(vo) switch and choose the phone you want, like the incredible iphone 14, on us. (cecily) on the network worth bragging about. verizon good friday morning. i'm carl quintanilla with melissa lee. got news out of the federal reserve. steve liesman has that for us. >> carl, thanks. the federal reserve out with a report about the failure of silicon valley bank in which it will blame the svb, the supervisors and talk about changes that need to be made the first case it says that svb was a textbook case of mismanagement. that it failed to manage basic

interest rate and liquidity risks as well. but the supervisors at the fed failed to take forceful enough action after they recognize these problems they missed the risk created by svb's mediocre growth before and after the pandemic for example, the bank failed before svb could be downgraded, even though downgrading discussions began months earlier in november. it demonstrates weaknesses in supervision and regulation, according to the report, and regulatory standards for svb and, indeed, banks were too low, the report says. also some blame for the board of directors who failed to oversee senior leadership at the bank. among the key findings, social media and technology combined with a concentrated deposit base that may have made fundamental changes in the speed of bank runs bank can contain contagion even if they're not that big or highly connected in the system

and fed should boost capital liquidity requirements for firms that don't meet certain standards. it should toughen rules on unrealized gains and losses on the available for-sale portfolio and also on compensation programs for executives. the vice chair for bank supervision, michael barr, says in a release, we need to develop a culture that empowers sprfrs every supervisors to act in the face of uncertainty. in the case of svb supervisors, delayed action to gather more evidence even as weaknesses were clear and growing. this meant that supervisors did not force svb to fix its problems, even as those problems worsened svb, it turned out, it three times as many supervisory findings compared to its peers by the time it failed. there was 31 of them the fed should rethink changes to the supervision it made in 2019, going back and having a problem with the changes made under randy quarles, the

trump-appointed vice chair for supervision, and then fed chair jay powell is recommending -- or saying he welcomes the report's representations. >> one question about what you just reported, you mentioned they had 31 supervisory provisions are these red flags, like speeding tickets, like, hey, guys, you're doing something wrong, there are 31 of them out there? >> yeah. they're parking tickets, kind of like parking tickets there are two kinds ofparking tickets. maybe parking tickets written on manila paper and one is written on red ticket paper. the mras and the mrias, matters requiring immediate attention and others requiring attention there were a whole boatload for svb and a lot out there in the system and the report talks, melissa, about the inability to get from mra or mria to actual action it seems like there's this incredibly -- and i've reported on this -- incredibly

bureaucratic process where there's supervisors in san francisco, committees of supervisors that are designed to make sure that all the banks in a certain size are treated the same and then the supervisors back in washington at the federal reserve board. it's a vbyzantine system >> we want to bring leslie picard into the conversation what's your initial take it seems to spell more regulation to come. >> just reading through vice chair barr's remarks more recommendations to come specifically he points out that as an example of additional regulation, there could be limits on capital distributions. that's buybacks, dividends, things bank investigators care about when it comes to investing in these stocks. additionally, incentive compensation is something they're looking at just broadly the takeaway is these banks grew at a paper that superseded the ability for

regulators and others supervising these firms to keep pace with that the growth that was experienced in terms of deposits, in terms of the concentration of the customer base wasn't something that the fed and other regulators were necessarily set up to keep pace with in terms of their ability to appropriately reg regulate i thought that was interesting as well, just given the back drop of our low interest rate environment. obviously, silicon valley bank emblematic of that. >> looking through that, it's a lengthy report here. steve, if you're still with us, looking at this line that regulators did not appreciate the seriousness of critical deficiencies in the firm's governance they make it sound, to some degree, the process as you point out in some ways was broken. >> yeah. i'm trying to understand, there's a line -- if you look on page 9 of the executive summary, carl, it takes about the idea they did the camel review or

ratings review in november, and they were going to downgrade it. let's count. december, january, february, failed in march. so, somewhere over that four-month period they could not get their act together, even though they were seeing those problems to end up and ultimately downgrade the bank, which would have created a whole bunch of new issues out there. and leslie's absolutely right. the story is we have the biggest banks essentially on lockdown. these guys are -- i think the supervisors are in there every day. the smaller community banks are kind of governed by the reserve banks. we have this middle area, what they call the lbos, the large banking organizations, that fall into this, oh, it's a little bit the district bank and a little bit the fed. there's going to have to be some changes made i think what leslie was talking about, the idea that more regulation is coming, more oversight is coming to those bigger but not biggest banks is

going to be inevitable here. >> leslie, what's your take on if there is more regulation in this sort of gray area of banks, it would seem that deposits and customers would go to the biggest banks, that it would be costly for these smaller banks to compete in that environment. >> that's the trick, is the profitability metrics obviously change when you have to make sure that you're holding onto more capital, which is something that's under consideration here. and so from an investor standpoint, sure, that's something that would be a material change. they do note here that this could take several years, it would require a comment period this isn't something we're going to wake up tomorrow and all of a sudden have additional regulation on these -- as steve mentioned, gray area, large banks that aren't necessarily deemed to be a systematic threat in terms of a sifi but that said, you know, in terms of deposits, i think if you look at what goes on with just the stock prices, they do

say in the report that the contagion has been contained because of the swift and forceful action by regulators during svb i think the jury is still out on that we look at shares of first republic, last i checked they were down about 30% right now. i think there is still some concern out there about exactly what the appetite is for regulators to get involved amidst all of this - >> hey, carl - >> -- deposits will flee because they'll be concerned about just looking at that stock price in and of itself creates concern there. >> steve >> yeah. i don't want to, you know, prewrite "the wall street journal" editorial on this, but let me say something that could sort of thing that would be in their editorial. which is, you can read this report and say, there were a series of errors here by supervisors, by banks, that if they had been caught under the existing system, we wouldn't be here talking about svb right

now. we wouldn't have had a couple anxious weekends where we're worried about about the banking system having all kinds of problems and so there's going to be an argument, i assume it's going to be a conservative argument, and i'm saying it's potentially supported by this report here that, you know what, there was a good system in place people failed. and maybe we don't need a whole bunch of new rules here to kind of fix this problem. >> yeah. on that note, leslie, there is a line that sticks out in the conclusion and that is the reviews did not consider the potential for extreme tail events like a rapid outflow of deposits i wonder, is there an element in this report that just says, look, technology is changing and part of this is adapting to that. >> i think they didn't appreciate the concentration of the customer base. same with first republic when you have a customer base that has the same look and feel and changes with regard to various macro economic events,

that affects their appetite to keep deposits in a certain bank. that's something regulators may be focused on or will likely be more focused on moving forward i think that that's a key part of this as well, is just that customer concentration, looking at who exactly is keeping their money at these specific firms as opposed to just that's money, it's green, it's either in the bank or out of the bank. >> all right steve and le leisle, thanks for breaking that down for us. let's move to the market wells fargo says it continues to see 10% correction in the months ahead thanks to macro concerns and bank of america staying ambiguity of 2023 will end with a crack in the labor market and eps recession as the fed's inflation rose more the month of march. joining us is tony dwyer i want to get your reaction to the report that was just released by the fed in so much

as, you know, this will impact credit and the economy this should theaoretically impac how we move through the last half of the year >> the credit contraction is i think like i said on the "fast money" last time, you could put all these banking -- whether it's a systematic risk or not, i'm not a bank analyst we love to come on and pretend we're experts. i'm not. since this happened, lending standards have tightened further. when you put all the great formulas and quaunt programs and things we do aside, it comes down to availability of money and does this statement even today that you just read increase the availability of money or decrease it if they're tightening up the regulations and looking for more capital, i'm finding it hard to believe they're going to make what is already a recessionary

based tightening of lending standards, i'm finding it hard to believe that's suddenly going to reverse there's only one thing that should really fix the money availability it's got to be a dramatic drop in the fed funds rate. >> it may not reverse but i'm looking at goldman, their argument is if this is a slow dragging credit crunch, it subtracts 40 bips from annual gdp, which they say would be a pretty tidy outcome. >> carl, i think the worse case scenario is the one that other people like me are dreaming about, soft landing and muddling through. all that does is keep the yield curves inverted. remember, we look at the percentage of yield curves inverted what's not being talked about in all this banking issue, carl, is the impact on private credit remember, so much credit now is not in the banking system. it's nonbank lending we have no idea how that's acting with continued historic inversion of the yield curve so, when we think about

whether -- let's say that employment stays okay. let's say that the economy has this mystical soft landing or rolling recession. that would be fantastic except that's the one thing that's going to keep the fed higher for longer how's that working what we know is that it's negatively impacting banking system and we also know that it's keeping the yield curves inverted if you have less banking, you know, lending availability, if you're already at full employment and continuing claims in the employment trends index is already telling you you're headed to a recession on that front, so you're not going to get increased pay there, where are you going to get the money to increase the growth rate in what i would call a zombie, slow growth environment so, unfortunate, history is very clear. you need a dramatic drop in the fed funds rate that will uninvert or give a positive slope to the curves. that's what -- guys, that's what bottoms the market in a recession. it's not because things are great. it's because things are so bad

that the outlook for money improves because the fed drops rate enough to incent forward-looking money indicators. >> let's say we're in the soft landing, muddling through kind of scenario. what do you do in the markets in terms of sectors in. >> our case is to be light and tight. i'm annoyingly consistent. i mean higher level of cash than you would normally have and slightly defensive bias. we're 15 months into this. the last thing i want to do is go out with -- even if it goes down 10%, i don't think you want to be excessively bearish because i want to attack that low. what creates that next leg lower, first you have good news is bad news because it means tighter fed. then bad news is good news because it means the fed is going to stop raising rates. ultimately you get bad news is wad news that's when you want to get it more aggressive in the cyclical and early cycle sectors. slightly defensive bias, higher level of cash and be ready to

pounce i'm so sick of being cautious and negative but that's what happens when you have a shutdown of money >> finally, tony, i mean, more tactically in short term, but would you argue the market successfully passed the earnings test this week >> but what market, carl yes, the mega cap stocks, of course as of opening today, the russell 2000, the s&p small cap index, equal weighted market, they all on a relative performance basis broke not only october's low, the russell 2000 is back to march of 2020. even with this week's rant, you have four or five sectors negative on the year so, i would urge the viewers to just understand when we talk about the market, it's not just the s&p 500, it's also the sectors underneath it. there, carl, therein lies the opportunity on any further weakness those sectors are already down, right? we're already discounting to some degree a recession in many

stocks you just want to standpointed to be able to buy the ones you choose or sectors you choose when you get that weakness. >> tony, great to see you. thank you. >> great to be with you guys. >> tony dwyer. speaking of those big dogs, let's get to one of the biggest movers today, intel. despite reporting the highest quarterly loss in the company's history last night the question the street is asking, is the worse over? jon fortt talked to ceo gelsinger and joins us now. >> the biggest reason the stock is moving higher this morning is there's a much clearer case to be made that after the current quarter, the worst is behind intel from an inventory and margin standpoint at least let's hear - >> the market is down as we've seen over the last couple of quarters you end up with a bunch of these underugtsization charges because it costs me x to run a factory

full and it costs me exactly x to run it empty. with that you have a lot of fixed charges that affect the overall business underutilization degrades margins. the second is the product rants we have coming in the second half of the year, those products are not yet qualified so we can't value the inventory. even as we're building inventories, we're only able to value it in the second half of the year we have pre-prq or prequalification reserves as well those two depress our margins in the first half of the year and we expect those to reverse and improve as we go through the second half of the year. we'll be comfortably in the 40s for margin in the second half of the year or comfortable we'll be able to accomplish that. >> you mentioned better than expected q1 data center market share results. you called it a turning point. can you give me some color on what your expectations it were and, perhaps, what you heard

from customers explaining why things turned out better than expected >> overall, i point to a couple of things. one is over -- the market is down year-on-year. the data center market is down, the cloud market is down, so in a down market, we're executing a little bit better. and part of that was our zion gen 4, where we were able to have a strong ramp in the quarter. we're rebuilding our customers' confidence and the strong data center update we gave earlier this quarter with our 23 products looking very good, the gen 4, gen 5 in the second half of the year and strong update for next year so, we're rebuilding their confidence as they look forward to next year, as we've called it our split road map of e-core with sierra and p-core with granite rapids, both on intel 3 sdpon

straighting our profit is in good health. all of that rear rebuilding their confidence as i like to say, we're going to fight for every socket it's still going to be competitive. we stumbled significantly over the past couple of years and we're rebuilding that momentum but we're feeling good like we're in a much better position this year and expect that that improves as we go in '24 and '25. >> and then there's the question of growth. if intel is, indeed, staunching the bleeding, rebuilding customer trust it also needs to sell ai chips, that's where its design chops will be tested against amd and nvidia and hyperscalers in the cloud that are designing their own ai chips gelsinger says he believes as more workloads move beyond ai generative phase into inferencing, intel will show strength with its ai chips. >> that's the inferencing portion of the market where

everybody wants to be using ai even though some are not generating ai. that's the strong suit for intel. even now we see the sapphire rapids, our gen 4 ramp has strong ai characteristics for inferencing. we believe that's part of the q1 results were a bit driven by some of those early inferencing use cases. we expect the ai workload to shift from generation as we saw with some generative ai examples to people using that that's where the workloads are going to go. we see that as helping our business in a meaningful way you know, as people deploy them broadly. much of that work today happens on our products. and we're going to deploy that across edge, across client, enterprise data centers as well as cloud as we compete >> so, you have wedbush upgrading from underperform to neutral, and benchmark from hold to buy don't expect smooth sailing from

here even if intel does everything right, they'll be spinning up more new manufacturing processes than usual over the next couple of years that's the full four nodes in five years thing in a compressed period of time and margins naturally take a temporary hit, guys, each time they do a new process until that process reaches volume. >> they're also bumping up an economy in which corporate customers might be thinking about how they spend you know, jon, the commentary last night seemed kind of like, you know, it's going to come, so normalization of the pc industry, the cfo, i think, said on the call, it's happening. it's going to happen in the back half of the year pat gelsinger himself talked about data center saying we haven't hit bottom but we're hitting a turning point. i'm wondering what your take is on how much they're saying, trust us, we'll do this and the economy needs stay going, you know, to keep going on the rails, so to speak >> yeah. i did ask him about the debt ceiling, for example and he said, he'll hear more

about that on "overtime" tonight. pat gelsinger said we need to not mess with an economy that's still going but kind of on the edge a little bit. also there are some analysts that say intel might be a little aggressive in their full-year pc expectations it's also true that intel is undershipping demand right now by about 20% meaning for every 100 pcs of demand, intel's shipping just sort of 80 chips into the channel. that's through the rest of this quarter. then that's expected to normalize out. naturally in the back half of the year, you have the holidays, christmas, demand is higher than it was in the front half if you're able to ship equal to demand into the channel and the second half is naturally stronger, all that's positive. now, of course, if we run into geopolitical mayhem and the markets go crazy and the market's not good, all bets are off for more than just intel perhaps intel gets damaged more

than others because they're in turn-around mode based on what they can see, they're positive and convinced we are sort of hitting the base right now and that's why the stock is higher. >> although even the upgrade, and you mention the wedbush today, they have a line, we have to continue it's not like amd or arm are going to be standing still. >> not at all. people are still betting against intel, against pat gelsinger being able to pull this off. but what investors have to be considering now is how much of that betting against intel is priced in and at what point is it worth it to bet the other way? that's why there are buyers and sellers. that's what makes the market. >> great interview brutal quarters for snap and pin terist we'll tell you why those stocks are down so much and we're continuing to keep an eye on first republic bank. that stock is significantly lower right now after a couple halts. it's halted again, as i understand it. sources telling our david faber

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earnings calls while amazon takes a step back, instead highlighting some of their retail efforts as intel and snap try and edge as well, it's not paying off for everyone snap in particular trying to highlight its investments in the space but that it would come at a major cost our expert says to build something to compete with openai at this point would cost hundreds of millions of dollars. can those small companies keep up it's great to have you back, eric we called it a craze at the top of the intro i wonder if it feels that way to you in the sense that like most crazes, we overshoot on investment and then we have to have a shakeout.

>> hi, carl. look, there is a craze and there is definitely a hiype, but in many ways the hype is justified. the again airtive ai or conversational ai is by far the most significant innovation in technology in decades. since the mobile phone and going back to the pc, it might even be more impactful it will impact every aspect of society, every aspect of the economy. so, there's a lot to like about what's going on. however, it's way early. this is -- you know, we're just at the very beginning of a long cycle of development in many ways, openai and the other generative ai platforms, you know, there's very so new, very raw, a lot of things to be fixed on them. and so, you know, to invest tens of millions if not hundreds of

millions of dollars in the field right now feels a little early to determine who are going to be the winners and who are going to be the losers. >> right your point about the cost makes you think that, i mean, only the incumbents can afford and even get the supplies necessary is it just going to feed the giants more than ever? >> for sure, the giants have a big, big advantage first of all, they've been working on this for years. if you just look at their engineering and other resources, they could deploy resources like -- which are hard to match. but the question is, is this going to become more of a commodity? you have six to eight big players who are developing or have developed generative platforms such as openai there's probably two or three more who are in the works. eventually it's all going to converge up to something that's a commodity. the question then is, where is the value going to be created on

top of these platforms what kind of applications, what kind of services will -- would you be able to build, big businesses built on that >> so in terms of funding new companies, eric, where are you seeing the best opportunities and have those valuations gone higher seeing the reaction of the markets to the efforts over at alphabet and microsoft and the market cap appreciation those companies have seen directly because of ai >> sure. it's kind of a little similar to what happened in crypto where some of the best minds and some of the best engineering talent in tech, you know, flocked to it and that draws, because of the talent, the money goes behind them and the valuations-g get high and the amounts of money being raised are high. we believe that it's too early that not only is it too early to determine the direction of all of that ai stuff, but also we

don't really know which are the features that are going to eventually end up being part of the infrastructure that might be funded today a lot of that happened during the early mobile days, the early pc days where promising companies drew a lot of investment, capital, but features ended up being part of the main platforms at the end of the day, these companies were worth nothing. >> "the atlantic" has a great piece where they argue, eric, yeah, it's huge but, in their view, more people are playing with it right now than actually employing it and that it might waste a billion hours before it saves us a billion hours i don't know if that gives corporates full credit for the research that's going on i don't know, do you agree >> yeah. sure there's people who are playing with it, but there are already applications that are working. take customer support as an example.

cornell university just came out with a study where they interviewed 5,000 customer support people and they determined their productivity has already gone up by about 14%. >> wow >> for the reason -- the reason for this is simple, is that the best customer service employees are really kind of training the newer employees or the people who have less skills, so that there's a level playing field that makes everybody more productive. >> yeah. on the list of occupations that are going to be displaced, telemarketing and post-secondary education are way up there it's going to be fascinating to watch. eric, it's great to have you back talk soon. >> my pleasure thank you. >> tv journalists are up there. >> i think journalists. >> probably. time for a news update with kristina partsinevelos >> thanks, melissa cnbc news update at this hour. at least 22 people have been killed in ukraine after russia launched its fair major air

strike in two months most of the casualties came from an apartment building in uman. fighting continues in sudan's capital after a 72-hour truce helped those evacuate but khartoum remains in conflict 500 civilians have been killed in sudan since april 15th. an oil tanker chartered by chevron was seized by iran iran's army claims it collided with an iranian ship they hope to resolve the situation shortly. the seizure by iran was the latest in a string of hijackings amid wider tensions over tehran's nuclear program. coming up, indecision on amazon stocks moving lower as this slowdown in cloud weighs on sentiment. retail is showing some resilience we'll talk about that after the break. meanwhile, look at chevron

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highlighting upside to the segment's top line and predicting the amazon story will shift more to retail given margin expansion joining us to break it down, courtney reagan. interesting this call, they're citing margin improving and improving in third-party at the same time, i thought there was cautious commentary when they were saying north american customers were looking hard at how they purchase, putting off discretionary purchases. >> exactly i thought that was interesting mixed messaging, too, melissa. exactly what we had heard from some other companies, including when i talked to the ceo of tractor supply who said, look, its direct shipping business would be soft and he would be surprised if he didn't see it from others. in your point from jpmorgan, they're focusing on the operating margin in north american retail. they said it came in at 1.2% and

encouraged by andy jassy, saying he thinks it can get back to 4% to 6%, pre-pandemic levels but jpmorgan saying that will take years and not quarters the other interesting point to note is it did beat expectations, that is the retail sales piece of the business. it was for the first time in eight quarters but still flat. it didn't really show growth i also thought it was interesting that the physical stores did also show growth of 7% now, that physical stores unit for amazon is quite small compared to the total revenue that the online business is going to pull in it is much smaller even than it used to be because it's mainly just whole foods, some of those go stores and grocery stores because they've closed the bookstores and they closed the four-star stores i do think there was interesting commentary about that third-party and the activity from consumers looking for deals. that's helping some of their third-party merchants. of course, if they're looking for deals, what does that say about the health of the

consumer >> it's interesting. you know, we've heard a couple of different things in the last 24 hours about trade down, capital one had some concerning comments about chargeoffs. i saw some data yesterday about cigarettes at the low end, one of the biggest tradedowns we've seen since '09 but real disposable income is getting better because wages are falling slower than inflation. it's just painting a very confusing picture about the consumer >> that is so true, carl when i looked back, backward looking you but at u.s. retail sales number i wanted to dig into that non-store number after we heard from amazon. for march it was up 1.9% actually, that was pretty good compared to what we saw with the broader indice with your point about tradedown, again, i attacked to tractor supply ceo yesterday, and he came up with examples about how they're seeing tradeup in premium dog foot and poultry food but at the same time, consumers are buying closer to need rather than placing those

online orders. if it is online, 75 % are picked up in store but not seeing evidence about a tradedown there's mixed messaging about what's going on in retail. consumers may be saying one thing but doing something else i think there's an awful lot of cautious commentary because it's very unpredictable what may or may not happen here as we look to the back half of the year with consumer behavior. >> meantime, early easter made things more confusing. tax rebates a little slower. so, there's a couple other variables to toss in there courtney, thanks record first quarter for imax has shares hitting within a 52-week high revenue up 145 rich gelfond will talk about the movie business in a moment lily! welcome to our third 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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take a look at the movie theater business shares of imax rallying, a new 52-week high q1 results beating across the board, revenue up 45 recording its highest gross in q1 ever with box office sales of $200 to 73 million joining us in an exclusive interview, imax ceo rich gelfond. i remember when the street a few

quarters were saying, imax punches against its weight, watch out. we're not even to the good part. >> the good part starts in about a week or two, carl, with "guardians of galaxy" coming out and "fast & furious" and "mission impossible," "raiders of the lost arc," oppenheimer. things have been so good that april was about double what it was last year. and that's supposed to be the weakest month of the quarter >> do you think this is about -- i mean, you can divide it up is it a china story? is it about some of the creators, basically reassuring exhibitors, especially this week at cinema con? >> remember, we're not an exhibitor, carl. we're a technology licensed company. and so we don't have brick and mortars. we don't own buildings we don't have debt we're an asset-like company and we're in 90 countries, so we're

completely different than what an exhibitor does. because of that, you know, we have tremendous operating leverage going forward the real surprise in the first quarter was local language films. so, in the old days imax showed hollywood blockbusters all over the world. now it's showing films from china, japan, we have one out in france right now, india. as a matter of fact, this weekend one of the big indian films is opening it was about a third of our box office in the first quarter. and that's not just local language films in their own countries. but japanese anime killed it in places like china and the u.s. indian films did well in scand scandinavia. so, our model is diversifying away from just hollywood bl blockbusters now it's not just theaters all over the world but that the films are from all over the world. that was really one of the main drivers of the quarter >> relative to pre-pandemic

levels, jeust focusing on china, china was down 7%. i wonder what's at force here, if the recovery you're seeing it not as robust as maybe you had anticipated? and what role sort of the government's interventions in the past in terms of what they green light for viewing in china, how much of a role that is playing into this number? >> actually, melissa, we had a record chinese new year, first quarter, in the history of our business china is a little later in the rest of the world coming back. remember, the covid restrictions were just lifted around christmastime. so, it's in the process of coming back. again in china, we have hollywood films as well as local language chinese films as a matter of fact, this weekend is labor day weekend in china. we have three films that we feel really good about. if you look globally, our market share is way higher than it was pre-pandemic so in the u.s. our market share

is up 50%. globally it's up about 35% so, i think you're seeing a real turn to premium. same kinds of things that's happening with concerts and sports events, things like that. >> we just had a long discussion about the consumer and looking at, you know, how long the runway is on some of their excess savings and their confidence in the labor market i assume it's your view that of the things they're going to sacrifice, trips to the theater will be one of the last on the list >> historically going to the movie theaters has been very recession resistant. it's a relatively cheap out of home form of entertainment you might not go to an expensive dinner or go on a vacation, but for the cost of going to a movie, especially an imax where it's phenomenal getaway kind of experience, it's relatively inexpensive. i've been doing, carl, as you

know for almost 30 years i've been through a bunch of recessions business is good for them. >> yeah, you've definitely been around the block, especially these last three years some amazing crucibles, richard. it's interesting to watch on the other side good to see you again. richard gelfond. >> good to see you you're right, carl, it's fun to be on the other side >> yes up next, more than 15 mentions of ai on the earnings call not enough to keep shares of snap in the green. pinterest tanking as well. we'll break down eps coming in below estimate but beat in internet subscribers and mobile subscribers giving the stock a boost to the tune of 7.5% "squawk on the street" is back in two each other rock stars? you're a rock star. you are a rock star. rock stars. please! do you know what it takes to be a rock star? i've trashed hotel rooms in 43 countries. i was on the road since i was 16.

i've done my share of bad things. also your share of bad things. we know that using workday for finance and hr makes you great at your job. but that don't make you a rock star. ted! ted! ted! oh ted in finance. you're a rock star! hey liz in hr? can you do this? unless you work with an actual rock star. you are a rock star! thank you! who's the new guy? hi, i'm ozwald. hello ozwald. give it up for pam. pam, you are a rock- [silence] i wasn't going to say it. ♪♪

social media stock snap and pinterest plunging today after warning of ad revenue weakness in earnings last night that's the focus of tech check with julia boorstin. >> while pinterest and snap beat on key first quarter metrics their stocks are plummeting on concerns about their second quarter outlook. take a look at those shares. snap shares down nearly 18% after the company's revenue in the quarter declined by 7% that was its first year over year decline ever and the company's internal forecast of the 6% revenue decline in the second quarter that also fell short of analyst expectations.

morgan stanley with an underweight rating on snap, write, quote, visible toward faster ad growth remains slow leading to an increased need on ai learning to increase the growth trajectory. pinterest shares are also down 17.5% on concerns about second quarter revenue guidance that missed estimates as well as operating expense growth that is faster than analysts had been looking for. but analysts are still fairly bullish about the news that it is opening its ad platform and its first partner is amazon, to bring amazon's ads onto pinterest. morgan stanley with a hold rating, calling this amazon partnership, quote, a potential key lever for pins to increase the breadth of shopable ad content on the platform which should lead to greater relevance and increased monetization 39% of analysts are rating pinterest a buy and just 15% are rating snap a buy.

some big challenges for those stocks amid this sell-off. >> julia, thanks first republic shares are now down about 50% the stock is at $3.20 a share. we have the latest right after this

david faber watching the news about frc about an hour and a half ago market did stumble on that news although it's recovered somewhat >> yeah, and the stock obviously is down sharply. we don't have anything particularly new to add other than even more context perhaps for what's going on right now. of course, again, to reiterate what we reported about an hour or so ago, first republic or i should say the fdic talking to any number of banks about a plan under which they would give them the best bid for what is essentially the bank at this point, but that would most likely be under receivership, in other words, the fdic takes it and announces a deal under which first republic is now part of

another bank, essentially, while taking off the bad assets and taking the hit for that. we have been reporting since the market digests those earnings from first republic and saw the deposit flows, we have been reporting on what has been a waning hope that they would be able to get a so-called private market or open bank solution under which many banks, many of the same banks that deposited that $30 billion on march 16th would step up to buy assets off the balance sheet at a higher price than the market would pay for them or perhaps convert some of their deposits into equity, although that seems less of a viable plan. but none of these things or possibilities seemed realistic unless the treasury or white house or some combination and the fed said you need to do this and that hasn't been the case. the sense is that they don't see political fallout from this bank going into receivership. they don't believe at least on their part there is systemic

risk and so that has become a much more likely scenario at this point. though, frankly, people close to frc are still holding out a hope, perhaps, there will be some private market solution >> some might argue this is the outcome that would have happened weeks ago, but in the meantime, we gain stability. do you think that was the game plan of the fdic >> i do. i think coming out of that weekend with svb and signature bank, there was a belief frc was in a very precarious situation, and we know it was given how much it gcarried, how many deposits it lost no fault of their own in the sense, melissa, it's not like they made bad loans. they just made loans at far lower interest rates, to very well heeled clients. many of whom are expected to keep their balances at the bank because they got a great mortgage then when rates start to move up and you can get 3%, 4%, 5%, that dynamic changed. meanwhile, they have many loans

and securities on their balance sheet that are far underwater. that was what we went through with svb and signature and to your point, it felt like this may happen very soon with frc, but it didn't >> they're hoping to push those underwater assets onto the balance sheets of a bank that will step up that's not going to happen at this point if it goes into receivership, it's on the government's books if somebody pays for this, is that a point where fdic insurance rates are higher for banks? and customers ultimately >> in fact, the assessment goes up for the banks so you know, again, that's part of the premise at least if you're advising first republic, you want to be out there saying well, banks are going to have to pay for it anyway. why not step up now? by the way, let's make sure of course that your uninsured deposit is going to be insured if this goes into receivership hard to imagine the fdic would not do that because that would set off a larger issue, a far larger issue but yeah, that is sort of what they were hoping would be the

construct of an argument as to why they should step up, but that hasn't been the case so far. they have lost more customers, more deposits. >> we'll watch it over the weekend, and tonight, even as we still absorb the lessons being spelled out in this report from the fed today, and of course, another busy week of earnings next week along with milken, let's get to frank holland and the half >> and welcome to the halftime report i'm frank holland in for scott wapner front and center this hour, the next move for your money is tech earnings they ton to roll in. our investment committee is standing by to break this down joining us, jim lebenthal, anastasia amarosa, let's get a check on the market. a bit of a muted day the dow over .5% the nasdaq the laggard if you will, down about .25%. the ten-year note at 3.44. not that much movement there