quell inflation and then have the ability to cut i mean, they've certainly been very good at cutting in the past >> okay, julie i want to thank you for joining us this morning, appreciate it very much. we've got a quick check on the markets before we end and pass it over to the guys on "squawk on the street. dow off about 140 points i want to thank you for hanging out, more than hanging out it's been fun. appreciate it. make sure you join us. "squawk on the street" begins right now. ♪ good thursday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. futures a little wobbly overnight with the ecb on deck in a few minutes the snb lifeline to credit suisse, yellen on the hill, goldman raising its recession odds and a mixed bag of data today. our road map begins with credit suisse, the embattled lender receiving a lifeline from the swiss national bank. >> the ecb is due out with its

decision on interest rates at 15 minutes past this very hour. and here back in the u.s., treasury secretary yellen is heading to capitol hill, set to tell a senate panel the u.s. banking system remains sound let's dive into cs this morning, borrowing nearly $54 billion from the swiss national bank after touching that all-time low in yesterday's session. the company out with a press release saying, "credit suisse is taking decisive action to preip preemptively strengthening its liquidity. this additional liquidity would support credit suisse's core businesses and clients as credit suisse takes the necessary steps to create a simpler and more focused bank built around client needs. jim? >> well, i mean, dave was saying yesterday, david on the "today" show that actually the bank itself was pretty solvent, and it's really just the chaos around it. but it's not -- >> right, the liquidity ratios, the capital ratios were okay

they want to reassure everybody. but that said, as we talked about for a long time, it comes down to how many people are pulling their accounts as one person termed it to me this morning, when you're dealing with them, it's more about counterparty risk than anything else in a sense it's not a depositor, you're a counterparty >> but the government can take care of it you would feel much more inclined because now it's like a u.s. government entity backstopping something where the common stock may not be worth anything >> correct the concern in terms of contagion or that it will fail in some way, i think, that's not going to happen. but in speaking to people who are close to what's going on over there, they still don't know what's going to happen. you can't predict these things we can talk all about -- we can talk about cs, and we can talk about first republic, and we can talk about a number of other regional banks you just can't fully predict at this point what is going to happen >> but in 2011, we all panicked

because of what was going on in europe, and it turned out that our banks had really kind of exited europe. >> yes >> so, right now, our banks are weaker off of europe, then i would question whether that's the correct way. maybe, carl, our banks are weaker because first republic was a -- is a very well known bank with a lot of wealthy people, and there were many people on air that recommended it at 50s and 40s, saying this was the opportunity, maybe even of a lifetime. and that's proving right now to be ill advised >> i started the week off on monday saying the government wanted this bank sold. remember, i said that. >> right they got this big flying -- >> that's not necessarily a good thing. on first republic, it's hard to know what happened tell me what the what the deposit outflows have really been i've heard on first republic that it's a $25 billion hold that may sound like a lot, but frankly, they have a significant liquidity, but that said, if you're a potential buyer, do you want to take that on as the

franchise value strong enough? and then there are also a lot of very wealthy peoplewho i speak to who believe in this bank, kept their money there, haven't pulled their deposits, and think it's just unfortunately been a victim of something that it had nothing to do with >> this does not have peter thiel on twitter saying he's pulling his money. >> no, no. >> peter thiel i'm just -- peter thiel in that case, i'm using as an amalgam of hedge funds that rated a bank after they left it >> you're tall silicon valley bank and peter thiel and that tweet when he said, i advise you to pull your money that started what, last thursday, one week ago, was the $42 billion in deposits that left svb, and then friday, another $55 billion ready to go, which is when the fdic said, you're done, you're out. >> when i spoke with first republic this weekend, they told me, listen, we got the money we need, that the outflows, whatever they were, minimal, and i think the issue is that

typically, when we see something, carl, that -- where a bank's for sale and it's a marquee name, the stock goes up, not down it's almost like people are thinking this is the foot race between the common stock going to zero or -- >> not when you have a $25 hold. >> this is what you have been saying on twitter. you either crunch the common or wipe out the common. >> right and i think that's what this is -- this is what it's looking like now, again, i think dave has got a point. there's good franchise value here but what we're learning is that franchise value may not mean that much if the government's not -- it's not willing to help the common stock shareholders. >> right, and so far, it hasn't been, or the bondholders, and even if we do, as many expect we will, of course, make it through this mini-crisis, there are concerns about regional banks and smaller community banks' ability to raise money, what

they're going to have to pay for that money, not to mention, will anybody ever want to go be a bondholder and/or an investor in a bond offering? >> remember, it's not equity if they need it they need deposits to stay >> they need -- i'm talking about the bigger picture over time >> no, but i'm saying, the government, i met with all these cfos this week, and they all feel like they're vulnerable if they keep their money in these banks, because, well, there's a lot of things that could happen. >> outflows have oderated, but i continue to hear that they have continued to some extent. >> to stay >> no, that they're still outflows >> oh my god, yeah, are you kidding. >> but they've moderated they're nothing like they were, let's call it, friday and monday of this week >> i think that's because there's a perception, first republic not included, that the government is going to change its stance and that it's going to be explicit guarantee of deposit, not implicit, because deposits are viewed as sacred, and equity, common stocks,

preferreds, are viewed as if it's fannie mae. >> and we need congress for this >> that's really interesting will they need congress? i don't think they have time for congress >> yeah, i think not >> but one of the things they feel good about is that both republicans and democrats, besides being united in hating metaverse, love -- well, though, of course, they're doing their bidding with tiktok. these banks are loved by both republicans and democrats. because they have a lot of congressional mind share >> we're going to find out more in a little bit as yellen goes to the hill. and we do have some idea of what she's going to say, namely that it seems inevitable some banks will need to pull back on lending or shore up their balance sheets and they're likely to see stricter capital standards for banks. yesterday, both goldman and jpm cut gdp on the notion that you'll see smaller lending out of banks >> here's the fed tightening, because we're so strong, the economy's so strong, we have to do that. david, look at this. >> what? what do you got? >> daily march recession watch

tracker from goldman-sachs the recession tracker while we tighten. we just went up to 35% from 10%. that's -- you know what we need right now? a good solid tightening. >> only went up the next 12 months by 10 basis points. >> they were 35%, low on the street >> this is why -- jay powell, maybe he should go 50 basis points >> are you arguing for none? >> old recession tracker >> i think that jay -- jay, because he's my close friend -- could easily say, we committed to higher, and we want to stick with that. but now we have to pause, because we don't want to be the reason why there's a technical issue in our system that is causing outflows of banks. he uses that, and we're golden >> it's a really interesting debate happening right now, and that is, why would you take a risk on financial stability when we get it? you're tough you've been tough. you've been 450 basis points tough. >> the market -- i mean, many investors agree with you they're like, no, they can't go

25 he's got to be, like, no and so i wonder whether, if they do go 25, what kind of market reaction we're going to see. >> what i don't like is that this is the first time nobody knows what they're going to do and there's no telegraph i mean, jay watches the "today" show, and he says, oh my god, david faber's at the top of it we got to -- we're in trouble. we can't raise now, i know that sounds facetious, but what i'm saying is that there's a coming -- when you have the cfos of major department stores, a large cosmetic, a drug company, and they're saying, we have money in community banks because we like to support community banks, brian moynihan has been on my show many times, ceo of bank of america, trying to support community banks. >> he just did jamie and philly. >> by the way, they're fine. don't worry about jpmorgan you know what they're doing right now? >> they're stemming inflows. >> they are turning down

deposits >> they're stemming inflows. >> for example, if you're a client of svb, and you want to be there, and they don't really have a close relationship with you in some way or don't think you're important, five months. five months before we can on-board you >> i'm going to offer a solution to all the publicity that goldman-sachs is doing it's an elegant solution, smarter than anything they're going to come up with, having worked there they're in this horrible low end, okay, marcus, credit cards, they carve that off or even sell it to some idiot -- i'm sorry, some person who's less wise. >> that's going to really help them in selling it >> then they buy first republic, because that's the best high-end book >> goldman for first republic might have made sense at one point. >> you mean like tuesday of last week what's the scrutiny? >> general scrutiny. >> everyone's under scrutiny we're all under scrutiny, except for ryan reynolds. >> i'm not getting as much sense as to where things stand with first republic in terms of a potential sale, but i'm not

hearing that there's -- that they're close. >> david, you are a student of history. you are a student of history >> i try >> are you or are you not? >> if i can remember my own history, i'm in good shape >> then i want to ask you -- >> it's a battle some days >> you're a student of jpmorgan. what happens if you come out, you're jim herbert, and you say, there's nothing to worry about, we're good >> tell people who he is, please, so they know >> well, that's -- what do you think, i'm the mentalist he's chairman of first republic. so, he tells you this weekend that we're money good. what does that mean to you if you're a short seller? >> doesn't mean anything to anybody. >> that's what i'm saying. >> when you have to reassure people, that's already the first sign >> thank you that was what i was saying >> as i say, when you're on the phone to me in the morning, telling me, everything's good, it's too late. >> how about if i was on the phone and i got that call? not as important >> no, it's too late calling any of us. >> when your kid calls you from college and says, dad, first

thing, i'm fine. >> that usually means they blacked out last night >> you want to hear that i'm safe and then, yeah, my wallet got st stolen, but i'm safe >> the only thing you're safe in is crypto. it's the biggest week for crypto >> best week in over a year. >> turns out sam bankman-fried is corrupt >> what explains that? >> why crypto? because it's not a bank. there's more sanctity to it. now, all these things sound like i'm facetious. i'm not. first republic was the premier bank for wealthy people. it was difficult to even open an account there. that's a great brand name until one week ago crypto was a -- had become a laughingstock. now it's considered to be a great store holder value people have to understand how quickly things are moving. >> yes, yes, and they still are moving, and that's why it makes it so difficult to know, fully, whether the fdic's going to be successful in selling the loan portfolio at svb, whether first republic and where it's going to end up, what's going to happen with credit suisse these are all -- you can't -- this is such a dynamic situation. credit suisse, different in its

own way, but nonetheless sort of related, because it still has to do with confidence >> what you do in this situation is go to the first national bank of apple i think tech -- >> i'm glad you -- >> -- acted unbelievable >> i'm glad you mentioned not just the big tech trade but the lack of ndx volatility versus the s&p. 52-week low. >> the ndx was not unlike crypto the ndx was just had a steaming hot move into the close, and then after the close, what happens, we seem to forget this, but adobe reports a quarter that is simply beautiful. as if nothing had ever happened. it was amazing in the meantime, if we want to get a little jingoistic, bert and ernie with baidu, that was like a nikola situation. i don't think their bot is powered by -- >> nvidia. >> thank you >> sorry, took me a second

yeah we can have the end of the world chat a little later in the show. i want to have it every day. did you see what chatgpt can do and not do it can hold things up and say, i want to give you a website that looks like this. >> mr. know-it-all, you can't make a commerce system without adobe and gpt. that's why gpt is alone. >> when does it start making copies of itself >> become self-aware >> it needs adobe. that's the problem does it have any human emotion >> adobe is very well placed right now. in part, they have so many images >> adobe destroyed docusign. adobe is the necessary commerce system to be with gpt whatever, 5. the chinese, who are supposed to be also powerful have bert and ernie failing last night right in front of us, and the stock goes down. i'm saying, u.s. 1, china, 0 >> meantime, they complete

discovery on the doj's second request on figma, which sounds like they're ready for whatever comes next >> i was an antitrust king when i went to harvard law, that's what i specialized in, actually true, that the issue here is that small and medium-size business people want to have one site where they can look like they're big business, so they get hurt if the justice department blocks that deal. but it's the second review david, the justice department seems to be committed to blocking everything. >> a lot of things figma is a private company, so that doesn't have market implications, other than for adobe. but it's not like we're going to look at, as we do with microsoft, activision, whereas activision in this case, huge deal >> this could be argued that it's positive if it's done for small business not negative >> got it. >> that's what i'm arguing >> let's get to the ecb, carl. >> do we have it >> here we go. >> i'm hearing 50 out of ecb >> 50?

boy, are they in step. >> deposit rate. yeah goes from 25 to 3. let's get to steve liesman, who i think is following too steve. >> yeah, carl, it is 50 across all three different benchmarks of the european central bank, so i will tell you this, we went into this thing, the odds had been moving around all morning, the probabilities. we went into it with a 65% probability of a 25 based on comments that were made just before the number came out or the decision came out from the ecb vice president about concern about the banking system that suddenly led people to believe that all of a sudden the ecb might go 25, but they're projecting ahead, and i've got a few more headlines here, i'm looking at the comments here from the elevated level of uncertainty reinforcing the importance of data-dependent approach for the ecb, which is interesting. and they'll say it's going to be determined by an assessment of the inflation outlook in light of new data. so, they're kind of taking future rate hikes, it seems to me, in these comments here and

making them a little bit uncertain. now, i want to check what's happened with u.s. markets and interest rates across the board. the two-year, we went into this at 3.93%, up a few basis points, it looks to me, at 3.97% i'll give you an actual print on that as soon as it updates in front of me. looks like it's 3.57%. we went in at 3.50%. anyway, up a few basis points, and it looks like futures as well, down a little bit. it seems to me, went in minus 17 at the s&p, now we're minus 25 so, the market had wanted a little bit less from the ecb now it's giving it a little bit more with the big question, what is the ricochet on the federal reserve here i'm going to need to look down a little bit, take a look at my fed fund futures and it seems to me they are a little bit lower here, it looks like to me. 3.82 on the year-end, 4.86 on the peak rate here, so again, building in more fed rate hikes,

why? because of the idea that perhaps the ecb might do more. we've got a comment here, i think we might, from a former boston fed president, one of two former fed officials who have been speaking out, and eric rosengren decidedly saying the federal reserve ought to pause eric was a fed president who was very tuned into the banking system and concerns about the bank system, and what he essentially said is that the federal reserve ought to pause because of financial -- he says, "financial crises create demand destruction banks reduce credit availability, consumers hold off large purchases, businesses defer spending interest rates should pause until the degree of demand destruction can be evaluated." guys, we have several days until the fed has to make this choice here, and i think a big part of it will be determined by how much stress remains in the banking system we'll get a picture of that today at 4:30 this afternoon

when the fed releases its weekly balance sheet, and we'll see how much takedown there's been, how much borrowing there's been at the federal reserve from small and medium-size businesses so, tune in at 4:30, and obviously, carl, we'll be watching all day, these interest rates and how the market's reacting and the expectations for the federal reserve. >> steve, does it give the fed cover to do at least 25? >> i think it does and i really want to look right now, carl, at the probabilities. yeah actually, we're seeing a little bit more now on a -- yeah, on a 25 a 70% probability. that's where we've been this morning. so, really, it's ricochetting back and saying, yes, exactly what you said, carl. there's more confidence now that the fed could do at least 25, despite some calls out there for a pause to figure out what the heck is going on >> and steve, we're going to -- you said this, but i want to make a point of it we're going to get some data on how many people pulled down under these new fed programs, the new fed program. is that -- what time is that

exactly going to be? >> that's exactly it at 4:30 we'll get that live. it will be, really, three or four things in there, david. first thing we'll look for is borrowing at the traditional window that's one the fed did ease some of the terms there. then there's the new fed program where it said, bring us your poor, your tired, your hungry, your paper that is not at par, and we will finance it at par. that's the new fed program and then we're also going to look at fhlb lending as well as some bank lending data, and david, that's something we're going to watch over time are the banks pulling back in their lending? >> okay. >> steve, thanks steve liesman. we'll watch for that jim, we'll watch for, obviously, commercial bank deposits, which we'll get on a weekly basis too. >> look, i think it's really important to understand that things are so fluid that the idea that something happens today could influence federal market is a little fanciful. this morning, the futures looked terrific, around 3:30, they

looked great, because we had this lifeline to great credit suisse and the matterhorn in switzerland and next thing you know, we have run on first republic stock, not their bank, and the futures turned down, david. remember, a lot of people came on to speak on our network that said, listen, your money's safe in the common stock. it doesn't look so good. >> no, not today we'll pay close attention to all the common stocks of the regionals. they had a big bounce, obviously, off the lows on monday >> but david, what happens with -- i mean, this first republic is -- now, i know i'm on the common stock basis, not good but does not seem systemically important bank, but it's a bank that everyone's going to be looking at today for a clue of what happens to the stock. >> listen. you tell me what the real outflows have been from that bank in terms of deposits, and i can give you a better sense of it what i'm hearing from people who are looking at is that the whole

is as much as 25 >> it's much bigger than i thought. >> but i haven't confirmed that, but that is what i have heard from a couple of different people who apparently have been looking. we'll see. that doesn't mean they can't make that up and live on they can >> okay. >> we'll keep an eye on that a lot of other stuff to get to, including all the data we got at 8:30, and there's more on the way. we'll watch oil. $66.50 this morning. cramer's "mad dash" and more we're back after a break think he's posting about all that ancient roman coinage? no. he's making real-time money moves with merrill. so no matter what the market's doing, he's ready. and that's... how you collect coins. your money never stops working for you with merrill, a bank of america company.

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>> announcer: the opening bell is brought to you by nuveen, a leader in income, alternatives, and responsible investing. all right, we getstarted with trading two minutes from now. let's squeeze in a "mad dash." >> david, there's very quizzical piece out of jpmorgan this morning saying good things about amazon they have a buy on it already, but they were saying, amazon web services, estimates modestly cut, now expecting only 10% revenue growth they're saying that the company has had $21 billion of negative free cash flow, and yet they say it is time to buy, because the

sentiment has never been more negative i would not make this call unless i had something in hand that told me that they're going to curtail the table employment and lay people off that's what i would do if i were an amazon analyst, just coming out here and trimming estimates does not make me want to buy it. could they embark on a scorched-earth mark zuckerberg plan we don't know. but to me, this piece read like, it can't get worse, time to guy. >> it's purely based on sentiment. >> yes, purely sentiment >> negative $21 billion in free cash flow? >> yeah. well, it looks -- kind of reminds me, david, of -- >> past two years, negative free cash flow, $21 billion wow. >> isn't that incredible >> i didn't realize it was that big a number >> you've got a terrific cfo, a great ceo. you know they're not just going to sit there and say, well, it's okay they're guys who like to make money. jassy is winner, not a loser, the ceo.

so, i am saying, i like this play >> let's get to the opening bell here as we take stock not just of the data by the ecb, all the gains in the fortune-telling surrounding the fed. at the big board, it is the nypd society in honor of st. patrick's day this week, and at the nasdaq, the st. patrick's day parade happening tomorrow and it's 261st year. >> how fabulous. it's really great. my wife has four grandparents from ireland, so she's an irish citizen and an american with dual citizenship the bag pipes at our wedding >> very nice >> remember? >> i to remember >> one of the greats chilling >> did you have it the second time and the third time? no >> david, yesterday -- >> liz taylor. >> no, jim had the party, remember he had the party after the wedding, the next party and the third party. by the way, you're due it's been a while.

>> i'm going to talk to my wife when i see her this weekend. i want to point out that ryan reynolds, a lot of these ceos, for instance, darius was on the honeywell, he came and said it's time to have more balance in life ryan reynolds said he needs more balance in his life, he's going to leave his family and spend more time working because he does not feel he has the correct balance in life. >> you had a very -- >> there you are >> i'm not kidding, and he gave me some tom ford, elton john sunglasses, and i felt very confident that apple is doing okay with t-mobile mike seifert was there too >> i didn't say hello to ryan. >> well, i didn't let you. >> no. >> i was blocking him. >> we had a good discussion about companies doing good was that fair to say >> he called it anti-aspirational. he came up with, who are the people that they can't aspire because they can't even call home and he came up with a card for them, $1.25 billion sale he's got a company, but i thought that was an amazing

moment and a reminder that not everybody's a raving lunatic capitalist some people are actually doing the right thing and turned out to make money in the interim >> guys, would you like to talk about the broader market i would love to get to another story that we have been following that's having a positive impact on meta. i haven't looked at snap, but i assume it may be as well, this continued course of concern about tiktok's operations in the united states. snap shares are up another 2%. this idea that they want to remove the chinese-based shareholders >> but the chinese are saying -- >> by the way, i think they're right. i'm not sure -- >> you think you're right? what are they, going to brainwash you with tiktok? >> what does it matter about where the ownership -- what matters is where the algorithm's coming from and who has access to the data. >> it's a complete abstraction what matters is whether you hate the chinese or like them there's nothing you can do with anything >> that clearly is but yes, the u.s. threatening to say, we're going to ban you if

you don't get rid of your chinese ownership. >> when is easier? having the six -- the seventh fleet in there or banning tiktok >> i guess it would be banning tiktok the question is, this doesn't seem to answer it, saying, well, all right, your chinese investors have to be gone. really, what would answer it is if you fully potentially moved all the data here, but you would also have to move the algorithm here, which is something bytedance has no interest in doing. at least the updated algorithm that's the key they don't want access to that here, so -- >> and i would buy meta if that's the truth >> that's what people are doing. >> by the way, what is mark spending a lot of time with? spending a lot of time with reels. he made that very good point, why he might be saving $7 billion, according to nathanson. >> by the way, bytedance, 350 to $450 billion value, it's a private company, it's enormous the u.s. is obviously an important market for them,

although unclear how profitable that market is, but clearly when it comes to total addressable market, very important this is what a spokesman had to say about the potential ban. "if protecting national security is the objective, divestment doesn't solve the problem. best way to address concerns about national security, get transparent, u.s.-based protection of u.s. data and systems with robust third-party monitoring, vetting, and verification." they say they're implementing that, but guys, this continues to be a focus as we know, and there are two beneficiaries. >> by the way, britain joined with the idea -- >> uk government as well not western europe, though >> okay, so, what are the chinese getting that we're all so worried about what kind of information are they getting on us >> i don't know. location information likes and dislikes

i don't know >> i mean, there is some strategic imperative, but i've not been able to figure it out, mostly because when i look at it, i feel like it just destroys my brain cells, and i don't have enough these days. tiktok -- it would be one thing if it was, say, a rail gun and this is the novel ghost fleet that marc benioff had. >> no clue >> rail gun and ghost fleet? >> you didn't read "ghost fleet" >> you can't make abstruse references to books that people haven't read >> chinese take over parts of our navy, which then fail when we're at war with the chinese. it's a lot more fun reading than graham allison i had him as a professor he's still around. it's great >> by the way, that would be very concerning. >> well, that's what i'm saying.

we're fighting these wars about videos that my kids show me, and that's -- is that what we've stooped to, worrying about that? or is it really about, hey, listen, we don't want you here in the same way that baidu didn't have nvidia we seem to be fighting them on every single level, other than on national security, which is what we should be worried about. >> we'll see snap was up almost 6% premarket. yields, jim, i mean, it seems like the bond market is saying to the fed, make my day. yeah >> i think that's absolutely right. i got to sell my two-year paper. i'm up huge on it. i did not buy two-year paper to make a profit. i bought it because, what else was there to do? that's what a lot of people in america should be thinking, taking that profit if you bought the two-year, because it's huge. >> when it does come to tiktok here in the u.s., you know, some people who apparently have seen the numbers say it's not that large percent of their overall revenue and it's not profitable. so, maybe it's not inconceivable that bytedance just says, okay,

fine we'll shutter it >> can i just offer some -- >> although there are going to be a lot of very unhappy teenage girls. >> well, that's an imperative. >> and i know that for a fact. >> others will fill that space >> reels i'm telling you. >> with the same algorithm the algorithm is incredibly powerful >> zuckerberg is on reels like you wouldn't believe i've been doing some reels >> he was leading an ascetic life now not hasidic, ascetic woody allen, that's zuckerberg now. yes. i thought he was living a very simple life now. >> you didn't like my crypto joke >> i missed it >> i said -- never mind. >> you can't go back >> sam bankman-fried, after what i read with alameda, it seems more like corrupto than crypto come on, that's good >> it was okay >> the few tickers here. you mentioned adobe. we got upgrades of qualcomm and

skyworks at ibc. >> we got some qualcomm for the travel trust, sold some because it seems derisked. there's an inventory correction. we're through the inventory correction there's so much positive in the real world that i hesitate to go into the fantasy world of first republic and so, people are now telling me, you know what? jim, i had the money to buy silicon valley bank, i just didn't get the call. >> by the way, when it comes to the auction of silicon valley bank, i've been doing a good amount of reporting around this. apparently, the deadline is tomorrow the fdic is trying to sell as much as they can in terms of the loan book of the company i'm told there's a $10 million hold there you had the $42 billion in deposits that left, $55 billion in the queue on friday that they then shut down there have been talks -- no, is jpmorgan interested? >> they're not allowed to. >> will private equity -- they

are, but nobody wants to sell to private equity, turn around in two years and say, oh, look how much money they made that seems unlikely. >> that will cause bad will, but at the same time, that loan book is more solid than people realize. >> and you do still get -- there is still something of that franchise in terms of being connected into that ecosystem. is that worth $10 billion? will the fdic provide some sort of assistance becomes a key question not clear to me this is going to end with anybody coming out with a big part of the loan book as of tomorrow if they do end the so-called auction at that point. >> you're telling me that if it works, it's bad for who buys it. >> if they don't do it without fdic assistance. >> if there's a profit, they give some of the profit back to the fdic, because they wouldn't be able to do it otherwise >> i don't think it works that way. >> what's the matter with keycorp? keycorp is a great american bank with regional offices everywhere congressmen, wake up that's something that is in your district that's allowed people to have

small businesses what are we doing here what are we doing? these are great regional banks what happened to the imperative of having regional banks so we're not like britain or france what is going on >> to your point, maybe you need an explicit guarantee of all deposits >> we have some unnamed treasury official saying, don't worry about it that's great if you're a major chain and you have money all over in community banks, do you take that to the bank >> greg fleming's point this morning was that it doesn't need to be to infinity. >> i thought that was very good. >> then charge for it. >> he was very calm, very rational, and very right he was david, this is not like mason storm in "hard to kill." this is not one of those situations okay >> okay. >> yeah. >> where you can take it to the bank that was the key phrase in that breakout steven seagal movie >> yeah, okay. can't go there with you on that one either i'm sorry.

but i can pronounce ascetic properly >> you threw me on that hacidic thing entirely >> jim, people want to hear a little bit more on adobe they do raise the guide on both the quarter and the year at the same time, you mentioned the rbc piece on a.i it's like almost 200 pages today, but one of the major points is that the risk to google search is incremental and small if you look at the bing traffic, it's basically been a blip >> yeah, it's just that they -- you have to keep coming back to the notion of, if you give money for google, for a small or medium-size business, and it says you get up in the subway, and it says, show me the best mexican restaurant nearby, tell me, and there's a queue, but now there will be no queue it will just give you an answer. it won't say, well, you can go to whichchipotle, but here's the that comes in second is that a huge part of their business no can they do other things with it yes. but the issue here is der

bingal bing, which we thought was, i don't know, dead >> yeah. >> bing's a winner >> bing is a winner. for microsoft. bing is a winner >> yeah, for the first time ever >> chatgpt iv is going to change a lot. >> here he goes again. >> well, it is >> i know. >> it is, it is, it is i got to get you more focused on this i think a lot of people don't want to, perhaps, because nobody really knows where all this is leading, including the creators. >> yeah, but before you get too negative on it, let's understand -- >> i'm not saying i'm negative >> about withe role of humans i world with chat. i think we still play a role >> yeah, less and less and less and less, until we're finally just -- until the machines take over entirely. >> please, people are going to be worried they're going to be watching and worried about first republic and now worried about their lives. >> i think the growth of a.i.

and its threat to the human species is maybe a bigger issue over time, but near term, perhaps you want to be more focused. >> i understand where david is going, because we've all used it it is rather amazing it is. >> it is >> but at the same time, we're behind it. >> we are. >> we still -- >> until it decides -- we're not quite there yet. >> jensen made this point. >> what happens when it takes over in some way and sends us all a signal on our phones that hypnotizes us and we all become zombies? is that going to happen? >> what does that have to do with bristol-myers >> exactly or intel, jim. >> if the inventory correction is over, remember, the pcs were down 37% year over year. i mean, that's pretty -- it's almost as if nobody ever bought a pc i think that pat gelsinger, who runs intel, is incredibly nice >> you keep saying that. >> well, i want to make that point. since '60, i've said it, so how could i be more right? >> defended 25 like three times. >> it held i like adobe

it's down huge, and they don't have to get that deal to make it work, david. they don't have to -- it would help them. >> ftx, jim, upgrade out of stifel today >> i like that call. that and u.p.s. seem very washed out. now, u.p.s. has a contract negotiation, fedex doesn't i think fedex is doing much better they lowered the bar so big there, david, that it could make it so they beat the numbers. >> they have lowered it a lot. >> a lot well, you know, more than that >> i mean, no, i don't have that much more than that. i followed it in terms of the activists who have been in that stock for some time, continue to be the pressure, sure to get fred smith not really involved any longer >> that's true, but fred's like that he's happy to do that. his son's coaching the falcons they could use his help, i think. >> and i guess we'll see what the numbers look like. >> the numbers are the numbers is what you're saying. >> i don't have a lot, i guess, is what i'm saying >> here's something that david can help us.

>> tell me >> blackstone writes off a big piece of property in vegas, right? >> yes >> but blackstone's probably the only outfit that i know that is savvy enough to get in very quickly and look at these books and make decisions will they ever do that >> on what >> first republic. they could do it they're that smart >> i think that -- i think there's a perception issue first of all, no no, no >> the perception, if you're smart, you can't do it >> we're not at that point where that becomes an issue. there's a potential buyer for first republic, they may want to listen the government may want to -- >> the reason i posit that is we all have this new perception that no regional bank is smart enough to know how to look at this you know that's what, behind the scenes, people are saying. they're not smart enough that's what they're saying >> right >> but is anyone smarter than john gray and his team terms of figuring out what a loan book is worth >> no. they probably have a very good sense for that as do any number of other -- >> are they working this

weekend? >> i don't know >> could you make a call >> i made a lot of calls, and i don't know >> why do we keep putting these banks up like they're on the do not resuscitate list >> it's funny you say that, because yesterday the jpm desk wrote that x financials, the desk is eerily quiet neither the shorts nor the longs want to press too hard 3,860 feels like a win for the longs for the week would you go along with that >> i would not as the late, grate jim fisk said about gold, you short this market, and i'll give you an invitation to your funeral i think this is a dangerous short market, just because of what you just said if nobody's doing anything, and we get, like, an ounce of good news, that could ignite something. i'm not saying -- we need an uns of good news we don't have that now but every single indicator for deflation, flashing, yes, we're

deflating at a time when the fed is going to have to raise rates because they want to show that they're tough. jay powell has to show he's tough. he's raised rates faster than any human in history now he has to show he's tough? what is he, clint eastwood "magnum force" >> most powerful handgun in the world. >> how about the police force within a police force, not unlike brazil in the '30s. >> to jim's point, import prices down oil, lowest since december devon, below $45 today >> that really blew a hole in my travel trust, but oil is, what oil is sticky for the airlines >> what is that saying about the global economy >> thank you, david. that's what i have been trying to focus on. >> oxy is eking out a small gain on this buffett stake. it's creeping higher and higher. >> by mike wirth at chevron, is he buying back every share or

what >> that price. it's been quite a week >> this is my focus. the deflation is happening so quickly, well, the ecb wouldn't know what hit them if a 2 by 4 hit them, but our fed is smart they do a huge amount of work, and i don't know what they're going to find that is up i mean, what's up since the last meeting? what food stuff is up? this is a crucial moment, because i think everyone is seeing prices have flattened or gone down, except for airline tickets. but if you go back to what united said, i think you would even question whether airline tickets. find me something that was up more than it was last month. even lennar did not give a high sign that housing is going down. housing is going -- i think this is a crucial moment where the fed can declare victory for once it's winning in every single front. why not declare victory?

go home? a "w" is a "w. >> we'll take a break here quick reminder, you can get in on the cnbc investing club with jim. sign up and find out more at cnbc.com, or you can use the qr code on your screen. it takes you right there s&p down about 20. holding 3,872. and as we said, treasuries, despite the ecb moving 50 today, yields pretty much lower across the board with the two-year back below 3.94%. (swords clashing) >> announcer: the bond report is brought to you by pimco.

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it's time for jim and stop trading. >> [ inaudible ] doesn't make money which is an issue and the idea that williams-sonoma and cigna reporting good numbers i want to talk about square for a second mizo recommends it they're the next to pivot to profitable the positive strots profitable is working -- pivot to profitability is still working i'm going to have okta on. >> the point is this could be an everything app. >> i think people have to recognize the nasdaq continues to have positives so you can focus on the banks or you can take a look at what's happening in the nasdaq and i think the nasdaq is the leader in this deflationary world. >> as jim says it try get back to the flat line nasdaq down a couple points. >> and i think we have to recognize that meta is the leader because it showed you can

cut out $7 billion, make $7 billion if you fired people. every company that has fired people, this is amazing, in the nasdaq, every single major tech company that's fired people the stock is higher. >> see you tonight. >> this could show. >> i love the it keep working williams-sonoma. restoration hardware. >> "mad money," 6:00 p.m. eastern time dow down 170, s&p leaders are going to include as jim says intel, amd, adoughby >> -- adobe. >> real companies. (vo) this is more than just a building. it's billion-dollar views. perfectly located. an inspiration. and enough space to start an empire.

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the network from the most innovative company. comcast business. powering possibilities™. good thursday morning. welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla and david faber. we are live for you as always at post nine of the new york stock exchange take a look at stocks under selling pressure a little bit. the s&p down a little more than 0.1% nasdaq is positive nasdaq 100 up a quarter of 1%. you're seeing strength in consumer discretionary, communication services and technologies

financial getting hit and the defensives like real estate and health care. we've got two huge events going on this hour ecb president christine lagarde and treasury secretary janet yellen are both testifying in separate events this morning lagarde is doing her press conference after raising interest rates by 50 basis points, which was what people had expected, but there were some questions going in about the banking tremors and whether she would actually do a double she did that and she's speaking and said she's monitoring the markets and situation and that they stand ready to act if needed but expressed confidence in the european banking sector and inflation is set to remain too high too long. speaking of europe, we're going to continue to monitor this for you. check out the move in credit suisse this morning surging on news it plans to borrow 50 million swiss francs, though the gains have evaporated and i haven't found one research note this morning that expresses confidence this is going to make this credit suisse problem go

away have you in. >> >> no. it's hard to know from these situations, even those in the room advising the company and senior executives as well f it's really going to happy, if you can stem the outflow of wealth management accounts completely, bolster confidence in some way, then you're in a much better position that's certainly something they hoped would occur as a result of the swiss national bank saying they're in a position to help if needed we said yesterday there were the contingency plans in place, they made them explicit, but there's counter party risks, margin requirements a lot of questions there and from what i'm getting at this point it's unclear as to what -- nobody thinks it's going to be allowed to fail. the question is what woo it be absorbed >> by a ubs. deutsch bank. >> other financial institutions. again, do you want to keep it in switzerland, therefore there's

really very few, the likes santander or other banks as rumored names of interest in some of it who knows. but it's a fluid situation as is the case with so many of these financial institutions that we've been talking about right now. >> the question going into today was, are the solutions good enough from the central banks and the government, right? we're wondering the same in europe, wondering the same in the u.s. it feels like they've put the band-aids on the problem, but there might have to be more to come if not inspiring to see financials down. >> is the ecb tone deaf with the 50 basis points rate hike? >> i don't think christine lagarde found it tone deaf she started out with inflation i think we have a sound bite can we listen to the european central bank president moments ago opening her news conference. >> inflation is projected to remain too high for too long

therefore, the governing council today decided to increase the three key ecb interest rates by 50 basis points in line with our determination to ensure the timely return of inflation to our 2% medium-term target. >> that's their priority that's their single man mandate. i don't think you can call it tone deaf because the next sentence out of her mouth was, we are monitoring the situation in the markets we think that european banking system is safe and has ample liquidity, but we stand ready to act as needed. and also, they scrapped their guidance so there's clearly risk building and they're following it and monitoring it. perhaps you could say they're taking a stance of confidence in the banking system that they're not panicking about it and not going off their track to fight inflation and that fed may be doing the same next week doing liquidity measures to shore up the financial system, i guess can go hand in hand with raising rates to shore up inflation. that's what the bank of england

did last year to shore up the failing pension funds. >> she does describe the market dislocations intention as severe it's not like they're completely deaf to what's happening she also says that china remains a wild card that could influence commodity prices but their view is very much zeroed the on inflation as you say. meantime goldman out today arguing that data doesn't really tell us yet if deposit outflows are picking up steam or getting any better that's going to be the other equation to watch here in the states. >> and what -- >> 4:30 when we get important data as steve liesman indicated. >> of who is tapping the fed window, the new program that allows you to, obviously, put your securities up and get par for them you might imagine a lot of people will be focused on that and see what the numbers look like. >> is anyone going to do it because it's a negative stigma to be doing it. >> if you have to. >> like credit suisse overnight.

i think the question, david, is that even if there's an implicit guarantee of deposits in the u.s. banking system, even if the fed made it clear it's willing to provide liquidity, is it enough more voices saying we're going to need to see congressional action for congress, the u.s. government, to all-out guarantee all the uninsured deposits at the banking system are we going to get to that point? >> we may because there's a lot of concern about the ability of rejal and community banks to fund themselves, whether you will see another bond investor step four an offering. >> first republic is down 30% almost. >> first republic suffering again. there was a report from another news organization they're for sale i began this week saying the government would like to see them sold. also talked about people i've spoken to who somewhere been part of a potential process and talked about significant, you know, capital hold that said, they have enormous amount of liquidity they brought

in jpmorgan for $10 billion, $60 billion as well, $70 billion, but it's unclear what happens to this franchise, i guess. again, these are fluid situations so it's hard to offer something that's concrete given they move very quickly. >> i think the other part of the story that makes it confusing on the bank sell-off we're all reassessing the earnings profile, what that's going to look like. lower rates will pressure their earnings, ironically, even though higher rates are a problem as well. >> i know. the funding costs for many banks may be going up and they are still pressured to offer depositors more typically than they have been because, for whatever reason, they have captive depositors to a certain extent because they've given them mortgages or in the case of silicon valley bank they do enormous amounts of business within the ekose system of their start-up world that's going away. so even with lower rates you have to off are higher deposits and funding costs are going up

and not a great balance. >> pimco out saying there's no appetite in congress to raise the 250k limit or reverse the crepo bill that allowed regionals to escape the restrictions the larger banks have. >> despite what elizabeth warren really wants right now. >> we're monitoring the credit suisse situation the stock up off the highs we saw in the european trading. everything is fine at the bank hadley gamble sat down with the chairman this morning, joins us with more. hadley, they're sticking with their position >> sara, it's been a wild ride for these guys, and the chairman of saudi national bank essentially saying to me, it had been an emotional 24 hours for him. he wanted to make several things clear, one being, svb, the largest share holder in credit suisse never been approached for a capital injection or bailout, they haven't been in a room

discussing the possibility of raising their stake and that, of course, is because due to regulatory requirements they can't go above the 9.9% stake they have in credit suisse he said that this was a major overreaction and even so far as to say this was a mischaracterization of what he told the media on wednesday. what i thought was interesting about our conversation, though, was he said he felt that regulators were moving swiftly off the back of svb and what we saw happening with credit suisse and in terms of getting that swiss national bank injection. listen to what he had to say >> the bank is on its way to do the restructuring they've been talking about. they have two, three great crown jewels in the business, the private block management and the middle east and asia, the domestic banking, their asset management business these are all stable, long-term, consistent businesses. they're working on shedding the other volatile businesses and we remain optimistic on them executing the plan and if they, cute the plan the bank is sound.

it's a 150-year-old brand. it's a great franchise and we are optimistic that it will go back to being what it is. >> you believe what we've seen over the last 24 hours is a manifestation of the fragility -- >> of the entire market. if you look at what even the swiss central bank said yesterday is that we've looked at all the ratio, they're sound, everything is fine. >> fascinating conversation, and it went on about 20 minutes. this is a man pretty desperate to get his message out there and recharacterize his comments from the day before one of the things i asked him f they're going to do another capital raise at saudi national bank as the largest shareholder going to fall in line and keep the stake up to 9.9% or 10% threshold. he said i don't think they're planning to do that in the near term he wanted to get in front of the cameras before the market opened guys >> i mean, very interesting

commentary i just wonder if it's connected with reality, hadley these problems with credit suisse they've been going on for decades and you can even go in the back of the last two years deposit outflows, management shifts, the internal control problem with accounting, like these have been ongoing. >> i think the gentleman who is very much in touch with reality, but you have to remember that this is saudi national bank and they are backed by the saudi government, so if mohamed bin salman says you're going to buy into this bank, that's what you're going to do. >> hadley, thanks. turning back to the broader markets we were beginning to repair some of the opening lows. nasdaq back to the flat line or awfully close. the s&p down 21. futures see the fed more likely to deliver that quarter point hike next week and rate cuts beginning as early as june joining us at post nine to

discuss, adam parker, who says it is prudent to sell some financials there could be problems continuing for banks and rbc capital markets, laurie callseena, s&p target of 4100. good to see both of you. if you're going to sell a bank, which one do you sell? >> i mean, i look at this, we talked about it last week when things were really, you know, first going south, i would say or starting to feel worrisome. i mean, what do i trust? what do i not trust? sara was asking about that what's the horizon i can believe? lagarde says they will have inflation at 2.1 in 2025 is that a noble concept? do i put stock in that is that just messaging because i want to calm people. i think ununcertainty should be treated with a lower multiple period okay this is a more uncertain time than a week ago or two weeks ago and i should pay less for risky assets full stop so explain to me why i should

want to play a higher price than last week for any bank >> well, if you think they're cheap and sold off too much and the u.s. government and federal government will come in and made it clear they're act swiftly and decisively to clean this up. >> in the 2 by 2 grid of competency and honesty where are we you don't want runs on multiple banks. in reality do you feel better about the banking system than a week ago >> do you? you don't. >> how could you i only have a sample size of 150 but everyone i know is moved and running out of one of the banks that was a problem whether in their private equity or personal life or business name one person, i'm cool, going to keep it and let it ride and see what happens. >> it would be worse if yields were doing the opposite, night. >> right less losses now than a week ago. great. but, you know, i think you have some tangible book that's -- you

have to think about the valuation. it's going to be lower, can't lend as much, restricted by the government i'm not, you know, doom and gloom. those don't make me want to pay a higher multiple than i did before. >> laurie, i want to tap into your expertise in tech and ask why that trade is working so well if we're going to be dealing with macro issues regarding liquidity and lending going forward in an aggregate? >> look, when it comes to tech, it's pretty simple and it's pretty mechanical. i would say number one, anything you thought about interest rates a week ago your expectations are lower now. we can debate whether we get 25, 50, pause, cuts, whatever, but i think the interest rate environment, i was hearing so many concerns about how high 2-year yields had gotten the last month or so and we've seen that drop precipitously. typically when we see interest rate expectations or levels come down, you get out performance in the growth parts of the market it's that simple

i think two, i agree with a lot of what adam said on the financials and uncertainty high there. what we're seeing underneath the surface and one of the reasons why the s&p has been so resilient this week is its exposure to the tech space and we're seeing a clear rotation out of the financials into the tech names, not just short covering but real rotation and money going back in. i think the macro got baked into the growthy sectors last year and getting baked into the value cyclical parts of the market right now, but that doesn't change the fact that the tech space really did bake in a lot of bad stuff last year so it's natural to see that rotation. >> aren't the economic fundamentals changing before our very eyes right now? you just said, adam, we'll see stricter lending standards, right? they will conserve cash, not going to lend as much. >> controversial - >> that weighs on the economy. >> sure. >> deflationary and hurts economic growth. >> the probability the economy is declining certainly seems a lot higher than the probability

it's expanding, right. i think -- >> is the recession getting priced in now finally? >> not fully, but i think people are, you know, saying there's a distribution of outcomes and the probability and earnings scenario, and it got shifted a little bit more to the worst possible set of scenarios. that's how i view. it what she said is spot on. people are saying the simplest thing is buy growth at a reasonable price, put my money somewhere, there's a chance the 2024 numbers for some of these businesses are actually in absolute terms above 2022. i can justify them that's the logic now, i think the debate is that price to earnings ratio versus the earnings price to earnings ratio, sure, fed fund futures get more dovish people think that helps the multiple expand. multiply the p/e times e i'm not confident we're going higher. >> laurie, are you finding it harder to justify your target on

the s&p if the economic outlook is changing for the worse, which is happening >> so look, i think it's a question of the road we've traveled and the road we've got ahead of us. when we look back to that october low in the s&p 500, it was a 25% drop from peak and that's close to median recession pricing. it only reflected the idea of 2023 economic carnage. the question we've god to ask right now is, when is this recession? whatever we're going to call it. when does it happen? is it a 2024 event, 2023 event i feel like what i've learned is we've increased the odds we're going to have something nasty like that happen in 2023 is the 2024, you know, kind of recession recovery thesis still intact i don't know that we have a definitive answer to that yet, but i don't think we can conclusively say no. i feel like what we're doing is kind of saying okay, whatever this is, we're going to go ahead and get it over and if that's the case, then we may have

actually put most of that pricing in last year. >> look, you get a 41 target i get it i've been in that target and i get it it's an unfortunate thing of having a good job like you have at a good firm who knows. she's got a european option 12 months, stick with it, seems reasonable, you don't panic. i get it the biggest bull case i can come up with is that everybody is negative, right, and nobody has a target above 4200 on the s&p that's a bull case. >> or patterns of what happens to the s&p when cpi peaks? >> what's shifted, statistically significant, fed fund futures up, the narrative is shifting toward if they get dovish because there's an earnings problem, and i'm not as confident that, you know, the soft landing unicorns and lollipop scenario we all thought was base case late january is as plausible. >> yeah.

>> how about all the money your friends moved out of other banks, keep it where they moved it or move it back >> i think -- i can use -- i can tell you what i'm doing and what everyone else who, you know, romanticizes where reasonably prudent does, you keep it at the cap and no more of the fdic and buy short-term treasury in the saving account you can access no fee any time you want. you know everyone i know, probably know a thousand name one that didn't do that. >> that's what's been going on. >> that's not bullish. >> it is not it is not. >> right back where we started laurie, happy birthday. >> thanks. >> happy birthday. >> larryurie and adam. thanks. our road map, the ecb sticking wait 50, double, basis point hike will be the fed be next. we'll discuss amid comments christine lagarde and janet yellen this hour. more on the banks. we'll have one analyst who says

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woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. welcome back to "squawk on the street." the six largest banks have lost nearly $165 billion in market cap this month that's about 13% of the combined

value. our next guest says regional bank earnings will be impacted by higher costs to keep depositors joining us is analyst erica najarian regionals in one bucket and money center banks in another. i mean is it fair to characterize it that way >> sure. i would add another bucket you have the super regionals and you have the regionals under $100 billion in assets that don't go through regular stress testing for either credit or liquidity. i think those are going to be different buckets. to your point, regulation is tight with the money center banks. for the regionals it's the potential for regulatory tightening is coming which could impact ultimate returns and i think that funding squeeze and ultimately tighter regulation coming for the smaller banks under 100 billion in assets could be more acute in terms of pressure and oes and lead to

more pressure in the small bank space. >> that's where the market seems to be focused. not as much on any actual failures but on their earnings power, ghanch rise in funding costs. how much have you been taking down your numbers for any number of these regional and smaller regional banks >> yeah. we're already well below consensus in terms of our system for regional banks because not only do we see continued funding squeeze which will impact net interest income, but we also see that we've essentially written the conclusion on a recession in the united states. that will lead to credit contraction, which is never a good thing for an economy, and then it will also lead to higher credit losses, especially in places like commercial real estate, subprime, and consumer. >> we were mentioning regulatory analysis saying there's minimal appetite in congress to do

anything regarding regulation on regionals. wouldn't that be a positive for the equity or the street wants more safeguards to make sure that we don't find ourselves in similar situations in the future >> there may be a limited appetite in congress, but keep in mind the regulatory bodies have already been talking about pushing down some of the rules that the regional banks, for example, there's something called total loss absorb capacity wherethere is a lot o talk from washington from the regulators, not congress, to push that down to some of the regional banks but you know, at the end of the day, i just wanted to take a step back, right so i think, particularly the super regional banks that i cover they're going to be able to withstand future tighter regulation with some hit to roe, but it will be quite profitable. the potential regulatory situation, you know, is not over

exaggerated. secondly, right, between now and rule making, these banks can generate lot of capital and a lot of liquidity on their balance sheet and their positioning could look very different from the fourth quarter which is the most recent disclosures we have, and, you know, if you fast forward two years when new rules could be in place from regulators. >> and finally, the biggest banks which have been the recipient of what we assume is significant deposit flows, should they be viewed differently after this period this last week >> so i think they will be viewed differently the ironic part, relative to, you know, the 2008 global financial crisis, is now the largest banks, quote, too big to fail banks are seen as flight to quality. some of the news reports over the past few days are right and someone like bank of america with 1.9 trillion in deposits

took in $15 billion, that's pretty small amount relative to dislocation generally priced into the stocks. that being said, i will say that the money center banks look particularly attractive from here, attractive from here because not only are they beneficiaries from flight of quality from a deposit standpoint but already their capital levels reflect some of these issues that investors have on available for sale securities, right, they have strong regulatory capital, strong liquidity, and additionally, you know, especially for a bank of america and jpmorgan, they have fortress balance sheets to withstand a recession. >> yeah. that forstress balance sheet thank you for your time. appreciate it. >> absolutely. >> we're going to talk more about the banks after the break. financials are lower today check out one mover that's higher signet jewelers, issuing strong guidance

i wept back and forth with the ceo what's happening there is they're seeing strength at higher price points of the jewelry and also that they're outpacing category growth and expect jewelry sales to decline this year but for them to gain share they have about 10% share with bridal jewelry declining na wgiill be on with jim on "mad money. we'll be back with more of "squawk on the street. whatev, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today.

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welcome back to "squawk on the street." i'm pippa stevens. stocks are mostly lower at this hour and we're keeping our eye on movement within the energy sector the worst performing group. occidental petroleum a relative outperformer as berkshire hathaway boosts its stake yet again, disclosing it bought nearly 8 million shares of the stock this week. that stock is about 0.4% higher right now. exand conoco phillips are lower and the sector remains in negative territory over the past week as oil trades near its lowest level since december 2021 carl, back to you. >> thanks so much. what day for energy today.

still to come this morning, a look at one key indicator of credit stress for the banks. seeing some big gains this week. we'll talk about that. overall it's kind of an inside day. haven't gotten to yesterday's intraday high or low sara is watching the euro in the wake of ecb dollar index is lower. >> yeah. there is a risky move. considered a risky move she raised 50 basis points the euro is stronger and a weaker dollar on the higher yields and equities holding up there are questions whether she did the right thing. me tethbrk. don't go away.

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the black sea. it also appears to show a bent propeller on the drone after one of the encounters. the pentagon says the video has been edited for length but shows events in the order they happened russia denying the u.s. claim one of its jets came in contact with the drone an investigation backed by the united nations says russia has committed what it calls a wide range of war crimes in ukraine and possibly rhymes against humanity the inquiry did not find firm evidence of genocide. britain banning the use of tiktok on government phones telling parliament it's a move due to security concerns the u.s. and u eu have similar restrictions dow down 170 the s&p down 11 points bob pisani joins us at post nine. >> volumes are exploding in options and futures. they're happy if you're running an exchange right now. tech has been doing great this

week qqq semi strong. the s&p is up this week, folks, up because of the performance of tech what has fallen apart, energy, oil down in the 60s, 17-month low in oil and the regional banks down 25% that was a focus of the conference people saying common thread the fed needs to stop raising rates because this is a real event that's going to slow down business activity. a lot of concerns that regional bank lending will be in for a period of decline. the regional banks down today. a lot of weird moving parts this week in etf. watch the momentum, inflows into gold and tech, inflos into short-term treasuries and outknows from corporate bonds, junk bonds, inflows into technology, outflows from energy and bank stocks. i managed a package, terry duffy head of the cme was happy,

record volumes we saw on friday, monday and tuesday record equity index futures and index rate futures the cboe said he saw record volumes as well. the bottom line here is what's important is not just the record volumes but everything working the plumbing of the system worked very well, tremendous stress in the last week, nothing broke, and that was very -- made a lot of participants very, very happy. >> that's something. bob, thank you bob pisani meanwhile ecb president christine lagarde has been speaking this hour on the heels of raising interest rates 50 basis points that was a double. the euro is strengthening as a result, talking tough on inflation. steve liesman joins us with the highlights although she did not ignore what was happening in the banking system and said they stand ready to act. >> quite the opposite. she took it on straight on and investors in the u.s. need to watch this carefully because this could be a dry run for the fed next week. the european central bank hiking

50 basis points and insisting there's no conflict or tradeoff between fighting inflation and securing the financial system. christine lagarde, the european central bank president, saying i believe that there is no tradeoff between price stability and financial stability and i think that if anything with this decision, we are demonstrating this we are addressing the price stability issue by raising interest rates by 50 basis points lagarde insisting inflation is too high, the ecb should continue to fight it as long as that is the forecast, but she did back off guaranteeing additional rate hikes saying that ecb will look at how financial instability will impact the data and the outlook. lagarde saying i quote persistently elevated financial market tensions could tighten broader credit commissioning more strongly and dampen confidence and change the inflation outlook and insisted the european banks are strong and the ecb has ample liquidity tools to deal with banking

issues separate from monetary policy most of all, i would say for the moment, i'm interested in your thoughts, she may be pulling this off there is some but not a lot of additional weakness in european bank stocks and little impact in fixed income markets fed chair, jay powell, could take a lesson from this and between the choice of a hawkish pause on one side or dovish hike, he could look to lagarde who successfully delivered the latter >> agree they still have an inflation problem and so does she. the dovish hike looks reasonable in the face of yes, banking turmoil, but not clear yet whether it's going to morph into something bigger she said what she needed to, they stand ready to act. the question will be, and neither of us and nobody can answer this and the market right now in -- you know a year from now, was this a mistake? remember the former ecb president raised rates in 2008 because he was worried about inflation which turned out to be

a massive mistake only making the economic troubles worse. we don't know if that's what this is right now. >> well there were some of us, vare, at the time making a terrible mistake at the time borne out. i will say another key difference, lagarde took a victory run, the ecb has better tools or more tools than the fed in addressing liquidity issues but a bigger issue may be, i'm interested in your thoughts, is the banking issue worse here in the united states such that there would be a bigger impact from the fed going through with a 50 or a 25 next week that would have a more negative impact you look today, our u.s. bank the stock down quite a bit where there's a little bit more stability perhaps already lower -- >> 100%. >> and also moody's said the rest of the european bank looked to be in stable, good, liquidity position agree with you, it feels more

widespread and potentially more dangerous at the moment. steve, thank you very much it's good to talk to you huge day for the ecb. >> and also, we're keeping an eye on credit suisse one of the bigger and more important european banks the shares are in the green this morning for the first time in a while. this on news it may borrow up to 50 billion swiss francs from the national bank. certainly has the ability to do it if it needs to. jeff cutmore live in zurich outside credit suisse's headquarters and has more this afternoon there, this morning here jeff >> yeah. very good afternoon or good morning to you which ever you want to choose. i wanted to pick up on what steve was saying the other interesting thing that christine lagarde may have pulled off here is stabilization around credit suisse we are off the highs of the session here, so the share price has traded down from that 40% open that we saw much earlier here in the morning in zurich,

but when christine lagarde came out and pulled the button or pulled the trigger on the 50 basis points, there was a kind of what does she know we don't know that central bankers may have been discussing it seemed to me. while some of the other european banking stocks were lower, credit suisse actually got a little bit of a jump there as i say, it is trading down a little bit now, but still up firmly and what you've got to i think understand here about credit suisse is nobody said there was a capital crisis here for this bank 40.1% ratio at the end of the fourth quarter, the liquidity coverage ratio about 150% back in early march, so generally, those numbers looked okay. but when the chairman of the saudi national bank was asked the question yesterday, this more money for credit suisse and they already have it just below 10% stake, he said no, we're not going to put more money in and

that caused a lot of nervousness in the market and a big sell-off we were down 24% by the end of session yesterday and that's why the smb, swiss national bank arrived with a fire engine and said you can have $54 billion worth of liquidity and we are backstopping what is seen as one of the systemically important banks globally, one of the big 30 banks supposedly too big to fail for the time being the swiss national bank has clearly stopped the fear and we have stabilization in the share price and investors are thinking okay, what next, because we're still below two swiss francs on the price basis. this looks cheap against other banks, but we know there's a major restructuring program ongoing and the banks already told us there will be more losses for this year how stable is the business model, as they restructure and

move towards a wealth management private banking model. that's the problem are investors going to stay on board? are depositors going to stay on board? they had huge outflow over $100 billion in the fourth quarter alone and clearly staff and investors and depositors are nervous about the story here in squaric. back to you. >> geoff cutmore thank you very much on the ground in zurich for us. the price of credit default swaps for banks we've seen rise dramatically this week and regular investors are getting in on the upswing kristina partsinevelos has been tracking the action and are we seeing some relief today >> yes, and no we're looking more long term at the numbers coming in, one in five each day. the cost to insure wall street bank bonds got more expensive amid the financial fallout from svb. before your eyes start to glaze over a 101 if i'm bank a, loan money to

credit suisse but worried credit suisse might default, go to bank b and buy insurance or protection this is a nice definition from the cfa institute. once i get that protection, bank b will cover the defaults if credit suisse goes under, and i'm at ease. that insurance is exemplified by the five-year credit default swaps on your screen by the mega banks and they have all to your point, all jumped dramatically recently these what we're seeing on your screen is over the past three months, up over 20%, but if we extend beyond just to six month look at that credit suisse is up over 300%. jpmorgan, bank of america, also at levels that we haven't seen since october. and these are u.s. banks, of course, and you have credit suisse which is the worst out of the group, goldman sachs, citi at high since november and that's showing systemic risk in the financial system it's still nothing compared to credit suisse which we know got a big lifeline over $50 billion

from the swiss national bank its credit default swaps hitting new record high. the good news, the good news is that most of these levels, except for credit suisse, are nowhere near where we saw in the financial crisis bad news, investors can't get involved with this kind of trading directly because it operates in a black box. one product, though, is cdx, the cdx etf, investors who want high yield junk bonds, risky but protected through defaults through hedging, get the yields but a little bit less risk and you can see that that is up over 6% today the end. >> thanks so much. kristina partsinevelos s&p has gone green, nasdaq as well. amazon, adobe and intel leading the s&p. "squawk on the street" is back aomt.in men erospace, advancing flight for future generations. ♪ welcome to a new era of flight.

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svb collapse and the turbulence spilling into european banking markets as well. our next guest closely watching the influence of european central bank's increase on the u.s. and in particular the speed and height of them let's bring in patrick, former ecbconahan, former governor at the peterson institute for international economics. it's a great day to have you here, patrick. were you surprised ecb president christine lagarde went forward with 50-basis point increase in rates? >> no, i wasn't surprised. they made a fairly firm announcement last time there was almost certainly going to be an increase this time of course that might have gotten derailed last weekend with the turbulence in bank stocks and bank withdrawals from the svb bank they clearly decided to hold their fire feeling there's not that sense of concern.

and also i think they want to say getting inflation under control is very important. we have a measured approach to that we want to keep interest rates at a level that ensures inflation comes under control. their forecasts are for even slightly faster fall in inflation this year. but i think what did change today was that they made no indications of further increases. previously they included language that had a steady set of further increases now weigh don't hear that from them i think they're much more in a wait-and-see mode. >> so is credit suisse a problem for them and for the european banking sector as a whole, or are you worrying more about what's happening in this country with regional banks? currently western alliance bankcorp is paused due to volatility this is still happening. >> yes i think we should distinguish between bank equity markets and

the deposit markets. credit suisse is a bank head quarters in switzerland, not part of the euro system. it's not in the direct -- the ecb is not in the direct line of fire credit suisse has operations in europe and in the united states. i think we should consider credit suisse as one of the big global systemic important banks and the swiss authorities, the swiss national bank have made it quite clear they're prepared to lend pretty substantial sums of money to credit suisse so they won't run short of liquidity in the coming days. i think that was not a direct concern. it's more the overall sense that the banking system has been weakened by the rise in interest rates because of the degree to which some parts have taken fairly substantial bets on interest rates remaining low when they haven't remained low >> so from your perspective do

you think the fed can get away with the same thing? hike next week and say we'll be there if things get worse? >> the textbooks say that's what they should do the fed has been lenient with the banks that are in trouble so far in the sense of, congress, they're not bailing out the shareholders they're not bailing out the bondholders, but they're providing liquidity support on very, very good terms. i think the fed will probably continue on the sort of course that has been mapped out already and certainly the action of the ecb certainly gives you a sense of the way central bankers think and are thinking the ecb knows about banking supervision, supervision of the first 100 or so biggest banks in europe is directly done by the ecb's single supervisory mech mechanism, so they're in touch but they raised interest rates by 50 basis points today >> patrick, it's great to have you here today

good day to talk about european banks and central banks. appreciate it. patrick honohan. david, another day and another series of regional bank trading halts. what's going on? first republic is a stock we've focused on since monday. if, in fact, be you had not gotten the fed stepping in on sunday, it certainly seems first republic would have been in deep trouble. you can see that reflected in the stock trading that has gone on this week earlier i talked about if you were to account for the depos the flows out, a large capital hole there and i reported on monday as well that the federal government would like to see it potentially sold now reporting moments ago according to their sources jpmorgan, morgan stanley, other banks discussing a deal that would include a sizable capital

infusion it's my understanding the fed has continued to be in contact on this particular possibility and might be there to sort of provide some capital relief if, in fact, there was a deal. when you're dealing with a large capital hole, talking negative book value when you buy the banks you need to market the assets take a loss on those that will hit your own book value and unclear how many want to do that what they're buying and how big the hit to their own book value would be if the fed or treasuries want to step in and given you capital relief that might make it more amenable we'll see. i've talked to a number of senior executives at these banks that might have had interest and they seem to me to be quite cautious

a lot defends on what, if any, assistance they receive from the fed. what would the ultimate equity value be for first republic in terms of what they would sell at a lot of moving parts. >> it makes you wonder what svb has on its books they couldn't get a deal done for svb in terms of a buyer. >> svb had so many deposits leave so quickly it just was not going to work. signature bank, for example, which we don't talk about as often, i'm hearing a lot of interest again, you don't have to pay anything for it. i have heard there are any number of buyers looking at it closely. we do see a bit of a rebound in shares trying to figure out what is

halted or not. it is moving so quickly, it's unclear what a buyer is willing to pay in terms of equity value given the potential hole they're taking on without government assistance >> yellen still testifying before the senate finance committee. she's talking about the budget >> she is. eamon javers, are you there to tell us what other highlights we're talking about as we see the broader markets up >> reporter: david, absolutely take a live look, janet yellen is testifying before the senate finance committee right now. each senator having the opportunity to ask her questions. there you see senator cassidy weighing in with some questions. the treasury secretary here offering some calming remarks in terms of americans' bank deposits and the security thereof. take a listen. >> reassure the members of the committee that our banking

system is sound and that americans can feel confident that their deposits will be there when they need them. >> reporter: this hearing was scheduled to talk about the president's budget priorities but obviously a lot of interest in silicon valley bank, what happened there, the decisions to bail that bank out, if that's the term you're going to want to use. a lot of debate whether this is a bailout or using appropriate authorities. we'll expect her to get more questions as the afternoon goes on and we'll monitor that and bring you any news back over to you >> eamon, thank you. eamon javers on what we can expect eamon, i would love to come back to you on this larger issue we've been discussing. jim has brought it up a number of times, the programs we got on sunday from the fdic, from treasury, the fed, in terms of potentially implicit amount of

deposits where do we stand on getting something that is explicit >> reporter: that's a real request of political will, david. chuck grassley in the hearing just now asked janet yellen about the fdic and raised the question whether the fdic slow walked a merger deal because the government didn't like the potential suitors. yellen ducked that question and said that's not a question for me how this process was played out whether we get an explicit guarantee would take more political will than i sense now. you have this situation where you're offering this implicit guarantee for depositors, but you're also you don't have the ability to offer it from those banks getting that implicit guarantee. what kind of a future does that

por portend? we don't know whether the political will will materialize. >> of course, that's a great point. regulation has to go along with it if you're going to guarantee everybody's deposits you don't want the banks to doing all sort of risky things >> reporter: the risk throttle goes way up and what does that lead to? >> eamon javers, thank you that will do it for me over to carl and sara who are on the floor. and another busy morning good thursday morning again. i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. setting the agenda holly newman kroft at neuberger berman on financials and this market >> torsten shok pivoting to a hard one now why he thinks the fed is done raising rates. and later former federal reserve governor and deputy treasury secretary sara bloo