reported a great quarter, proving that they are continuing to grow. >> jim >> boeing. getting big orders, delivering planes that's what i want >> guys, i'll see you on "closing bell" in a couple hours. we have a nice little move on our market "the exchange" begins right now. ♪ ♪ thank you, scott hi, everybody. welcome to "the exchange." i'm kelly evans. let's recap everything that's happened in the past couple of hours, starting with the european central bank. they raised 50, they're going full steam ahead despite the banking turmoil. this after credit suisse got the $50 billion backstop here is the last check and as you just heard from david's reporting, here at home, a group of financial institutions, up to eight, were named, including morgan stanley

and jpmorgan, are in talks to deposit $20 billion in first republic this is a 40-point swing on the day here at the lows this morning and pre-market trade, first republic were down to the low 20s now back above $34 a share as you just heard jim say, it's unclear what this implies for the equity the shares have been halted earlier in the session we'll bring you nomore updates the dow up 332 points. the s&p yesterday closed below the 200 day. this has some people relieved, 63 points, 1.6% to 3955. the nasdaq has been a source of strength you just heard brenda mention adobe. these are stocks doing quite well, including amd. the nasdaq up 2% the bank stocks have been a point of strength since january,

and again today. look at amazon, up almost 5% same is true for alphabet, netflix and meta are also in the green. let's get over to steve for the very latest on this curious juxtaposition where we have failing banks, lifelines being thrown everywhere. and yet rate hikes, to be honest, i keep thinking back to 2008 remember when the european central bank did that final rate hike into the crisis, and we'll see if they're repeating that this time around kz >> kelly, it's a day not to blink. u.s. markets, trading with more confidence right now that the fed is going to hike next week by a quarter point perhaps in reaction to this news faber was just talking about, big banks coordinating a rescue of first republic, and reaction to a 50 basis point hike by the europeans. that was received well

whatever the reason, the probability of a 25 point basis hike at 83%. ecb president might have shown fed chair jay powell the way by what you can call a dovish hike this morning she hiked by 50, she backed off promises of future hikes, insisted the banks are in good shape and emphasized that there is a difference between the monetary policy tools and the financial stability tools, and she's going to use all of them, and she has the tools she needs. europe is somewhat different the inflation rate in the u.s. is 6% now and falling. 8.5% in europe the policy rate quite a bit above where europe is right now. 4.63 in the u.s. versus 3% in europe while it may be too early to tell, there's differences in the banking issues, with the problem looking more tenuous in the u.s. among smaller banks. europe right now, as far as we

know, has just one big banking problem, maybe it's solved with that $53 billion powell does have the option, he can pull off a dovish hike instead of a hawkish pause >> steve, the headlines are coming fast and furious, which tells me we are near the point of getting a big announcement here first, "the wall street journal" reporting eight banks are involved with this lifeline to first republic now there are reports that these banks are in talks to provide first republic with $25 billion to $30 billion so what does this tell you, as we watch first republic shares rallying on this news, and the nature of the kind of rescue we're talking about here janet yellen has been on capitol hill, saying the first time she heard of these problems at svb was last thursday. so where do we go from here? >> yeah, that's part of what

they're going to try to do here, kelly, you're right. it looks like they have created this broad program, program number one is what's happening at the fed the discount window over there, and the new fund that will take your compllateral and finance i. and two, this idea of treating it bank by bank, and there is this implicit insurance deposit. i don't know i have to think there needs to be some caution on the equity here, if you don't know what happens to the equity, you will want to be careful here. i'm just not familiar with how the equity is going to be treated in this deal >> it's a major question, as we watch these shares steve, thank you stick around steve is holding down the miami bureau there let's bring in bruce here from jpmorgan welcome to all of you. margaret, apologies for the late

notice as this is breaking, but what are your thoughts as it regards the future of first republic with these reports? >> well, i think it says quite a bit of positive confidence that this group of banks has the ability to do this this cycle is very different in 2008, the banks were crushed by trillions in bad mortgages and structured products. this bank is in very good shape. even the regional banks are in good shape i think it was just a panic, thinking we might repeat the past so a little bit of confidence can stop this incredible erosion in bank values >> prior to this, had you been a fan of the small and regional banks, and after these dislocations, are there any bargains you will be looking for, or are you on the sidelines now? >> i think the banks are very intriguing now, because values certainly reflect a lot of bad news the biggest bad news for the

banks has been what the fed did by raising rates by 4.5%, which put a lot of banks in very bad position as far as taking into pauses so i think that will roll over as the fed realizes they have been too aggressive in raising rates and bailed them out. and liquidity, certainly the regionals are in very good shape. so i think they're quite interesting at this level. stha >> that is an interesting take on what the fed should do here u bruce, on the one hand, you can say jobless claims are low margaret was explaining the differences between now and '08, so the fed should keep hiking. on the other hand, we're on the precipice of something like a credit crunch. >> the fed has to find the balance.

we have had strong data on growth and high inflation news in the first couple of months of the year so the fed isn't done fighting inflation. the fed has financial stress to deal with, and potentially stress that will broaden out here i think as steve said, and as president laguard said, they'll argue the banking system is healthy. however, i think the fed would have been considering a 50 basis point rate hike next week. it will now scale back to a 25 basis point hike, and it will be pretty open minded about the path ahead >> steve whiting, are you bullish on the market? >> i'm not i don't think that there is a catastrophe for the economy here but we have a monetary policy that's caused this to go from zero to 4 1/2 within a year it's not parade level, but starting at zero, going for a

period of aggressive stimulus to aggressive restraint has caused problems you heard marty talk about that earlier. again, the official policy rate yields were above the rate at which banks earn on their existing asset base. i think it's important to see this from an economic perspective that monetary policy tightening works through banking channels, not just for financial markets. if you were to take a look at credit spreads, price of equities, that's one thing but we saw aggressive tightening of lending, before any of this turmoil happened, before any of the news happened, right and this is showing, again, that monetary policies move aggressively, and this will only have an additional chilling effect on lending, which we're going to see the small business sector we will see that across the economy. >> steve, we are -- as people continue to dissect what happened at svb and should they have hedged their exposures,

there's a couple of other banks that have gone under or on the precipice here it seems like this is the fallout from fed tightening and not a sideshow where they should just ignore it and keep going. >> yeah. you know, kelly, i want to relay a conversation i had with a source of mine in '08 and '09, who was really on top and made a lot of money to what happened with the banking system. i was asking does it feel or seem like what happened back then he said absolutely not he says the market may be overstating the concern here in part, we talked about this, kelly, the idea that the problem here is a mismatch between what's on the asset side and the liability side, but not actual soundness of the collateral itself and that governments appear to be well positioned to solve that problem. and you saw that what the swiss national bank did, pro-vviding

credit to credit suisse. so the question is when you put up that january 24 feds fund contract, have they overdone what they think the fed is going to do in terms of cuts on the backside of the quarter point hike next week and if it ends up being something that is isolated, if part because of better capital, better regulation that's out there, despite a couple failures, nobody said we were going to have no failures at all, kelly and if they are able to contain this, then perhaps we move on and we get back to the inflation fight sooner rather than later, and the credit channel impact that steve is talking about ends up being attenuated. >> so we shouldn't forget that the real economy looks like it's heading into recession maybe not this month, but would you say that the odds of a recession before the end of the year are much higher now, and if so, again, why would that be an environment where the feds should keep tightening >> i think we should recognize a couple of things here. first of all, the economy is not looking like it's sliding into

recession right now. second of all, while the fed is tightening 450 basis points so far, the stress in financial markets to this point has been very limited we are starting to see transition beginning to work to the extend that -- we're going to have tighter credit conditions the other thing is the fed is going to respond to this by doing less and i do think that the economy will have a recession. i do think the fed won't be easing until that recession comes. i think we should be open minded as to whether that recession happens later this year in 2024. i don't think it's going to happen in the next three to four months, though >> does this matter when we know it's coming? if we know it's coming, why would we keep tightening >> well, it's coming partly because the fed needs to restrain demand enough to get inflation in control it probably does need a significantly higher unemployment rate. how much they can rely on that

is a question. whether they overdo it is a question but ultimately, the problem here is we will not be able to bring inflation back down to the fed's considerate zone without the unemployment rate rising materially >> why does that leave you, steve? we have seen the outperformance of technology. people are trying to figure out whether they can look past that kind of event or pile into the growth stocks that are supposed to outperform in a low growth environment. what would you say >> let me first start by saying take a look at what happened to the inflation data new cycle highs are the cost of shelter. coincident with conmonetary tightening core cpi has risen in the 2.2% rate in the past six months. so if you don't believe we need a recession right now, it would be a good time to stop i agree with everyone who said that the fed and the ecb, again,

both think that they can take regulatory actions that allow them to go and keep pressing on with monetary tightening, as if we can segregate these sorts of things but we should still be cautious about cyclicals. i look back to 2008 and 2009 everyone says what happens in the financial markets, i haven't seen demand weakness yet i haven't seen the economy weaken yet that's a big problem >> steve -- >> small caps, we want to worry about industrial materials and the financials again are really reflecting things to come there. >> you're bullish on the industrials, if i'm not mistaken >> yes, i think the industrial part of the economy is in good shape. those companies restructured their balance sheets so many of them are impervious to increases in these rates by the fed, unlike the banking system and so i think that left to

their own devices, if the fed steps back, we should be -- i think these company also do well >> quick last word, steve. >> i think what the guard is explaining to us is the idea that you try to keep financial stability and monetary policy separate until the credit channel affects the economy and inflation. you try to keep them separate until you can't. >> thank you all so much for your time today. great to see you we appreciate it still to come, the commodity collapse oil prices down 11% this week, and it's dragging down a lot of the big energy names halliburton, slb, all down more than 10% have we reached capitulation or recession? plus, contagion from the banks to the housing market. we'll see exactly what could happen here.

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welcome back believe it or not, banks are not the worst performing sector this week that prize goes to energy, as oil prices collapse. west texas and brent are at the lowest levels since december of 2021 and down from 50% from the highs last june. everyone in the sector getting hurt, transocean, halliburton, all these names down more than 10%. my next guest was calling for a big jump in oil prices this year when we had him on in december crude is flat since that call. so where does that leave us now? rob, it's good to see you. are you scratching your head like everybody else, or is it a recession and fed story? >> i think what's happening is, we're simply having a risk off switch the risk switch has been turned off effectively.

that's just caused a lot of sectors, including energy, to trade off, being led by obviously a sharp decline in commodity prices, as you highlighted over the last year, and then over the last week, as well >> so what it's showing us is that the supply demand dynamic can't overcommon tear tightening, is that right? >> yeah. the fundamentals, the operational fundamentals in the energy sector in particular are really quite strong. forecast for 2023 to have record levels of crude oil demand globally the u.s. is going to produce a record level of natural gas and export a record number of lng. so the u.s. has solidified itself as a provider of reliable, affordable energy. not only domestically, but to the rest of the world that will be positive for the energy sector throughout the year >> when we talked in december, everybody in the energy market thought the china reopening

would be a huge source of demand why hasn't it been it's not our imagination when they track the tankers that might be bringing crude to china. those levels are down, not up. it's odd >> yeah. you know, i think the expectation has always been, generally speak, that the second half of the year would be stronger for the demand from china than the first half of the year but you're right, it hasn't been quite as strong yet to start the year but the forecast, remember last year we had a decline in demand from china for oil that was the first time in a long, long time that we have seen this. this year we expect to see a significant surge. 700,000 barrels a day of demand growth from china is significant. this oil market is still very tight. there's not a lot of excess capacity it may be a it will oversupplied today, but the second half of the year it will become undersupplied. even a little bit, that will result in higher prices. >> yeah. which names or areas do you feel the strongest conviction about

right now? and what are they? >> yes right now, i like energy infrastructure, because those stocks rely less on commodity price and more just on stable, consistent cash flow so an energy like energy transfer, if oil prices are $50, $60, $90, their cash flow is still going to be plus or minus 5%, and they will pay out a lot of dividends to shareholders share energy is the largest shipper in the u.s., it has the lng trade, and the u.s. being a provider of natural gas to the rest of the world is something we will be talking about for generations to come. >> all right these market pullbacks perhaps, you know, providing an entry

point. i certainly keep worrying, you know, once everyone reaches peak bearishness, do we get a rebound move rob, we'll leave it there. we appreciate it >> thanks, kelly shares of exxon are down with the rest of the big names in energy this week. even as the company is expanding its refinery foot print in texas. the u.s. grappling with refining capacity, keeping pump prices elevated kayla has the latest hi, kayla. >> reporter: hey, kelly. despite the swings in prices, energy producers will weighing how to meet long-term demand take exxonmobil, spending $2 billion to expand this century old facility in the biggest u.s. refinery in a decade construction began four years ago, before joe biden called on producers to increase supply this facility is close to adding 250,000 barrels a day to the market that represents about a 1.5%

bump to the country's supply, but it could become material if there is a hurricane or last year when the economy was hut, the u.s. was near 100% refining capacity exxon president tells me even with a pivot towards lower emission products in the future, there's still going to be a lot more refining capacity needed. >> this is reliable supply of fuels that underpin modern life. you know, the pricing of fuel, of course, is a complex equation of taxes and supply and demand we're playing our part towards increasing supply, so that there is enough supply to keep prices down in the market >> reporter: the white house did not provide a comment in response to this expansion but the eia, which is the official government data source on energy prices, says refining throughput is expected to rise again this year, even if prices don't reach the peak that they did last year, kelly

>> kayla, by the way, is this going to be the last refinery for a while? >> reporter: well, there are some projects that are about to see them come online there's a chevron facility, a valero and marathon facility, most here in texas but none of them are the size of this one that has expanded 65% of exxon's capacity here like i said, it's the biggest expansion in a decade and will likely be the biggest for a long time to come, kelly. >> we'll see if it makes an impact on spreads and otherwise. thank you. coming up, social stocks higher today we'll look at what's driving that snap now up 7.5% shares of academy sports and outdoor soaring, trading at an all-time high. we'll talk to the ceo ken hicks about it and take a look at the dow the index up 342 points right now, with intel, travelers and microsoft the biggest gainers. home dotep, visa, verizon, those

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a full year guidance hike. management updated the progress of the doj investigation into its $20 billion acquisition of figma. wells fargo waving a red flag about commercial real estate, cutting their price target on new york land lord sl green. the equity is down 3.5%, the lowest level since jowuly of 20. now over to tyler for an update. >> keep hearing more about commercial real estate welcome, everybody the senate just voted minutes ago 68-27 to proceed on legislation that would repeal the 1991 and 2002 authorizations for the use of force that led to america's actions militarily in kuwait and iraq. the 2001 war on terror authorization passed after the 9/11 attacks is not affected and is still being used for u.s.

action against terror groups republicans on the senate judiciary committee held a news conference to make the case for what they are calling respect for the second amendment act lindsey graham, the chair, says it will codify two supreme court decisions into federal law, so that individuals can't, in his words, sue those who are coming after your right to responsibly own a gun. and kelly, you mentioned the social media stock moves the white house says today the administration continues to support legislation that would give joe biden new grounds to go after what it describes as foreign technology threats, including, yes, a potential tiktok ban back to you. >> a lot going on in washington, d.c. thank you, tyler still ahead, the yield of a ten year is dropping by half a point but mortgage rates haven't moved. what is behind the disconnect and what could the fed decision next week an fmeor the housing market see you after this quick break

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welcome back to "the exchange." the market is roughly split between a quarter point rate hike and a pause and fresh data illustrates the

conundrum. housing starts jumped by 10% in february, with new home construction climbing. and new jobless claims returned to their near historical lows, as well. should the fed keep hiking to slow the economy or pause to make sure the banking system doesn't break as a result? joining me to discuss now are my panel. welcome, everybody diana, erin, let me start with you guys diana, was this just a one off >> the headline number is a little misleading, up 10%. when you have multi-family versus single family, single family were down 32% year over year and building permits were way down year over year.

multi-family is very volatile. and right now it's being overproduced we have more of that supply coming on the market than we have had in decades. it's the single family we are focused on the buildings are skittish about putting poles in the ground. >> erin, describe the trends you are seeing if you didn't know that the fed -- i mean, it's kind of confusing what they should do here the market has been resilient. >> everyone is all of a sudden a supply and demand expert but that demand is driven by stability and knowing that you're going to have a job so you can make decisions and supply and everything can even out. what we were just discussing with multi-family housing, that is driven by the lack of affordability. it's all rentals people can't afford to save. they can't afford the mortgage rates any more they were just caught too short. so i think we're going to see more of the same people will continue to choose

to rent. although i'm a big fan of the idea that mimicking the herd brings aggression. so when everybody else is remitting, that's when you should focus on buying we have a terrific opportunity for buyers right now compared to last week, 30-year rates are almost down a point due to all of this volatility. that won't last. i suggest you lock it in today it's not going to be here next week >> erin, you were pointing this out and it's important for the audience to connect the dots, first republic is a big mortgage lender so what is at stake here >> yeah. so just to clarify, it's very different than silicon valley bank that primary client is 20 years old, it's a startup founder, and they don't have revenue. so that's why they keep drawing and drawing. first republic is much more stable in the long-term. they have high, high net worth clientele that is diversified. not only across different

banking systems, but within their investments. that said, i'm not making excuses for them they are a huge jumbo loan originator they also have a huge exposure to a.r.m.s >> i wonder to some extent if that's the problem, if they have a high exposure to fixed rate loans, this is such a twist from the credit crisis, right in this case, bank problems could come back on the housing market everyone who borrowed got a low rate and now the bank is left holding the bag. >> this is so different than what we talked about when it was the quality of the mortgages that were at stake today, the quality of mortgages is excellent due to low interest rates that everybody reified into and nobody is going to refie out of those, because rates are so much more i would say one thing about the

opportunities for home buying right now. i don't think we're still in such a great place we did see rates pull back a little bit because of this banking stress but 6.5% compared to 4.5% a year ago. affordability is still rough home prices are still very high, and the supply of homes for sale is supremely weak right now, as we get into spring when you usually see people put their houses on the market, we're seeing a huge drop in new sellers coming onto the market in march they should be flooding the market >> do you want them to hike by a quarter point next week? if they do, maybe the ten-year yield drops. the mortgage rate might respond opposite to what they do with the rate hike. >> that's what we see through the fall i do think a quarter point is where we should settle out we also have to remember that the fed funds rate and the mortgage rates are not identical. they have a lot more inputs into mortgage rates a lot of times what we saw through the fall, even the fed fund rates kept hiking, mortgage

rates declined right now, we're at historic medians for 30-year rates. it's 7.77% is the average over the last 50 years. so we still have an opportunity to lock in a decent rate it's not a home run any more but i personally hope we never see 2.5% mortgages again that's why we're in the conundrum that we are in today >> maybe if we make them 40-year mortgages, maybe 50-year thank you both we appreciate it we turn to the jobs market what explains the strength there? let's bring in julia from zip recruiter now. maybe as part of answering that, do you guys have any kind of high frequency data that tells you about the labor market in the last couple days >> absolutely. very interestingly, job postings online ticked up this week i was expecting them to fall amid this enormous business

uncertainty. and past research shows that uncertainty can have a very chilling effect on hiring. not happening yet. >> why do you think that is? >> so i think that while it is a year of efficiency in silicon valley, it's still the roaring '20s on main street. a study shows that wednesday afternoon golf sessions have gone up 287% because of remote work so there are these shifts in demand, but it's still taking place, and employers are rushing to adjust. so hiring at restaurants and hotels, it's still very, very intense and urgent >> how soon will you expect to see fallout from the svb collapse or could it take quite a while for its full effects to show up? >> so we could see it show up in the market in the next few months that's because large amounts of banking deposits are moving to large banks from the small, regional banks that are a key source of funding for small businesses and for start-ups

and business applications skyrocketed after the pandemic and may have remained really, really high ever since so these new entrepreneurial, small businesses are a key source of job openings and job growth right now but they could be disrupted by this >> i was going to ask, because others documented the overwhelming share of openings and hiring from small businesses any idea of that breakdown, julia, and if we have moved from seeing the bigger firms getting hit last year, now seeing more impact on the smaller players in the economy. >> i think this is a real-time issue. and we could see it in the coming weeks and months. this is really the big risk to watch. but there are others, too. rising interest rates historically have hurt employment in manufacturing, construction, mining, and other interest rate sensitive industries and we are seeing a big pullback

among enterprise companies that doesn't seem to be pausing just yet. >> julia, thank you. we appreciate being able to check in see you soon, i hope >> thank you, thank you. coming up, the fdic insures deposits up to $250,000. but what if you have cash over nine figures and catch as"lt call" at 7:00 p.m. on cnbc wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq

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(woman 1) i just switched to verizon business unlimited. it's just right for my little business. unlimited premium data. unlimited hotspot data. (woman 2) you know it's from the most reliable 5g network in america? (vo) when it comes to your business, not all bars are created equal. so switch to verizon business unlimited today. welcome back we have more breaking news on the first republic cash infusion let's get to tdavid faber. what are you hearing >> following up on an earlier story towards the end of the noon hour, we can give you more details on this potential -- i guess you want to call it a rescue plan. maybe you do, maybe some others want to.

so we'll use that name i'll call it the bank consortium plan it is going up there are more banks and more commitments to what is expected to be, again, an uninsured deposit by all these banks bank of america, walls fargo, jpm, citi, i'm told by the many people who seem familiar with this now at $5 billion morgan stanley, $2.5 billion interesting to note, no word on goldman sachs, truist, pnc bank, i think it's mnt, capital one, all in for a bill. add it up, you get to about $27.5 billion right there. and perhaps the fed and treasury have been coordinating this unusual plan in which it's not about buying the equity,

it's not about taking a preferred of some kind it's not about taking loans off their hands or anything like that it's simply putting in a huge slug of uninsured deposits i don't know what they will be getting paid on those deposits by the way to help instill more confidence in this particular institution and hope that this is kind of the last of what they hope, again, would have been a short series of dominos. we all came into monday thinking without any fed assistance, first republic was in big trouble. got that fed assistance, in terms of at least a guaranteed of uninsured deposits. now you have these big banks, and large regionals coming in, kelly, to support first republic on its deposit side. >> so david, are you surprised by the reaction in the equity, this 12% rally, or does that make sense to you based on these

details? >> it makes sense. frankly, this day began with not a good situation with first republic i talked about a $25 billion hole in the balance sheet. so you wondered, are we going to get to a point where they are going to need to be either for sale with government assistance of some kind, liquidation. it didn't look particularly good in some ways again, these situations are dynamic as we say so often things can change very quickly but this plan, if it works, and that's a big if, and we expect it to be announced later this afternoon, conceivably would stem any further deposit losses at the institution, instill confidence, and allow them to go about its business which has been a valuable franchise, certainly of making

mortgages to high net worth people so yeah, to the extent it allows the equity to go on, the company to resume its trajectory obviously, you have to wonder about the cost of funds overall and whether that will be heightened overall certainly, that would seem to penalize its earning hower over time but it's a much better scenario that many anticipated. >> it's a bit odd as well seeing eight heeding u.s. banks coming to shore it up and you see the equity doing what it's doing. maybe there were no management missteps, but those are all fixed-rate loans that's not a greatthing to hav extended when rates spike. so i understand that, you know, no one ever feels bad when people panic and pull deposits out. you almost rarely see that but there were some management moves here that might need a

closer look, and you wonder after things stabilize, and we hope they do, what that comes back to. >> those are all very good points you know, obviously, i think a bit different than silicon valley bank, which made a huge bank on duration of its securities portfolio when it got a huge influx and rates were low. but you're right and one would expect that would be the case. again, right now they're just trying to at fed and treasury and amongst the banks just trying to deal with whatever they can to sort of create more confidence and stop this, let's call it mini banking crisis we've been in the midst of for the last week or so. and it was clear at least from my reporting that it was not clear at all that anybody would step up to buy this thing. actually pay some sort of price for first republic because to do so, kelly, would have meant a change in control and a markdown of even the maturity add sets. that's where to your point a lot of things aren't going to look

good when you mark them given the rise in rates. nobody wanted to do that to do that deal. this is an elegant solution if it works and saying, hey, those things don't need to be marked, you can go on your way and have enough in deposits and confidence to continue past this crisis. >> no matter what, it's excellent reporting. the detail especially want to make sure everybody caught it with the names on the screen and amounts contributed. thank you for bringing that to us i'm sure that's not the last we'll hear from you. david faber at the new york stock exchange speaking of bank cash concerns they have been shifting assets around robert franks and moving to interesting places. >> as david mentioned, a lot of wealthy clients at first republic and why we're seeing a lot of big investors and wealth investors making two big moves after this banking crisis we're in shifting money out of the smaller banks and out of cash balances and advisers say big investors were moving cash from checking and savings account

into higher combreelding treasury and money markets that's only accelerated over the past week. since those investments are not on the bank balance sheets and therefore less at risk, now, they are also moving away from banks and into custodial accounts like fidelity, pershing and schwab and schwab says they're moving $2 billion a day in net new as sets they allow a lot more flexibility for stock ownership and change advisers. >> this was a real wake-up call to with individuals who have cash that, you know, why have money in a bank, in a bake deposit in it's not necessary? if you can simply own a money market fund or brokerage account. >> wealthy clients also pushing back on the widespread practice by banks of requiring deposits or primary banking relationships in exchange for loans or

mortgages. you can read a lot more about where family offs are putting their money and investing in our latest family office investor interview. that is on cnbc pro today. >> can you imagine if you were -- the next banking crisis people will move their money into money market funds. >> into money market funds which was the big no-no in the financial crisis. >> lack of alternatives. there's not a lot of great safe places to put capital and i don't know if we're going to keep ping-ponging it around. >> where yields are makes sense not to have any money unless what you are need in cash right now, you have to have something earning 4% or 5% robert frank, all the focus on the health of the banking system but let's not forget about the u.s. consumer. if academy sports & outdoors is any indication maybe they're doing all right. shares are not only climbing despite a mixed earnings report and comps down 5% but helped by higher ticket prices gross margins up 50 basis points thanks to lower freight costs.

shares a fraction below all-time high 400% since going public in 2020 ken hicks, what a story. welcome. >> thank you, appreciate it. >> you seeing any signs of consumer stress that match the kind of panicky bank headlines we've been getting the past week >> we are -- we know the consumer is stressed and we are a value retailer so we are seeing the consumer gravitate a little bit more to value but they're buying what they want and they, you know, as far as their discretionary income they're putting more of it into things they want to did which is what we sell like sports and outdoor activities >> so where in particular and this is something we heard from some of the grocers, big box chains, they say they can see inflation shifting consumer preferences. do you see that easing up at all? in other words, we know the price pressures have stopped being as bad as they were. but prices are still higher than they were and now we see signs

of a slowing economy and some fraying in parts, for instance, of subprime auto, things like that, ken. would you say that's just a one-off or make sense to you >> there is definitely pressure. one thing is how people deal with it and, for example, you know, bicycles, we, that's a business where we have a good position in, but we want to maintain that opening price, $100 bicycle and $59 bicycle for kid so we work shorter on that opening price and on some of the higher price we may take more margin on to continue to offer for that customer who is really challenged, a good value as opposed to, you know, them, you know, not being able to buy a bike at all because it's gone up $20. >> right, maybe make it up on the fancy fly-fishing equipment or something like that >> or whatever >> sure.

you're in business yourself. where is your money. what banks or money market funds? do you sympathize with people who got trapped in the banks out west or do you think they're not indicative of the rest of the economy? >> no, we've got -- i'm actually old enough i went through this in texas in the '80s when the oil industry similar situation with the banks, we're fortunate in that our money as a subpoena is in the large bank, it's very secure and feel very, very safe but that said, we have seen some of our vendors, we're getting calls from them as they move their money around and have to change their banking relationship with us but you have to have sympathy for people it was nothing that they did that put them in the position where their money is at risk and have to change a banking relationship that they might have had for years. >> you know, i was just saying to the producers, i want to talk to someone who went through the

texas banking crisis i didn't know you would be that person so, ken, thank you. curious if we had any kind of regional sour grapes but people understand the risks do you think those are going to normalize here pretty quickly. >> i think they will i mean, there will be some collateral damage and some banks, but i don't think we'll see what happened in texas, back in the '80s texas had three of the ten largest banks headquartered in texas by the end of the '80s they didn't have any in the top 20. >> wow. >> i don't think you'll see that this time. >> well, i appreciate the dose of levity and seriousness. it's always the opposite of the one that i think, ken, congrats again, very tough environment that may get tougher you're putting up results and thank you for your time. >> thank you we appreciate it >> ken hicks, academy sports and outdoor. that does it for "the exchange" for more on the markets sign up in one easy step for my

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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 welcome to "power lunch. first republic may receive support from big banks here. the ecb and u.s. treasury department both scrambling to reassure customers that the system is stable how will the fed handle this economic narrative >> at the same time the white house putting tiktok on the clock. just like that the most social media app coul