wins in ai, they're buying stuff from nvidia. period >> you had so much time left, josh you're complaining, you're grousing about not having enough time it was fun, guys i'll see you tonight at 5:00 "the exchange" with kelly starts right now. >> melissa, thanks hi, everybody. welcome to "the exchange." i'm kelly evans. here is what is head we have new details on first republic's desperate pitch to save the bank. the window to act is closing fast should the government step in? one of the guests says the answer is yes, and he explains why. and the economy is like a car speeding down the cul-de-sac it looks good right now, but there's nowhere to go. two names he's buying. as the uk is clearly closed for business harsh words from activision after regulators block its deal

with microsoft we look at what happens next and what it means for others but first, today's market and dom chu has the big numbers. >> i'm trying to get the vision of a car speeding down a cul-de-sac there is nowhere to go the markets today are relatively stable after, of course, what was a bigger down day yesterday for the s&p 500, shedding 1.5% of its value we're still below 4100 for the s&p, up about eight points right now. just to give you an idea, we were up 18 points a t the highs of the session, down ten at the lows so we've been going up and down here, but more positive day for stocks the dow industrials, just about flat the nasdaq composite, the real outperformer 11,927 for the index one other place that is seeing big market action is the solar energy stocks. the results came in quarterly

just pretty much beating expectations, but its guidance is what tanked a lot of that stock's movement here, coming in below estimates for this quarter. so enphase energy is off about 25%. solaredge, as well so keep an eye on solar stocks not very happy these days. and then the stock of the day, you can call it maybe the last of the most important regional bank reports to come out that's pacific west bank corporation is up 15% right now. after the bell yesterday, they came out with an earnings report that really wasn't scrutinized for the headline numbers, but for the deposits they did show outflows but more importantly, kelly, much like western alliance, pacwest says in the first few weeks of this current month and quarter, they saw a deposit inflows to the tune of $700 million, but the spectrum of the

regional banks still in focus. back to you. >> they were trying to be much more transparent dom, thank you as you just heard, pacwest is seeing deposit inflows over the past month, but a very different story nor first republic, shares falling almost 50% yesterday today, the bleeding continues. as we were below $5 on the equity at one point. this was a $147 stock in february new reporting is shedding some light on first republic's efforts to save itself the pitch, help us now or pay more later if we fail. the reporter behind that story is with me for more on that. and we're joined by john maxfield who says the window to act is closing fast. and ron is the ceo of steeple financial. they've been hiring some commercial bankers who found themselves at the center of this turmoil. welcome to all of you. hugh, what's the latest on first republic >> great to be with you. we were able to shed some light

on the approach that first republic's advisers would have in trying to save the bank, which is essentially, you know, as it was reported on tuesday, the plan was to convince the banks who put in $30 billion into first republic to once again help out by overpaying essentially for bonds that are on first republic's balance sheet. so paying higher than market value. which, on its face, was a tough ask. so my question, to the advisers, why would the banks go for it? the answer is, you know, the coercion that was said to happen is basically the pitch -- if you don't do this now, take a hit to the tune of several billion dollars in total for all the banks, when this goes into receivership, the fdic special assessment fees that you will have to pay are good to the tune of $30 billion so it's in your financial interest to save first republic now. >> that was first republic's pitch. after you reported that story, the shares absolutely tanked

so if you're the big banks, you're going it's obvious that the market hates the idea. they already feel like they've been tainted by giving the $30 billion, and now there's questions about whether they can get that back. and now they're looking at this like a lose-lose >> there are a couple of observations this is the kind of brirnkmanshi that needs to happen earlier today, david mentioned the idea that the government might be reluctant to coerce, you know, the big banks to act and if that's the case, the conversations i had with bankers, the advisers, the first republic ones, we need the government we need them to corral all these players to -- just like in 2008-2009, get the ceos in a room together so we can brow beat them into doing the right thing. if they don't have the government to act, i don't think that their plan will get to fruition >> even as frc struggles, we see the others acting resilient.

maybe we could describe it as that that's not going to galvanize either the private or the public sector to come to first republic's rescue, because these are trial balloons if it was bringing down the whole sfindustry, that would be different story. >> i agree if it seems like first republic is isolated in this case, then it gives more ammunition to regulators to say, let's let this play out. >> it sounds like they are willing to let banks fail. >> if it is possible that this can be resolved without anyone whiff of government assistance or a bailout and private market solution, that's the preferred route. >> hugh, it's been great reporting. give us a sense of the time frame here >> yeah, certainly the sense i got from the advisers is that

they want to create a sense of urgency. they want this to happen soon. there's a couple reasons for that this is a degrading asset. there is, you know, the possibility that in future quarters, they're going to have quarterly losses, an upside down balance sheet if they don't get this fixed there's a lot hanging on this, and they don't want to let this play out for much longer >> already, it's been festering. hugh, thank you. my next guest is a veteran voice in the banking industry who says the time to act on first republic is now. the government maybe even needs to step in, even if it seems unfair, because it's less unfair to subject the whole of society to the errors of a few john, great to have you here today. welcome. >> i appreciate it >> i can't imagine -- if you were a banker right now, you know these guys very well. all the other heads of these

banks. should they just watch this collapse or come one a solution to help? what are your thoughts >> good question, kelly. when you look at the crises in the past and how banks have responded, one thing you notice is that the banks that typically do well over time, like through the crisis, are those that do less opposed to those that do more in the '80s in the s&l crisis, that really caused a lot of problems later in that decade. so if you are a banker, as hard as it is to do nothing, that really is the more prudent approach, just trying to survive through this thing and see what it looks like on the other side. >> what about policymakers we look at this and say -- people who are poor stewards of banks, bank panics are unique. why do you think the onus might

be on policymakers to do something and what should that something be >> so there have been nine major banking panics in the united states if you go back to the beginning. one of the interesting things you'll see is when you analyze the shape of these panics, you'll see a double bump failures, it will calm down, then failures, it will cam down. 1819, 1873, 193, great depression, '80s there was only time there wasn't a double bump. that was the financial crisis. one bump and straight down so what was different about the financial crisis than the other crises, and my assessment is that you had a student of the great depression running the federal reserve at the time, which is the main insfrument t that attacking that. so he knew you had to deal with it all at once so what we are having right now is we are setting ourselves up

for a double bump situation. you need to put time in between when first republic -- when silicon valley bank went down, that's not a one plus one plus one equals three, it's a one plus one plus one equals eight so you had to put some time -- you don't want to put so much time in between where it starts its own thing and you have another bump so you go back to that traditional shape we have had in the past >> great point to a lot of people, it feels like we're at one of those junctures. you look at the equities today, and i mentioned this a moment ago, a lot of the rest of the regional banks are -- i'll say in air quotes, fine, while first republic continues to weaken does that suggest there's confidence in the marketplace that we don't need a bigger regulatory response here >> i don't know what it suggests, kelly, but my guest is that what it means is that -- everybody who knows about

banking knows that first republic -- that's the story that's been written. if you look at it, it's lost $100 billion in deposits it's got $70 billion in extra assistance from the government and $30 billion there the banks. it's in a tight spot everybody knows that it's not in fear of a huge run so everybody knows where it's going to go. so i don't think it's a huge surprise but i think everybody is just like sitting and waiting it out at this point. let me bring up one point, i think this is a really interesting point. so nor for a long time, one of conversations in banking is deposits are sticky, they're not going to leave the banks when technology came in, they said they're going to leave because technology will facilitate that to happen. it wasn't just until last month that the banks in rural communities and small metropolitan areas, started to see that impact where if they typically they could have six

additional months after rate increased to increase their rates before they lost their depositors this time it was immediate so it's an interesting dynamic going on >> and may explain why we haven't seen a lot of recovery in share prices. john, thank you so much. >> appreciate it, kelly. my next guest could be one of the places that sees a business lift from the banking turmoil. let's get to the chairman and ceo of teasteeple financial. you guys have been pretty proactive here >> well, of course i mean, look, first of all, i'm not sure i agree completely with what was just said remember, kelly, we had two banks fail out of 4700 banks the two were rather spectacular fails. of course, first republic is having issues.

but the issues are pretty well known. they got long, fixed-rate securities and a lot of uninsured deposits so let's not throw the baby out with the bath water. there are some things that need to be done with respect to policy but regarding steeple, look, silicon valley's venture business was a very good business what got them in trouble was risk management on a mismatch. but we're excited. we have hired a number of more than 20 bankers. we have already been in the venture banking business it's highly synergistic with our investment bank and our wealth management so we see opportunity. >> all right with that said, what about the broader questions about profitability? even if we just said okay, is the deposit issue contained? you're not one of those regional banks, even if we said that issue is contained, what about the bigger picture

what are earnings going to look like 12 months out >> first of all, we are in a very unique situation with respect to the whole question of deposit costs. the difference between the six-month and the ten-year is 150 basis points inverted. that is a unique situation i think when we get back to a normal yield curve, there will be less focus on this. i think the bigger issue, kelly, though, is that what this has done is it has hurt the confidence of the safety of deposits in the regional and mid-sized banks. that's where i think the issue is there is no question in my mind that the playing field in banks is heavily tilted to the too big to fail banks. they have implicit deposit insurance. i think what you saw was everyone said, i've got to move my mornymoney to a big bank.

that is the bigger issue of what we are seeing today. >> sure. again, this goes back to a question, even yesterday one of our analysts was saying, he's interested in owning maybe a too big to fail bank there's so much sort of gray area right now about what exactly kind of backstop we're talking about and we all know the truth depends on the deposits we may or may not see in the weeks or months to come >> look, the local economies across the united states are based upon the mid-sized and regional and local banks those banks, and many of them, are the foundation of business deposits and those business deposits, by definition, are more than $250,000 so we have to find a way -- i'm not for government intervention ever, but the government has intervened because those deposits are viewed as essentially guaranteed at too

big to fail banks, and not so at regional m alal mid-sized banks that needs to be fixed otherwise, the next crisis is going to be more of an emphasis on, where should my deposit be and those need to stay in our local community banks. >> so you do think that business deposits, commercial transactional deposits specifically should have full fdic backing up to any number >> i do. and i think that some of my big bank colleagues will get mad at me for saying this, but they need to fair their fair share of the fdic premium i absolutely do believe that business deposits need to be insured across the industry, and everyone should againcompete for those deposits based on local dynamics, ervice, and competitive grades not the fact that it's insured

at a big bank and not here >> we were just having a conversation about the government meaning to step in here i think the question is, they do need to make it clear what the rules are, right no one is saying, step up here and provide up limited bailouts u. be there is a need to spell out the rules of engagement right now. which deposits are backed and which aren't >> but kelly, the government has intervened everyone believes that the too big to fame banks are insured. look at credit suisse. that was resolved because credit suisse was too big to fail so government has intervened because the deposits are guaranteed they need to level the playing field with respect to business deposits and mid-size, community banks. they're safe 234i way.

when you get -- when people question the credit quality of a mid-size versus a too big to fail, and that's just not fair >> thank you so much for joining us today appreciate it very much. coming up, he said the economy is like a car speeding down a cul-de-sac. if it's true, how to invest? we're joined next by mike santoli. and meta's year of every is going well, up 76% since january 1. as we go to break, a quick look at the markets. the dow is negative by about 56 points the nasdaq is up by 1% health care softer, though the ten-year yield, $3.45. "the exchange" is back after this

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welcome back to "the exchange." the market debates whether the economy is still running hot or cooling down, my next guest says it's like being in a car speeding down a cul-de-sac it looks good but there's no place to go. joining me now is the chief

equity strategist at emmitt capital management and michael fimpbnch is here, a well how did we steal you from the new york stock exchange? >> once in a while i like to make an appearance over here >> any thoughts about the kind of market structure this afternoon with first republic doing what it's doing? >> microsoft's gain has accounted for more than the entire s&p gain at the moment. the regional banks, they are up a little bit today, but there is this sense out there that frc is its own situation, but it doesn't resolve the overall question, which is this very stop/start nature of the economic data. a lot of the cyclicals have taken pain >> do you think microsoft sup as much as it is because of earnings or maybe because they killed the activision deal >> mostly earnings and mostly

the excuse that analysts found in the comments after the earnings report to raise estimates a little bit i think they're getting a huge growth premium, because growth is scarce right now. you know, the ai energy is still running through that stock so i think activision, it's a $70 billion proposed deal on a $2 trillion market cap company >> chris, you have mai capital management where are you looking in the market specifically right now for opportunities? >> well, as hugh mentioned, it's a really tough market. i do think the economy is like a car speeding down a cul-de-sac with really no place to go things are set to slow down over the summer so what we take, instead of buying broadly or expecting growth, let's find the good companies that have already gotten kind of the stuffing knocked out of them. we like two stocks and two really quite different areas,

one in health care and one in housing. so the first one is danaher that got creamed yesterday. it was down 9% yesterday on what i would call a covid hangover. danaherd made lots of stuff for testing covid. that business is falling off a cliff, thank god but this is a short-term issue, by the end of the year it should be fixed they provide complex stuff for the testing and development of drugs. those are getting more complex as the years goes by so it's a chance to buy right now at a low you haven't seen since it was a pure play in health care about seven years ago. >> it had been a big favorite stock. what about black&decker, too >> sure. as you know, and on this show we have talked about buying the

housing stocks we bought them because when interest rates started to go up and mortgage rates go up, they got the tar knocked out of them. so they were down up to 60%. but people are still buying houses, even with mortgages at 6%, like they used to do for decades, before the great financial crisis we think the same thing will happen to stanley black and decker they're losing money now, because they have a glut of too many hammers, too many drills. but that glut will get cleared, and it's a 150-year-old company. it's not that complicated a business they know what they're doing they should be nicely profitable by year end. and, again, a 20-year low valuation. here is a company that, even if we go into recession, as already fallen >> are you exiting the home building trade

now it's on such a tear, that it feels like you would want to be a seller >> you're right. on the show, when recommending something, it might be a good idea if i get an incredulous look from you or some of the viewers saying what are you doing that for but you are right, we started this and now we are looking for the new thing. >> mike, quick last word >> yeah, it's real interesting about the mixed signals. very hard to find a clinching argument between recession now and we're fine and the whole housing industry is one of the reasons for that it's really horrible, the economy, to fall apart is housing demand is taking it hard to add on to the car speeding down a cul-de-sac, we don't know

how long the cul-de-sac is, and it's one of those old cars where it reads "e" on the fuel gauge, you still have some time >> who is better at analogies than mike and chris? for more, tune in tonight for market ideas at 6:00 p.m. eastern for our special. chris, appreciate your time. still ahead, activision shares taking 11% after a uk regulator blocked microsoft's acquisition. and activision released their earnings early we'll break it down. health care is dragging the blue chips down back after this. hi, i'm katie. i live in flagstaff, arizona. i'm an older student. i'm getting my doctorate in clinical psychology. i do a lot of hiking and kayaking. i needed something to help me gain clarity. so i was in the pharmacy and i saw a display of prevagen

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welcome back to "the exchange," everybody here's your cnbc news update at this hour. joe biden meeting with the president of south korea at the white house. the leaders celebrated the 70-year-old alliance between their countries. the visit follows the largest u.s./south korean joint military exercises in years, and they are stepping up security coordination with japan, holding talks in w earlier this month. one day after joe biden announced his re-election campaign, former arkansas governor asa hutchinson announced his bid for the presidency today in his speech, he touched upon plans to address the economy, crime, and border security, as he joins a growing list of republicans eyeing the nomination general motors plans to stop production of its chevy bolt

electric vehicle by the end of this year, although the chevy bolt ev and its larger utility make up the vast majority of the company's electric vehicle sales. the battery cells in the cars use an older design compared with gm's newer electric vehicles kelly, back to you >> tyler, thank you. still ahead, meta is only 5% below its 52-week high and caterpillar has been a bellwether for economic growth should you buy the name? it's all ahead ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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welcome back to "the exchange," everybody we're halfway through a massive week for earnings, kind of a mixed bag. let's get the action, the story, and the trade on the next key names on deck. meta has been on a tear since bottoming out last year, up 76% in 2023 alone. but options are still pricing some fireworks tonight with about a 12% move monetizing reels, competing with tiktok, the metaverse pivot and a mixed result for alphabet. here with more is joseph

sculley. how much life does meta have left in it >> still a fair amount of life we think tonight is going to be interesting. i think overall, it's going to be pretty muted, similar to what we saw out of google i think when you parse out the numbers, you'll see the rate of decline has definitely improved. there is a chance to see an uptick a little bit. but even without that, this really has become more of a cost containment story, and we need to get to the $10 eps a share for this year as quickly as we can. >> we all agree and maybe it's oversimplistic, that the stock has rallied on cost cuts but they can't keep cutting all the way to the bone, right as that narrative runs out, is there more risk for the shares >> i think look, the stock is trading around nine times cash flow, around 17 times pe so even though the stock is up

70%, it's still not expensive. it's -- it was down 80%, you know, through last year, before it started resuming its increase but clearly, we need to see top-end acceleration some of that is in their control. i think they have started gaining share back from tiktok, both in terms of engagement of users and even the number of people using the service so that's really important it would be great to see some familiar number associated with revenues from reels. last year was $3 billion we think they're tracking to about $4.5 billion plus, so that would be really important. and clearly the macro has a lot to do with all of these ad driven names at some point, hopefully later this year, we should get some of that with the macro. and meta should be one of the best beneficiaries >> the shares today up 2%.

if you can just give me an additional word on that. what is going over so poorly with the market? is it just the microsoft is it what they said about ad or -- what to you is the big -- i don't want to call it disappointment, but something approaching that >> well, i think the rhetoric around the name today has been around them losing a little bit of market share. microsoft reported last night. google grew 2% so just looking at the numbers will tell you that clearly microsoft is gaining a little bit. we're talking about microsoft owning single digit percentage market relative to google with 90% plus so clearly, it's a lot easier to move the needle on the lower share percentage but i think that's temporary i think google is now leaning in aggressively with ai and over the next few quarters,

google will start getting some of that share back but i think that has been the primary driver of the shares not doing too well today >> great point they seem to be aggressive i keep kgetting emails saying this is how to use bard and microsoft too, by the way. thank you for your time today. let's move on to service now. also on deck with results as the $90 billion software company has been on an uptrend for almost a year now that said, analysts might be a little concerned about conservative guidance here from cost cutting across the tech space. we turn now to jeff. this is one of those stocks a little under the radar, jeff, but a solid performer. what would you do with it here >> you're right. i want to be a buyer here. but this tech teenager, all we have been talking about is the mega cap tech giants, microsoft,

amazon but this is a very under the radar, knocking on $100 billion in market cap. this is truly a work flow automation company you see it continue to grow from an earnings perspective. their earnings per share estimates exceeded 100%. they also hit their revenue estimates by 88% the last two years. so expectations, you see the stock move higher. expectations are for them to deliver once again however, kelly, i want to buy this for a trade it's still above the two-day moving average if i'm talking longer term, i want to own oracle that is the big brother. three times the market cap we have seen oracle move higher. where you have seen service be stagnant on a 12-month perspective. >> it's not a perfect comp, but seagate has people a little nervous. >> that's a great question i think service now specifically is less discretionary. i know we have to split hairs here, but when you look at what

this is, servicenow is less discretionary. oracle is going to continue to grow as well, but this tech teenager is growing up >> let's turn to -- do we call it a boomer stock,caterpillar, what do you think is the trade here, jeff >> i think first and foremost, you have to be in the camp, which i'm firmly in, that we are not having a recession i want to be a buyer of caterpillar. yes, there's high expectations, implied volatility, uptick for this specific earnings season. to your point, you have seen the stock jump about 91% so here we are, kind of at all-time highs you have to understand that this stock, it's time to big in i want to sell puts here

and at $220, you can correct $7.60. and if i get -- this puts me owning the stock under the 200 day moving average >> fair enough but i see we have commentary about a freight recession, commodity prices ebbing. we've got demand slowdown here in the u.s. on the manufacturing side so it just feels like -- maybe to your point, that's already priced in. >> well, it may not be priced in to your point. it's very fair that you bring it up, and that's the beauty of having buyers and sellers in the caterpillar stock. but the head wind is substantial. we are seeing supply chain disruptions. but i'm going to fall on the side that i believe china is reopening. i don't think we will have escalation in tensions so a name like this, this is a stock you want to own. it's a big name and if you see

the global economy going for ward, people will continue to need their equipment >> jeff, thank you so much today. should be another rowdy afternoon. jeff kilburg, appreciate it. regulators in the uk blocking microsoft's purchase of activision activision's ceo says this is far from the final word on this deal is that true we'll look at what's next. don't miss cnbc's newest show weeknights here at 007: p.m. back after this.

>> so good to have you here with us we're talking about ai, and it's all over the headlines why is it so important right now? >> this is an exciting time. when we think about conversational and generative ai, this is not about chatgbt helping kids with their homework we can literally go from text to code that transforms the speed at which we can help enterprise unlock value so it's going to change absolutely everything, and no one can afford to sit on the sidelines. >> is this a new way of business here to stay >> the technology is going to keep evolving very quickly but this is not a fad. we're working with our clients to help them challenge absolutely every aspect of the business, from sales to marketing, to e-commerce, to supply chain, to packaging everything has an opportunity to evolve with the value of ai. >> what is it that companies really need to keep top of mind? >> they need to keep top of mind that data can help them find

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not spreadsheets. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire welcome back, everybody. the biggest deal in the markets right now is in danger of falling apart. with uk regulators blocking microsoft's acquisition of activision, shares are down 9% and microsoft is surging both are planning to appeal the decision steve is here with the details what comes next? >> there is this appeal, but the

sentiment is, they tend to just stick with the original decision there more, it's pretty much done, but it looks like it's not going to happen now. >> i heard people in the deal before this happened saying okay, the u.s. we at least have the court system in the uk, is there any similar opportunity to go to court over this >> it doesn't seem like it back to the regulator, do the appeal they say no, and here we are, $3 billion break free this is not what they were expecting. just several weeks, the cna really took out a huge chunk of this that made microsoft optimistic that maybe they will approve they have shown they're happy to accept conditions and they have gone out of their way to make those deals with nintendo and nvidia to show regulators that

we are willing to work with you guys before you can come at them with your concerns >> we had reports saying they felt this deal was close to getting done >> the market did, too it was getting close to $95 a share. >> the other thing you have to wonlder is whether global regulators are on the same page. if the u.s. blocks it, that will be appealed through the court system if the uk blocks it, it does our job, but there's no appeal >> and microsoft was almost certainly ready to accept any conditions, if there were any. hope next month that the eu approves it. and then just move ahead and go through the courts and say we're going to buy the company any way. they have until mid july to make this happen. and they can say hey, ftc come sue us >> is there any likelihood they'll carve out the uk in this

deal >> i don't think so. they're running out of options what else can they offer them that they haven't already offered? >> and the big picture here is, when the specific deal appears to be on a bit of a hypothetical supposition, so there's that on the one piece and people saying how important is it that the video game industry remains frozen in time the way it is now? >> right >> so a couple of things that didn't feel like there was direct consumer harm >> at first, they were talking about consumer harm, then they dropped it and realized that's not a great argument here. so they're make thing cloud argument, which is a very small part of how people play video games. streaming games like a netflix movie. microsoft does have that product. it's very small, but what the cna says is this could become big one day. this might be a thing. microsoft is more positioned to be dominant there. but it's just such a small part

of the gaming market and hard to predict that microsoft may be the leader now. sony, playstation has a similar offer. >> by the way, activision is a big warren buffett holding, as well but even at comcast, there are reports that nbc was going to merge. now that we're winding the costs back, could we see new, strange kinds of combinations? >> that's what i was wondering you've got to wonder if these publishers want to get bigger, because what a lot of the platforms like microsoft and sony are doing, they have these subscription services where they offer hundreds per a game. >> now it sounds like no deals will happen, period. >> especially that and there's the anti-big tech sentiment. a big tech giant coming in,

trying to do their biggest deal in history the knee jerk reaction from regulators is to say no, no matter how solid the argument is >> steve, thank you. don't miss activision's ceo tomorrow on "squawk box. >> if you want a the consumer is doing, look no further than this right here up 10% so far in 2023. but can the gains keep going as recessioris sen skri if you have this... and you get this...

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welcome back, everybody. visa was our mystery stock the largest payment network in the u.s. it beat out second quarter earnings last night. it's a real-time window into the consumer with its name on over 50% of all credit cards in circulation. here's what the cfo had to say during the call. >> we think the consumer is still in good shape. as we said, spending across most categories other than a couple i mentioned like fuel and some retail price cutting, very strong across services, strong across travel and entertainment, strong in nondiscretionary so yes, that's how we feel >> visa's overall payments

volume rose 10% from a year ago. while its more lucrative cross-border volume jumped 24% joining me to dig through the results, lisa ellis, partner and equity analyst thank you for joining me here. >> hi. >> i remember when we were talking about this a year ago, you know, still felt like the depths of the pandemic you said just wait, when people start traveling, cross-border payments, here it is playing out. >> absolutely. we still have a little room to go it's been a big year, but visa, yesterday their cross-border travel volumes were actually still up almost 60% year on year total cross-border international spending up about 30% year on year and that's really what drove the beat they beat both on top line and bottom line because that is very lucrative high margin revenue, as well, when it comes in. >> mastercard, have they reported yet >> they come in tomorrow morning. we're expecting similar results from mastercard. >> you know, the two of them -- during the whole block chain

defi boom, there was a moment i remember asking about it saying, wait a minute, could they finally be disintermediated. could the duopoly of the 2010s be ending here did that tide recede as the teed and crypto and those hoping to disrupt didn't make it across the finish line? >> what they've done effectively over the last couple of years is really separate the core payment infrastructure from the value added services that they provide on top of that things like fraud detection, things like those alerts you get to your phone. you know, spending management. all of the kind of consumer protections around your cards. and you'll hear more and more from them talking about value-added services, et cetera, because what they're doing is they're separating kind of how they add value from that core underlying infrastructure which is being modernized through things like block chain, really stable coin networks, cbdcs, or

through the newer networks like the fed is rolling out called fed now, coming out later this year we are seeing that modernization, the underlying infrastructure, but they're really pulling their service says up on top of that >> it a wi-- reminds me of apple and the app store, we'll make sure these apps are safe, and it's not going to be malware and things like that just going back to the kind of bread and butter business for a second, they've been raising fees a lot obviously it's caused a -- i notice it more than ever, people putting up signs about surcharges and passing it on how much more can they raise price there, do you think? >> yeah, it's always a -- a question because the reality is, you know, cards are ubiquitous, consumers want to use them we're not going to get away there that at the same time -- and the more you're buying things on line or even through your mobile phone there's actually a lot more fraud, about five times the level of fraud on line than there is in store. so they are actually adding more

value. but in a -- i think we'll see sort of a balancing out. there was a lot of pent-up -- if you recall early in the pandemic they had pricing changes planned, then they held off on those for two years actually so we're just sort of seeing that catching up >> got it. interesting. that's why people feel like inflation is getting worse even though the headlines moderate. i guess more an observation than anything else, but looking back through 2008, as late as april they were saying the consumer looks fine, no sign of a looming downturn i worry when i hear commentary saying things are great, and it is reassuring because other indications say march was a bad month. but they're saying it was fine but they can't see around the corner >> yeah, you're right. i mean, they're seeing just the real-time updates i guess in some categories, maybe they get a forward lookbecause you buy things like airline tickets months in advance, et cetera but you know, but -- as you said, six months ago when they gave their fiscal year guidance and said hey, we think the

consumer's doing fine, they scared everyone, but the reality is here we are six months later, and they are beating -- you know, they've beat two quarters in a row on top line, and that consumer is chugging right along. little bit of a bifur indication, i might highlight. the more affluent consumer is still spending strong on travel, entertainment, all those, you know, taylor swift tickets, et cetera but they are starting to highlight that they're seeing some trading down in some of the lower income categories. a lot more quick service restaurants as opposed to fine dining walmart, you know, versus the more upper end retail. >> that jives with what we heard from mcdonald's as well. lease agreat to dive in with you, thanks for your time. see you tomorrow that does it for "the exchange." see you on the other side of this break bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find

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