for shack. mr. weis >> i sold bunge. there was uncertainty in the tone from the ceo and on the conference call. i thought, okay, trading range of 90 to 100, but it'll break before that. >> dow down more than 300. i'll see you on "the closing bell." "the exchange" is now. hi, everybody. welcome to "the exchange." i'm kelly evans. not even 24 hours after fed chair jay powell elevated the pain of inflation over the pain in banking, this heat map speaks for itself there's plenty of pain going on in the regionals today a couple in the green but not many two, in particular, are making big headlines. you can find them down here. we'll get to the details in a moment red across the board for the kre regional bank etf. massive declines for pacwest and western alliance how do we stop the bleeding? moratorium on bank short

selling? former fdic chair joins us in a moment, sheila bair. dom chu will lay it down for the hour. >> we have the losses in the broader s&p 500, kelly 4,067 right now, at one point in the day, we were off more than 40 plus points. >> wow. >> we're down 23 right now, half of 1%. again, having the losses there, the dow industrials down 326 points we were down over 400 at one point. a little bit more downside there. the nasdaq composite, 11,992, below the 12,000 mark. s&p, watch the 50-day moving average traders look at for a sentiment gauge. >> sure. >> the banks, you point out the heat map stuff going on for the kre regionals. if you look at bank of hawaii, zions, these two are not directly affected by what's happening with pacwest and western alliance but they're western banks and caught up in

everything zions off 10%, 11%, along with bank of hawaii, bragging it all down 6%, again, off the lows the two you mentioned, let's look at those because they're headliners today pacwest and western alliance if you look at the chart so far, what we are seeing is a down 46% move for pacwest what they did do is acknowledge they've met with potential investors, potential partners. they are still exploring strategic options, as well as strategic asset sales. they made a record statement on that pacwest down 46% western alliance, slightly different story, reporting from "t"the finanthe financial timesg they were exploring options. the company said that's false, nothing is happening right now we've been trading and halted multiple times. >> we're off 30% believe it or not, it's well-off the session lows one more because there's so much to talk about in regional banks. first horizon was supposed to be

acquired by tortoronto. regulators are caught up in everything else going on, they've strapped the deal. td is up on the news, horizon is down. >> look at the year-to-date performance. this would have been across border the ex-u.s. banks outperforming by a long shot the u.s. bank this year. td is only down 7% year-to-date. hsbc, and that and unicredit up 18% from january 1 unicredit up 38% we did not see this in 2008. people are wondering, is it a matter of catchup or a structural difference? >> i'm glad you brought it up. there's a thematic view among bank investors and investors in general, whether u.s. banks are better off than their european counterparts just this morning, analysts over at citigroup updated deutsche

bank. >> in an environment like this. >> they're more transparent. their liquidity issues are less in focus they've been more transparent about the commercial real estate exposure. >> amazing. >> especially in the u.s upgrade on the buy it is an attractive entry point. it gives an idea of the debate going on. >> right from credit suisse, now an update is this a canary in the coal mine for a looming global recession? let's bring in the former fdic chair, author of "bull by the horns" and children's books "money tales." i'm tempted to ask you tell us the children's book version of this, but let's get to the point today, what would stop the bleeding >> i only try to write happy stories for the kids, so i can't write about this yeah, so i do think, look, this is overblown the vast majority of regional banks are just fine. i do think there's been a lot of hyperbole around this, you know, saying this is the second,

third, fourth largest failures in history that's misleading because during the great financial crisis, we had a lot of very large banks that should have failed. we didn't let it fail, right this is nothing like the great financial crisis, and people shouldn't imply it the vast majority of these banks are fine if you're below the insured deposit limits, the fdic, 90 years, perfect record of protecting insured deposits. if you are uninsured, be vigilant i do think congress should move to provide an unlimited deposit guarantee, only for transaction accounts this is something we did during the great financial crisis we were seeing uninsured deposits migrate to the too-btoo too-big-to-fail banks. i think a limited guarantee for transaction accounts local governments, you know, companies use for payroll, to pay bills, take money in, take money out.

there's an important real economy benefit for having those accounts continue to function. again, i think the regional banks, given their sensitive business lending relationships with small businesses and medium sized businesses, in particular, would benefit particularly from that so i do think that's something that's called for. only mainly because there's just a lot of what i think is unwarranted hysteria around this >> on that note, sheila, let me try to clarify a couple points out there in the market. the first is that we could give deposits a backstop in '08 but we can't anymore because of dodd/frank, now we need congress >> that's right. >> do we need congress, or dan clifton and others made the point you could do a nuclear option workaround, using the stabilization fund in a true emergency. >> yeah. >> you know, as he himself said, it would be a nuclear move. >> right. >> how do we backstop deposits >> as someone who used to work in the senate for many years, it distresses me that because congress is so polarized and

dysfunctional, we have to think of workarounds that are, frankly, bad governance. the administration should try to get approval from congress this is something we did during the great financial crisis actually, congress authorizes these unlimited guarantees for transaction accounts during the pandemic the fdic didn't need to use it, but it was authorized. it was requested by the trump administration it is non-partisan i do think that they should ask. if you can't get it, things deteriorate, maybe look at the nuclear options. first, try to do the right process and go to the hill. >> yeah. so then the next question is, on the short selling ban, there's -- i read an analysthe' out, talking about short sellers driving the banks to zero and we have to intervene and slap a ban on this again. what would your response be to that idea? >> yeah, we did do a short selling moratorium same kind of a problem during the great financial crisis i do think a lot of this is driven by short sellers who,

again, are capitalizing on kind of, i think, some of the exaggerated characterizations of what's going on. you know, that's the sec's call, but it is important for depositors to understand what a bank's share price is has nothing to do with whether a bank regulator considers it insolvent and, thus, needs to be closed a bank capital determination is based on your book equity, basically, at a high level, whether your assets exceed your liabilities, these banks, you know -- that's okay. based on the current accounting rules, you know, it's not apparent that there is an issue. so don't worry when you see a share price tank like that a lot of, i think, it is being driven by short selling. t it doesn't have anything to do with a regulatory thing about whether it is insolvent and needs to close. >> so many of the candidates that are the hardest hit are the ones who fail. the precedent is troubling. >> it is. >> who is going to rescue banks that need additional funding,

capital, purchases we've played the jp prkpmorgand they needed a waiver to do that. are there enough big or super regional banks out there who would be able to acquire weaker players? what does it mean for the fdic fund >> yeah, well, that's right. this could be, especially if they keep trying to find ways to protect uninsured without -- you know, this is why you need targeted protection on transaction accounts uninsured should be subject to caps so it's a good question. i will tell you, looks to me like there's a lot of bargains out there. open bank acquisitions you don't need the fdic involved that's probably easier than to try to wait for the government to step in i don't know the government will step in. again, a lot of this is being driven by fear and not basic fundamentals about how healthy these banks are. >> final word, sheila, would raising the deposit cap even batter at this point because i wonder if the concern has migrated from uninsured depositors and sort of flighty money to actually just concerns

about credit weakness. we're going into recession, obviously, just a question of timing at this point you could raise the cap on transactions i'm not sure that'd make a difference in this phase of the crisis what do you think? >> well, i think it's a good point. there is a larger, looming issue of recession and monetary policy and the continued ratcheting up of interest rates. this really has nothing to do with whether, you know, banks have made bad loans or bad investments. with this steeply inverted yield curve, a bank business model is borrowing short and lending born to exceed the investing longer, you have a problem with the model. the way the fed has been tightening, they're really focusing encoll exclusive ly aln short-term rates they're raising short-term rates basically by paying banks and other financial intermediaries not to lend.

part your bank at the fed, get a juicy return it'll go up to over 5% now so that really, this yield curve inversion and how the fed is raising short-term rates and focusing almost exclusively on it is the concern i have, more than if banks are underregulated or not. >> sheila, thank you for your time i know you have your next appearance joining me to talk about the state of the banking system, former chair of the fdic, during the financial crisis no less. there is urgency as the u.s. careening toward the debt ceiling. 2011, lawmakers waited until stocks fell 20% before taking action my next guest sees a similar setup this time around, also meaning another leg down for the financials in particular brian reynolds is chief market strategist with reynolds strategy on set is senior portfolio manager with washington crossing advisers welcome. brian, we had an auction go off

at 5.85%, an hour ago. >> last week, it was 200 basis points lower. >> last week >> last week, it was 200 basis points lower than it is today. one matured in may and the other matured in june. there's been a flight to quality within the treasury bill market, which should be the safest market around. it's not because of the debt ceiling issue. >> one of the points you've made is we kind of need to get to june 15th. then a rush of corporate tax revenue hits might buy us time. september 15, we face a similar scenario it'll be dicey the next 27 days. how much money, how much time do they have left think we'll hit the ceiling before june 1? >> no, i don't the treasury secretary on monday made her announcement, and all she's ever talked about is the earliest day there could be a debt ceiling what she did in january when we would have hit the debt ceiling on january 19th, she's been taking extraordinary measures granted to her by congress to

push the debt ceiling out. the earliest could be early june this week, she said june 1st she pulled it in by ten days, a small amount that set off a wave of rising rates in treasury bills in june and falling rates on treasury bills in may it was a pure flight to quality. it was an overreaction if we can get to june 15th, we push this out, i don't think she wants that that's why she pulled it in. she wants to bring everyone to the table for a quick resolution. >> interesting. >> otherwise, it will be repeat of 2011, and we will have a stock price decline. that's the thing that will get congress to compromise. >> i feel better, chad i mean, listen, there's no one better than brian on this stuff. if he says maybe we're not going to hit it and we could wait a couple months, could we rally? or is the bank crisis and recessionary concerns overcoming that >> we have a cornucopia of issues here. the financial issues as well as the debt ceiling yes, there could be a softening

within the overall markets we do anticipate that to occur with that said, we would be advising investors to move up the quality spectrum, not only within the equity markets but also the fixed income markets. >> sure. let's talk about this and dwell on it for a second the heart of the issue right now, and kind of what brings this discussion together, are yields that you can get on various types of things. t-bills right now, i think the six-month is yielding more than 5% chad, if you look at one-year cds, a lot you can still get around 5%. >> right. >> on high yield savings, you do get upwards of 4.5%. that makes for, unfortunately, a difficult environment. maybe a good one for people who at least feel like they have some place to put their money for a few months. >> there is an alternative you don't have to be in the highest, riskiest stocks, and you don't have to be in the deep end of the risk pool now, this is what the federal reserve wanted they wanted to decelerate credit creation and demand. there is going to be a tightening of lending overall, and there's going to be headwinds. you have money supply that's

negative and going negative. you have credit creation from z1 report from the credit reserve showing deceleration of credit now, you have, of course, what brian is mentioning, this headline risk. we don't think, though, there's going to be default within the u.s. government, but overall, it could create some major choppy waters. >> brian, i know you've been cautious on the market for some time because of this event but also because of others sketch it out for us sell in may and go away, or what's going to happen here? >> from a trading sftandpoint, i say i want to sell rallies and buy decline. this is a choppy environment we're creating we have investors, institutional inve investors, reaching for safety in the money market space, they're reaching for the safest bills and overnight repo with the fed, and there is an increased borrower from the fed. they're not going to be extending credit in that environment, i want to sell rallies if we pass june 1 on the debt

kr ceiling, i think there will be a relief rally and i want to sell it as a trader i want to buy below s&p 4,000. >> you're not buying until we're below 4,000? >> no need to push it. as 2011 1 as the template for t last debt ceiling debate, no need to rush congress waits until the last minute to decide something, then it takes the market a month or two to gyrate and think whether it's real or not, then prices g up. >> we have to go, but chad, below 4,000, are you excited about ek wbuying eqequities >> go with high-quality 60/40 risk of high quality bonds this is what i'd recommend for retail investors and institutional. >> we could be more comfortable with the bond piece, i think thank you, both. chad morganlander and brian reynolds joining me today. coming up, the next major market event is tomorrow morning's jobs report. what if it's hot like adp, and what if it doesn't paramount missing earnings,

cutting the shares and now a credit rating downgrade at s&p we'll look at the worsening problems when "the exchange" is back, right after this dow is down. >> announcer: this is "the exchange" on cnbc. lily! welcome to our third bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way

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welcome back to "the exchange," everybody jobless claims came in high this week, a bad sign for the labor market we had adp tell us wednesday we added more jobs than expected last month what will the government's read tell us tomorrow morning and what will it mean for the fed and the markets? here is the chairman and ceo of recruiter.com. evan, we are desperate for any sign here on the labor -- i don't want to root for it to crack, but at the same time, it feels like the fed just thinks everyone is going to be -- like we can lose all these banks and there's not going to be any

spillover effect i don't know. >> first of all, thanks for having me on your show you know, i'm going to use the same word we used in the last segment, it's a choppy job market we're seeing layoffs we're seeing hiring freezes. we're seeing old companies putting on a freeze because a.i. is going to take over jobs we saw 49% of the recruiters reported salaries went up. we saw in new york city, new york is now increasing the minimum wage so there's this crazy trend going on now you looked at the report, and the hiring numbers for february and march were the same, but the quits were coming down the quit year-over-year according to the report was 15% fewer quits in march than they were -- of '23 to march of '22 the hiring is staying consistent the quits are coming down. we also saw that, i think, 38% more people reported the candidates having three jobs in the past two years

that actually means that you can see here now, i lost my job, maybe i was laid off but i can be rehired quickly the application volume is increasing fewer recruiters are handling more jobs. >> so that tells you what in terms of how quickly we might see payroll gains go to losses >> i think there's still -- and the disparity here is the different types of jobs. we've had lots of openings still on the service side of the economy, and so it's the knowledge workers getting laid off. the replacements of the service-oriented jobs, the travel jobs were up according to our index. you're seeing the layoffs. what you see on the screen now, knowledge workers, real knowledge workers, now many are finding jobs quickly we saw some really good statistics about that a couple months ago we're seeing changing. we're seeing changing priorities work/life balance is coming back up now we saw reasons for leaving were

management related not just compensation related. >> kind of if we extend that out, then what do you expect people to experience in the workplace -- okay, this is may -- as we move through the summer months? >> i think, you know, it's almost this management is going to say, look, you have to do more with less there are fewer of you right? we've right-sized the company or laid people off to adjust to the economy, to ensure we're driving profitability. now, you have to do more you spent that pandemic time of almost doing less, right i had more free time, more availability, and now i'm going to be pushed to actually getting more done and being more efficient, more effective. sort of the elon musk approach of, hey, do more with a lot less there's going to be that pressure, which is why we saw work/life balance come up as a higher priority this past index than compensation. >> the remote work issue, obviously, this one was for so long a driving factor in the labor force. what's happening with remote work now >> so we actually saw that pick

back up here now that probably goes with sales. sales has always been, and, again, not always, but many sales roles have always been remote, right? you want the salespeople out in the field. we saw that hit the number one industry segment that the recruiters were recruiting for not surprising that remote would tick up if people are focused on the sale side. health care was down, and it is typically an in-person role. >> evan, appreciate your time today. we'll see, drum roll please, for the morning and beyond evan sohn from recruiter.com. in a sea of read, royal caribbean is in an island of green after better than expected results. we'll talk about the bank turmoil on the consumer. here's a look at dow it's turned negative for the year, breaking below the 50-day moving average of 33,076, now well above that level. 33,197 as the tone firms up a little as we move throughout the afternoon.

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lachaka: because it takes a heart for somebody to say that i'm willing to give to st. jude so that they can help save more lives. that's huge. damon: our giving to st. jude is right up there with our mortgage. that's the priority that we put on giving to st. jude. announcer: please call or go online right now. become a partner in hope today. welcome back to "the exc exc exchange." we're still on the worst week since march, but the dow is down 247. we had an ipo today. johnson & johnson spinning off the consumer health visit, kenvue k-v-u-e is the ticker. biggest since rivian in 2022 that was the nasdaq peak this is near the high end of the range yesterday, $22 a share health care one of the only places you want to be right now.

priced at $22. goes public at, call it $26. $25.53, trading at $26.29, and it values the company around $50 billion. elsewhere, royal caribbean is higher after the cruise operator reported getter than expected results and raised the full year guidance almost a 9% pop. joining us is the ceo, jason liberty, along with our very own seema mody welcome to both of you ja jason, any signs of weakness from the bank crisis and everything going on? >> first, thanks for having me today. greetings from oasis of the seas as we talked about this morning, we are not seeing any sign of weakness from our guests if anything, we've seen acceleration, not just in terms of demand, but also their willingness to pay. >> an analyst calling it a mic drop moment for the cruise industry you raised the profit outlook after reporting earnings this morning. you're trying to build your pipeline you have the icon coming ou

out next year, one of the world's largest ships. is that harder to finance as credit conditions stay tight >> first off, whenever we enter a contract for a ship, we always have fully committed financing there's no issue with us in terms of getting access for financing for our ships. fortunately, we have methodically taken a lot of great action on our balance sheet, and we don't see any need in the immediate or near term to have to access the capital market we're generating a lot of cash flow this business, when it is fully up and operating, which it is now, generates a lot of cash flow allows us to effectively service our outstanding obligationings. >> banking stocks down but the travel stocks outperforming on this resiliency we're seeing in the consumer how long can this last you raise your profit outlook, but when it comes to pricing, do you see that remaining strong and the customer being willing to pay up for a cruise going

into the second half of this year >> i think there's a lot of great tailwinds for us there's demographic tailwinds. there's secular, like you can see this in the credit card data, as well as in our data, people shifting from buying stuff to buying experiences. the other thing, which is, you know, we trade still at a pretty significant discount to land-based vacation. i think even with the conconsum, if they're a little mixed, they're going to fly to flight of course, we want to close that value gap, but we see really exaccelerated demand they're making bookings well into '24 and 2025. we have a pretty good sense of what they're looking to do. >> jason, the last time we had a bad recession, 2008, that was when the consumer was overextended they were running on fumes they were in the middle of the home price collapse. this feels a little different. how do you kind of prepare for and expect to navigate through an environment where your business, i hate to say it, but maybe could do okay? if so, does the industry make any sort of consolidation moves?

do you think that everybody could benefit from some of the tailwinds you're seeing? >> i think, first off, i don't really see any consolidation moves in the future. what i do see is that i think that there is this flight to value. of course, the higher quality operators, which we would describe ourselves, we feel are going to win best brands, best ships, best people, and the ability to deliver these incredible experiences to our guests. i think we feel, you know, even in choppier times, there is a reality that, you know, our guests, our customers who we address, they're well employed they have high paying jobs they're sitting on a lot of savings. that puts them in a pretty good place, as the market or the dynamics might change. >> analysts were surprised by the comeback you're seeing in europe, where itineraries expected for about 17% of your full year capacity how does that look going into the summer, jason? >> yeah, well one of our key

differentiators is that our brands are globalized. we source our guests from all over the world we also source a lot of our guests for europe out of europe. so that platform allows us to harvest quality demand anywhere in the world what we are seeing, while we were a little bittner v nervous earlier in the year, that's buoyed itself. we've seen strong demand trends for europe here as we go into the summer. >> all right stock up 47% i've been on that ship, the oasis of the seas. >> is it good for toddlers >> i believe so. they've got a latot of activitis >> great for toddlers. >> babysitting is it free >> we do. >> all that, actually. >> jason, thank you for your time today >> yeah, thanks for having me. >> jason liberty and seema mody, fascinating stuff. thank you. let's get to a quick break before we do that, let's get to dom chu for a cnbc news update. >> thank you, kelly. at this hour, the world health organization firing the scientist who led a high-profile united nations delegation to

china two years ago. he is dismissed last year over sexual misconduct allegations stemming from 2015 and 2017. the w.h.o. says it's stepped up efforts to root out sexual abuse and harassment in recent months. a new york state judge dismissing former president trump's $100 million lawsuit against "the new york times" and three of its journalists trump filed that suit back in 2021 against "the times" for its pulitzer prize winning series on his financials in 2018 the judge also ordering trump to pay attorneys fees for the paper and those three defendants. and a jury concluded that british singer ed sheeran did not, not steal key components of marvin gaye's classic tune "let's get it on" when he created his hit song "thinking out loud." the verdict comes after a two-week trial that featured a courtroom performance by sheeran, as the singer insisted that the trial was a threat to all musicians who create their own music. music, news, kelly, black to

y -- back to you. >> i have to stop from breaking out in song. i'll spare the audience. >> aye seen it happen. >> he's right, you want people to get their due, but if you stop creativity because things sound too similar, it'd chill activity. >> i think you're way more creative than me, kelly. >> see you next hour, thank you. apple earnings we're live in cupertino with more on what customers have been hinting on how the quarter could go "the ehae"xcng is back apple in the red by a third of 1% no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across multiple systems globally, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. . ..to make quick decisions? check. aaaand check. that's the hybrid cloud solution ibm and a global bank created. what will you create? ibm. let's create.

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welcome back to "the exchange." apple expected to report a amid demand for pcs and smartphones the stock is up 30%. is the bad news priced in or not? for more, "new york times" assistant editor, barton crockett, and steve kovac is at the visitor center only the visitor center in cupe cupertino, california. steve, do tell, what's the whole shutt shu shuttlebut here? >> i am at apple hq, right behind me. there's the spaceship. anyway, you're right about the qualcomm warning that sent fears rippling throughout today's what's expected for today's earnings. that's really -- it's all rinne

jin hinging on the guidance. we are expecting the guidance to show, yes, sales are going to be down in the june quarter year-over-year, but how bad is it going to be, the kind of sentiment in the investor community, the analysts are saying, look, if it's about 5%, you know, down quarter, fine, great. if it's worse than that, then things are going to start to show, you know, some panic around the demand for apple products that's telling last year, the story around apple was it was resistant to all this demand weakness especially when we're talking about demand, yes, iphone is supposed to be -- or expected to be more resilient, but mac and ipad are going to be way down year on year, just the whole pc market is collapsing right now. >> barton, what multiple do you think apple deserves to trade at right now? >> look, i think they're trading right now at about a 27 pe you know, they're getting close to my price target i had a buy rating on the shares this year that's about 1.5 times the market multiple right now,

which is on relevant basis peak, on the absolute basis, not peak. but, look, i think that, you know, i've been liking apple i think if there's some pullback, there's your opportunity to kind of pick up more shares. you have to be valuation sensitive and environment sensitive. there's a lot of treacherous things in the air right now that could trip these guys up on the report that we're hearing tonight. you know, weighing against that is they're making the best device in the most important area on the planet right now, which is smartphones you know, down only 2% in the march quarter in units the industry down 15%. that type of share gain for this important of a device, i think, will continue to pull people into apple, you know, as a relatively durable play in an important area clearly, there's a lot of things in the air to worry about today. >> this is the quarter they open the store or those stores in india. >> yes. >> if you're looking to pull people in, that's a big opportunity. >> well, they don't want to rely too much on china, right

in the march quarter, china opened back up that might probably help them. >> except for estee lauder, who had, you know, face-planted on the china exposure a little bit. >> opening in india i think is crucial. not just opening to the consumers there, but also manufacturing, right i think that's tim cook's way of saying, you know, we hedge against china. it's super important to them, but they need to find other ways in to expand their market. >> we have to talk paramount with everybody here, as well stock is down 27% today after missing on earnings and cutting the dividend berkshire, remember, is the largest stakeholder of paramount. last month, becky quick asked warren buffett about it. >> is it fundamentally that good of a business, whether producing movies or -- and you've got some people that have deep pockets that aren't going to quit. and the product they're offering people, a chance to watch all those movies for, you know, peanuts and all that, but can

they raise prices? we'll find out so far, they haven't been able to they've been able to attract subscribers but it's at a terrible price. >> you gave reasons why not to buy paramount. why did you? >> we'll see what happens. >> that was, like, the best 5 seconds there. why did you buy it ed, what would you say >> i think it's a takeover target, obviously, right great intellectual property. decades and decades of library stuff. it just doesn't have the distribution that's the problem in an industry where distribution is cratering but you have a lot of ip, you know, and exit, basically, whether it's at netflix or apple for that matter, coming along and looking for it, that's a possibility, amazon. >> would apple, steve, be the buyer? >> this happens all the time people talk, is apple going to buy a studio disney is the one that constantly gets thrown about it'd be very surprising if they buy a studio like this i'm not sure the valuation, but it'd be the biggest acquisition ever, over beats several years a ago. they usually don't have an

appetite for buying stuff this big. at the same time, if you want to talk about what they are going to spend their money on, sports rights seems to be what they're more interested in, kelly. nba rights are going to come up pretty soon. >> nba one is the big one. kind of fit apple's ethos. i don't know barton, comment on that or paramount, whichever is less dangerous, i guess. >> they're connected, i think. i have a sell rating on paramount. the idea of someone buying them is hope over substance, in terms of a big tech company. they don't want the tv networks, the distribution they don't want that they'd take the content and put it on their own internet platform you know, if you're just valuing it on a content library, i don't think it's something you want to own into a takeover. moreover, they see an opportunity to improve the business, and they're not ready to quit. i think it's a tough setup all the cash flow comes from traditional pay tv, but that's tethered to sports

more of the sports rights are going to the tech companies that can afford the inflationary spiral we're continuing to go through. >> absolutely. >> nba goes to apple, that's bad for everyone at pay tv, whether you have nba rights or not. >> well said great to have you on a day when you have maybe not the favorite buy and sell, but it tells the whole story. appreciate it, ed and barton steve, you have a busy afternoon, as well this weekend, don't miss the berkshire hathaway shareholder meeting, live all day on cnbc and cnbc.com. reports just crossing that microsoft will help finance amd's expansion into a.i. proc processors shares of amd are popping almost 9% on that news. remember, amd just had a cuff quarter earlier this week. one small business sentiment gauge was at recession levels last monlth main street could be egaining confidence, at least for the short term we have the results of a survey next as far as it does fast.

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welcome back, everybody. could small business confidence actually be brightening? the latest surveymonkey read on small business is out, and kate rodgers is here with the results. >> kelly, we surveyed 2,000 small business owners in late april. first off, owners who have confidence in the banking system versus those who don't came in at a nearly even split at 49% and 50% respectively a majority of small business owners say they are confident their business capital is secure but less, about 53%, say it's easy for them to accessneeded fs most were banking at regional and community banks are 40% at larger institutions. small business owners are feeling somewhat more confident with the business confidence index showing an overall score of 46 out of 100 but the broader outlook on the economy, not so hot, just 21% say the economy is good or great right now. part of the big issue here is

inflation. it's been a stubborn, top concern for owners for more than a year at this point as we've been discussing, i think banking picture is going to be really important as we move ahead. >> absolutely. this is why i was surprised to hear their confidence might be brightening in the near term maybe it's doomsday but not now, something like that. >> it's such a mixed bag so we did see this quarter that more owners were feeling that they were going to increase their head count over the next year and their revenues would also increase over the next year but broad outlooks on the economy are not great. they're feeling somewhat better but, again, this banking issue, we have to see how that continues to play out. this is our own cnbc data. we have the nfib optimism index out for the month of april next week, and that'll give a look. it'll be a key concern. >> thank you, kate rogers. still ahead, this name up about 17% year-to-date it's called the best growth story what has him bullish

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welcome back to "the exchange." the regional banking turmoil touching on commercial real estate concerns. already dealing with covid-related vacancy problems and big box store bankruptcies mall operator simon property group missed on the funds.

vno pairing losses after trading new 52-week lows not all bad news though. shares of extra space storage, because we are a storage nation, are up 8% after reaffirming guidance despite a miss. and well tower is only down fractionally that was our mystery chart well tower seeing earnings and margin tailwinds it's the best growth story in reits. let's bring back ron camden. welcome. >> great to be on. >> let me just start i mean, i know it's not the most dazzling thing to talk about, but when we talk about senior living and that reit area, it was actually an area of concern that huntington bank flagged for us a couple of weeks ago for them, it was more specific to long-term care where they said reimbursement rates hadn't kept up with inflation i am curious if there are any other places other than self-storage to be in the reit space now? >> yeah, for sure. if you think about the backdrop in the senior housing space, during the pandemic they lost a

tremendous amount of occupancy industry occupancy was 90% before the pandemic and it went down to 75%. what we think is really interesting about this space on the reit is there is a massive opportunity as occupancy gained to see outsized organic growth out of the sector. if you look at the national housing and care data in 1q '23, you saw rent growth coming through the mid service digital space. when you take a step back and think about the senior housing recovery, there's really limited ways to play it in the reit space. we are looking for organic growth to drive over 10% earnings growth, which would be twice the rest of the reit group. >> it's the reit play on health care everyone knows if you feel defensive and bearish, you pile into health care and this has some of those characteristics. let's go back to some of the main points of concern which are

obviously commercial real estate and to some extent retail and shopping center. what inning are we in in terms of price netting reits have more negative news priced into them than the s&p 500. that seems like not an efficient market >> yeah. so when you think about the commercial real estate market, it's a big and diversified market we size it about 11 trillion and the connection to the banks is that it's a levered asset class. you have about 4.5 trillion of debt outstanding you look at the lenders. about 40% are the banks. if i double click that 40% you're going to see that 70% of the 40 are the small banks so there's no question that the fact that the banks are tightening lending conditions is going to have a negative impact on the commercial real estate market so i think the reason that the reits have priced in so much is because the reits also have leverage. so the market's anticipating potential down side in property values and that gets magnified in the equity values that you're talking about.

i think you are getting closer to the end but you're not quite there yet because even though some of the sectors like office have priced in a lot, there's other parts of the real estate market that still have availability leverage, maturities are coming due that have not been fully baked in yet. at this point we still think there's potentially more down side before it's all clear. >> the question becomes i don't want to use a word like contagion but when we see the banks move as quickly as they are, what does that mean for trading the reits? what happened in 2008? >> yeah. that's a good question the way you want to think of the reits. there are 16 different subsectors there are always pockets of opportunities where there's very low leverage or balance sheets senior housing is one of the ones you mentioned you do want to be really careful about parts of the market that do have high leverage. we talked about office initially

but if you look at some of the lodging names, if you look at the retail names you want to steer clear of those as property values come down, if you have leverage, that's even more down side for the equities. >> what's wrong with the lodging names? >> so if you think about pebble brook and pk, they've got -- they're trading at about seven times debt to ebitda, which is one or two turns above where the rest of the reit market is and in an environment where you have maturities coming due and you're trying to refinance those assets, you could have some potential down side to both the interest calls and obviously the earnings of those companies. >> that's fascinating. finally, do you ride it out in kind of multi-family and real estate or is that an area where the pressure will be coming down the road >> really good uestion on the multi-family side, we think you've got to be selective because if you think about multi-family, there's a lot of supply coming in the sunbelt there is a repricing that's

happening in commercial real estate market and multi-family had some of the highest valuation or the lowest cap rates, right so as rates move, you can see more repricing happen. we're being a little bit more selective on the multi-family side only looking at names like udr that are pretty w well diversified, pretty good operators and don't face as much of a head wind on the supply front. you have to be selective. >> we appreciate your knowledge. if there was reits jeopardy, i would bet on you going all the way. there are so many different pockets here to cover and at a time when everybody are treating everything like it's the same, your experience is really appreciated. thanks for your time today. >> thanks for having me. >> ron kamden joining us from morgan stanley that does it for "the exchange." for my comments you can sign up at cnbc.com/exchange-newsletter or scan the qr code. "power lunch", macy's big

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welcome to ""power lunch." i'm dominic chew alongside with kelly evans filling in for tyler mathisen we are watching everything going on in the regional bank. pacwest, western alliance getting absolutely crushed pacwest says it's weighing a possible sale at least sale of assets western alliance says it is not, absolutely not, kel. >> both of those stocks down big as you can see apple down fractionally. we'll get you ready for the big report as we take a look at the broader markets which despite the turmoil, it's moved off the low. >> we were down 40 points and we're down 20 points now let's get right into the latest leg of this banking crisis joining us now is leslie picker. leslie, i think what's the state