broader averages are holding up. >> one year down, 92% on first republic bank. we go into this weekend at the very least with no perceptible cloud hanginge1 this really like last weekend, everybody knew that creditfá suisse was going be the topic over the weekend and it sure i had turned out to be. it has been a very busy week and we're glad you were able to join us for at least part of it. thanks for watching "power lunch." "closing bell" starts right now. welcome to "closing bell," i'm mike santoli in for scott wapner, we're live at new york the european banking sector, rom although withw3 the s&p 500 up the day, and the week, the market firming up after the european market did close which leads us to the talk of the tape. should the stock market be more worried about the message comin3 from bonds following the fed's latest rate hike this week?

or are things less dire than the plunge in treasury yields now suggest? here to help answer that question is wharton school professor of finance jeremy siegel.a' cf1 o professori]çó siegel, look, i m the fed went through the quarter point hike. a lot of criticism in the bond market. had a pretty profound reaction to it, given it came at a time of financial w3instability.!!eì% jayçó powell and other official making the case we could fight in nation, with higherjf okrate with one hand, and wuq the other, we can take measures to try to ensure banking stability. do you agree that'sok possible? >> no, i don't. let meq tell you my thoughts on how absurd the conference and projections are. they lowered theirñi gdp projection for this year to 0.4%. we already know that the first quarter is overxd ó[■2%.lp in fact, it is now 3.2%. soñi this means that theçóçó fe

(r over the remaining three quarters of this year. negativeok gdp growth. quarters. if that's not a recession, i don't know what is.e1 and by the way, that also over the nextu■ nine months. now, think about that. payroll, over the last six and now he says we will have that's what the e1fed's predictions are. actually, he doesn't use the worde1t( prediction. that's what the fed says should happen under appropriateok monetary policy. how can the fed project a recession, a loss ofe1 millionsf jobs, negative payroll, as

appropriate monetary policy? of. >> well, even in december, the fed was projecting an unemployment rate getting up to 4.5, e14.6%. this is a light modification what they thought in december. the difference seems to have been the strength of the economy sq■ far by all accounts in the first quarter, and then some stickiness in inflation,i] righ? telling us for over a yeare1 th policy in a dramatic way if they see inflation coming down in th] here andx÷ you think that that typeñr of stance has essentially gotten stale? i mean look, the banking system is showing some level oflp distress and the bond market as i was saying, it is set up in such a way that it is kind of calling out for the fed to get easier. >> but you said it yourself. the f%gq■ turned out much stronger than they expected. and now they're lowering the whole year projected in gdp,

which really says they're going to make the last three quarters ■ make the last three quarters lastfáq december. one thing that really stuck out to me, i mean powell virtually admitted that if it weren't for svb and the banking crisis, that he was prepared to go up 50 bó3%s points. so now he is convinced 25, so now he is convinced 25, saying that basicallyeiq banking crisis is worth only ond quarter of one percent, in the fed funds rate. now, i don't know whether you, anyone else on your show has ever talked to any bankers or any economists, nobody sayst( tt is worth only one. it is worth two or three. some exists have even said eight. so bye1 raising it one quarter, and if you take a true increase in the tighteningi] of credit tt the banking crisis has engendered, it is like raising it one and saying yeah, we're going to cause a recession, and

that's fine. i meanfá i don't see -- i don't see it at all. i don't know whether the fed understands the implicationsfá its ownr >> well, powell did concede that of course there's a wide range of okestimates, you can't know the moment e!)@tly what the contraction might be one1 the economy. but it's almost as if the market, i mean look, the fed is never goin#wto say we're now done, right? in sot( many words. the market has take continue to mean the fed is likely done unless things somehow look a lot better in six weeks when they ÷t better in sitt oth"n investmento think -- are you suggesting it is a massive mistake, and the economy is kind of on a one-way trip lower? is that in fact what the market is going to have to dealxd with? >> i think really if they go anything that they're saying, robability ofq a recession, it is definitely much higherq and i think fáunnecessa i mean i think a lot of

progress, as i've mentioned, has been made on inflation8i i mean nexte1 tuesday, we're going to t another housing report, it is going to be thelp second consecutive decline in the housingr theok zillow apartment index, that's all down. that's the biggest segment of the consumer price index. as i mentioned before, if you factor in real housing xdprices in the cpi, the cpi core has actually been negative overe1 t last five months. so i meane1 this constant emphas on oh, we still= out this wage inflation, with chairman powell himself in the november meeting admitted it is a structurale1 shift. the fed could not beñc3 response for supply side shift. nothing about wageu■ increasesr when wages lagged inflation. i think it is a wrong-ended policy. i think let's say, i think the

mistake of not testing banks foe ó.÷ interest rate from what i hear, they didn't stress test the bank for an interest rate over 2%, while he was planning for the last year to raise it two to three times that much, it is a failure for not raising it rates in 2020-2021 to prevent the inflation. >>xd i am just astonished. and by the way, let me also mention somethingi] else. remember one of hise1 statement. we're not thinking -- despite projecting negative gdp growth, over the next thee quarvw$m1ñe1 negative payroll growth, we're not thitk'ng about lowering rates. did heok not say thate1 explici? >> sure. >> michael, that sounded like a mirror image ofe1 that famous o should i say infamous statement e made in 2021, when inflation was raging, in fact inflation was raging and he said

we're not even thinking about, thinking about raising rates. how far ze;%9 is? >> yes, i gotcha. let's bring in stephane, jf hightower advisers, a cnbc contributor along with senior economics reporter steve liesman. steve, if i could ask you toçó jump in. maybe frame it with some contex] here, in terms of the fed's communication challenge. look, we were just at a 5% i] two-year note yield a fewr ago. people thought inflationq would force it to go to 6%. so maybe conceding in the press conference, and saying we may be cutting, it is not necessarily that tone deaf a message. >> yeah, let me first weigh in and say i don't necessarily share the professor's certainty about a negative outcome bq(m i do share his concern. i'm not sure that thexdq move o

wednesday was the right move, andçó i think, it is a bit oflp cop-out to say time will oktell one of the classicçó monetary policy blunders. the fed's running an experiment here. and i think professorg just grabbed what is left of his hair and pulled it out. but they are running an experiment here. i can sayñi that, right? i'm allowed to say that. stephane can't say that. but i can say that. what they're trying to do is they're trying to figure out, can they run monetary policy to attack inflation with one set of tools, and then run the financial stability issue with another set of tools? they feel like they've geared up for this moment for a lot of years. and they feel like they have5a■ series of,fá they have an abili to do things on the financial stability side that they didn't have before. sometimes it means dusting off an old program. ■ means creating new ones, like this bank term

and they will see if they5a■ cao think they have an inflation problem, and that inflation problem, mike, as you said, comesóom from the fact that gro has been stronger than expected, and the payrolls just don't seem willing to give it up now the way they like it to. they may be forced, and i asked jimjf that question today as to when the financial policye1 and %%1%■ty meet and it comes through the growth in the inflation channel. if inflation begins to decline, they will reverse course on policy. right now, mike, i want to show you our famous fed market gap graphic that we have up here. and it shows that the fed is 120 basis points more hawkish than the market is right now.3ìáhp &% that is to say the fed has itt(t 5.13% rate projection the end of the year and the market is down near 3.80fá or so. >> we all know markets move a lot faster than committees.

and tend to overshoot in the short term.léem=jñ guess some g expected. steph, with all of this, and with just exactly how contorted the treasury yield curve is, ie mean the stock market is better than gnat for the week, it's not too far from where it was from when the fedxd did what it did, what's your read on that? is what is the equity market sort of feeding off of? or maybe what is it ignoring? >> qva■first, i think it is fee off of technology and com service, 35% of the weighting in the s&p 500, those two sectors have done remarkably well year di1 far superior that any otheres.ñ sector year to date. so i think that at( lot of thats that. a big chunk that is done really, really well. the other part of it is i think, we're kind of looking through the bankingq issues. i am on record and i'll say it again, and i think that the three failures were three very problematic banks to begin with. and i think the market is seeing

that, right? i think the marketq knows that t was in afá world of hurt, unprofitable and hadfá very lite capital, because the capital requirements were so much less over the last 16 years, ine1 europe, versus the u.s. banks, we know that silicon valley bank had a mixfá issue with vcs and know that they had an issue with crypto. i think today, specifically, deutsche bank does not seew3 us. and i think that's what the market is looking through.çó it reorganized in 2019. it's been profitable. the solvency and liquidity ratios are fine. better than fine. in fact, by the way, profitability, the last quarters of profitability. rú this is a different story, ■ uni-credit, backing their 80 bonds, 81 bonds outáqçó this morning was i think also a sign that the

credit suisse issues were really more specific. we'll see, mike. but i just think the market is looking at these two things and that's why it is hanging in there. >> so as you look at the movement within the market, steph, in terms of, look, we had a great run for industrials, and start of this year, a lot of that has fallen back to a degree, and has it surfaced any particular types of opportunities? or would you still, i don't rj workip'$r' the moment here, which is kind >> i think if is a balance. last year i was definitely leaning more value and moree1 i still want to have some of that. because i think so. cyclical sectors are actually doing okay and very stock 3 ç- some of the banks down here as i just mentioned, a lot of these one-offs here, i think bank of america, i pick the up schwab for the first time in a couple of years, given its 30% decline. but at the same time, i'm trying to pick up a couple of other names. maybe a little more defensive,x

tjx. &háhp &hc% ge health care which by the way has been a great stock but ixd think it has a lot ofe1 tail wis ahead of it. so i think your almost back to the barbell i had two years ago, i kind of want to say that. but today was all safety sectors for surñé8 staples, health care, utilities, i get it, i understand it, but i'm not sure i want to go that defensive at this pointe1 in ti. >> professoru■ siegel, for as alarmed you a were with what the fed did and what it continues to say, is it not a scenario where the in nation number, inflation numbers start to really become a help to the fed, maybe starting next week? we know the credit issues are going to be net disinflationary, to the point where they may be able to, i don't know, land this thing and make both sides, the would-be hawktd the would-bee1e doves somewhat satisfied in the short term? >> i would hope so. first though, do want to correct

steve. this is not my projection for that negative gdp growth over the next thee quarters. this is the fed's projectiono co >> yes. >> undere1 appropriate monetary policy. >> fair e1enough. >> yes. >> i'm sorry about saying that. >> so i go ñ to make that clear. yes, i mean generally, we love them to be able toed they the needle, and asqq i say, theyw3 finally recognized the housing data and that won't start to help us until the end of the year. but look, thei] fed is supposedo be a forward-looking institution on whatñr they see is happeningo inflation and i know there's got to be a little more wage increases but at this point and in this delicate time fort economy, i just think it is absolutely the wrong thing to do. >> hey,e1 mike. maybe one more point? just very quicjny, i have within

reporting on this bank failure and these bank failures andçó ie been refreshing my knowledge of how the fed operates, and the fdic operates, and it dawned on me, mike, you're a dogged reporter out this, it is a very bank failure, to the point i had kind of forgotten someçó of the phrases and some of the processes and it was a remind fwr!■ myself, hey, you know wha, banks fail. not qeverybody, not every banko has the perfectó[■ business man. sometimes they screwó[■ up.r and not every time is it a systemic problem. i know we have issues and i know it's not limited to just one bank. this may be more banks. but it is more normal for banks to fail than for banks not to fail. and so i just think this is a possig out not to be the end of the world is my point. >> they say this before, by the way, on that general issue, steve, we're not done with potential news on this front for the week, so what are we looking

for in this fed report after th■ close? >> so that was one of the things i was refreshing myself on+nnd how to read the h-8 which is the statement of banking position, and what we wilr get isu■ we'll get the deposit base of theu■ total. all of the bank, the small banks and the large b7émet by the way so everybody knows, it is a week old, it's going to pre-date yesterdayñ but it will tell you 1 the failure of siliconi=$u(s&ey bank and signature, a lot of money moved out of the small banks into the large banks. that's the think we will be looking for and be able to report÷ wa. ÷:ñ all right, we'll get it fro you in a little bit. appreciate that. thanks so much for the time today. earlier today,lp double lin capital jeffrey gunlock tweeting u.s. two year versus 10 year is inverted 40 basis points. 107 basis points a few weeks

yearsjfa■ ouderkirk out are well below the fed funds rate. red alert. recession signals. do youe1 agree? head to twitter to vote. we will share thet( results lat in the hour. and you don't want to miss our interview monday at 3:00 p.m.xdt( eastern. we will speak with jeffrey gunlock. coming up, gaming out a rally, our next guest is highlighting what hee1 sees as best path to a second quarter bounce. he will make the case after this quick break. we're live from the new york stock exchange. you're watching "closing bell" you're watching "closing bell" on c .c the cloud makes it possible to expand your infrastructure. but to make it powerful enough to connect your data wherever it is, you need cdw and netapp. cdw experts will work with you to understand your needs, then customize a netapp cloud services solution to integrate data management for all your clouds, helping you reduce spend, improve security, control data 24/7 and automatically detect anomalies. in the cloud, at least. netapp makes efficient cloud management possible.

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welcome back. less than 40 minutm&l in the trading day. a check of top stocks. >>ñr shares of general millse1 looking for a weekly gain, while manye1 analysts have a hold ratg on the stock, many havew3 raise their rating on the stock overnight. we're seeing some outperformance from lululemon. deutsche bank an lifts say the stock's valuation is attractive heading into what they believe is an earnings week. 2.3% up. tracking for a weekly gain. >> thanks. we are actually at session highs here. the s&p 500 up more than half a percent. tech stocks have been outperforming quite a bit this year. as investors flock tow3 the secr amid more rate hikes and bank turmoil. our next guest believes that

l market need to stage a rally for it to beñi meaningful. ed, thanks fore1 coming on. the market has been pretty conspicuous, as we have been talking about it for a week or two here. how do you think it resolves? do we think heart in the fact that investors have been rotating toward perceived safety or a narrow market, a dangerous market? >> well, i think withinxd equities, a narrow market is a dangerous market. because then if those few companies that have beenxd rallying run into trouble by themselves, there's nothing left for the market to hang on to. but i do take hart in that investors have not left equities as a whole. they haven't abandoned theu■ st■ market. could rotate back in. for example, you don't want to see whate1 we call multiple teno one down days with all of the the volumes stock, more than ten

times the stocks up on a day. that only happened once, a couple of thursdays ago when the silicon valley bank news b/juáu broke. besides that, it has been more of a rotation. what we want to seeb.■ is a rotation back into some of these areas beaten down. >> i know you do a lot ofu■ wor trying to characterize what sort ñ it's a bear market and what kind of moment in the cycle we might be at. if you go back ten months,çó th s&p 500 has been very, very sideways, it's been hard to although we're up off the october lows. there was a lot of excitement in january and you looked at it closely about how broad the rally was, withñ industrials an materials stocks and cyclicals leading and it seemed to prompt a lot of people saying you know ■ have been an and we ubñ be in a new bull market, where do we stand on trying to figure that out? >> we'ret( going through a testg

phase. in fact, if you weret( to say maybe october was the start of a the time in the rally you tend to get a gut check. now, theseñi cycles will differ. it may not be ae1lp bank failur. one cycle. but this is where you would expect it to happen,fá michael. and at this point, youxd haven' seen enough5a■ bj te damage for that to take place. and also, i'd add thy(8 a lot o times,çó the first scare really brings out a lot of the people who were nervous and you've seen that from a lot of sentiment data showing that people have beenpgl skeptical. that's ae1 positive signuzá!q■ market, you know, is working through this information. and of course, the big caveat is i xd failures. this is ring-fenced withine1 th bank so far, and then that would >> yes,fá there's no doubt folk are afraid. you know, the way the yield curve looks in treasuries and the fact that they will tell you that if the fed is aboutt( 4nmpo

pause, or about to cut, that is not always the best time to get 7v excited about stocks. world war ii, after thee1 last hike, you e1know, six monthsohç later, the market is actual i had down, the s&p 500 to be specific, is down about 5.5%. so not a great time to be in the market. although i would say sincet(e1 ó kind of the modern fed since greeuáp', four to five times the market has been up, double digits, six monthsfá later. now, what happened sometimes like ini] 1989, 2006, the fed d break something, and juste1çó t more than a year for the stock market to roll over. happened, but in the more recent history, it is probably a little more positivg over the short term, the next few months, for the fed to be done with hiking rates. >> it gets tricky figuring out the leads andçó lags. ed, great to see you. thanks for coming on. >> thanks for having me.

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apple tim cob is in beijing today, with the developmentçóq forum. >> also taking a stop by beijing, appleçó stores there, saw him post a pictureú on the ch)5uz social network. this is his first known visit since the pandemic hit. and he's also expected to attend u)u forum this weekend along with other u.s. executives like the pfizeruh■ and this is seen as a kind of coming out party for china after it decided to reopen everything a couple of months ago. by the way, coming amidst rising tensions between the u.s. and china, recently the tiktok ceo yesterday5a■ faced a grilling a

lawmakers consider a ban of that app.ìáhp &hc% highlights the conundrum many of these companies are in. they rely on huge sales inu■ china, like apple, for example, $24 billion in china in just the that was about 20% of all sales in that holiday quarter. and not to mention of all of the it is we've seen plane times thatu■ñi they're trying to divert the manufacturing after the issues we saw with the covid lockdown last year there. and by the way, china needs apple, it provides tens of thousands of jobs through the manufacturing facility, primarily foxcon. kind of of a double-edged sword here, mike. >> absolutely. dave, thanks so much. >> you got it. deutsche bank off the toñ the globalxdzv■ risk-off sparke concerns over the european g banking system spilling over into the banking market. sara ketterer is the c¡y of causeway capital management. she joins us now.

sara, categorize your level of concern about deutsche bank, about the european banking complex in general, and maybe how it fits into an3t%9 might see in terms of bracing for axd recession. >>e1e1 this encapsulates what w think of european banks, betteá capital shape than u.s. peers and this includes deutsche bank and it should protect them more than say the u.s. regionals and: yet we look at so many of these banks. the big european banks and they have plummeted. they're nowhereq near where the were in 2020 but the fact is you can get some banking bargains. we're marking up costs for risk and marking down share price targets but if this continues,

these are really qualitye1 institutions. so the contingent effect from the u.s. is to rethink somewhat unjustifiably. >> interesting. so you've adjusted your assumptions based on some of what is going on,fá and even wi that, you find some of the big european banks to have value? >> yes, they do. now, yours is an interesting situation. it is not one that we have in our fund but we do think the market has gotten a littlee1 carried away with itself. i guess we would agree with the german chancellor on that. this is a bank that has become profitable across all four areas, b#+kness lines that they, have including private world and corporatefá lending. they have a low loan to deposit ratio. and this is where we getçó worrd about commercial real estateçó banks, but in their case, the nonrecourse loans in real estate, and commercial real estate, about 7% of gross loans, and that is manageable.

so again, the market has gotten a little nervous, after credit suisse. it looks like deutsche bank will be next in line. we think it is very unlikely that they will see a run or hav] to be rescued. the other interesting ñu=a■ bank is barclay's in the u.k. well managed and delivering profitability, just about all of the european banr and q1 should be very profitable for the bulk the. >> maybe the reporting will come as a bit of a relief this. more broadly, sarra, are you kind of recession-proofing your portfolios? what are you actually doingfá mt here in terms of leaning toward or against certainçó parts of t market at this point? >> well, we just put on our list a piece called the end of easy money, and that's no surprise to anyone. but what it does meane1 is that with banks being cautious particularly in the developed world, andlp reining in loans a less liquidity means less money

pressure on assete1e1 prices wo be possibly likely a recession in the nesfñ six months, it is hard to say, depending ow aggressive the central banks continue to be butçó in the meantime, we want to see companies engaged in operational restructuringw3 where they're actively cuttingñr costs and improving their business and this happens to be quite a few outside the u.s. nom in the food business. nutritional food, dairy andq water. well managed. the dividends increasing. really attractive. we want to see more capitalñr returned to shareholders. and now cash is worth something. so we'll take it, thank you very much. and!oost of that, there's many technology, like sap in germany, so there's a long list. the other side this sort of meltdown is an opportunity. >> sara, great to talk to you. thanksxs today. >> thank you. all right, up next, we're

tracking the biggest movers as we head to the close. >> as major. a head for weekly gains, we're talking about some of the biggest gainers for the week. stay with us.

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e+kosing int( on 20 minutes closing in on 20 minutes until

the closing bell. the s&p 500 up 0.5%. let's get toe1 stocks to watch. >> two big weekly outperformers starting with gamestop, thet( bt weekçó since may after posting e first quarterly profit in two yearsxd and the stock's first weekly gamexd in five. it is more than 50% after the recent highs anz( up in today's trade. another big gamer is on holding, heading for the best weeke1 sin going public in 2021.t( this is the swiss running shoe company that has become very popular. the quarterly results on tuesday, including a street high priceok target of $39 and ubs currentlyñr trading at $31 andç change. >> thank you. it is the last chance to weigh in on a twitter question. ahead of our big interview on monday at 3:00 p.m. east"nn time, we want to know,ñzdo you time, we want to know,ñzdo you agree with jeffrey

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♪ yeah, yeah ♪ bell"t( market.xde1lpñr "the wall street journal," breaking down the crucial moments of the trading day. and more on the turn-around in theçó banking stocks that we're seeing. welcome to you all. we've had a fed ratee1 hike. record volatility in the bond market. yet the stock market has been relatively on solid footing.e1 we're up for the year still. up for the week. if ny4ning else, i guess you

could say this is not a 2022 type of stock market reaction. >> absolutely not. it's pretty wild to see that we just saw the first week of inflows in domestic funds for thet( year. the biggest weekly inflows since november 2022. and that is just showing that people are shrugging off the banking fears and i think that the crisis trade, the nasdaq is up more thanñr double dquqm"áju year, so people are piling back into the stock market. but i do think that's masking a lot of uncertainty under the surface.'a9èuzq aree1 seeing po anxiety, whether it isy1 in the options market, the bond market, the gold market. >> for sure. and in fact, those inflows i think were very much skewed warren, i know you're not necessarily particularly encouraged by this, by the way, the stock market is acting, given what is happening in the bond market. in the way that the wholee1 yie structure has really got ton

some dramatic extremes. >> yes, thanks for having me. what we have really been paying a lot ofq attention to since lat year is this relationship between the fed funds rate and the oktwo-year yield. and so this is a great proxy for forward fed policy. and during crisis periods and financial stress. so most recently, we've seen that spread drope1 below 100 bas points and this is absolutely vñ you onlyiñr see this right befo thei] crisis. and so when did this go out to 75 basis points or more? a handful of cases. the s & $ó crisis. thee1 1997 recession. 1998. 2001 rescission. one in '08, one in '08 in the great financial crisis.i] again, right before covid. so they happen right before crisis periods, between the fed

funds rate and the two year andp always, in every case, the fed cuts rates within almost a month following the huge inversion. what weu■ saw was the fed hikin rates just this week. so this is odd. we're off the map. we've never seen this kind of behavior from a fed when we have this kind of a signal from the and i would say it is pretty ominous for investors. >> it's fascinating. i would look at that list of prior instances and maybe push back and sayxd obviously they wp dramatic in the moment, they were scary, there was certainly more risk that came along with idxf but the s & l crisis 1986, the economy seemed tot( weather it. shallow recession, in 1997 and even in 1998,5a■ some say the f got too easy too quickly given how strong the u.s. economy was so i wonder you can say that you don't necessarily have to have the fed immediately go into panic mode in order to avert au bigger disaster? >> it'snb■ hard to always to

counter factually, and know how history would turn oute1 if the fed didn't cut rate but every one oft( those cases was absolutely respond to the inversion. let's look at 1998 and for a moment, think about how much difference the backdrop is. i hear bullsu■ making the v that the fed would come in with coverage and reinflate the bubble certainly.$x■ we're off 30% off thee1 inversi for 1998, so is that possible? > right. i guess the net effect is you fñe3■ like theñrxd fed isñr squ

into a position of remaining to tight for tooñi long, right? in a word. >> absolutely. and ilp think for equity verse, the average max drawdown in each one of these cases is like 25%. so your down side volatility is extreme. if you think about the history of the stock market, over any given'c■ 12-month period, you cd expect an average drawdown of like 11 or 12%. so it is more than double following these massive inversions. and so we don't have the fed responding. i think .e—q going to need the market to throw a bit in order to get theme1 to respond so expt down side volatility. >> all right, warren, thankse1 much. appreciate it. >> thank you. let'se1 talk to steven, may a surprise, we have regional and larger banks. more or less flattish for the week right now. does that tell you that the storm has potentially passed for at least the u.s.xd banks? >> mike, you know, i thinkçó so. i mean certainly the valuations have been cut pretty

substantially, the kre down about 30% here, or so, i think investors are finding some value. they're finding value in a much higher dividend, 5%, 6% yields at this point, and lookingñi at the price to book type ratio, p/es and a lot of value to be found when a market gets shattered like that with a 30%t drawdown. i think we found some healthy news out of the fed more recently, the primary credit, t("ñ#ed discount winz/á, actually from 153 to 110 million in the past week, the bank lending program, the new program that allows banks toe1 pledge underwaterxd assets at lppar, r to 54 billiord in the last week from 12 billion. so that doesn't sounák like aq crisis. so i think some of this is cooler heads are prevailing. >> so even if it is not that kind of acute crisis, in the çó moment, you know that thelp rejoineder to, that which is well, what aboutxd commercial rl estate?

what aboutçó the fact that theye going to be pulling back on lending appetites? what about the higher funding costs. i mean is all of that already priced in? >> well, a 30% haircut for the o regional banks, and less so for the global bank, it will most likely be beneficiaries of the deposit surge, but i think that's -- you know, the narrative that has been developing is the fed has gone too far. the credit reduction from the banks themselves, on the spot side are also going to be hampered by reduced loan demand with the primary now at 8%. so a couple of projects are going to start getting shelved auátáë9 an costs are going to be moving up and that is going to hurts them a little bit. we still have this banking confidence issue. and the fed's narrative is still for another quarter point rise. so this are some issues on thex

horizon. credit costs add to that ast( well. you about i think by and large a lot of this is facted in. >> all right. we'llñi see. thanks for joining us, appreciate that. i want to get bi< on this idea of investor taking shelter from tech, and we have netflix up about 8% this week. itlpok is upe1 another couple p today and people buying it will tell you for netflixe1 reasons. there is report of some pricing benefits and things like that. nvidia, people buying that aren't thinking about buying safety. they think they're buying a new story. and apple, it feels asñr if they're just the staples of ti(. ñ are. and i think people are really focused on those two stocks, microsoft and apple, and we're those two stocks hit the highest level since the 1970s, when at&t and ibm were looming large over the market&3 so it is fascinating to see howk

much, how that factors in jf latlq. >> i know you wrote about that this week. i'mxd trying to think bó#$ to s in 1978, were people alarmed that at&t and ibm were the two biggest? or in fact, was that okay they weres7■ solid companies and predictable companies? i think it is hard to avoid the idea that the'. and they have higher valuations. once again, we have açó two-yea process of tech having a gut still going to pay a premium for it. >> that's right. and who what is crazy is last year, we saw tremendous outflows fromb.■ technology. i think people realized a risk of being concentrated in a handful of names and yet here we are. and i think it highlightsko■ ho people were caught this year. they were positioned for higher yields, for value, for cyclicals g been what happened. instead, we see people turn to the 2020-2021ok favorites, you

know -- >> and people own more cash. that is sitting to the side. money market funds have huge in flows as well. and keep an eye on the options market to. what dry doesnb■ -- what degree does that type of freen zied activity, day to day reflect the appetite and is it hedging or all sorts of other stuff. >> i think what we have seen during the banking turmoil is a rush to protection in the market which is nothing like what we saw last year,t( where even thoh we have a steady gri!ñ lower, people weren'uó turning to put options and not turning to the stock -- they h i think it goes back to how the stock market has a lot ofñi anxiety underneath, because we have seen the heavy demand pick up in the options market. just yesterday, we saw put options activity, tied to georgia bank, hitfá a record. that tells that you there are

people who aun looking at the prices and seeing it playing out, and i think we're all ñ spend the weekend on twitter, and spend it watching another bank go down? >> well, i had flashbacks to not just th+ow÷ chart thatt( we've all day and buying credit protection but i remember the leverage ud inverse etfs for the banking stoqq creating some of the pre-conditions for the financial crisis. >> totally. i mean i think that just speaks to this market moment that we're in, where this does seem to, as it is going to take up our entire weekend, flowing into next week, and next week we have an inflation fed, which ups the ant"1p,■ for what we're seeing the market right now, where people are saying we don't think the fed will keep raising interest rates but powell is saying, cutting rates is not what will happen. so it will be an interesting stretch for sure. >> a reminder that the cpi

numbers are coming up. great to haveu■ you. thanks so much. appreciate it. the s&p 500 up half a percent today. up for the week on the s&p 500ih stocks higher. the action is just getting started. welcome to "closing belg overtime," we are awaitin breaking news this hour with the fed expected to rehese the latest data on assets and liabilities of commercial banks, and thisu,pai=u9 in fromlp the week