nvidia but those shares of north of $174 52-week high is $176 it's a nice move you know about the year-to-date move, as well. we'll talk about that on "closing bell. that does it for us here "the exchange" is now. ♪ ♪ thank you, scott welcome to "the exchange" on a busy afternoon i'm kelly evans. here is what's ahead with the markets about mixed. we'll get to that in a moment. can artificial intelligence keep us out of recession? o [ inaudible ♪ ♪ will investorst just get fooled again? we'll debate and see where the best uopportunities are. and google could end up being a big loser. we'll look at why and who is

best positioned to come out on top. and three more games getting ready to report. what to watch and how to trade before all that, get's let the latest on these markets and i guess it depends on where you are looking. >> the markets have been generally green, and they have hit the higher end of their recent trading range before backing off today. so as we take a look at the s&p 500, it is, again, 4170. so we're kind of testing the upper end of the range generally that we have seen over the last month, month and a half or so. so that was pretty good. now we have come off the session highs. up 28 points for s&p 500, down five at the low. so, again, still positive. kind of near the high-end of the trading range. we'll see if that sticks the dow industrials, down half of 1%. the nasdaq composite, the outperformer, up almost one full percent.

one main reason, specifically in technology, check out what is happening in the nasdaq with some of the mega cap tech and communication services meta platforms, alphabet, snap, among some of the names generally in social media that are in focus today on some different headlines. one involving the supreme court, leaving in place the liability shield protections so internet based companies like youtube, meta platforms, are not libel for the stuff that users post. more generally speaking, meta platforms giving some positivity and a little bit of a hook into their ai chips they will be using in the future. some of that providing the positivity there so watch those social media stocks the stock of the day probably has to be walmart. big bellwether for the american consumer for just shopping, maybe the economy in general up about 1/3 of 1% it was up much more so earlier in the session

generally, a well-received earnings report. we were talking about whether or not walmart can see some shifting trends in the way people shop, much more toward grocery and staples. a little bit more, less so i guess if you want to put it that way on discretionary items walmart, a big stock in focus. >> dom, how about netflix? i haven't heard the ai angle there, but the stock is up 9% today. >> it's like this generation's block chain, right ai will be a big point for a lot of different companies out there. by the way, especially for retailers like walmart, perhaps amazon and others. remember, amazon says they're already big into ai. i've been using alexa for a lot of the stuff that i just ask willy-nilly here and there i have gotten used to having that voice in my house it probably becomes much more ubiquitous in the coming months and years. ai has been dominating the

news and now analysts are saying it could dominate the markets and economy. paul jones telling cnbc just this week that the technology will create a productivity boom we have only seen a few times in 75 years service now ceo bill mcdermott echoed that yesterday. and steve cohen reportedly said investors may be mising a big ai wave of opportunity by being too focused on recession odds. ai could push up goldman profits by 30% and one of my next guests calls these numbers too conservative the other says they're too far-fetched. joining me now is brian jacobson, along with keith fitzgerald keith, you think this is for real, and maybe we're underestimating how big of an impact it will have. >> i think it's not only being underestimated but most investors are not aware of the magnitude of what we are talking

about. this parallels the introduction of electricity, something that will change the course of human history. the goldman numbers are low, and every company is going to adopt or use ai in the next ten years, and profits will follow. >> i am not sure many people would disagree with you. where everyone disagrees is what it means for the stocks that are affected when you see anyone who mentions ai, the stock gets a bounce. the ai ticker is up double this year i don't know, we are reaching the point at which, you know, the hype's going to overtake everything and drive things to silly levels >> respectfully, that's always a risk, and it's go ting to like dot com 22 years ago there's going to be a degree of hype that comes with anything that sin vented. it's the same when we transitioned from silent movies to talkies

but if you look out beyond that, if you look at the longer historical record in the introduction of technology, we have two things now that we didn't have. we have speed and adoption, and breadth. and we have billions of people carrying devices just like this one, which means that it is going to be in your life immediately within seconds when it takes affect. >> so given all of that, you own what you buy what what is the basket for something that we're really just now building out >> i think you go with the big names that have the cash flow stability and development capacity to me, this is going to be companies like apple, tesla, and i own them >> interesting mix there, brian. let's turn to you for a little dose of, what do you call it >> realism >> we have dr. realist here. go ahead >> yeah. i think that ai, it is going to

be transformative. but this is going to play out over probably the course of decades, and not necessarily the course of months so when we think about the immediate concerns of investors right now in terms of inflation coming down, growth slowing, ai is not going to fix that now maybe it will two or three recessions from now, but not immediately. so there is some distopian fears, some utopian ideas. >> so the semi stocks would have looked way worse if it weren't for ai, because we know we were coming out of the pandemic and had massive overstocking so did that already save us from the wrreckoning? did this come at the right point to keep us from a far worse downturn >> that's a great observation. does that mean we're going to be slight slightly disappointed? we're thinking about it in terms of how will ai help companies

control costs, protect margins and the market share that can be applied across any one of the sectors the average age of an s&p 500 company is about 21 years. so perhaps the biggest winner hasn't even been born yet. >> what would you do investment wise what would be in the brian basket >> probably more longer term i agree with some of the fundamentals as far as the cash cows if you think about the companies that have the margins, the cash flow generation capabilities, in order to adopt the technology as it becomes more involved so we're finding some of those opportunities in the united states, but we're more overweight internationally and emerging markets a lot of the developments and applications could be transformative, especially for emerging markets >> they may leapfrog into certain areas. we might be at the napster moment of ai i think a lot of people would

share that view. and we would go, no one looks back and thinks i really missed out on that napster investment >> betting against any of this stuff today, you might be betting against steve jobs back in the day i don't know anybody that regrets buying apple or microsoft. if you're talking short term, you've got to have margin protection and flexibility we share that view on a longer term investment balanced approach but in terms of ai, you have to be ahead of this buy low, sell high these stocks are going to be dirt cheap >> do you think we have pushed off the recession by a couple of months because of all the investment that's happening, and the business transformation? everybody who has been cast aside by other parts of the tech world for the past couple of years at least has an opportunity in ai to be redeployed did that help us out in a big way there? >> i don't think so. a lot of the people when they

saw the layoffs, didn't have the skill sets to pivot towards ai, or were they more focused on other projects i don't think it's done anything to stave off the current recession. in fact, i think we have gone through a recession already. if you think about q4 in 2021 to q4 in 2022, the earnings drop for the s&p 500, it was more than 26% on a quarterly basis. >> you agree that maybe that has already taken place. gentlemen, thank you the nasdaq still positive. that's the theme here. while some ai claims may seem far-fetched, the technology is already being used to literally save lives in the medical field. julia takes us inside the o.r. ♪ ♪

>> reporter: surgeons making life and death decisions in realtime are no longer operating on their own they now have an ai safety net this doctor is one of hundreds at over a dozen hospitals across the country using what startup feeder calls its surgical intelligence in the operating room >> the most fascinating part of this, we get this information in realtime >> reporter: feeder, which has raised over $42 million from the mayo clinic, advises doctors starting with preop decisions about techniques then it records summaries, comparing the video to similar procedures, to identify which decisions yield the best outcomes >> we're enabling pattern recognition at a scale that's never been seen before, learning from that to inform surgeons moving forward on the best approach to a certain situation. >> reporter: he says reviewing and analyzing surgery videos can

sometimes take surgeons months but this ai helps them instantly in key moments >> we can predict things like if i make an incision here, it could mean something else for a patient. it can predict a complication or cancer recurrence. some things that are critical to how we do surgery. >> reporter: ai is also being used by emergency responders >> okay. is he unconscious? >> evidently, yeah i can't get any response >> reporter: ai focuses on emergency medicine and listens in on calls, analyzing voice and background noises, alerting medical professionals about any help the caller might need it equips nurses and paramedics with realtime suggestions. but like in any new technology, there are risks. and in health care, patient confidentiality is always a top concern. and that has been a big focus or

companies applying ai in the medical space. but many doctors see the upside from ai as massive >> i think most of these major obstacles are addressed. i think the sky is the limit for where this technology can go >> julia joins me now. >> what's so interesting about this technology, it's not just surgeons and paramedics. we're seeing ai's fall in detecting cancer or developing drugs far faster and more efficiently than ever before this is notable how different this type of use of ai is, with a fixed data set, deployed by professionals. very different from the likes of chat bots that are trained on the entirety of the internet and they have raised concerns about misleading consumers >> it feels like the interesting phase of this will be when corporations can use all their proprietary data and chat with it think about all the data we have here at cnbc to have that capability will be phenomenal >> what we are talking about is

deploying ai with a fixed data set and adding some of those conversations that we have seen and enjoyed so much interacting with the likes of chatgbt. but if you think back to what we heard from capitol hill earlier this week, all the concerns were about misleading consumers, right? what does the consumer experience here? could it impact voting and elections? but if you are looking at ai's use, it's a very different use case, and so much potential to make use of all that data. we talked about data mining. this is data synthesis >> the debate the market is having about how much it will increase profits, does this offer us insight >> absolutely. you are talking about surgeons, not only perhaps being able to make better choice, but continuing to train the ai machine to get smarter and smarter and smarter. so it's not like you could have one surgeon doing more surgeries, but you could make one surgeon as smart as a

surgeon with a lot more experience so it's giving people the expertise of all those that came before them. >> that is one way of reducing costs. >> i do think it's interesting to think about what the positive benefits are and if you can address concerns that hippa compliance and about the safety of personal data, i would want a surgeon to have access to the entirety, the history of surgeries about something very similar if you're a paramedic, you want them to have instant access to information that can save lives. >> and the next thing we need to build is better health care, and i'm like great, time to do this. julia, thank you for now coming up, from health care to travel, why ai could take a bite out of google's bottom line that's next. plus, tractors, trainers, and tech, we have the numbers.

and here is a look at the markets where we see the dow down 148 points. the s&phanging on to a ten-point game the nasdaq still up nearly 1%. netflix a top performer today. and the ten-year note has jumped to 3.64. back after this.

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welcome back to "the exchange." shares of google are now up 38% year-to-date, as investors shrug off the company's initial missteps in ai and grow excited about its promise. but what if ai disrupts a profitable part of google's search, namely travel? my next guest says the edition of chat-based media search will have google as no longer the sole gateway to the internet joining me now are my guests welcome to you both. alex, it's a bold move to say google is going to lose at anything, but what do you see going on with bookings at expedia and others here? >> good afternoon.

i think the crucial thing to consider is the others of focus on the market is what can ai bring in terms of, you know, cons consumers, drive through assistance at wendy's, et cetera but you need to think about the starting point on top right now is a very consolidated industry that is dominated by google. and if you're the only shop in town, you can charge what you want and the consequence is there a huge amount of money paid. >> you were saying the likes of booking and expedia are one of google's biggest revenue sources. the thing i would like to zero in on as well is this idea google won't be the only gateway to the internet. what if it is? what if it is able to maintain that leadership position without undermining the ability for others to do better? >> that's a great question, and i think that's something that

everyone is thinking about i guess going back to that starting point, right now, google is upwards of 90% search, and they obviously were a tremendous success in their era. going into the next era was to say -- it could be the same in all probability, it will be lower. you have a great level of progress that you have been touching on, on your show about open ai, chatgbt, open ai, open source ai driving progress, and we're seeing consumer programs on top of that they're trying to be the first place a consumer goes to search for something. that reduces the level of share that google has, and that creates different environments where these guys that control the content, and that is key

>> this comes when open ai just announced chatgbt is coming to the app store. >> it's right here >> if you can talk with that and say hey, i would like to book a trip, google tried and backed away from being in the travel business itself. >> because ai trust concerns, let's be honest. >> now has that opened the way how is this going to play out? >> this reminded me, and alex made a good point, it reminded me of amazon, because we so so many ad dollars shifting over to amazon, why should i search google i'll just go to amazon and do it we know how amazon's ad business is doing i can see that translating here, as well. and we should also note, google is thig about this and yesterday it was reported that they are thinking about how to integrate this ai into their ads to make ads better and more effective.

for example, doing similar to what facebook announced, using generative ai to help smaller companies that don't have the capability to make these ads >> maybe the question for investors, do you watch for headlines like expedia or b booking developing its own chat app, or do you think okay, that becomes the portal by which these companies can benefit? >> that's a great question you're talking about the potential for google, but we the other side of the debate, can google monetize other pieces of the industry that aren't in search so i wouldn't be negative on google, because there are other pieces that they can lean on to generate revenue to offset some of that loss to your point, google and expedia are developing their own in-house functions

to help to get more direct traffic. that's hugely important. i say the biggest focus is, can you enable the traffic that you buy to be more profitable? right now, booking.com is spending as much as its entire -- acquiring traffic. to google, they're making about $1.20 a click. if you have ten different places to buy that traffic from, if you imagine microsoft co-pilot to get you straight to booking.com, maybe the cost is significantly lower. i make a point in my note, who said if you look at the generic drug industry, when generic drugs go online, prices drop up

to 80% so i think that it's obviously difficult to draw a direct line, but that's kind of an interesting one. the other point i'll make briefly, a lot of the questions i get, does ai mean you'll have microsoft co-pilot go straight to the hotel the point i make in the report, there are millions of properties out there, even before you start thinking about the foundation. effi if you had all of these trying to develop their own travel businesses, do you think they're going to go out there during that rush and try to connect to every single one of those small hotels >> forget about it >> go to booking.com and they'll give you all of it >> is search going off that is my big idea take away from this. alex, thank you for joining us

says the house could vote on a debt ceiling deal as soon as next week. am'll get the latest on the dra in washington. "the exchange" is back after this [phone: starting route.] technology helps us navigate to work. [phone: go straight.] but, to navigate the complexities of modern work... [phone: turn left.] ...you need more than technology. you need cdw. [phone: you have arrived.] so we'll implement cloud based microsoft modern work solutions like microsoft 365, teams and azure, so your teams can collaborate with zero trust security anywhere. [phone: destination ahead.] microsoft makes modern work possible. cdw makes it powerful. the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner

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welcome pack to "the exchange." the headline right now is the nasdaq another 1% surge today, even in the face of higher interest rates. it's a fact. the s&p is up 0.4%, and the dow down object about 123 points

right now. we're watching shares of bed, bath -- i did it bath and body works today up 9%. revenues in line the cfo says they're starting to see some modest deflation in q2, shares back above the 50-day moving average so bath and body works is up 9% today. elsewhere, a name we have covered here, bowlero plunging 17%. loss was up 80% versus last year the shares are back to the lowest level since september on what had been one of the best performing stocks. now over to tyler for an update. >> thank you very much here's what's happening at this hour nbc news reports that ron desantis will enter the 2024 presidential race next week. the florida republican governor summoning his top donors to meetings in miami next week in conjunction with his expected

campaign launch. desantis, long viewed as president trump's strongest republican challenger in 2024, has also traveled internationally in recent weeks to raise his profile prosecutors in the trial against pentagon document leak suspect jack teixeira say he had been previously warned about the handling of classified information. justice department lawyers told the judge that the air national guardsman continued leaking documents even after he was admonished by superiors on two separate occasions and sam zell has died at the able of 8 is he grew hundreds of companies during his more than 60-year career he called himself the deprave da -- grave dancer, he was a regular guest with us on cnbc. and kelly, i remember him as being a very unfiltered guy.

a peppery fellow who told you what he thought. >> he more or less pioneered the whole reits asset class. some of the things he did are legendary. the sale in 2006 of his -- i think it was $39 billion sale. he had this uncanning timing so people watched his every move so up fortunate he's no longer -- unfortunate he's no longer with us we'll be right back.

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welcome back we're in the thick of retail earnings but we have a key semi name and ad giant on deck let's get into that starting with applied materials, one of the quietly best performing chip stocks in the s&p so far this year, up nearly 35%. last quarter, they did warn of on tps going supply chain challenges and charges from a cybersecurity event at one of their suppliers. they announced a $10 billion buyback program in march let's bring in my guests

welcome to both of you christina, what are investors watching for >> unlike other u.s. chip equipment suppliers, applied materials is more exposed to matured lagging notes, so these chips are used in car sensors and power stations the overexposure to that sector could help applied materials offset the pullback in capital spending i bring that up, because they had the worst quarter in history with over $2 billion in losses over just a three-month period if they're not making money, they're not buying equipment that hurts equipment makers. but for applied materials, it's less exposed to memory chips the last point is about china. it's a very important customer to applied materials so all positive. >> great point

mi micron, still up 15% boris, what would you do with amd stock? >> you know what else is important? taiwan semiconductor i think part of the trade in amd has been the bet on ai having said this, the stock is really rallying to the earnings. so to me, it's a dangerous play at this point, because if they disappoint or guide forward cautiously, all of their competitors guided down, and they have been underperforming everybody else in the industry so it's hard to think that they're going to overperform, given the situation as it stands it's a bet forward on a lot of that technology being supportive of ai. to me, i'm cautious. i would rather wait and hear what they say. >> are there any names that jump out to you here or do all of them suffer the same fate in

semis? >> obviously, nvidia has been the semi name that you want, but i think all of them are in a capital spend cycle right now, where there is a pause and the market has really gotten excited about ai >> all right we'll leave it there christina, thank you shares up 3.5%, about a 20 times for word multiple. let's move on to deere, which blew earnings estimates out of the water in february. and shares are down 14% year-to-date steve, what's the deal >> sentiment has cooled, and there's been this debate about whether the agricultural equipment cycle has peaked that's why tomorrow the key focus is going to be inventory levels deere saying are they sitting on more inventory

the other big focus is the company's technology budget. i spoke to their chief technology officer last month. he was confident that the company will continue to put more money into this division, which includes artificial intelligence and robotics. but what i'm hearing from wall street is there's a bigger focus on a timeline. when do we get to see a full launch of their robotics equipment, channeling 2024 is that going to be extended because of what we see in the economy? that will be something they really want more clarity on. north america still holding up a lot better than overseas in fact, brazil has been a weak spot you know for the agriculture player, it's a key market, so that will be something to look out for, as well >> great point boris, do you like the stock >> i do. i mean, first of all, they're a leader in the space. and it will be a growth story for a long time. operationally, they're doing very well. they're trying to move away from

it, to really evening out the revenue through a lot of start, industrial technology, which is what i call software as a product that they're doing there are a little bit of head winds. a lot of states are creating these right-to-repair laws but overall, they're putting so much value added to all their products i think it's going to be a very powerful thing going forward and they're going to collect a lot more revenue >> i'll take the over on how many times they mentioned ai they have been big on tech, big on all of this and maybe now is the time to highlight all that our final stock today is foot locker. shares are up 11% this year. where does that leave foot locker >> so the ceo has only just taken over as of september 1 she's looking at this year as

more of a reset year they're repositioning some of their store banners like champs, they're optimizing their store fleet, which means opening up some, closing some, changing the size they're look at re-examining sort of their positioning and their vendor relationship with nike, as nike moves more direct to consumer and they reshuffle some of their other brands to pick up that white space so we're looking for earnings and revenues to fall sharply year over year look for margins to be a little bit compressed we heard from underarmor talking about how they were able to spur sales. but because of offering discounts on their gooding that might be a clue as to what we might see here. and lastly, potential discretionary pressure dick's sporting goods, a competitor, argues a lot of the goods are not discretionary. that if your kids need new cleats, that you have to buy them, it's not a choice here

but foot locker's customer is a bit more lower income than general footwear customers they say their customer base, half are lower income, compared to 36% for more broader footwear so we'll have to see what they put out tomorrow expectations are relatively low as they work through a lot of changes going forward. >> courtney, thank you boris, what do you do with the stock? >> i'm going to steal all of my research points from my wife who is a much better analyst that be i am she said that, you know, foot locker has like 30% of their business in the u.s. and does similar business they had a very, very strong quarter of revenue i think with walmart reporting today as far as the consumer goes, there may be an upside surprise but the street is comping down of course, the really two big stories is how is the

relationship with nike, which is crucial going forward. and what is the ceo of foot locker going to do so i think the stock will act far less this quarter. >> boris, i didn't know your wife was a retail analyst. >> she's very good >> you guys are like a power couple we'll leave it there thank you. be sure to catch an interview with mary tomorrow at 11:00 a.m. time coming up next, after a break, less than a week ago, the cbo was warning about significant risk of a debt default by joune 1. is a deal around the corner or not? new details, nt.ex conventional results. thins at allspring, we break away with purpose.

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welcome back after weeks of partisan politics, it now appears the white house and congress are on a path to debt ceiling r reso resolution it comes even as a group of senate democrats, including bernie sanders and elizabeth warren, are urging joe biden to invoke the 14th amendment to avoid a default if negotiations fail let's get to our reporter in california kayla? >> reporter: to be sure, the partisan politics are still alive and well, but at least for today, the smaller team of core negotiators for both sides met again at the capitol after a marathon meeting yesterday, with just two weeks before that critical june 1st deadline the mood today seemed positive and participants seemed optimistic a deal could be reached by the end of this week. here's house speaker kevin mccarthy >> i'm not confident about anything i just believe where we were a week ago and where we are today is a much better place, because we have the right people in the room discussing it in a very

professional knowledge with all the different leaders and what they want. i know and i can see where a deal can come together >> reporter: certainly a different place than last week and now chuck schumer is weighing in, too >> the negotiations are currently making progress. as speaker mccarthy has said, he expects the house will vote next week if an agreement is reached, and the senate would begin consideration after that >> reporter: several senate democrats are not on board more than a dozen led by bernie sanders sent a letter urging the president to invoke the 14th amendment if the two sides can't agree, writing -- >> reporter: national economic counsel director told reporters

today the administration is seeking a reasonable, bipartisan budget agreement, though the details of any nascent deal are still under wraps. >> so if they do the 14th amendment, or a discharge petition or something, does that mean the base will the dissatisfied if the president makes a deal where he has to make recessions with republicans? >> it's unclear how much -- how seriously the white house is really considering any of those stop gap measures. the president said that some of his advisers have told him that exercising the 14th amendment is a legitimate option. but the deputy treasury secretary said the president is not seriously considering that, and that the only thing that would keep uncertainty from permeating the markets is congress lifting the debt limit. so certainly, you know, the white house is trying to appear as if it has other 11th hour measures that it doesn't need congress for but the question is what it can do that will keep the markets from going haywire if they end

up getting close to june 1st kelly? >> it's been a very odd period of time. but everyone feels confident about something. kayla, thank you still ahead, proposing new oversight for banks in his testimony on the till today. but if regulation didn't work last time around, should we trust it to work going forward to catch problems like those at svb? e ckfter this, with the dow at session lows. (whistles) yeek. not cryin', are ya? let's tighten that. (fabric ripping) ooh. - wait, wh- wh- what was that? - huh? what, that? no, don't worry about that. here we go. - asking the right question can greatly impact your future. - are, are you qualified to do this? - what? - especially when it comes to your finances. - yeehaw! - do you have a question? - are you a certified financial planner™? - yes. i'm a cfp® professional. - cfp® professionals are committed to acting in your best interest. that's why it's gotta be a cfp®. find your cfp® professional at letsmakeaplan.org.

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welcome back the senate banking committee holding a hearing on oversight of financial regulators. two months after the collapse of silicon valley bank, which triggered more bank failures in its wake michael barr said we need to improve the speed, force and agility of supervision, something that will change the way banks operate. joining us to discuss, chris christowski and leslie picker as well let's start with what we learned at the hearing and hopefully there was a bit of explanation by the regulators as well as to why they didn't simply carry out the duties they saw on the job were -- they needed to do in order to prevent the failures.

>> i think a lot of it boils down to did they have the power to effectuate change in a way that would have prevented the failures from taking place in the camp of what did i learn from the hearings, i learned we should be expecting some debate and exploration of tougher rules, tougher capital levels, things that could be material to some of the banks that we cover here on this network over time i think it is something that likely will take a few years to play in and work their way in a material way but, basically, the regulators said you know we didn't necessarily have the power, the ability, the authority to prevent these things from happening. >> so, that said, chris, the logical -- it is kind of inevitable, they go, this all happened because more regulation, so what exactly is that regulation form going to take and how would it have changed the fact they didn't have enough seats filled at the regular regulatory bodies to do the job that they have a slide about svb in a presentation to

the fed. >> you look at the problem here, part of it is as it was said classic failure of old style banking. they had too many long dated securities on their balance sheet. but, part of it is also the fact that there is this new thing about how $100 billion can flow out of the bank at a moment's notice and, to me, it was obvious in september we downgraded the stock september 12th, when they did a conference presentation at lehman brothers, it was obvious that they had rate sensitivity issues it didn't occur to me that all the deposits would flow out on friday afternoon but the fact that they had an issue was obvious. and i think what you look at from, like, the barr report and from this is that the supervision is a constant process that the supervisors are in the bank every day of the

week they are every time they are uncovering something, they say, okay, take care of this. and so there is this constant flow of mras which say, we found something new, take care of that, and then takes a couple of months to knock that off and so on and some are quick and some take a while so, you know, i think that's part of it that all said, i think there are some obvious things that need to be changed and addressed and it relates more to liquidity management and interest rate management than it does to capital. and, you know, one thing that didn't come out in the hearings is why are banks allowed to not to market their bond portfolios for capital reasons. there is a good reason for it, which is that that would only be marking one side of the balance sheet. most of the banks have also long-term debt on the other side of the balance sheet and capital, and so on

and for most of the industry, it is reasonably balanced if you look at the amount of securities in their portfolio, it is about 80% of the capital they have on their own balance sheet. if for silicon valley, that number was like 4x they had four times as much securities in theirs -- >> is there -- we're run out of time, is there a regulatory tweak that would have prevented that from happening or what would the regulatory fix have been >> there are two tweaks in particular one is limit the amount of stuff that you can jam into that health and maturity bucket make sure it has some reality into what is on the other side of the balance sheet and secondly, get rid of this aoci opt out where on the available for sale securities, you know, you -- the smaller

banks don't have to recognize it i understand if you want to make it easier for smaller banks, or if you want to have lower capital standards for smaller banks. i don't agree with it. but i understand it. we shouldn't have different accounting for the same thing. >> leslie, quick final word. >> i would say that line of questioning was posed to ceo becker who was the ceo of silicon valley bank saying if you had had higher capital levels, do you believe it would have prevented insolvency and he said no. this was fueled by the fastest bank run in history. this was a social media, a mobile banking, all of these technological advances that we have never seen this level of deposit outflow in such a short period of time. >> a novel deposit surge going into that, arguably the most important part of this story all right, we'll leave it there. we'll see what comes out of it that does it for "the

exchange." thanks for your time tyler is getting ready for li sve lunch." jua,te who else is in there? i'll join them on the other side of the break

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welcome to "power lunch," everybody. alongside kelly evans, across the room from kelly evans, i'm tyler mathisen everybody is talking about ai. its impact on society and the markets. seven stocks driving the gains, most of them knee deep in the ai boom plus, retail results coming in we heard from walmart, target, which is the better buy right now? sounds like the recipe for a bullfight. >> indeed, indeed. just wait, everybody quick check on the markets, tyler thank you. mixed picture, dow near session lows the s&p 500 hanging on to a two-point gain, 4161 the nasdaq up .6%. the nasdaq highest level since august, absolutely worth bearing in mind that