help you see untapped possibilities and relentlessly work with you to make them real. ♪ good friday morning. welcome to another hour of "squawk on the street. i'm sara eisen here with carl quintanilla and david faber has the morning off. we'll be hearing from him, though we are live as always at post nine of the new york stock exchange

busy morning, huge news day in our world. s&p 500 about 3900 right now, down about half a percent. it's holding up given some of the magnitude of the declines and some of these bank stocks. the nasdaq down 0.8% on the back of a 1.8% slide in the s&p yesterday. financials and regional banks in focus as shares of silicon valley bank, this is the oi oifts -- eye of the storm plunge again. they're halted david faber telling us the company in talks to sell itself after attempts to raise capital have failed. we also got a jobs report this morning, the bottom line, i don't see how the fed can raise 50 basis points in march that was the story of the week powell put that on the table he can no longer say that these rate hikes are not impacting the financial system after what's happening with the bnanks

the backdrop is a massively inverted yield curve and swift and abrupt change in interest rates and we're seeing the fallout of this and all the notes this morning, is this idiosyncratic, contagious. one, it was a major venture capital lender, huge ripple effects in silicon valley and it's starting to infect the regional banks and who else mismanaged interest rate risks. >> the impact on silicon valley is, obviously, the jobs number two, the only area hiring was down was info tech and warehousing how that's related i mean, the other side is the argument that we haven't seen the relief we expect because of rate hikes, that's now happening if you look at month on month average hourly earnings, work week, labor force participation, women, we talked about starting to come back to the labor force. >> actually, this is a good breakdown of the top job creators in the month and then the top job losers

you mentioned technology at the bottom there with transportation the reason i wanted to show this, because yes, we're seeing very strong job growth in tourism, leisure, hospitality, restaurants. they're hiring it's not the entire economy. a lot of people look at the defusion index which shows you the breadth of job creation which has can down the important thing it gives powell a little bit of breathing room and shows that we're not seeing massive job creation despite the fact that headline was really strong, more than 300,000 jobs created again beneath the surface it is a two-part economy, parts growing and hiring and parts that are not. between that and the moderating wage growth and the fact that unemployment rate ticked up for good reasons because of labor participation, powell has an excuse not to do 50 and to cool it, especially with what's happening in the banking system. >> not to mention the household survey at 177 that got people's

attention as well. svb the other big kettle that we're watching today david faber joined us and cramer joins us with more color good morning again, david. >> good morning. yeah, this is the situation, obviously, the market is focused on this morning for obvious reasons. we can go back and sort oftalk about it from a macro perspective as well. it's interesting given the pressure that svb has been under only recently as a result of the deposits leaving in part because so many of the clients they have are emerging companies that thought they might go public that have needs for the deposits on hand there, but also overall in the banking system. we've seen deposits moving out because of the opportunity for higher yield even in the treasury market. one year you can get 5%. you have the duration risk starting to show itself because the assets offsetting those may have been put on the books before rates moved up and

therefore bond portfolios are under water. none means much unless you have deposits flowing out as the case at svb and brings us to the current moment here. we reported this morning that after a failed capital raise, after an attempt by the company to raise as much as $2 billion, goldman sachs was the lead on that, they failed to do it, they really, as we pointed out earlier, seemed to have timed it poorly as to a loss in their bond portfolio and not having the capital raise in place, they moved on as you might expect and i reported this morning to potential sale of the entire bank there are large financial institutions that have been interested in svb in the past. seeing this, perhaps, as an opportunity to seize a real franchise here in silicon valley all the relationships with high net worth clients and emerging companies that could become very important. however, as i reported later in the 9:00, these things move too quickly to be able to negotiate any sort of a deal in the time you need to take to negotiate a

takeover and when i say things i mean deposits they're moving out of this bank at a rapid clip and it's becoming very much unclear the ability of silicon valley bank to sell itself and that may set up, of course, something else over the weekend we'll have to wait and see we'll see if the stock opens, but everything i hear indicates deposits are flowing out quickly from many of those companies that have balances well over $250,000, saying hey, let's get our money out of this bank we'll ask questions later. >> and david, we're looking at the spillover effect which is broad across the banking system, especially in some of these regional banks first republic down more than 50% a moment ago pac west is down more than 20% you know, we're trying to figure out how unique silicon valley bank was it did have this unique singular focus on venture capital lending and we're going to see an impact

on that. as far as the broader issue, though, of the rapid change in interest rates and what's been happening with deposits, i mean a lot of regional banks could be at risk here what are you hearing. >> there is, you know, that duration risk is real. in the case of svb, i think you have what, a $21 billion bond portfolio they sold generating the loss because they bought those bonds when they had a huge inflow of dpoitss in 2000 and 2001 time frame. there are many other banks also facing potential deposit outflows in part because they're not paying high enough rates, people see yields other places and are sitting on losses that you never have to crystallize because you don't have to worry, necessarily, about, you know, deposits really leaving. so, yeah, there's duration risk there, sara, at some of these regional banks again a lot of it depends on whether you have to take the loss, right. it's not something that report

in their earnings. they'll tell you you can look and see their bond portfolio may be under water given the rise in rates, but right now a lot of investors are simply selling and ask questions later, particularly for some of the focused banks, like republic, even though i think it's an incredibly well respected bank that has a strong loan portfolio, nonetheless, we are seeing a lot of investors sort of, again, making their choices here in terms of where they want to be and they don't want to be in these names, given that potential duration risk. >> yeah. epic contraction in bank deposits given what's happened they've been slow to raise deposit rates as well. the big banks, the financials under performing but they're holding up better and all the analysts that cover them are going out of their way to say the big banks are in very good shape, there's not financial contake jun here goldman sachs said use the

weakness to buy some of the big banks. >> yeah. that may be true many of them may be sitting on what are paper losses in bond portfolios that they, obviously, have, but it would seem hard to imagine given the capital that they have on hand if there's any real systemic risk, certainly not from svb we're seeing it play out in the equity market, but one would imagine this can be stemmed quickly. i know that government is already in there at svb. you have to imagine looking at what they can do, if something needs to be done in terms of preserving deposits across the board, transferring those deposits and assets to another institution. we'll see if it happens. we'll see, perhaps, if they're successful in some way in getting somebody to buy them, as i've said that seems increasingly unlikely given the rapid departure of deposits. as for the big banks, one may be there on sunday night taking on

the assets and deposits and relationships forced by the government perhaps to do so. kind of reminiscent of a period we saw almost 15 years ago exactly now with when bear stearns went down. >> yep something about march and the ides it's creepy. we'll talk to you in a bit i'm sure great color and information out of david faber regarding svb jobs as sara mentioned the other story. let's bring in steve liesman with his take on the data and wage information. >> i think there were three elements we were looking for in the report the jobs number was strong the wage number weak we had a surge in participation which i mean technically doesn't really matter how many people are put to work as long as we have people coming in to the work force to take the jobs. this is sort of i think they're offsetting in the idea that wages were relatively tame in terms of the year over year and

the month-to-month change. the average hour work for the week was 34.5 so that came down a bit. the net average weekly hours were down year over year relative to the prior year over year rate. then you have this surge of participation which has gone on for three months now we've been ticking up. so i think what's interesting about this, this is a cornerstone of what jeremy siegel is saying if you let wages go up, you bring people back into the workforce seems to be the case right now. >> that or there's increasing pain in the economy, right, where people want to come back and they need to get jobs because the tightening is working and we're seeing the economy slow and how about what i said about the fact that now there is real risk in the financial system whether there's contagion or not the fed has to be paying attention to what's happening today and yesterday and svb and the fallout. >> it took this to bring it to the for. a lot of us throughout, i don't know if david is including this,

looking at the different instruments that might be out there that could create systemic risk, the idea of corporate bopz bonds, high yield bonds, the private loans out there. i don't think anybody was too exercised about this issue which we knew was out there, the portfolios had experienced those losses and again, as you guys said, we're getting information from some of the banking lobbies an stuff telling us how wonderfully the large banks are capitalized. we have no reason to doubt that. it seems to me, sara, to be sort of idiosyncratic, which is that this bank got hit coming and going in the sense that they were concentrated in this one area and the same people that were having trouble need withdraw their deposits are the same people that they are heavily involved in where they put their portfolio and they got hit that way i don't think banks, the other banks, or many other banks, will have this deposit run but they are going to have to raise their

deposit rates and could mean losses for those banks. >> and tighten their lending guidelines. >> so that's a great point, sara we are now -- this is a place and a point where higher fed policy, higher fed rates begins to bite into the real economy, this idea they would tighten their lending guidelines and make money harder to get. >> meantime yellen on the tape, treasury monitoring a few banks amid issues at svb steve, thanks for that. >> there's a point, carl, where officials are going to have to talk if this becomes widespread and tell us what they think. i was reading back the monetary policy report to congress and most of the comments in there suggested there was no concern on the part of regulators about the funding needs of banks i don't know if that's changing as we speak, but that was their assessment a week ago friday. >> thanks. steve liesman. our next guest says the risk-reward for the s&p looks worse today than it did a few

months ago adam parker is here at post nine research founder and ceo great to have you on an important day. what's going through your mind >> what's going tu my mind is, you know, when you can't figure out who the idiot at the poker table is, it's you i've been doing this for a long time we work in an industry with smart, hardworking people, and why did i choose to compete in that field cfos of giant banks, analysts, investment bankers, all tend to be smart, hardworking people and none know what the heck they're doing. i'm not saying i do. i don't know what to make of this is it just totally idiosyncratic? i don't know i've never recommended regional fwhanks my career because i've only been a strategist since '08, but i don't know, this doesn't sound great to me that note you were referencing was before the last couple days. >> sure.

>> a reaction to a hawkish fed and higher perception about rates, less compelling valuation, more speculation, earnings expectations that seem too high, we didn't mention so much going on, gap and -- there's little nuggets of things imploding left and right to walk in today and say i feel more bullish about equities three months ago, one month, seems hard to me the only positive i can come up with, everyone else is negative and you want to romanticize your contrarian doesn't feel like right time to do that to me. >> you don't think any change in the fed narrative or relief in short-term yields at least changes the equation for equities even though we haven't discounted much. >> financial conditions are everything your point about lending and tightening conditions is not good for risk taking and so i don't think so i think the challenge, and what we've been saying, you don't want the fed to get dovish because if they get dovish, things are bad, earnings will decline, the economy is

teetering towards imploding than eroding. you want the goldilocks of an erosion where they kind of slowly pump the brakes and pause for two years. if they cut it's because things are bad and your earnings estimates are way too high. >> it's not the inversion of the curve that hurts it's when the inversion repairs itself. >> they said they will use their balance sheet as a tool. they've been shrinking their balance sheet and they can stop doing that if there are signs of stress in the credit market and liquidity conditions. >> when things get bad they have to try to ease financial conditions you're still looking at a probability of an eroding economy. you want the stock market to go up, you think it's up 10% in the next year the earnings have to pick up or the story has to pick up your story on the multiple, you thought you would be accommodative by 2024 and things

were a soft landing. your story on earnings, are they going up are you sure 2024 earnings are above 2023 i'm not. i'm worried six months from now everyone is underwriting long ideas, the bottom consensus 11.4% earnings we talked a couple months ago, i'm not sure i want a big long book. >> you can see why people think 24 will be better, the recession not that deep and we have a nice cushion, created 300,000 jobs after a year of tightening policy, the tightest we've ever had since the '80s, it's holding up very well. >> i think it's hard i remember years ago, i was finishing my ph.d. and somebody said when you ask you finish say six months from now they can't remember you're not telling them you're doing it right now i feel like that's the outlook i don't know what's going to happen six months from now i'm not 100% sure. in the past when we had v-shaped

recoveries there's a combination, incremental, fiscal, accommodative monetary policy. >> that ain't happening. >> maybe it could be, but things have to get much worse and the fed always said the same thing, full employment, stable pricing. do we have a really bad jobs environment? we have other stuff to distract us from the jobs print a little bit, but i would have thought in isolation it was a hawkish print. >> are you in a -- >> a little bit. >> for those who are in a mode the t-bill and school where you park cash at the front end has that changed today or still intact >> i still think it's hard look, starting last may, i think i talked about on the air, i've been latering short-term government bonds frpts first time in my professional career used to have to do cds and whatever yes, compelling alternatives to equity if you can do that what would make you walk in

today and say i love, i don't know, pick a stock, pepsi at 27 times forward with 70% free cash flow conversion and high estimates and i get why you own it for risk management and every earnings a 5% too high less than a 3% dividend can't i buy the 2-year at whatever. >> 4.6. >> looks better guaranteed by the government if it comes lower i can move on if i want. less compelling for equities and i don't -- i'm not trying to -- it's not gloom and doom. there's things you can buy but i don't know about stepping in to the large cap banks because they share gain from -- that feels a little -- i wouldn't do that with my pa. >> nickel and steam roller kind of thing. >> feels worrisome to me and stocks that are cheap, sometimes it's -- sometimes they're cheap for a reason like on average, stocks that have multiple contraction prior to recession under perform in

the recession because the market is right to have taken the multiple down in an anticipatory fashion and their earnings get impaired we're eroding not implode but the first kind of -- couple little things that are worrisome and i think people should, you know, be positioned -- i think the challenge in an equity portfolio, most people i talk to are trying to buy equities and they're there. how do you get defensive i don't think staples an utilities are great because they're expensive. you have to find other things. is it insurance, pharma, something where the estimates have 5 or 10% too high in a market where they're 15 or 20 -- >> and converge. >> energy and health care working today. >> energy has been - >> which you love. >> i love because i think they don't have the same inventory issues that other sectors do like semis the demand growth will succeed supply growth unless we get in a dark recession yeah i think there's in this you can own but saying compare equities today to, you know, to other

asset classes you don't have the same compel pelling argument everyone i talk to in the last three or four weeks talking about non-u.s. equities than u.s. equities any time i can remember in the last 10, 15 years. i like japanese banks. people pushing ideas because it's tough to want to own u.s. growth when you have kind of a hawkish outlook in a declining economy. >> we talked about this yesterday. >> it's a good day to have you in. >> love being here. >> as we head to break, our road map for a very busy rest of the hour more on silicon valley bank fallout with one guest who has a warning for other tech private and public companies and svb still owns part of this. >> the ceo of docusign as shares slump double digits after results. >> and goldman sachs chief economist jan hat zus his take on the bwo js po aloutobrerts stocks to look to close out the stocks to look to close out the week in the red.

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treasury secretary yellen is monitoring the fallout tied to silicon valley we have been tracking the story closely and both join us now with more. talk about what you're hearing today. >> my understanding is four banks have been the beneficiaries out of flight out of svb jpmorgan, morgan stanley, first

republic and a start-up called brexit jp's commercial bankers have received dozens of incoming calls from customers looking to move money yesterday they wouldn't put dollar signs on it, but they have said that supposedly they are told not to actually attempt to poach svb clients but allow them to come in and call if they're incoming calls. brexit is a more interesting case a high flying silicon valley startups catering to startups and they have received billions of dollars in incoming deposits from svb on thursday in one day alone. they're a fin technology that can open up accounts quickly, in the space of one day on thursday, remarkable turn of events in the svb story. my understanding they're busy but they're not thrilled by this turn of events because, you know, this is a bad day for tech and a negative for tech in

general when you have a well-regarded bank like svb come under this pressure. >> for tech and presumably for the banking system even if it's unique it is unique in terms of how much this bank lent toprivate equity, mostly capital firms and tech startups across the area. how have you wrapped your arms around the size and scope of damage in tech right now >> the damage is still playing out. i would say there's still a lot of anxiety on the ground in the bay area among the tech ecosystem. founders and venture capitalists alike. any start-up that didn't get their money out yesterday are rushing to do so, going to bank branches to get cashier deposits because we've heard it's taking time for svb to get wires out. it makes sense

it is swamped under what is going on what you mentioned the liabilities, yes, they are different for silicon valley bank because of its role in the tech ecosystem half of all vc backed startups had money with svb at some point. when you look at the risk and loan profile they were doing things at 3% with the earliest stage start-up, something like 9% of loans that repayment was dependent on the borrower's ability to fund rise or exit in this environment and for a while that has been an incredibly it difficult proposition. the ipo window has remained shut and folks here are talking about how poorly this has been handled. the meeting yesterday i haven't heard anything good about that with greg beck the ceo of silicon valley bank brought clients on to zoom and said don't panic, stay calm, made things worse and continues to play out today. >> huge story. along with the jobs number today. we'll check in with you often,

deirdre and hugh banks are a key focus this morning. check out the move, though, in tech names like docusign we'll break things dn thhe o in just a moment

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welcome back to "squawk on the street." look at shares of docusign esignature software company reporting result tas beat estimates on the top and bottom line, but the stock is plummeting down 20%. announced the current cfo would be stepping down jpmorgan downgrades the stock from underweight from neutral. joining us to talk about this is docusign's ceo allan thygesen. welcome to the show. >> thank you for having me. >> i wonder if today there are increasing worries about everything that's happening across tech and silicon valley you sell into the financial vertical, don't you? are you affected by these concerns about some of the banks, the silicon valley banks? >> no. i mean we certainly do have a meaningful business with the financial sector more broadly, but i think to the extent we had any overexposure in the real

estate space that's correct mostly played out by now and we've not seen any, you know, meaningful softening in our relationship with the big banks who are mostly big customers of ours. >> so the numbers were better on the quarter and this was your first quarter. >> yes. >> as ceo. there was concern about the outlook, not as good as expected and softness in places like billing and the impact from the macro economic environment how would you characterize the conversations you're having with investors today. >> yeah. first of all, i think we had a solid quarter. we exceeded on the top and the bottom as you said, and we guided within the range we had previously hinted at on the earlier call we are incredibly excited about the opportunity ahead for docusign you think about the agreement space, we are just at the very beginning of moving to digital think of music, people moved first thing that happened was the files became digitized and

then the usage model, the sharing model, all of that evolved dramatically over the next decade. that's where we are with the agreement space. we intend to leave that and we're well positioned to do that that's why we're investing in innovation. >> in terms of the cost side, we talked about where you are in the trajectory of head count reduction. are you essentially done and what happens to the savings you're able to generate from that >> yeah. so we did have a restructuring it was a focused pivot for us. we reduced our head count in the field organizations, sales folks, and we are investing significantly in product development. so overall, i feel we are in the right space now, both in terms of our overall head count as well as the balancing of that head count across functions, poised for growth and this will be a really important foundational year for docusign

to position us for significant growth in the future years. >> but isn't it hard to do at a time where you're seeing broad tech layoffs doesn't that equal fewer licenses for you and reduced enterprise spending because of what's happening in technology >> you know, we certainly sell into the tech sector i don't think we have a dramatic over exposure to the tech sector in fact, that's been a nice area of growth for us we have a very diversified customer portfolio, so i mentioned financials, all financial firms tend to do business with docusign we're seeing significant strength across health, manufacturing, telecommunications, so i'm feeling good about it. i don't think we're particularly exposed to the challenges in the broader tech sector right now. >> are you feeling pricing pressure on your products? >> i think every sass company feels some degree of pricing pressure large enterprises are consolidating, trying to

exercise buying power and we have those negotiations, but overall, if you look at our position and win rates we're well positioned and one of the reasons we're investing in innovation is to capture -- deliver more value and capture more value pricing is trending slightly down but nothing out of the ordinary and off trend. >> allan, we appreciate you coming on on a tough day addressing the investor concerns thank you. >> i appreciate you having me. thank you. >> allan thygesen, ceo of docusign dow down about 45 points we've got jobs, banking worries. goldman sachs chief economist jan hatzius with his take on the action when we come back on "squawk on the street. nasdaq underperformance down 0.7% financials at the bottom of the markets with the worries about

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stocks under some selling pressure we're headed for a down week after a slide yesterday and all of these concernsed in the early part of the week about fed tightening and now the financial system and ripple effects from silicon valley bank. another one a lot better than expected joining us goldman sachs chief economist head of global investment research jan hatzius. i don't see how they can do 50 basis points in march, given some of these concerns in the banking system, do you >> well, i think it is possible. i mean, you know, jay powell put it on the table clearly in his testimony, and as you say, this was a very strong report payrolls there's also reason to believe

that the cpi on tuesday could be quite strong we're at 0.45% for the month on month. that's pretty firm but on balance, i would also say 25 is still somewhat more likely in part because if you look more broadly at the labor market news, there is actually quite a lot of evidence for more of a soft landing in the rotation you had weaker survey with increase in the unemployment rate, the claimsnumbers, jobless claims numbers higher and average earnings numbers printed a soft number and growing at only a little over 3% in the first couple months of 2023 at an annual rate so if i take it all together, it seems to me, 25 is still a bit more likely. >> i would just ad, don't you think, quits are down and job

openings still high but are slowing, right, and now there is increasing evidence that banks, even if they're not the biggest banks in the country r affected by the size of the rate move >> yeah. i think on balance the job openings news is also supportive the official jolts release higher than expected, but i think there's increasing signs that there's some real issues with that data set it's been very noisy and far from what bottom up measures of job openings like the link up series and the indeed series would have suggested so i think yeah on balance, the demand supply balance is improving as well. i think that's supporting the idea of a soft landing in the labor market and you know, i think in terms of the turmoil in

markets, it's a little too early to tell how important that is, but probably also should argue for going a little bit more slowly if it has any impact. >> although to your point about 25, earlier in the week you said even if they decide on 25 and split on the pace they could compromise or make up for it by engineering a 50 basis points hike in the peak on the dots is that still likely >> that is still our forecast, that -- but i mean that's partly driven by the fact that we have, you know, somewhat more optimistic view on the growth side we think the economy is still quite resilient, about a percentage point above consensus in terms of 2023 growth and we have a lower project of recession. if the economy proves to be resilient, then, you know, that could keep them going even beyond the june fomc meeting

we have four 25 basis points moves here in our baseline forecast with, you know, with the 25 versus 50 question in march. a relatively close call still. that could still go either way i think that ultimately we'll see a higher peak funds rate. >> wow so four more 25s after weeks like the one we're encountering right now. i guess i'm wondering how much scrutiny is that forecast getting in your office today >> i would say look, it's been a forecast that that, you know, where we've continued to move higher the terminal funds rate and at the moment, of course, there is discussion about what's going on in financial markets and there are all these risks around it. as a baseline forecast it seems the right place to be. >> so you don't seem that worried what's happening in the banking system right now, the

fact that there could be a spillover effect and at the least we might end up seeing banks have to tighten lending standards as a result of this and that hurts the economy. >> yeah. i mean, when i look at, you know, banking overall, banking system, i look at the amount of equity capital that we have, you know, the leverage in the banking system, and i mean, i've done this for a pretty long tim and i remember 2007 and 2008 very well and we're in a completely different world in terms of the leverage in the financial system and in the banking system specifically. so, yeah, baseline expectation is that we will see, you know, continued strong banking system. you're right that the, you know, that lending standards have been tightening and that is a drag on near-term growth that's part of the transmission of monetary policy and i think

it's going to continue to be the case there are also some strong reasons for why the economy is still resilient. real disposable income is rising by our estimates at 3.5 to 4% rate and, you know, the drag from financial conditions in areas like housing i think it's going to be smaller, six months from now than it has been the last six months. >> how do you read the yield curve then this is a week in which the spread between the 2-year and 10-year reached a full percent it continues to invert do you think that's not a signal >> well, i think it's a signal that monetary policy is restrictive and, you know, the fed that's, obviously, what the fed is trying to do, they're trying to slow down growth to -- or keep growth at a below trend pace, you know, pushing against what otherwise might be an

acceleration to a trend or above trend pace and markets are confident that the long-term funds rate is, you know, still quite low. so if you put those two things together the fed's tightening at the short end and markets have a very anchored view of where rates are going to be in the longer term and you get a deeply inverted curve there's not, you know, that's the basic story, and i do think that it is still compatible with an economy that grows at a below trend pace, somewhat below trend. >> there it is the case for the soft landing. thank you for joining us today really good to have you on a day like today. >> thank you great to be on. >> jan hatzius chief economist at goldman sachs four 25s and a soft landing is a positive case right now. >> yeah. >> and you're hearing less of it. >> i mean it's not a departure they have been below consensus on recession risks. >> they're right the economy has held up. but there's some questions.

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i will say you mentioned silicon valley bank, there are recent developments that concern a few banks that i'm monitoring very carefully and when banks experience financial losses it is and should be a matter of concern. >> that's treasury secretary yellen testifying before the house weighs and means committee a short time ago we want to stick with the svb fallout. the bank investing in our next guest's company. joining us this morning mountain founder and ceo mark doug glass. we're grateful for your time today in light of what yellen is saying and the street is saying, what's being talked about in

your circles regarding svb >> yeah. so i think what's important to understand is svb is not like any other bank i mean there's not going to be lines of employees withdrawing money or anything like that. they don't have branches they bank half of all startups in the banking agreements where the loan agreements go with the deposits and they cannot be separated. so, you might have some of the smaller startups doing referrals right now. those will be the weaker companies.

svb wouldn't even lend money to. but the bigger, more successful companies, the midsize, the one that have raised good rounds of funding, they are intertwined with the banks and that's the backdrop to deposits at the bank that i don't think people are taking into account here. >> that's interesting. although, if it's true, why are we getting reports of failed capital raises w >> well, i think trying to raise money over the weekend is going to be difficult. i think for svb, there was an actual financial -- financial issue with bonds they're trying to address that but i think the -- you know, the core point here is that this, like, idea that, like, all of their deposits are, you know, eventually going to leave, that's just not able to happen given the relationship, the way the structure of all their relationships. when you bank with svb, you have letters of credit, you have

receivable lines they're reviewing your financials every month it's all very intertwined. i've talked to a lot of vcs this morning, you know, before having this chat. and i'm not hearing from those vcs. like you heard mark schiff this morning said everyone should calm down. i talked to my investors about what they're hearing and a lot of their startups bank with svb. i think for the most part, thinks will hopefully start to calm down a bit over the next 24 hours and certainly over the weekend. >> they advised companies to withdrawal from svb. that was sort of a wow moment. so, there are those that are withdrawaling funds. what's your communication with the bank have you heard from them >> well, we formally bank with svb, we grew to a size where we

bank with another bank we've had loan agreements with svb. at this moment, you know, they're not sending out, to my knowledge, letters to all their depositors, things like that but i also just talked to another entrepreneur literally a few minutes ago. i think people, like i said, are nervous because they kind of don't know what other people are going to do, but given this cohort of customers and also the relationships that svb has, they really are with the venture capitalists. in other words, you raise around the funding and svb says, since you raised that round, i'll loan you additional money that's all dependent on investors being very transparent with the bank and having kind of the sem bebiotic relationships i think those that have relationships with scb will not be saying the same thing peter twill is saying. >> peter ackman is saying it's a

future bridge to longer term economic growth. as a result, he thinks it deserves some more support do you think it's that critical over the long term >> i do. there's a reason svb banks half of all tech startups if you go and you raise your startup and raise a $20 million round, it's almost your plans that you'll go the silicon valley bank and they're going to say, because you raised $20 million and because you have growing revenue, we're going to give you lines of credits. we're going to give you a receivables line so you can manage the cash flow you don't want to use venture capital to, like, pay your everyday bills so, you know, they -- one thing leads to another and i think bill is right. if you lose that kind of lending facility and that kind of banking facility, which is extremely unique to svb as the leader in this space, then you also put more pressure on startups to raise more money to fill in the gap.

i think that's going to be -- that will have an impact if that was lost in the market. >> it also raises the question mark how tough it's gotten in the venture capital and private funding market that led to this crunch and this exodus some are wondering if this is the vc bubble bursting >> well, i mean, value -- i think that bubble burst last year i mean, there hasn't been a round of funding of valuations if you look at 2021 valuations for vc startups, they were significant. i think 2022 kind of did a massive correction to those valuations i know vc firms, i had a meeting with a private equity firm yesterday morning. they literally just won't invest in a company that's not profitable, period that's part of their investment thesis i'm not looking for an investment my company is profitable but, i mean, it's at that level. like that -- you know, it's baked into the investment

thesis we live in a very volatile world now. and i think people are correcting their view on things. literally seems like by the week and so, you know, that kind of thinking is already baked in again going back to the original point, if i did -- like the bank i do bank with, if i withdraw my money, i lose my letter of credit it's -- the old adage is when a ship is weak, the strongest swimmers jump in the water first. in this case, it would be the weakest jump in the water first and strongest are like part of the ship they can't just jump and so that's the support. i think it's going to be a little more turmoil here, but it should stabilize >> mark, it's good radar we appreciate it the market needs as many gut checks as it can get please come back mark douglas, founder and ceo of mountain thank you. >> thank you we're watching the markets

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welcome back to "squawk on the street." i'm dominic chu. let's check on relative bright spots in today's trading check out what's happening with health care, vertex, amgen in the green right now. by the way, most of the major energy stocks are tracking for weekly declines, marathon, che chevron, holding above the flat line today now let's send it back downtown to the new york stock exchange to carl and sara for the final hour of "squawk on the street. good friday morning. i'm carl quintanilla with sara eisen live on the floor of the new york stock exchange. setting the agenda today council of economic advisers chair cecilia rouse is with us live from the white house and we'll address the turmoils in financials. absolutely, kbw ceo thomas michaud. is this liquidity crunch for