good friday morning and welcome to another hour of "squawk on the street. i'm sara eisen with carl quintanilla live on the floor of the new york stock exchange. setting the agenda for us today, dan niles, not believing in the bounce he says he's starting to short name financial services sector after the recent rally he joins us in a few minutes with stocks in the green after lower than expected data. plus, is commercial real estate the next victim of the

banking crisis we're joined by the ceo of ray group east properties. taking a look at stocks on the final day of the week, month-end, quarter-end, on what has been a positive run for stocks the s&p is adding 0.6%, a broad rally. more stabilization in the banks, though the banks are the hard spot of march and of the quarter so far, down more than 20% ask if you would have told me the nasdaq is up 15% on a month where we saw the second biggest failure of a u.s. bank in history and multiple bank runs, it would be unbelievable. >> i'm thinking back to the first day of svb coverage where morgan stanley called them highly idiosyncratic a four-to-one update, getting close to what some think will be a gut check at 4100. >> the regulators didn't treat it as idiosyncratic. they treated it as systematically important and they took swift and sdedecisive

action they did that for svb and others and put in lots of liquidity to stop the contagion so far so good, at least it's working. but as we've been talking about, the bank stocks haven't had such a big bounce there's a rethink on the bank profile and profitability. >> with earnings a couple of weeks away we'll start with the momentum trade, stocks closing out with tech in a clear liv leadership position the jpmorgan desk asking if sentiment is shifting around the edges. they say sellers have been aggressive at the lows they say it's technical for momentum they say investors need to start making their bets very fast. krnks senior market commentator mike santoli joins us. do you go along with that.

>> i would argue the bears on the macro economy are highly convicted, but they're not so sure if the market has a lot left to give back. so, therefore, tactically, i think we have had this pattern of panic, flush, squeeze, feel like you need to chase because you're underinvested if this is going to run and if we have this benign scenario taking shape, and then the reversal when we get overbought we haven't been overbought but i think there's a sense that the market has been able to navigate around some of the rocks so far. right now we have this window, fed pauses until the first hike have been historically positive for the market i don't know what we believe - >> until the first cut >> exactly, the pause before the first cut has been this window where it worked. didn't work every other time in the last 35 years. the problem is, i think we're overanticipating everything that comes along the way 37 we overanticipated the tightening cycle on the way down so i don't know where we are in the life

cycle if. >> if there's a fade of the cut, if that's the next move in the bond market, is that a big headwind for stocks in april >> i don't think we get there for a while. i think we have a six-month horizon -- >> more fed speak like we heard in the last 24 hours, they are talking about doing more and staying restrictive because inflation is a problem slowing in inflation growth in the numbers today. >> that's the issue. at the upper end of the range, you can tolerate only so much of the fed hawkishness or the economy will weaken. we've had a good run it's been better than anticipated. the question is, does that bring out more hawkish expectation nobody knows you mentioned bank stability it's a good thing. 1995 and 1998 exist. which means fed gets more dovish in response to financial stress and the markets and the economy are fine they exist they're in the history records we can say there's precedence for that i don't know that you want to bet heavily for that. >> we didn't have an inflation

problem then. >> we thought we were going to in '94-'95, but we didn't. >> thanks, mike. with the nasdaq and s&p closing out this very strong quarter, led by technology, how do you position the portfolio on that front? joining us this morning talking about what q2 may bring, satori funds' dan niles welcome back tell us how you processed this swing in sentiment, really in just the last three weeks? >> so, we thought the market would bottom we put out a tenth on march 10th saying we were covering our shorts that's the day silicon valley bank failed. looking back, my general view was the government would do something to backstop this they had gone through the lehman crisis, they'd gone through washington mutual and they would step in over the weekend the market has gone from a low of 3810.

that following monday. it's now rallied about 250 points or so i had an interview with mike santoli that tuesday, march 14th i said i think the market can get up to 4100 or until earnings start to get reported for the first quarter. we're kind of getting into that range. and jpmorgan kind of kicks off earnings season on i think it's april 14th, if i remember correctly. so, i think that's sort of your sell by date on this rally when the banks are poor, you're going to go from we are focused on financial instability to what are earnings and earnings are going to have to get cut anywhere from 10% to 20% on bank eps just because you had deposit rates go up a lot, which squeezes the net interest income margins schwab yesterday is a good maybe sample set of what could potentially happen where you had morgan stanley lose like the stock for seven years, downgrade the company and say, hey, net

interest margins are going to get hit. they cut their estimates by 30%. you're like, well, the stock's already down 34% going into this it goes down 5% yesterday anyway last time i checked, it was down again today. clearly, it's not all in the numbers yet as much as people desperately want to believe it is >> dan, have you missed this run that we've seen, s&p 500 up for the quarter 6%, nasdaq comp up 16%? have you been too bearish? >> no, because -- the answer to the prior question, sara, but i said on march 10th, you can look at the tweet, we're covering our shorts for a short-term bounce on the 14th, i said with mike, we think we can get up to 4,100 or close so, we've done very well with this bounce. we've gone from 55% net short before, the banking crisis 5% net short on that following monday on the 13th we've gotten a good portion of this rally

we're up for the year. we were up last year we're doing very well. now we're just looking to add back those shorts. we start adding a few. we're back up to 0.5% of the portfolio being short but nowhere near the 55 we had going into this. >> got it. that was the part about you thinking the regulators would step in, as they did got that right so now, dan, when it comes to adding to the short position and being worried about bank earnings and the risks out there in the system, what are you targeting? are you targeting the banks? the big tech companies, which have been going in the opposite direction? >> no. we like a lot of the big tech companies. obviously, meta is a name we've liked for a while. we were recommending intel when people hated it. the stock up over 20% for the year so you have to go sector by sector we're targeting the banks. that's where we started adding back a majority of our shorts. we've gone from having no shorts in the banking system in, i think it was like that following monday on the 13th, to now we've

added back a whole bunch of those shorts because earnings are going to matter and people are going to startw those. the bank stocks haven't necessarily cut the earnings cuts that are potentially coming we like semiconductors because we've hated that space for about a year some of these companies -- micron guided to negative gross margins for the upcoming quarter when they reported the stock was still up 7% a couple of days ago and so with that space, you've got revenues in some cases down over 50% year over year. so intel, nvidia, those are two names we mentioned before. we like facebook a lot some of the sports betting stuff we like as well, names like draftkings or fanduel. sectors we like. you have to remember, we lived through this false rally narrative back in '08-'09 where the s&p rallied 24% in six

weeks, up until january 6th of '09. everybody's like, the t.a.r.p. came in at $700 billion, everything is good, the worst is behind us. and january 6th is right before the start of earnings season for q4 companies reported guidance and the next month the s&p went down 28%. earnings do matter they don't matter in the short term that's all sentiment that matters. we have earnings in two weeks and i think you need to pay attention to that because a lot of tech companies -- i.t. spending in general, tech spender is the biggest spender in that $4.4 trillion, they're 11% to 12% these banks aren't focused on spending money they're focused on surviving i think these tech companies you could have an issue with earnings as well. >> that will be interesting. that's going to be a very interesting part of the bank earnings rush because i was -- just a few quarters ago, dan, we

were talking about expenses getting out of control at the biggest banks. >> absolutely. so, now we've kind of switched to the opposite. facebook is a good example of how fast things can change you remember we were on "techcheck" of november of last year meta had guided to this horrific expense growth we were like, well, we like the stock. we're buying it here because they can cut that expense any time they like you've had three expense cuts since then stocks doubled everybody hated it at 90 they love it at 200. you look at the banks and they're in a similar situation, as you pointed out, carl, business looks great, margins ex expending, et cetera, now have you to worry, oh, my god, can i survive? they have to cut back on all the expenses they can and that's going to start flowing through to the companies that supply them they're the second biggest spender, besides the tech companies themselves, on technology there's going to be a lot of

very interesting cross-currents when these companies report. i gave you micron, but you can also look at the semiconductor space yesterday, and the stock was down over 20% when they cut their numbers. it's going to be very company-to-company specific as you go through this. >> overall, dan, the move in mega cap tech, it's been beaten to death now people understand it pretty well given what's happened regarding financial stability. but don't you -- do you believe that things like ai, structural growth stories are going to be the thing that powers it forward more than people expect? >> well, remember, there's going to be certain companies that benefit from that. so, we like nvidia they're going to be the big winner, obviously, in ai and you're going to need more powerful microprocessors as well and intel is very, very inexpensive. i think the numbers are probably going to be okay because they didn't cut so draconianly going

into this. if you step back and say, what's going to happen with the networking stuff that goes into big enterprise, what's going to happen with com, industrial, some of the other stuff, then it gets a lot more tricky auto has been a space that's been really, really strong but if you're going into a recession, lending standards have obviously gone up over a percent. auto delinquencies are at the highest level since 2006, i want to say delinquencies are starting to rise you're starting to see pressure on the consumer. he's going to run out of that excess savings that's down to about $1.5 trillion in excess savings from all the stimulus checks during the pandemic at this rate, it's going to be gone by the end of this year that's why we are still thinking the back half of this year could be somewhat problematic from an earnings standpoint versus the multiple movement we've seen earlier. >> well, i remember a few quarters ago where you said the labor market's not going to

crack until you see small and medium size businesses lay off the argument's now being made, well, that's where the tightening and lending will happen the fiercest. maybe that is a back half story. dan, thanks, as always good to see you. happy friday dan niles. >> thank you still to come, the bull case for the banks. why deutsche bank says charles schwab could rise 50% after that bearish call from morgan stanley yesterday. plus, is commercial real estate the next victim of the banking crisis we'll discuss with the ceos of east group and jll east group saying now may be a buying opportunity in the sector we're back in two minutes.

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this is why we need to raise the fdic insurance caps. come on. we should not be asking a nonprofit. we should not be asking a small business or medium size business, go check out the financials of your bank before you deposit the money you're going to count on. >> senator elizabeth warren with us this morning calling for a raise on the fdic insurance caps in the wake of the banking crisis leads us to the call topping our desk, that's deutsche reiterating a buy on schwab saying shares could rise as much as 50% morgan stanley said something similar yesterday. 23% upside besides moving to the sidelines. it's been a volatile year.

conflicting reports on whether there is systematic vulnerability there as well, although the ceo says they have enough liquidity to cover 100% of deposits should they have to. your interview with him a couple weeks ago on his personal stake in the company. >> right he was buying back stocks during the difficult period nonetheless, these concerns persist, even though he's gone to great lengths to come out and say, we've got the liquidity 80% of our funds are fdic insured, below $250,000, but they have the problem of mismatch in duration, where they have unrealized losses and people continue to worry about cash sorting, which is basically moving money around where they lose the margin on those products they're worried about the earnings profile as well charles schwab having its worth month since 1987 the company comes out with earnings in a few week and i think they have to do more to clarify the liquidity position, the cash sorting business and what's happening on outflows,

right? deposit outflows there's a lot of money moving around right now and a lot is going into places like money markets and that makes investors nervous about some of the places where it's coming out of. >> b of a calls it the dash for cash in q1 roughly $508 billion quarter to date going into money markets. >> it's a huge wave of money you wonder where that's going to stop and where it's coming from. so, friday we get the report from the fed on deposits from small banks and large banks and how much is leaving the system overall. and that will be indicative of how much concern there really should be here >> all about deposit flows right now. when we come back this morning, global stocks outperforming the s&p over the last month and quarter we'll break down some of what's going on in europe on the heels of their inflation data this morning. take a look at the dow up so the day, still negative the quarter, but having its best week since november we got s&p 4080 now. don't go anywhere. you are a rock star.

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welcome back global stocks have outperformed the s&p 500 to start this year but this morning citigroup says that run is over double upgrading u.s. equities while cutting europe to neutral. seema mody with the action we see overseas heading into the european close. >> european financials faring a lot better than u.s. banks in the past month despite news of credit suisse and deutsche bank and that has allowed european stock indices to outperform most global markets, including the s&p up around 6% the rally led by france and germany with double digit percentage point gains due in part to reduce concerns around an energy shortage and optimism around a china recovery. a gauge used to measure activity in china, services sector hitting the highest in more than a decade that came out this morning that along with the restructuring of two chinese tech giants, all alibaba and jd.

the shanghai composite up around 6% citi, downgrading europe, worth noting, it does remain positive on china strategists say the reopening should lead to an acceleration both in gdp and earnings growth. morgan stanley's top strategist says she's still betting on emerging markets hbc writing the dollar will remain high focus next month while there's less fear of a hawkish fed, it is the dollar that could determine whether emerging markets outperform. >> always, always. and everybody's gotten relief from the weak dollar so far this year, and certainly for the month. i guess the eye of the storm is now in the u.s. and in the u.s. banking system is that the call is that why the outperformance in global stocks >> yeah. there seems to be this perception that the banking stress is still confined to the u.s. that's perhaps one of the reasons global equities have been able to outperform. interestingly enough, i was

speaking to julian emanuel at evercore isi saying what's the biggest event you're watching in march? he says it's not the state council in china, it is the first republic earnings on april 15th that willdrive sentiment not just here but overseas. >> jpmorgan on the 14th still some discussion, i think it was citi last night, that said, look, tier 1 capital still better this cycle than it was in 2015 or 2008 because there have been so many hard lessons learned by the banks they would argue policymakers, too, seema. >> it's a great point. who learned what during the last financial crisis and who's better for it. >> seema mody on the banks it's going to be an eventful set of earnings in a couple of weeks. let's get a news update with contessa brewer. >> good morning, carl. the new york police department says it's seen no credible threats to the city after the indictment of former president donald trump the nypd has had mobilization plans prepared since last week in anticipation of potential

criminal charges being filed against the former president trump is due to appear in court in lower manhattan tuesday for arraignment in this case. the justice department has filed a lawsuit against norfolk southern over the railway company's train derailment in ohio that lawsuit alleges clean water act violations that allegedly occurred due to the derailment, which caused a fire and local evacuation. the vatican says pope frances is expected to released from the rome hospital where he's being treated for bronchitis they say the pope will be in st. peter's square for palm sunday mass this weekend. wishing him the best recovery. sara >> contessa, thank you. after the break, some warning, reits and commercial real estate, some are warning they will be the next shoe to drop from higher rates amid the banking trouble. we'll check in with two ceos to get a full picture of the situation. reit group, focusing on

warehouse environments and the ceo of jll, one of the largest commercial real estate players in the u.s back after a quick break

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welcome back one of the biggest questions stemming from this month's failures, what is the read-through for commercial real estate our next guest runs an industrial reit, nearly 500 properties across the sun belt he thinks the turbulence we've seen could be net positive for the space. joining us is east group property ceo marshall loeb

it's great to have you on the show, marshall how can they be positive when everybody is worried about tighter lending standards, rates coming into with tighter interest starts. >> i'll preface it with i'm an optimist where i think it's positive and as we step back from it, a little over 160 reits, per the reit association there's 13 different sectors. in industrial it's positive and my description, a few thoughts, one is we heading into this downturn we're a little over 98% leased on the numbers we put out at the end of february and roughly call it in that same zip code as we wind up first quarter. i think the banking you'll see a tightening in lending standards. you read about that. so, that's already in effect the banks are already moving that way, and then the second thing, that's today, and then tomorrow i'm expected, i would

imagine, there will be even more banking regulation as the reits usually it's the larger companies president average reit is about one-third leveraged as terms of their market capitalization. we're probably a little under 20% as we sit here today with a number of banks in our line, 11 different banks i think at 90% leased and you start to constrict supply, that will lead to demand and industrials have been strong the last several years when you start to constrict supply, we get excited coming through this as we look ahead to 2024, the back half of 2023. >> is access to capital to loans a problem or not >> i think it has been we started seeing it mid last year again, i'm speaking on industrial and a lot of days i'll say i missed the forest for the tree

with the bank crisis, i think it's human nature. consumer sentiment will be a little lower and i think banks will be tighter with credit. there's other sectors within, broadly speaking reits, office and retail, hotel, things like that where the construction starts will hit. that's where we get excited. as you said, what's the theory or my hope is we have about 1600 tenants within our company i hope access to capital doesn't hit them hard. we don't have many near-term maturities, so we can manage through that we'll be opportunistic the other benefit we see there's pros and cons of being public, but access to public equity and public debt. so, we're not just relying on banks. we can go to live companies and

the largest of the reits will issue public debt. there is that access we raised equity through february right at 90$million and we'll continue to be opt opportunistic in terms of raising equity through the balance of the year. and with that -- i'm sorry, go ahead, sara. >> a little more color how many banks do you have lines of credit with >> it's one line, thankfully but we work with 11 banks. probably, as we added up the other day, it's something we talk about, which banks do we work with, in our line it's one line, we just expanded it at the end of the year. thankfully i'll credit our finance team our balance on it is pretty minimal. we raised that by another $200 million. 11 banks, four of the top six banks in the country of those 11 banks, so i hope and i expect, we've been, like everybody, in contact with them

of late. they'll all be fine. the banking world seems to be settling down a little bit bad things can happen quickly. if something happened and one of those banks failed, the other ten banks would have an opportunity to step in so, either one bank or all ten would step in. and then eventually i guess it could shrink the size of our line with a balance of -- that's pretty minimal for us, up $650 million in availability, today i like that. and i'm not wishing ill on any of our peers, but some of our development peers are local, regional companies we'll build smaller, shallow, last mile, people call it. some people with variable rate debt, our line is the only variable rate debt, thankfully refinancing construction loans, and then really the acquisition market so much in the past it was a merchant developer would build a

building, build it up, flip it we've been in price discovery, as brokers call it, since mid-last year because it's hard to know where yields are going to trade today much less say, you know, 15, 16 months from now, which is about as long as it would take you to stabilize an industrial building longer for office or hotel >> marshall, thank you very much it's really good color i appreciate you joining us. >> thank you have a good weekend. >> you, too. take a look at another stock in the commercial real estate space, that's jll, roughly down 10% on the year amid these recent headwinds the company says it's expecting the market to adjust compared to previousdown turns when it comes to office, they believe cyclical headwinds are obscuring what continues to be a positive growth story. joining us jll ceo christian it's great to have you back. talk to me about what's positive long term in a time where people are arguing return to office is

a structural step down in the need for office space? >> well, what we have already seen over the last couple of weeks, people are returning to office so ouccupancies in office are growing across the u.s we shouldn't dismiss office buildings overall. it is the place for meeting and working and engaging with your company. so, i'm pretty sure that offices have a big role to play going forward. >> it's funny. the news service has a story today about meta, for example, where they reportedly brought in a deejay to convince employees to come back to the office i mean, you're not seriously expecting five days to become the standard anymore, are you? >> no, no, definitely not. we would expect the standard would be probably three to four days a week, depending a little

bit what industry you're in and what role you're playing within your company, but around that, 3 1/2 days will probably be the average in the u.s. going forward. >> aren't we looking at a situation now where in 12 to 24 months, a company can say, we've got two-thirds of our people back on any given day. we can afford to let go of a third of the space in our urban centers? what makes that unreasonable to think? >> first of all, companies have to decide whether they have assigned seating or unassigned seating. if you have assigned seating, it doesn't matter if your people come every other week or five days a week, you have a seat for that person. companies first have to move to unassigned seating to reuse this space for work desks usually what we see when they reduce the work -- the space for work desks, they are increasing their space for meetings, for engaging, for innovation, for well-being so, it's not necessarily the

case they're all downsizing the space they're using. most are actually upgrading the space they're using and trying to move to better buildings. it's not necessarily -- the deejay is not better space. >> we were talking about the relationship with banks. there is this thesis kompts are going to diversify their deposits i wonder if you think that theory is overdone given the friction in establishing new lines of credit, establishing new relationships with additional bankers do you think people are overthinking it? >> you know the situation of fdd was very unique because they had in their business model, that startup had to bank with them. in most cases had to bank only with them. the majority of corporates do have different banking relationships and not only one banking relationship if they feel their banking relationships may not be strong enough or the banks may not be strong enough, they may diversify some of those, but i

don't think this is a broad theme in the corporate world. >> there have been some calls on office reits today on the sale side, deutsche has a report out today, part of it is we think the selloff is done but we don't have the transaction frequency to make a longer term call right now you think that frequency is going to heat up in the back half, yes? >> most definitely what with are seeing is a lot of private equity investors are ramping up their kind of look into the office market probably into the office market over the debt side and later move into the equity side. what we have seen over the last couple of months is that prices have been taken down across the board no matter what the quality of the buildings is. now people will become much more granular again and great buildings will have a use in the future and they will trade and trade at reasonable prices so, capital is lining up for that already >> you and i were on a panel

together in davos at the beginning of the year. it was a bleak time for real estate because interest rates had risen so much. there was a lot of pes nisimism i feel like it's gotten exponentially worse as a result of these banking problems, as people realize these loans are starting to come due what do you feel is the biggest misconception out there? >> i don't necessarily say there is a massive misconception what people have been doing because the market was getting very nervous is that they were treating everybody the same. andnow as the dust is settling a little bit, people are back to seeing who is really strong, who has really strong buildings in their portfolio, what are the great developments and those will be differentiated now massively against those products which are actually having a problem there's no doubt a lot of office buildings, which we call commodity offices, do have an issue going forward. that doesn't mean the whole

market has an issue. and, therefore, i think that bifur i bifurcation of the market will be much more visible going forward. >> is that why your stock is down 10% this year when boston properties is down 60% this year well, that's in 12 months. still, some of these other office reit stocks have gotten clobbered. boston property down 20%, some of the others down 10% to 20%. >> listen, we are obviously a service provider to that industry our stock was taken down as well we are quite optimistic for the second half of this year let's see how that is playing out. i don't see a big banking crisis coming if it were to come, it would certainly not come from the commercial real estate sector. it will play out over the course of the year, and hopefully all of the stocks and other reits you just mentioned will go back up again.

>> that's the other concern, right, it'sa vicious cycle where now the commercial real estate problem will get so intense and you might see distress that that will impact the banks and put more pressure on banks like deutsche bank. >> yes we have a couple of banks with bigger exposure to the office sector than others at the end of the day we have to be careful assessing it with one broad brush. we have to look at the product which they have actually financed and, you know, roughly 20% of lending is to offices and within that 20% probably the upper half will not create any issues for the lender. the lower half is the pieces we have to look at. again, that will play out hopefully in a good fashion and people will find solution. there will be pain here and there but i don't think that pain will create a big crisis.

>> it's going to be interesting to see how patient and discerning the market can be because it will take some time for this to ripple through thanks as always good to see you. thank you. >> thank you there was a lot of doom and gloom on that panel back in january on commercial real estate. >> i bet. >> i can imagine it would have only been a lot worse now. after the break, beauty stocks they've been nice to look at this year. ul that and elf off all-time highs. morgan stanley says one of these names can rally another 20%. more on that next. watching intel, for as much criticism as it's gotten from the street, the ocisstk rebounding in march. best performer on the dow, nasdaq and s&p 500 for the month. "squawk on the street" will be back in two minutes. when you come to that realization, i think it's very important that you spend your time wisely. and what better way of spending time than traveling, continuing to educate ourselves and broaden our minds?

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news alert out of treasury on medicare and social security. kayla has that hi, kayla. >> hi, carl. treasury is releasing its annual report on the financial outlook for critical medicare and social security trust funds, which treasury says continue to face what it calls significant financing issues the hospital insurance trust fund, which represents medicare, can only pay 100% of its funds through 2031 that's three years later than last estimated but it's less than a decade from now. that longer time frame, though, is attributed to lower use of health care programs, lower morbidity for survivors

to the nature of joint replacement programs shifting from in-patient procedures to outpatient procedures. the old age and survivors fund, which disperses monthly retirement expires one year sooner than previously expected. officials say the projections are changing because of baby boomers retiring at a faster rate than the economy is adding new workers and higher wage jobs seeing pay increases beyond that cap more quickly than lower wage jobs seeing an increase in pay within the cap officials say in the last year, medicare took in $989 billion and spent $905 billion they said legislative changes are needed to preserve these programs for future generations. carl and sara? >> yeah. even higher retirement ages, ala france thank you, kayla. shifting gears, wanted to highlight beauty it's been a major bright spot in

the market this year ulta and elf, while coty is at its highest in two years cnbc retail reporter melissa repko has that story it really has been a bright spot, like a consumer staple, like buying food. >> yes, sara good t discretionary spending has been beauty ulta shares are up 15% this year, outperforming the retail focused xrt and nasdaq retail is up 40% since 2019, crossing the $10 billion in the last fiscal year with same store sales expected to increase by 4% to 5% this year i spoke to ulta ceo dave campbell earlier this week on all this optimism and why beauty is succeeding where other segments aren't. >> historically beauty has been somewhat resilient to economic

challenges and changes and pressures. it is seen as an affordable luxury and particularly now in the context of self-care and wellness give us some confidence it will be able to adapt as a category to change as a head. >> it's worth noting other retailers are following this trend, too target's opening mini ulta beauty shops in select locations and kohl's is adding sephora in all locations. >> that was a great interview. thank you. melissa repko. it is amazing these stocks continue to make new highs, even on down days in the market. >> you got that right. so much activity out there regarding retail fascinating stuff. ahead, another chinese e-commerce company splitting up. we'll get details next with that sector in the red. we want to draw your attention to ge, the stock hitting the highest level since february of 2018 and close ssitoeson highs, qqq

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jd.com planning to split up just a few days after baba made a similar announcement, the focus of today's "tech check." >> part of a wider trend beijing is now unshackling big tech and trying to show the world china is open for business

jd.com is the second public chinese tech company in just a week to announce it's breaking up its sprawling businesses by targeting hong kong ipos for property in industrial units it comes days after alibaba said it would split itself into six different independently run companies that could seek separate ipos. between the two subsidiaries that have filed and alibaba's logistics unit in talks with bankers, china's ipo window may reopen soon and before even ours has and there could be plenty more opportunities if this is indepd the new playbook. ten sent, baidu, bytedance under that one umbrella. diversification for chin's big tech has been ki like for our own big tech companies important to keep in mind, though, when it comes to the chinese ones, this is full circle from 2020 remember that was set to be the world's largest debut. then beijing pulled the plug and kicked off years of regulatory attacks and value destruction.

even though we could see billions of dollars reaccrue, the landscape has fundamentally changed by breaking them up china has diminished their influence, fixed idea ceos like jack ma have become too powerful by breaking up alibaba, he is seen as neutralized and investors can't forget beijing has taken the so-called golden shares unclaire what happens if we see more spinoff. they do give outsized power to influence or even to veto some decisions. while the crackdown on china's own tech giants may be easing, micron today could be an indication that attention is now shifting to american companies, that we're finally seeing some of that retaliation. >> absolutely. deirdre, i was going to ask why, why they're doing this is it for some strategic reason or, as you say, a power move by

the chinese regulators to take away the power of some of these huge conglomerates >> why, simply because it can. there have always been questions what could the chinese government go after, especially talking about the huawei debacle, would they go after something as big as an ample you can't go after an apple because the chinese love their iphones. that would be far too disruptive a micron, it's not a household name in china. it's the nuts and bolts. they can more easily do so in a way you couldn't go after starbucks or nike or tesla watch out for the chips companies with the u.s. export ban. >> meanwhile, they've hosted tim cook, they may host elon musk and macron in the next couple of days >> come to china for the friendly business condition. >> certain businesses. you have to be careful as always taiwan semi, they need to be friendly or even a dutch company

because they need some of that equipment. where they can, where they think they have the upper hand, you might see more pssreure. >> deirdre, thank you. wall street is buzzing about deal making this year or lack thereof. that story is next ever better. it's when disruption hits your supply chain and ryder makes sure you're ever delivering with freight brokerage to transportation management, truckload capacity and dedicated trucks and drivers. ♪ great estimations ♪ interesting piece. let me bring in my expert. mmm... so many scratches... oh those are from my car keys. such a rich history. yeah.

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something wall street is buzzing about this morning global deal making slumping to a ten-year low the volume of mergers and acquisitions plunging 48% in q 1. recession fears, some of the factors to blame for softening deal activity does stand in stark contrast to the action in the markets where the s&p will end up sharply higher but there is a lack of confidence, i think. faangs, tighter financing conditions as well for deals they've been getting busy. >> we'll look forecast commentary when we get the earnings from the big investment banks and get a sense of what

expense per head count is doing. we know bonuses are down double digits >> lee very bullish says you don't get two back-to-back quarters of gains in markets no news on banks has been good news so far for the overall market >> and we're only 15 points away from 4100 which for a lot of people was a target on the s&p holiday shortened week next week let's get to the judge carl, thank you very much. welcome to "the halftime report." i'm scott wapner front and center this hour the quarter ahead for stocks is earnings, the fed, more economic data loom large not to mention potential surprises, of course the investment committee revealing their playbooks for the months ahead joining me kari firestone, jim lebenthal,