it is 5:00 a.m. here at cnbc globa global headquarters. here is your top "five@5." the capital infusion is doing nothing to help the stock which is hitting all-time lows. jay powell and the fed kickoff the policy meeting today. the central bank is past the

point of no return. plus, the fallout continues in the wake of the deal for credit suisse. bondholders may not go down without a fight. later, our special rolls on with the housing market and if it is set to reset we take a deep dive into the mortgage market. it is tuesday, march 21st, 2023. you are watching "worldwide exchange" here on cnbc good morning welcome to "worldwide exchange." i'm frank holland. let's check on the u.s. stock futures. right now, we are seeing stock futures at session highs dow opening up 100 points higher s&p and nasdaq at .25% higher. we are checking the bond market.

yields are near lows the 2-year treasury, 5-year and 10-year. the 10-year treasury at 3.51 that is something we will watch. we are also watching energy. oil coming off the low since december of 2021 we are seeing a tick higher with the banking issues wti crude at $68 brent crude at $74 we are watching crypto it is moving higher with all of the banking turmoil. bitcoin is just below the 28,000 mark falling this morning down $27,700. xrp is up 3%s. solana is one of the volatile currencies down 2% this morning. let's check on the overnight action in asia and europe with julianna tatelbaum who is in the

london newsroom with more on that good morning, julianna >> good morning, frank let's kick off with europe the mood continues to improve after yesterday's massive turn around around this time yesterday where the sentiment was turning positive we opened 2% lower yesterday and closed 1% higher a 3% turn throughout the day. investors continue to pile into equities very strong gains. italian markup 2%. spanish market up 2% as well cac 40 is up 1.3%. the rally is broad based every region participating in the march higher the turn in sentiment seemed to come around two statements yesterday. one from the banking authority and bank of england assuring that at-1 bonds, at the heart of

the concern for credit suisse, will rank in the pecking order easing concerns of the ubs merger is precedent setting for the at-1 bondholders here is a look at the european banks. commerz bank up 6% deutsche bank up 3.9%. ubs building as up 4%. asian markets rallied in the overnight session. frank, back to you >> julianna, thank you. turning attention this morning to the top stories as we watch shares of first republic bank which are higher after a rough session yesterday. silvana henao is here with those. silvana? >> frank, that is right. shares of first republic bouncing off a new all-time low after shedding another 47%

yesterday. down more than 90% this monday after multiple reports as top executives worked to come up with a plan to shore up the lender last week's $30 billion lineline having little effect jpmorgan chase's jamie dimon, who spearheaded the deposit plan he reportedly weighing converting all or a portion of the 11 banks deposits into a capital infusion outside of that, u.s. officials look to limit any more panic in the banking sector bloomberg is reporting that they are studying ways to expand the fdic coverage of all deposits past the $250,000 cap, frank >> a discussion about that silvana, thank you welcome back great to see you. investors continue to weigh

the fallout with the bank reckoning and what it means for the policy meeting today joining me to discuss the global impact is seema shah at principal asset management great to have you here, seema. >> good to be on thanks >> we start off with the fed meeting today. what is the expectation from the fed? we get the decision tomorrow afternoon at 2:00 p.m. how big an impact is the global banking crisis will have on the decision from the central bank >> if you recall over two weeks ago, powell had given hawkish testimony to indicate they could shift to a more hawkish path then the market started to price in the 50 basis point hike the banking crisis has changed a lot of the narrative it is quite difficult to know at this stage how the fed will be responding the market stability over the

last day or so will be reassuring it suggests they will continue at the hiking path you know, more of the standard, but trying to focus on price stability. still talking about the inflation fight. still the acknowledgment of the banking system and the other part of this is we are not expecting forward guidance to emphasize the data dependency of the future decisions. >> that seems to be the theme and stability. people are looking for stability in every market in every way i want to run new data by you. investors are wasting no time and flocking into cash inflows in money markets last week topped $108 billion we are showing the graphic to the viewers, seema this is the fifth largest inflow

on record going back to 1992 what does that tell you about investor sentiment >> i think investors have been frightened by the last week of the news streaming out look, i think clearly things have been concerning we havehave seen a lot of damago sentiment. i think what we have seen from policymakers is they try to arrange the banking sector and continue to look at new ways of ensuring that this doesn't turn into a big contagion banking crisis once you have the federal reserve and the raising of rates, it does mean investor sentiment is pessimistic going forward. that leads into the markets. i want to expect this to continue i'm not surprised by the move. >> seema, we are in an inflection point with portfolio management for people like you that manage portfolios we are well past the t.i.n.a.

trade. when we are talking about bonds and other vehicles to get away from the risk of equities and what percentage should number a bond, whether short or long, or money market or mutual fund? how are you guiding in. >> we moved to overweight in the bond space several months ago. we have concerns over what could happen to the economy and what could happen with central bank rates. we think this is the time to be focused more on the fixed income space. within that fixed income, more defensive assets that is the core fixed with treasuries and mortgage back and investment grade staying clear from high yield. these things do provide a bit of a yield like we had for several years now. they should provide diversification in moments with the stress >> do you mean a 60/40 portfolio

with the bonds or some other formulation here >> i think the 60/40 had a terrible year last year. we think it could have space in the diversification benefits you need to look outside of equity and fixed income. think about real assets. you can get inflation mitigation and that provides stability when things are getting tough >> all right seema shah, thank you very much for your time. when come back on "wex," first it was wells fargo and now tom porcelli weighs in on joining the chorus and on the back of the historic deal for credit suisse. why they may not be going down without a fight. and vladimir putin and xi

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welcome back to "worldwide exchange." bondholders on the hook wiping out $17 billion of the bonds and

threat eening a larger bond market joumanna bercetche is joining us from credit suisse headquarters in zurich. >> reporter: frank, one issue coming from the weekend is what would happen with the at-1 bondholders after it was apparent the deal included a wipeout of anyone who holds the bonds. the think about the bonds is it is not unprecedented for them to be facing complete losses in a case of insolvency what was special is the common equity shareholders did receive a marginal payout and the at-1 bondholders got nothing and this setoff a legal discourse between the owners of the bonds and potentially mounting legal cases against credit suisse and against the regulators following on from that decision. what was interesting is we did see quite a very significant selloff in the bonds early

yesterday morning which prompted a response out of the ecb and the bank of england to come to the market and say in terms of the capital structure seniority will be respected in case of resolution the ecb and bank of england saying within those jurisdictions, the first loss ab ab absorbsion will see that come to the hit. the question is what it means for the at-1 market in general $250 billion market in total you have certain issuers who have been issuing quite a lot of paper in dollars and euro over the course of the past few years. whether or not the deal of the weekend is a precedent for the resolution mechanisms looks like is a key question going forward for anyone investing in the space. at this point, it is a matter of legal wrangling and people going

over the documentation to see if the regulator was right in doing what it did. >> we are hearing from two agencies with regard to ubs. not doing the bank any favors. >> reporter: yeah. absolutely we did get both moody's and s&p downgrade ubs credit to negative overnight. the concern is they are citing it will take some time for this deal to be executed. they talk about the risk of execution and complexity of the deal in addition to the duration if you go back to the press conference, the chairman said it will not be before 2027 when the deal is liquid it will take a couple of years for the entities to come together it will entail difficult decisions and cost cuts and reduce the investment bank all of the changes have to take

place. they will take time. the credit agency in the short-term is quite circumspect for what it means for ubs. >> joumanna bercetche with the latest on credit suisse and ubs. thank you. ahead on "wex," top trending stories and the city topping the r st for the most expensive spot fotravel the name revealed when "wex" returns. dad, we got this. we got this. we got this. we got this. we got this. yay! we got this.

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welcome back president xi and president putin are holding a summit in moscow today. eunice yoon is joining from us beijing in more on what the meeting could mean good morning, eunice >> reporter: frank, good morning. business in beijing is thriving. it looks to get better official meetings during the xi visit to moscow are supposed to get underway this afternoon. state tv shows the two presidents greeting each other warmly and referring as dear friend xi stating strong leadership and predicted russians would reelect putin next year although he hasn't declared he would run

and praised xi's so-called peace plan to settle the ukraine crisis which was unveiled last month. according to the chinese readout after the four-hour discussions, they covered bilateral ties and conflict in ukraine. china said putin carefully studied the 12-point plan and praised the fairness said he is open to talks for peace and welcomes china to play a constructive role. no word of what russia would concede. frank. >> eunice, this continuing today. what is the event schedule for the "dear friends" for today >> reporter: well, the dear friends will have a formal discussion today just in the next couple hours and it looks those discussions will be more economic in nature.

the two sides have said they will be discussing a blueprint for a strategic partnership. delegations are supposed to first meet before president xi and president putin join those discussions. the two leaders are then expected to sign a dozen, according to the kremlin, agreements one on economic cooperation through 2030 in the evening, president xi is treated to a state dinner. no word on exactly what is on the menu >> eunice yoon, thank you very m much. time for the check on other headlines outside of business. we hhave frances rivera in new york with those. >> good morning, frank all eyes are focused on the new york grand jury investigating the hush money case involving trump. agencies are preparing for protests after former president trump on saturday called for supporters to take action if he

is arrested. in a monday email to staff members at the senate, the sergeant at arms revealed measures taken in miss of protests including the deployment of barriers along some streets around the capitol. the three-day strike for los angeles public schools teachers are walking out representing the lowest paid employees including bus drivers and food service workers they demand better working conditions and salary increases. the district superintendent would be available for not guilty -- available for negotiations the city is offering grab-and-go meals for those students relying on school lunches. a fungus that is potentially deadly the cdc said it is spreading

through healthcare facilities in the united states. it is not a threat to healthy people, but can be lethal to those with weakened immune systems. for tuesday morning, frank, those are the headlines. >> thank you, frances. strayight ahead on "wex," to high profile names and what the fed's policy move should be. we have tom porcelli in the house here to weigh in if you haven't already, check us out on your podcast app. "wex" will be right back three kids?! this was never part of the plan! these kids order the lobster mac 'n cheese! what if she wants to play golf? we're going to have to outlaw golf. absolutely no golf in this house! not under my roof! since we started working with empower, all of our financial questions have been answered, so we don't have to worry. so you never- nope. always part of the plan. join 17 million people and take control of your financial future to empower what's next.

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it is 5:30 in new york city. we are just getting started here on "wex. jay powell and company set to kickoff the rate meeting and it deals with the global banking crisis on top the inflation. and shares of first republic on the move this morning as jpmorgan chase steps in to help the bank find new avenues for survival and looking at the housing market and a top mortgage provide lays out the higher rates which is having on his business it is tuesday, march 21st. you are watching "worldwide exchange" here on cnbc

welcome back i'm frank holland. thanks for staying with "wex." let's pick up on u.s. markets. we are seeing the dow could open up 150 points higher if the markets open now the s&p and nasdaq more than .25 higher now this after the markets staged the relief rally in the hopes the turmoil may improve with the banking market the highly fed policy meeting expected this week the 10-year treasury is 3.25 important here to see the 2-year treasury move 80 points lower than it was at the start of march 10th that is important. the start of the svb crisis. let's look at oil. wti is below $70 a barrel. something to watch the april contract expires with may being the most active

contract for wti below $70. something to watch brent crude up 1%. we are watching shares of first republic bouncing back this morning after hitting a fresh all-time low yesterday when it shed 47% trading halted at some point we are seeing shares up more than 20% up 21% right now this amid multiple reports that jpmorgan chase's jamie dimon is leading executives to come up with a new plan to shore up the lender which could include all or at least a portion of the $30 billion in deposits placed into what is called a capital infusion let's check on the top corporate headlines with silvana henao. silvana. >> good morning, frank a federal judge says jpmorgan chase and deutsche bank must face lawsuits accusing the banks

of enabling jeffery epstein's sex trafficking. that could lead them to damage for keeping epstein on as a client after registering as a sex offender the cases filed by the u.s. virgin islands alleging the bank missed the red flags of epstein abusing women on the island he owned. vanguard deciding to shut the remaining business in china. according to reports, the u.s. fund giant is closing the office in shanghai and end the partnership with antgroup. this is two years after it would not set up a fund unit. tesla is entering junk status

moody's is upgrading to the lowest level of junk rated debt. moody's saying tesla will maintain the market leadership and cited expanded product lineup in the global upgrade from last october. >> silvana henao thank you. to the top stories the fed kicking off the two-day policy meeting today ahead of day one, more than 75% of interest rate traders according to the cme fed watch tool are expecting a .25% fed rate hike, but moody's and wells fargo don't agree. economists are calling for the fed to move hawkish. we have tom porcelli with us now. we have the differences of opinions over whether this should be a pause or quarter

hike what is your opinion and what do you think the fed will do? >> good morning. good to see you. i have been doing this a long time i don't really recall a time recently where there has been such a dispersion of views particularly a day before the fmoc meeting our view is the fed will raise rates tomorrow. -- tomorrow. 25 basis points. it will be a close one this is a classic idiom of what they should do over what they will do. you know, our view the fed was fighting the war on inflation. we never believed getting this aggressive at the end of the hiking cycle it is clear with the market as you said 75% chance of the fed

going tomorrow to deliver. if they didn't deliver on the back of market pricing and virtually a 25 basis point hike for tomorrow, i think it would lend itself to confusion and worry and what do they know that we don't i think it looks like they will go >> i think we have plenty already. to be clear, we will show the graphic. you are agreeing with jpmorgan chase and wells fargo and citi of a 25 basis point hike tomorrow >> either that or they agree with me. >> depends which way you look at it i want to bounce one other thing from your colleagues at jpmorgan chase. the fed on a path of a no quote. the fed is facing a difficult task on wednesday, but it is likely past the point of no rush -- no return. the soft landing is unlikely now. a lot there.

a lot of metaphor. the audience gets the point. what is your take? >> one of the things we find compelling about what is happening now is if you look at lending standards, they are rising they were already on the rise. if you look at the four quarter delta change, it was the biggest four quarter changes we have seen since the gfc in fairness, it was coming from a lower level. the travel or direction of travel was compelling. that was before the bank crisis came into play what will happen going noforwar? it will get more tight that is a prime source of momentum from the consumption. we think by the second half of the year, the consumer will look in rough shape which is an irony or not if you look at where we are now from consumption, q1 growth is looking good

it might be strong i think it will turn abruptly on the back of this >> the fed says it is data dependent. a lot of people believe 25 basis point hike tomorrow. there will be ears on the commentary over what they will do going forward what do you expect going forward and how will the banking crisis weigh on the move forward? >> they will knowledge what is happening. i don't know how you can't i think the fed wants maximum flexibility. i would want to build a case for maximum flexibility. lo look, if things deteriorate, the hiking cycle is over if wie get out of it and we are looking okay, we want the ability to hike. i think they should aim for maximum flexibility. >> wouldn't the markets

appreciate clarity >> where is the clarity? you have half the community saying they will go tomorrow and half saying they're not. we are in the fuzzy place which is why maximum flexibility is what they should aim >> do you think the market will respond saying that's it >> i think the market might worry about that if that is it, why is it because all of a sudden things are deteriorating more than we think? that is -- look, i think if we're being honest, the fed is having a hard time with narratives it is a really tricky one for the fed to pull off tomorrow >> tom porcelli, thank you it is important to note, jpmorgan chase and citi and the rest of them agree with you. when you come in person, you get the credit. coming up on "wex," the week

long look at the hougssing mark and the reset. we talk to one of the industry experts over what this means for affordability. before we head to break, netflix is releasing video games this year. it has nearly 100 more in development a year after the mobile gaming platform. the trip to the big apple. new york is the most expensive business trip destination last year costing $800 a day. washington, d.c. and san francisco along with geneva and zurich, switzerland. and google giving early pixel users access to bard chatbot. google employees testing out the bot.

"worldwide exchange" back in a moment stay with us helping them achieve financial freedom. we're proud to serve people everywhere, in investing for the retirement they envision. from the plains to the coasts, we help americans invest for their future. and help communities thrive.

welcome back we get a glimpse inside the housing market with the release of home sales data as we continue our look at the spring housing market and if it is set for reset. today we focus on affordability. a critical factor now with the wild ride in mortgage rates and now fresh stress in the banking

system diana olick is back here with a closer look. good morning, diana. >> reporter: good morning, frank. home prices shot up around 40% in the first two years of the pandemic partly because mortgage rates dropped to historic lows and that gave buyers more power. rates are higher now and prices are stubborn let's go to cleveland, ohio. this three-bedroom home is listed at $350,000 recently went under contract that might not seem like a lot to other homeowners, but the median price is $122,000 in cleveland. one-third of the national price. prices were rising last spring until mortgage rates shot up in the summer and fall and hit buyers hard. >> the mortgage percentage has lowered our original range

originally it was $400,000 now we are looking in the $300,000 >> reporter: the home was listed at $450,000, but nobody showed up at the first open they slashed the price >> this is a bigger house. you cannot build this house for 450 right now. the market not like my thought we went to 350 >> reporter: that's because demand, while very strong, is now hypersensitive to mortgage rates. cleveland prices shot up in the past two weeks that reflects homes under contract in january when rates dropped sharply. they shot back up in it february when this home went on the market now we have mortgage rates falling again due to investor concern over the banking system. of course, all eyes are on the fed tomorrow mortgage rates don't follow the

fed fund rate, but influenced by the fed thinking on the economy. frank. >> diana, thank you. stay with us for a second. let's talk about the mortgages and an volatility and impact on the housing market we are joined by stanley middleman. stan, thank you for being here with us. >> thanks for having me. >> stan, the natural question is how does the combination of falling rates and global banking crisis and crisis in the u.s. impact your business >> the lower the rates, the busier we are. the lower the rates, the more kp excited the buyers get and affordability kicks in however, sellers have to sell. that combination has to meet >> stanley, we have seen rates come back a bit, obviously in the last couple weeks. the trajectory could be higher

we saw them pop a little bit yesterday. for buyers, there is talk of mortgage rate buy down some people don't understand that can you explain what that is >> it is not really risky. you are spending up front money to buy the rate down temporarily. it is fine sometimes the mortgage company contributes to that reduction in price. by and large, you are still getting a 30-year mortgage at a rate that's going to be market you are just moving around how you are paying for it. >> coming up today, we have existing home sales. diana and stan, how big of an impact will that have on the market with the other factors? >> the problem with the data, as you know, it is backward looking. we are getting existing home sales for february those are contracts signed in

december and january rates dropped back in january. that is when we heard from the builders they were seeing a surge in demand and signed contracts. we saw that in the pending home sales. you probably see a bump up in home sales for february. in february, rates went up again. there may be a pull back next month. it is hard to say. >> stan, is this something you track for your business as well? >> not very closely. the reality is home sales move in a very narrow band. given the total course of all mortgages. the variation in home sales is fairly small i think it is important to note that sellers -- not a lot of inventory on the market. that really drives the price up if demand rises. so i think affordability is going to be a major concern

going forward. >> stanley, do you have any concern given the banking issues that there will be a problem for your business to get liquidity to lend to others? >> i think liquidity is going to be the issue as we move forward. the uncertainty certainly creates create s issues in and of itself. if the banking system is uncertain, people tend to hoard money. whether it is for business or banks and i think there will be some tightening of credit as people are more careful with what they do with their money. you know, we are pretty well situated to face the issues as they confront us i think in the broader markets, liquidity is probably the next great challenge. >> stan, one thing is for certain. there is a housing shortage in the united states. people put it at 2 million

units. right now, with the rates so high and people helpsitant to sl their home, how long do you see the shortage lasting >> well, there is just not enough supply. i don't think the supply is going to come online quickly enough to make a difference in this buying season i think if rates get lower and the country stays full employment, then the opportunities are certainly there. the fed is doing everything it can to dampen demand when you combine that with the heavy deflationary tendencies, we will have higher rates and drive property values higher. >> stanley middleman, thank you.

diana olick, thank you you will be back tomorrow. still ahead on "wex," navigating what our next guest says is a scary time for the markets. what david katz says is putting his money to work. and we are sharing the stories of women in march for women's history month. here is etsy coo >> it is gratifying to be a leader at an organization and pursuing a path to small business ownership when i reflect on my career to date, moments where i take on a role or project out of my comfort zone led to the greatest periods of growth. women feel they have to meet every qualification before taking on something new. that is not true i encourage you to be bold and raise your hand for the roles or projects you are excited and

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that have an appetite for performance. ibm. let's create. welcome back time for the "wex wrap-up. six stories for the 6:00 hour. republican committee members looking for oversight records for silicon valley bank and signature bank calling regulators out for the lack of enforcement. and shares of new york community bank up after a subsidiary agreed to buy signature bank. and ubs getting dowgrading for the credit suisse deal. and general motors getting permission to test self driving cars across california after the

service in san francisco for more than two years. and google flagging apps made by pinduoduo as malware tracking users . gearing up for the trading day ahead. looking for home sales and reporting from nike and gamestop and the fed has the two-day policy meeting today and janet yellen is speaking at the and wnual summit. back to the markets after

yesterday's relief rally expect tations the fed will slow tightening let's bring in david katz. good morning, david. >> good morning. >> david, what do you expect from the fed >> we are hopeful that they were going to pause and talk about looking at things on an ongoing basis. the primary objective should be stabilizing the financial markets. we think they likely will raise by a quarter point and look at the data on the ongoing basis. possibly a pause that the point. one of the two of those scenarios would be positive for the markets. if they raise, that would be a negative. >> david, investors are really going toward cash. this is according to rifinitiv

investments into money markets topped $1.3 billion. for people listening, we are showing a chart with a huge spike for the data we are talking about. david, what does that say about investor sentiment >> it says investors are scared. scared about what the stock market and bond market is doing. they are taking that out 4% money market is very attractive over the near term, we think if we had a 9 to 12 month stock significantly higher and outpace that we suggest looking at long-term asset allocation if you have room for stocks, we would buy into weakness. we try to turn down the day-to-day concerns about the market because we think it is very worrisome out there we think the market will get through this we think the finance at crisis is going to ultimately be

contained and we think there are stocks with attractive valuations the key is a longer term horizon. we would not take stocks out >> interesting take right there. i want to ask about one stock in particular when you talk about weakness first republic this morning, it is up 20% in pre-market clawing back half of the losses from yesterday obviously the stock is down more than 80% month to date you gave us financial picks. this is not one of them to be fair you did not pick first republic. is this an attractive opportunity to buy first republic is the bottom reached? >> we have been doing this a long time and been through many financial crises it doesn't pay to think about it on a sick financial. it might go up a lot, but sick financials have problems and things don't turn out well for equity investors we think the whole banking group

and the baby has been thrown out with the bath water. you are able to get great banks and financials at attractive prices we focus on those companies and companies were bank of new york or goldman sachs or pnc. lower risk and great stock price. you might make more in republic, but you could lose more. companies we suggest if you have that 9-to-12 month time horizon, you are able to make money. >> and one more pick, amazon with layoff news yesterday that is why you feel positive with the company they are leaning toward efficiency or is there some other factor >> we think on a valuation basis, a price-to-sale basis for the last 3three to five years, they are finally getting control of costs we think that combination and

lower valuation and focus on costs and favorable outlook means the stock should be a good performer. >> david katz, thank you looking at futures, we are in the green the dow would open up 200 points higher that is it for "worldwide exchgean." "squawk box" is coming up next thanks for watching. listening more than talking, and a personalized plan ♪ to guide you through a changing world. ♪

good morning stocks looking to add to yesterday's gains. the fed beginning its two-day policy meeting predictions. will they? elon musk and bill ackman are debating the merits of the

fed pause against the interest rate cut shares of first republic when it was all said and done yesterday lost half their value. word that jpmorgan chase or jamie dimon is taking a lead roll helping the bank evaluate its options. it is tuesday, march 21st, 2023. it is still in the 20s for the temperature. let's go unless it is the lion and the lamb is not here yet "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq site in times square. i'm becky quick with joe kernen and andrew ross sorkin here we are, guys. it's tuesday