good friday morning. 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 today, an exclusive with the ceo of charles schwab, his first since the company reported results, 11% in profits and pause in the pieback. fed speak pointing to another 25-basis-point hike rate in may. and kkr searching for opportunity overseas we'll hear more why they say a nuanced approach is needed while picking international equities and will name their favorite market. > top of the tape, hawkishness

from fed, multiple bank failures not enough to change the fed's tone when it comes to another rate hike in may, reiterating the longer for higher mantra we're getting incrementally from bostic and harken in the last 24 hours. >> i haven't heard any of them say we need to pause. >> goolsbee is look, do it - >> caution but they still have an inflation problem richard fisher, he's always been worried about inflation, but he articulated really well, the former dallas fed president told us last hour, their credibility is on the line there's also still inflationary pressure in this economy and there are still surprises. how about the april pmi data this morning on manufacturing and services coming in hot it's confusing because we thought everything was going to be weakening but it's not, so the fed will have to move. >> we'll get more indicators next week with pce and gdp from q1 in the meantime, markets hanging in there some moderate declines

volume is better than it has been normally this time of day expiration will maybe give it a boost. >> this is the time of the day the market recovers from the lows of the morning, as mike santoli told us. not seeing it much today it's being led by defensives those are the stocks working today, staples and health care what's weighing down, tech, financials, industrials, materials. we'll kick off the day talking about financials, particularly charles schwab posting on monday, bank deposits down 11% from the previous quarter and pausing their stock buyback promise citing turbulence across the sector and uncertainty. joining us to talk about this and more in a cnbc exclusive, charles schwab ceo walt bettinger. thank you for making the time. nice to see you. >> good morning, sara. thanks for the invitation. it's wonderful to be with you again. >> we have a lot to work through. let's start on deposits because i mentioned the quarterly

decline. 30% down from where they were last year. i know the market expected numbers like this, but it doesn't feel like there's a ton of confidence that that issue is over is it? >> well, what we've seen is we've seen investors make the very natural move that they should make and that we've encouraged them to make. and that is as rates have gone up, they've moved from transactional cash relatively lower yielding bank deposits into higher yielding solutions again, all at schwab when we look at the trajectory, in other words, the daily movements, february was lower than january, and then march was lower than february. particularly if you make adjustment for the one day in march right after the svb issues and april is lower than march, and measurably lower even taking into consideration that april is tax month.

we're watching it very closely, but the trajectory would indicate that we're much closer to the end of this process than the beginning. >> that's a good update on april. i was wondering if the tax seasonality was going to exaggerate some of those deposit outflows walt, can you explain cash sorting? a lot of debate around your stock has to do with this idea of cash sorting and it's getting worse. i know it's what you were talking about with customers moving money around. >> i guess i wouldn't put it in a category of getting better or getting worse. again, it's a natural movement by clients when interest rates are at zero, they mix their transactional cash a way to think about that is cash you have in checking act with long-term investment cash because there's no reason to keep the two separate from a yield standpoint when rates start to move up, then we reach out to our clients and encourage them to move their

longer term investment cash into a money market fund or a cdc or treasury bills, whatever is in their best interest. they go ahead and take that action we began that process over a year ago so we're probably ahead of maybe some of the other organizations that may be just entering into this world that you refer to as sorting. but we see it -- again, we see the trajectory moderating, but it's a good thing. i don't want to put it in the context of something negative. it's what clients should do and what we encourage them to do. >> but also puts pressure on your profitability >> well, it does in the short run, but at schwab we play a much longer term approach than that we want to do what's right by the client when i think of strategy and the way clients view us as a safe port in the storm and a trusted partner, we always want to do what's right for them. in the long run, we think that pays off much better than any

shorter term strategy that is near term profit oriented. >> i remember when we talked, walt, during the depths of the crisis in march and a lot of people were eyeing schwab, your stock was getting hammered and you came on to clear up a few misconceptions i wonder if you feel there have been any, since you did the earnings and business update earlier this week. it's such a hotly debated name >> i think early on there was a lot of misinformation about our bank balance sheet and whether we had gone out and purchased long-dated securities, things of that nature we tried to clear that up with the commentary we made we tried to clear it up for our clients. institutional investors, they understand the difference between comments that we would make that are, of course, from a regulatory standpoint certain to be as accurate as we can, and maybe a blog post or an article

that maybe has a catchy headline for individual investors or retail investors discerning between those two can be complicated. so, it's beholden on us to be out, tell our message, make sure facts are in the market. we're grateful you and others have given us that opportunity to do so >> so a lot has to do with the pressure on the stock with the earnings pressure we're seeing, across the banking system, but particularly earnings are falling, cost pressures are ri rising how much more pressure do you see there and when does the cost side peak? >> well, we're going to experience some modest pressure on our margins as we move into the next couple of quarters. we were almost 46% adjusted pretax q1. i think margin most services and financials would be happy with we could see some modest

pressure on that over the coming quarters as i indicated in our business update on monday, we expect a more expensive funding that we've accessed principally cds, but some borrowing. we expect to have that largely paid off by the end of '24 you should see our margins begin to grow as we get possibly later into this year, but certainly as we move into 2024. >> is there anything you wish you had done differently, walt, heading into this tightening cycle? >> well, it's always easy to go back and look. if i would have known or we would have known that the fed was going to embark on a relatively historic increase of 500 basis points, we might have done something differently again, i look at it from the perspective of our clients we served our clients well we've reached out to them and encouraged them to take right

actions. they viewed us as a safe port in the storm. they brought over $130 billion in net new assets to us in q1 with each month of the quarter getting higher and higher culminating in march at $53 billion. our clients understand our position they understand what kind of firm they work with and to us that's most gratifying. >> a lot of the problems we're talking about have to do with the schwab bank, not the broker. there was an interesting note out of jpmorgan wondering about debanking schwab, whether you would consider actually separating the broker and bank the jpmorgan analyst argues schwab would trade at potentially a meaningful higher multiple is that something you'd consider >> well, we have respect for ken worthington who wrote that piece. as you can imagine, we considered the banking

at the end we weigh all the different factors, it's not something we're going to look at in the short run i guess three things i would suggest to consider when you look at the idea of debanking. first, our clients benefit tremendously from our banking offering and we've researched with them and they value it. you have combination of your investing, your banking, your lending, trust services, all delivered in an integrated model that's very low cost so, our clients want us to offer those services the second thing is from a stockholder standpoint, i understand the perspective of moving all of the suite -- cash balances to a money market fund. we have to remember that we've been in a zero interest rate period for many years since 2008 if we move all those bounces into a money market fund and we moved back into zirp we would have zero revenue on those cash

sweeps because we would wave our management fees to make sure clients didn't have a negative yield. the third thing you have to look at is from a big picture standpoint i don't think it would make sense to do long-term strategic moves based off what has been an extraordinary period of sort of unprecedented circumstances. you had a global pandemic, then you had a massive amount of fiscal and monetary stimulus now the fastest fed tightening in history i'm just not sure that's a formula that should have a company like ours making very big long-term, strategic changes. >> fair enough it's good that you saw the note and responded. what about the buybacks, you paused it, citing regulatory uncertainty. can you just elaborate on what your expectations are there and when the buyback might return. >> one of the fortunate things about my role is i have the benefit of working on a daily basis with chuck schwab. there's probably few people in

financial services who have more experience or knowledge about different cycles than chuck. and i remember chuck telling me 15, 20 years ago that when you are in a very unusual economic environment, that capital is king and so that's the approach we've followed that's uncertainty, uncertainty in the economy, uncertainty about the future trajectory of rates, uncertainty from a regulatory standpoint. this is a time for us to conserve capital that helps us ensure we are the safe port in the storm that our 35 million or so clients count on >> well, one possibility is you could be moved to, i guess, category 2 regulation as a financial institution instead of category 3 have you gamed that out, do you have the financial capacity to deal with those higher capital levels and increase stress tests? >> well, we're well aware of that possibility as you can imagine, in all of our planning, we look at various

contingencies. at this point i don't think it would be healthy for me to speculate on the direction our regulators will go we have more than adequate capital by the regulatory standards and we'll continue to monitor that capital if we feel it makes sense to make adjustments in it, we'll do so, as we have in the past. >> there's a report from the journal that the fed is considering now treating those unrealized losses in terms of capital levels, to have to report them and they would dent them, whereas you didn't have to that was the problem with svb. is that something you think is realistic and how would it affect you >> well, i think what's being looked at is the possibility of unrealized losses and available for sale being included from a regulatory capital standpoint. again, that's the kind of thing that we are studying, we're looking at and if, in fact, that were to come to pass, we look at our internal and organic capital generation as one of the means

that we would be able to cover that and if that wasn't sufficient or wasn't at the pace that we wanted to move, then there are other actions that we could consider that we would downstream to the bank there are many actions available to us. the key in all of this is the health of the client franchise when the client franchise is healthy, a lot of these other things that unfold in, again, unprecedented circumstances, they will tend to work themselves out that's why our focus is on the clients and grateful to the clients to the ongoing trust they place in us. >> finally, a lot of this is being caused by, you said it, the fastest interest rate increase we've seen in history do you have a view on what the fed should do next we're going into another meeting after next week. and there are questions about whether they should pause, whether they should do one and done, whether they should cut. from your vantage point, given

you've lived through this storm right no and you're still living through it, what do you think? >> well, we have a lot of respect for the open market committee at the fed that has to make these decisions they have a lot of data that probably goes beyond what we have i do believe that we should be getting near the end of this rate rising cycle. it's probably also correct that lending could be pulled in quite a bit as banks have to look at capital ratios and other possible changes but we trust their judgment and believe that they'll make wise decisions for the economy as a whole. >> are you still buying stock? you told me last time -- >> i'm still a big, big believer in our company i think the window has closed around earnings time, but i'm a huge believer in the long term i'm so confident in our future when you look at our client positions, our client strategy, we have this integration with aameritrade bringing 10 million

more clients into exposed to schwab capabilities. it's a time that i feel very, very optimistic for the future of our business. i mean, we're strong, we're secure and our clients value that and the company's future, i think, is bright. >> well, thank you very much for the time today and for going over some of those concerns out there. >> thank you, sara. >> walt bettinger, the ceo of charles schwab carl >> meantime, federal reserve officials are expected to raise rates in may after a week of weak econ data, it's uncertain labor continuing claims highest since november '21 next week we'll hear from the dallas, richmond and kansas city fed and get our first read on q1 gdp. joining us with expectations at post 9, bank new york mellon sonia is with us we've been talking about the fed

all week does the trajectory of the commentary feel sturdy to you, may at least >> i think the decision about may has pretty much been made. i would say both the fed and investors are probably thinking more about june. >> june you think is possible? >> i believe that. we'll be looking for what sort of indication chair powell, the stat statement, any kind of commentary even before the meeting would tell us about the possible move in june. >> should we be taking this morning's pmi's and europe's pmis, for that matter, as reliable indicators or is some of this survey data, the softer data, still a little suspect >> i think that data has generally been quite mixed we had empire state in the u.s., the philly fed the headline wasn't that strong but the underlying components were quite a bit stronger the data has been mixed and hasn't given us too much

direction one way or another on net. >> what is your number for q1 gdp next week? >> i think it could possible 2%. i think it could be quite strong whether that's sustained is a different question generally, i think the data has surprised in real terms at least, the gdp might surprise. >> the data has been crazy new york empire state, manufacturing's great. philly fed, down 30 points and then we get today's -- like, it's very confusing. what is actually happening in manufacturing and in services? >> i think that, you know, some of this is sentiment versus real data that dichotomy we have witnessed for quite some time already. at least a few months, definitely 2022. philly fed, great example, the headline is about business sentiment, very low, but the underlying components, shipments, new orders, quite a bit stronger. >> if i were to ask you about lagging indicators that were poised to crack first, would you be looking at shelter or wages

>> i would look at wages more. i do think there's some dichotomy in wage indicator. the eci and atlanta fed numbers are quite a bit stronger again than average hourly earnings, for example. yes, it's very sensitive on the one hand, but on the other hand, structurally, i think we're still low on supply. it's hard to disentangle those two forces. >> b of a has a piece out today about whether or not you can see wages soften more than they have without a rise in unemployment their theory is employers are willing to higher a less productive employee or shorten business hours or not have housekeeping do your hotel room, right? and fill the job just not as expensive as they did before does that make sense >> it makes sense. another thing that would make sense to me over time is

actually higher technological use in menial work. >> that's where productivity and ai and the next chapter may go, right? >> right. >> how fast does inflation come down overall >> great question. i think the fed is asking itself this question every day. i do think that, listen, there's some stickiness to this, especially in services we're still short on labor in services so, i think it's going to be a difficult way down >> then that argues they have more work to do, i guess. >> absolutely. >> despite people thinking that forward-looking indicators are showing that it is coming down and they might be going too far and we still have lagged impacts to come? >> that's true and i do think that this recent events in the banking sector are probably going to constrain credit a bit more. the magnitude is very hard to triangulate. it could be the equivalent of

25-basis point or 100-basis-point cut. we don't know. >> most important loan officer survey the next few weeks than we've ever seen, or in a while >> yeah. >> that's going to be key. thank you. >> thanks for having me. still to come, kkk bullish on international equities. we'll tell you which country in particular they're eyeing when "squawk on the street" comes ckba if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee, even if it received ppp, and all it takes is eight minutes to get started. then we'll work with you to fill out your forms and submit the application; that easy. and if your business doesn't get paid, we don't get paid. getrefunds.com has helped businesses like yours claim over $2 billion but it's only available for a limited time. go to getrefunds.com, powered by innovation refunds.

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png. shares up almost 4% after delivering a beat on the top and bottom lines in the latest earnings report and raising their sales growth guidance for the fiscal year. one of the biggest factors behind that beat, higher prices. offsetting lower demand for products like febreeze, tide, toothpaste those results marking the fourth quarter of shrinking volume. volume down three, pricing up ten. that's how you get revenue growth of 7% they have one quarter left so they raised guidance because they're seeing strong pricing actions filtered through consumers are taking it. flat volumes, flat to lower volumes is not bad when you're having price increases in some spots double digits. fabric care up 13%. >> volume down 2 if not for some adjustments. >> that's price elasticity it's what the food companies and household product companies and beverage companies are seeing in a way they have not seen before.

consumers taking the higher prices the question is for how much longer i mentioned last hour, ceo did talk about weakness in europe. volumes were down there about 7% in the quarter if you can see -- if you start seeing bigger falls in volume, then they will have to cool it. >> on the other hand, if volumes hold in, we saw this with hca and your costs come down, you're in a bit of a sweet spot >> margins. >> and you get to have high margins. gross margin increased 150 basis point. >> and all you have to worry about is the backlash of, quote, gouging the customer and you're managing your margin for longer. >> and running the business for shareholders and they're dealing with extreme foreign exchange pressure and they're trying to offset that with higher prices as well that's why -- they also say they have tons of innovation. this also leads them to believe and feel confident they can raise prices it's not recessionary because typically, carl, when you see a recession, and i know png is a

staple you always need toothpaste and tide detergent, but normally you see tradedowns from the premium brands you can't call it recessionary behavior from the consumer at all. time for a news update with seema mody >> here's what's happening at this hour. president biden planning to sign an executive order to expand on his administration's environmental justice goals today. the order will focus on delivering clean air and water to communities nationwide and establish a new office of environmental justice to coordinate efforts across the government biden is scheduled to deliver on remarks about the executive action this afternoon. 15 million in gold and other valuables were stolen from the toronto airport on monday. canadian police are investigating after an air cargo container carrying the valuables vanished from the airport. they said it was transported to a holding facility as per normal procedure, but how it disappeared remains a mystery. and "the wall street

journal" reporting that apple is working on a journalling app that will let users record their daily activities and thoughts. the app will compete with existing software on the market like day one the move highlights apple's continued push into health care and interest in addressing mental health. guys, back to you. >> thanks. coming up next, a big divergence in big tech after tesla's recent drop, another mega cap gaining iesr nvto attention. we'll have that trade coming up after the break. ♪ 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. this won't do well at auction. but at at&t, it's worth a brand-new samsung galaxy s23. wait really? mmhmm.

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we are getting breaking news from treasury. let's get to steve liesman with details. steve? >> thanks very much. treasury secretary janet yellen now chairing a meeting of the financial stability oversight committee where they're going to vote on two proposals on new financial regulations. the first proposal that they're going to vote on is framework for identifying financial risk this framework is going to provide an outline for basically how fsoc works to identify, assess and also mitigate risks it addresses a criticism that's

been out there that fsoc is kind of a black hole that doesn't explain how it does business they could focus on certain activities, markets, individuals, entities, the secretary will say another proposal, maybe potentially far-reaching, also voting on a proposal to make it easier to designate nonfinancial bank institutions for financial supervision. the current guidance creates, yellen will say, inappropriate hurdles for designation. essentially what they're doing is rolling back trump administration guidance that was passed in 2019 under the current rules, yellen says it could take six years to designate a financial entity for supervision, not fast enough given when financial risk has taken place. yellen does not say what companies could be designated in her speech she says designation is an important preventive tool to address systematic risk that

might arise from nonbank financial firm whose activities or distress could threaten the stability. that designation was taken away. it could be crypto entities t could be money markets t could be subject to designation. firms will have an ability, yellen says, to engage with the fsoc before, during and after designation, i guess, to oppose it or otherwise address the reasons they were put into designation. proposal goes out for 60-day comment period before it's active >> there's a lot of proposals and chatter about what's going to happen on bank regulation and making the system safer, whether addressing issues like this, svb. i'm just curious if you think it's moving fast and where it's going. >> well, this has been something that's been talked about a bit by treasury officials for some

time it's been out there. this was moving. doesn't seem to be any particular reason to -- any particular incident that's happened with a nonbank financial entity like a hedge fund this is something they wanted to do yellen apparently at the time in 2019 wrote a letter opposing those changes made by the treasury she has fed chair powell on her right, gensler, and all the major regulators around the table right now considering this this will make it easier to take some of these big entities, sara, and make them under financial supervision. >> i do wonder if it gets an added sense of urgency we're talking nonbanks, shadow

lenders, a sense of you are gentscy. there have been regulatory blind spots, right, when we saw with svb. it adds a little bit of a sense of needing to do something maybe. >> i think so. i think, you know, they're using this opportunity from svb to deal with a separate part. as you know, i think you talked about it earlier in the hour, there's other proposals that deal with banks as well. and we're also, by the way, as you know, sara, we're waiting on the postmortem to come from barr, vice chair of supervision at the federal reserve we're not really sure what happened in the meltdown of svb or how to fix it it might be a little early yet to be doing proposals relative to fixing what happened at silicon valley bank. >> good point. i can't wait for that. that's going to be so juicy, that barr report steve, thank you steve liesman. still to come, private equity firm kkr returning from a trip to asia, bullish on one

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investor enthusiasm for big

tech seeing an inflection point as tesla slips below mega cap. that's the focus of today's "techcheck" with deirdre bosa. >> as we get ready for tech next week, one thing is clear, investors are rewarding efficiency that's evidence of how these priorities have shifted in the face of higher interest rates and a softer macro back drop tesla, still putting growth ahead of profits, has seen its market value slip below that of m meta's for the first time in 16 months meta has seen its share price surge more than 75% this year. never mind that tesla grew revenue 24% in the first quarter and meta is expected to grow its by just 1.5% the rest of big tech isn't expected to look very growthy next week either alphabet, revenue expected to grow but just barely amazon, that's the best of the bunch. and still we're expecting below

10% top line growth. apple's revenue, it's actually expected to contract, which i had to check a few times, even got steve kovach on the phone to make sure i was reading that right. big tech likes it for not their growth they've also been willing to look past worsening margins if the ceos are making adjustments, doing cost cuts. the big question for next week, guys, when they all report, are they doing enough to continue to show they are on that efficiency train? and will investors still be willing to overlook that top line deceleration? i was looking at that same note you were that says they don't need big beats and raises from a company like microsoft, they just need clean and stable that says it all. >> given how much concentration is in tech, you can imagine what would happen to the broader indices if we had a big spill in one of those names and they specifically point to microsoft and service now.

>> that's why, stability, the clean results are seen as a win in this market environment because we have seen a runup in the first quarter of this year they basically just need to keep it going, worries for the second half of the year continue. of course, we'll be looking at the cloud players. i keep going back to them because they're a good indication of enterprise spend broadly which these companies will give an indication of. >> got it. deirdre, thank you. bullishness in japan, kkr cio, henry mcveigh is with us to discuss why they're so bullish don't go anywhere. imagine, a car that goes as far as it does fast. as sleek as it is spacious. as smart as it is beautiful. introducing lucid air. experience the best. ♪ ♪

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welcome back let's turn to the story abroad european markets closely mostly higher today eurozone pmi data coming in with mixed service sector activity, rising to an 11-month high and the manufacturing sector experiencing falling demand. it's kind of an unclear picture both here and in europe. but the main story abroad today is in japan, the key inflation metric watched by the central bank, rising 3.8% in march that is the fastest pace in 40 years. remember, japan's been battling deflation forever. our next guest highlights the country may be finally exiting the structural deflation it's experienced, which could deteriorate the value of owning cash and push investors into higher risk alternatives he just returned from a trip to asia joining us is henry mcvey with

kkr and mike santoli joins the conversation as well warren buffett who henry mcvey just got back from asia and is bullish on the country. why? >> i wish that was the case. i've been going to japan since 1995 and the firm has a big presence there we've been focusing on corporate carveouts. i think what you have to think about japan now, what if they do exit deflation that's a bold statement but literally trillions of dollars have been sitting in cash which is the rational thing to do. i think you'll see money start to move. so, what's the opportunity set one, it's clearly more focused on return on equity in the public equity markets. our theme at kkr of doing corporate carveouts with large conglomerates that's going to accelerate further and what does the insurance world do what do individual investors do and institutions do that have been sitting on all this cash when that was a rational thing to do? right now real yields are negative i didn't know it was a 40-year

high you can feel it on the ground. i waited an hour and a half in line to get through customs. there's a lot of people going into japan >> i was going to say, that reflects to some degree maybe the chance for a higher metabolism or a lot more money in motion from japan and then you have that at the same time where china at a totally different stage of a reopening process or whatever is also maybe coming back to life so, i'm wondering what you think the implications are, whether it's offsets to u.s. weakness or anything in terms of opportunities in the market. >> first thing is in asia, we have eight offices and 130 people, none of them who are american, all local. there is no one asia that's point one point two is i do think that we're going to see a tightening of financial conditions from the regional bank stories you guys have been recovering well. offset is china is bottoming it's coming out of a funk. i don't think we're going back to where we were in terms of -- i was saying when i joined kkr,

nominal gdp in china was 20% today it's 5%. it's less than the u.s there are definitely green chutes there that feels good. i would say one thing both china and japan are dealing with is the demographics, right? there is a labor shortage going on globally around developed markets. china's not been immune from that either. >> how do you talk to u.s., say, retail investors on how to leverage this whole trade? >> to me, one is our structural view is the dollar has been peaking. i noticed earlier commentary, if you look, europe has doubled the u.s. performance this year you've got to get some money outside the u.s. second is i think there's going to be more corporate reform in japan. and then i think the other thing is ultimately, you know, one of the things i see from our 46 years of data is when we've made a macro bet being super bullish or super bearish, that's not the way to play it you have to stay consistent on your deployment and we're trying

to do that globally. right now there's a lot of opportunity in credit where banks have seized up but this theme around public -- corporate carveouts that's a global phenomenon and more of that coming. >> here's what i don't get, henry. if a company is exiting decades of deflation, it would argue for tighter monetary policy. that's been the hallmark of japan. easing and easing and easing and buying stocks and -- >> yeah. >> if they get away from that, isn't that bad for the risk appetite there >> i think ultimately their structural level of real rates is a lot lower than the u.s. they've got more demographic challenges so, what i'm saying is you're going from deflation to some very low inflation you'll still have -- the banks are very well capitalized over there. there's tons of liquidity. ultimately if inflation settles in at zero, it's been negative 1 to 2, that's a big change. and so you still got to pick your spots it means you can't own cash as

an alternative the same thing here. what happened with the banking crisis, people woke up and said, hey, wait a minute, i'm earning negative on my deposit and i can go to the fixed income market and money got in motion. we've clearly overstimulated demand on money in the system from the central banks japan's probably the last, i'd say, one to fall in terms of shifting policy a bit. they've signaled that with their new central banker i don't think it's going to be disorderly but it's a major shift after 30 years >> you mentioned the opportunities still in private credit with banks maybe getting more restrictive is that still a timely idea? i guess because people worried about if we'll see erode in credit quality, if there's more credit risk you need to take to participate. >> i would say there are three areas in the private markets that are interesting right now one is corporate direct lending. the second is real estate lending because the banks clearly have seized up there and the third is something we call asset base lending where you have collateral against it

there was an article maybe a day or two ago saying there will be some combination on big transactions of private and public i think the private market can move more quickly, it can do the complex stuff and that's a source of liquidity for corporates, particularly at a time when we have a lot of deposit flight around the world. >> talk about the u.s. then in terms of the cycle how long until you would be writing reports that said, it's time to come home? >> yeah. look, i think structurally the dollar is a big deal the u.s. has incredible economy in terms of energy efficiency, self-sufficiency, same thing on water and ultimately we have a great tech sector. so, i think the u.s. remains stable i just think the u.s. has outperformed every other market by double digits for the last five years and some rebalancing is needed. my personal take is -- i've been doing this a long time when energy became huge in 1982, financials were big in 2007. tech in 2000

you get some redistribution of the market cap and i think that's going to happen in the industrials, parts of consumer, parts of health care you could end up where maybe the small caps or other sectors outperform and the law of large numbers catches up with big tech. >> you think the dollar has real vulnerability here in the way the dooms sayers talk about? >> i've been to europe and after russia invaded ukraine, people said in the u.s. people put sanctions on, do we live in an hour of dollar hedging but people are looking for alternatives the that are is still in pretty good shape but structurally above trend. >> henry, a lot of big ideas thank you very much for coming on >> this is great thank you for having me. >> coming off the worst day in more than 20 years on the heels of that earnings print some rebound today hsbc says it may be an

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and once-in-a-lifetime. i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck. a big week for space launches, as you know, and not just spacex. morgan brennan's space broadcast is out today, and she joins us with more on what we're seeing in that space. >> hey, carl, spacex's starship shining a light on a trend that is manifesting in the space sector bigger rockets

there's nothing else like starship, it's the most powerful rocket ever built, others are developing their own larger vehicles take relativity space. the disruptor 50 company is already retiring its smaller 3d printed rocket that just flew for the first time last month, instead focusing on a new heavy lift rocket. >> there has to be in the u.s. a second quickly moving disruptive launch company at the medium to heavy lift payload side and there isn't. spacex is dominant, so many launches it's inevitable there has to be a company to build this capability because spacex otherwise would have a complete monopoly as far as low cost disruptive launch and so we really are working to do that next company >> so disruption of the disruptor. the ceo and co-founder tim ellis says tnr will be partially reusable but won't fly until 2026 touts $1.6 billion backlog,

billions more in the pipeline and relativity is not alone. blue origin, united launch alliance and rocket lab which dominates the small launch rocket is launching on medium lift knew tron to carry larger payloads as well why are we seeing this with hundreds of thousands of satellites planned, there's a shortage of launch capacity emerging bigger rockets can transport more satellites, more cost efficiently. can you catch my conversation with tim ellis on "manifest space" which is out now wherever you get your podcasts. guys >> very exciting morgan, thank you. what a week to launch it morgan brennan, we'll look for the podcast. ♪ ♪ do the work, before the work.

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it's not the most liquid market but if that and t-bills, which are pushing higher, a 22-month high on thursday, that's what's taking this whole debate seriously and we know it will get messy and we had the opening gambit from house speaker mccarthy we talked to the former dallas fed president in the last hour it will impact confidence and could impact the whole recession debate especially if we get into the 11th hour which is what we're expecting. >> we're getting back and forth between the white house and the speaker and even the freedom caucus at large about what next week will bring. mea meantime, the tax receipt watch is definitely on, coming in weaker we don't know where that date is >> treasury will update us hope flip in the next week or two, once they can get a better picture of the tax receipts when the next date is the worry is june, mid-june, instead of december because tax

receipts look weak >> amazon is noteworthy. there were reports of some corporate layoffs at whole foods. certainly we're in a mode where the markets are rewarding companies that do cut head count and we'll see if that happens. >> many including jim cramer have been looking for them to do more on that front we've seen the benefits from meta stocks overtaking tesla in market cap >> good weekend. let's get to "the half." welcome to "the halftime report." i'm scott wapner front and center with the worst week for stocks in a month, more than a month, says about the state of the market now. a huge week of earnings is looming large. we'll discuss and depp bait all it have with the investment committee. joining me here post 9 jason snipe, jenny harrington and steve weiss. let's check the markets. we have been in the red for much of the morning good economic data today after bad economic data yesterday. you have an expiration day weiss, i feel like the market doesn't really know what it wants to do. one day the data is