it, but ultimately, you know, i don't think the world's changed all that much. the market momentum. >> big contribution from intel today up 5% for the dow jones being -- >> people look for the next adobe and the next one and they think it can be intel. >> so we'll see what happens over the final few hours here and i'll see you in "the closing bell," and "the exchange" is now. thank you very much, scott hi and welcome to "the exchange." i'm kelly evans and here's what's ahead today a cardboard box recession. that's what we're in according to charles schwab's jeff kleintop and what is it? what does it mean for the economy and the stock market plus his latest take on international stocks and bank of america's ceo, brian moynihan joins us live for an exclusive interview, we'll talk loan demand, deposits light and consolidation and the impact of the fed's decision this wednesday. >> and the market rally has been powered by big tech and our

guest says the gains aren't over and the three stocks she expects to keep outperforming from here. before all of that, let's start with today's markets, dom chu. i miss you, dom. how is it looking down there >> everything looks so green down here and it's not dramatic and we are in session highs right now for the stock market and you look at the dow industrials and up 110 points and one-third of 1% and up about one-half of 1% for the s&p 500 and still solidly above 4300 and 4317, and up about 18 points and the outperformer has been the technology oriented trade in the nasdaq composite and 108 points to the upside and aer i nearly % gain there kelly did mention the interest rate decision ahead this week and let's take a look at where yields have been moving and they've been creeping higher along the maturity curve, and risen in price, the two-year net

yield, currently 4.60% if you look at the ten-year note yield and low to medium term trending higher and now at 3.78% and the 30-year long bond and an indication today, today also yields slightly creeping higher and values going down. one another place to keep a close eye on is crude oil. i'll show you, u.s. benchmark west texas intermedia and currently it is $67.53 near the lows of the session right now down 3.75% due in part to analysts at goldman sachs led by jeff curry who now cut their price targets for brent and wti from the likes of russia and iran and that's helping to push prices lower and you can see it below $70 solidly and 67.53 so keep an eye on that. and the stock of the day, mega-cap technology and business enterprise software and cloud computing and databases and

everything rolled together and those shares up 5.5% at a record high right now and this is ahead of their earnings report after the closing bell today so you could say, kelly, that expectation are high up 5.5% right now, but many analysts out there including those at wolf research, j.p. morgan have noted that o krrci, oracle cloud infrastructure platform, they can have the growth story for oracle and whether or not that comes to fruition, kel >> just an astonishing up 72% and like an all-time high and not many companies can say that after the 2021 rally dom, we appreciate it. tons of economic points are due out this week from cpi tomorrow to jobless claims on thursday and the fed's decision comes right in the middle of all of that already this morning a key gauge of inflation expectations that could factor into the fed's next move we turn, of course, to senior economics reporter steve liesman

with more. hi, steve. >> kelly, by thursday investors will have a lot of new information on consumer, the fed and the job market, tons as you say and it will set expectations for the month ahead and here's what wall street forecasters think will happen. they're not always right, but here's the consensus inflation cpi headline dropping and that's a big drop from the 4.9 we had last month and ex food and energy that's the sticky part still down two ticks and still at a high level of 5.3% to maintain the fed's concern. the fed expected to skip and hint of a hike talking about a hawkish pause or a hawkish skip there and the ppi comes, as well and thursday we'll watch jobless claims closer than usual and we had the pop last week of 26 and expect it to come down and more tame this week and there was talk of a seasonal adjustment issue and it seemed down a tick, a tenth of a percentage point from the 0.4% rise in the prior

month, but take out autos and it looks a little bit better if you take out autos and the markets have embraced the skip and hike sequence with the 17% probability of a pause and a 69% probability and in july, at least july is the last rate hike that's priced in the bad news, no longer any cuts priced in for this year in the future's market. the new fed forecast this week could move the goalpost even further out. the fed reported mixed news in its efforts to control inflation expectations and longer term inflation expectations and that's a good number especially because it wasn't because people thought gas prices were coming down and there were other things responsible for it and the three-year, up a tick and the fed hopes to keep the high inflation expectations from becoming entrenched in the minds of businesses and consumers.

it's slowly achieving that goal short term, but the longer term numbers seem anchored maybe a bit on the high side right now, kelly. >> i can't remember what they used to look like back in the 1.5% inflation days and the one-year drop seems pretty noteworthy and the one-year hike has been where the fed has started to get super concerned and that coming down the way that it has, again, maybe that's gas prices and regardless, that seems like a dovish development. >> it is, and one way to think about it is what number do you use, kelly and everybody has their own to figure out what the real funds rate is? what are you deflating it by >> current inflation if you use current inflation, and say the fed is a percentage points and some people like fed black likes to use the inflation expectation and that's the choice you're making >> right am i going to save now or am i going to spend now so when that number comes down, that one year ahead of inflation

expectation comes down the fed gets relatively tighter or looks relatively tighter or has policy relatively better in the right place. >> dovish development. whether they choose to emphasize it, you know, who knows? that's up to them especially after the cpi tomorrow and we appreciate it. >> our steve liesman >> my next guest expects to hold rates steady and the cpi could prompt a hike. we are currently in a cardboard box recession. here to explain is jeff kleintof >> we've often used the cardboard box as an indicator and you seemed to be going a step further >> europe entered a recession in q4 and q1 and it might not be too surprising and it is a generalization because not everything is in a recession and it's what i'm calling a cardboard box recession. during a typical global

recession you get all areas going down, services, trade, construction and they do so around the same time and now only manufacturing and trade seem to be in a global recession and not just in europe and on a global basis i'm referring to this as a cardboard box recession because manufactured items tend to go in a box and demand for corrugated fibreboard which is what most are made from, kelly, that contrast with services industries which have continued to grow. dom talked about it, about ten minutes ago with regard to the cruise ships and now we're seeing the air transport association doubled with the surge in flying. so all of this explains the mild economic and earnings downturn so far it's just a cardboard box recession. >> you know, you're absolutely right, in terms of the pandemic reset that we're going through, but i was going to go out and be extra bearish for you.

what if that's going to happen and then the broader recession hits in other words, i look at the news where grub hub is laying off 15% of its workforce and yes, travel services are the strongest part of the economy right now, but the business cycle hasn't really turned yet when that happens, we'll have had a previous recession and a c cardboard box recession which is a real thing and we had had the inflation so people feel like we've been in a recession for five years at that point >> yeah. i'm afraid you're right. the second half of the year will keep us over pins and needles over the cardboard box recession could spread over services last year we had the shortages to gluts in the global market for goods and the cardboard box stuff and that took place last year and generally, if we look across the globe, the nsci world index of companies and i'm counting the number of times i'm hearing job cuts, reduction in cuts, furloughs, downsizing

compared to mentions like things like labor shortages and difficult ney hiring and we've gone over a shortage environment to now a labor glut environment and when you combine that with -- >> yeah. >> i've seen way more mentions of layoffs than difficulty in hiring and that might be an indicator as we look at the second half and it could get tough in the service sector. i want to make sure people hear and i want to give you headline credit and when you say we're in a labor glut that can't help until the unemployment rate is much higher than it is now but you think that shift has happened >> that's what we're hearing from business leaders. it might take a few months for that to show up in the data. usually they tell shareholders and make announcementsbefore they actually implement them, right? usually it's three to six months later. i'm thinking that's a story for the second half and lending conditions also contribute to the weaker jobs outlook and there is a leading relationship

between lending standards and job growth and it leads for a couple of months and it all happened march. >> we need to talk about germany and the rest of it you've been a big fan of international and you've been doubling down on that for the back half of the year? >> i am. if you look outside of the u.s. the rally is much broader and the bull market is much broader than in the u.s. if we look at an equal weighted index which represents the average stock since the end of october win and the equal weighted index is well up over 20% and the eagle weighted s&p only up 4% since then showing how narrow the u.s. advances and the greater number of stocks helping to push the overall market higher internationally is a better base of support as we look to the second half of the year >> it's just fun to see it go from, you know, all of us writing, oh, japan and it's never going to get its act together and buffett loves it and the stock market is doing great and i know i'll share your

enthusiasm >> the tokyo stock exchange has changed the rules and they're looking to book the price-to-book ratio and they're starting to employ that in the share buybacks and they turn around profitability there and the investors are profiting and the nikkei is doubling the return of the s&p 500. >> thank you very much so much for joining me from charles schwab today now to the bullish calls in the market and we'll say "barron's" is one of them saying the fun has just begun and it's a cover indicator and the s&p has broken out 20% from those october lows and helped in large part to the ai boom, alphabet, amazon, microsoft and apple all up 5%. meta up more than 125% and my next guest says there are three names in the group that you'll want to keep betting on and it is getting bigger and better with me is laura marten. great to see you welcome. >> hi. >> you are feeling bullish or

were you bearish and just reluctantly chasing these higher give me context here >> generative ai is a whole new area that will drive cloud performance. i think like the old ai, big blue which is the most famous traditional machine learning was trained on 8,000 parameters. this new generative ai is trained on 175 billion parameters and it's also not the same business and i think generative ai is expensive and these foundation models cost $3 billion and it cost to build and you need to have the big company and have cloud resources and the great news is once chatgpt is an app that was built on the open ai language model and once you build an app on the aws foundation model or google and microsoft, you're not moving if you're a business, you would have to start over by creating

and i can think it will create stickiness in the third-party cloud providers. this is a structural new form of business competition and 95% of businesses will not build their own 175 billion foundation model. they'll build apps on the ones that exist on the big cloud providers. >> i think you're absolutely right and this is one of the most breakthrough, transcendent innovations. when i mention the list of the five biggest gainers this year, we said you kind of narrowed that down to three, but maybe we're overnarrowing it you seem enthusiastic about all of them. >> we cover amazon and google so that would be our call ask we are sanguine about meta and they're working on creating their foundation models and the reason we want more parameters is it makes new stuff and it creates new content and new images and if it trains on 65

billion parameters and it will not be as good as generating the next new thing as someone who trained on aws or google google is a trillion parameters and its large language model and you'll end up with better, new content out of those larger models so we're a little less positive on meta in this particular aspect in generative ai. >> you know what's unique and i'm thinking about the companies that are powering this disruption and the stable diffusion and there are a lot of these different start-ups and there's not a lot of publicly available ones left to trade and past innovation cycles and the way to trade it already exist in the most successful companies and it just seems like a rare opportunity and i don't know how much more they can move to the upside before all of this hype is really priced in. >> the large get larger here because you have to have data flows and round numbers like microsoft has said publicly it will commit $13 billion to own 49% of open ai, as its foundation model

so these things take tens of billions of dollars to create and then have losses from. so that just means the big get bigger and the regulators that are trying to stop the massive -- it's going to be impossible like, the regulators this new generative ai will make the big stocks even bigger and smaller companies will use the foundation models to build apps on it just makes the divide between companies larger >> yeah. last thing very quickly implies how much upside? >> on this specifically like generative ai i think it's 15% on this particular aspect. >> given that they've had the runs that they've had and you know i'm waiting until i can talk to you about netflix. the password sharing crackdown seems to have been one of the most bullish catalysts we've ever seen for a stock like this maybe other than ai. is the hype going to be met with

the numbers in the next quarter, do you think >> no. ultimately all of the price sharing thing is a price increase they're saying okay, i paid $20 today and my kids can no longer take my password my kids pay $8 each and say they do that or don't do that, but two years ago, that's it it's a hidden form of price increase and it's just moving decks around -- chairs around on the titanic and people who pay $20 probably have a lot of password shares at home. >> here's my non-scientific person of the world take on this, you watch the efforts by so many other players and tremendous amount of capital and nowhere near the subscribers that netflix has it's clearly in the lead any still so cheap and it has the pricing power and the ability to tap into that by demand. i just have to give it to them i think i underestimated them.

>> they they all overreport it and that is the biggest expense so they'll over deliver and so writers and sag will spend on strike which makes it's great for the pnls streamers >> that is fascinating pippi think you helped more our viewers with that. laura martin joining me from n needham today. brian moynihan live from the world medical innovation forum and we'll talk medical, the consumer and what he wants the fed to do wednesday and how does it factor into all of this the story behind the construction of manhattan's mega towers an incredible new book on the key players, celebrity tenants and shadow lending market and one obvious victor according to the author you're looking at the shares, down, down 24% for the year for another reason she joins us ahead with all she uncovered and as we head to

break let's get a quick check on the markets as the dow is almost at 34,000 which you know will garner lots of headlines and the s&p over 4300 which will close for the for the time if we hold there and the nasdaq powering the way up almost 5% and the ten-year, 3.77 we're back after this. ♪ ♪ this is "the exchange" on cnbc what happens if you ever need to miss work for a long time? why would i miss work? you could sprain your ankle. get hit by a school bus. get kicked by a horse. scurvy! plan today, feel comfortable about tomorrow. massmutual. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech.

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welcome back to "the e change." here's the market. the 3% gain for the dow today, pretty much just below session highs and s&p at 16, nasdaq up 0.8% and the evs continue to be ones to watch. blink charging shares are high or news that it will be adding those connectors that tesla users to its latest group of fast charging stations this has been a whole issue. the shares are up 8.5% and blink took a hit as ford was teaming up for their evs shares of tesla continued their run up for the 12th straight trading day. that's a record. they are now up 35% just since late may it's up about 1% today and it's not the only maker up today, buffett and munger, favorite byd getting a boost from evercore,

writing a note if you're bullish on electrification you need to be familiar with this chinese manufacturer and nio up 8% today. it is cutting prices for cars and the delay for capex and rnd projects and investors are rewarding the near-term boost that should deliver. now to contessa brewer >> former president donald trump is on his way to florida to face criminal charges over claims he mishandled classified documents. trump departed from his new jersey golf club ahead of tomorrow's initial appearance in miami. he has r claimed his innocence and says the 37 count against him will not affect his 2024 run for the white house. following the arraignment, trump is expected to travel back to new jersey where he will then deliver's marks. the u.s. has rejoined the u.n. cultural and scientific agency unesco after a decade-long dispute. u.s. officials say that decisions's motivated by concern that china will fill the gap left by the u.s. when it comes to policy making especially when

setting standards for artificial intelligence and technology education. the u.s. stopped funding unesco in 2011 when the agency voted to include palestine as a member state. the u.s. owes $600 million in back dues in order to rejoin and kia is recalling nearly 100,000 2023 sportage vehicle because of a problem with the braking system a part of the brake can become misaligned and leak and that can result in a loss of power. just so you know u kelly? >> contessa brewer still ahead, brian moynihan in an exclusive interview live from the medical innovation forum we'll talk lending, the consumer and what he wants the fed to do wednesday that and how medical costs factor into inflation. you don't want to miss it. >> the shake-up under way in america's pension plan calpers making a multibillion-dollar push into venture capital to make up for a lost deed a and that's according to the financial times

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(swords clashing) at weathertech.com -had enough? -no... arthritis. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. ♪ ♪ ♪ welcome back to "the exchange." the world medical innovation forum hosted by bank of america and mass general hospital is under way in boston. health care obviously remains a key industry to disrupt, but they are gathering global leaders to assess the opportunities and challenges in the space. joining us now for an exclusive interview from that conference is bank of america ceo brian moynihan along with our very own bertha coombs. bertha, kick things off for us. >> kelly, thanks very much

brian, thanks so much for making the time. >> it's great to be here >> i was really interested in something that you talked about just on stage a few minutes ago saying that when you're talking to companies that are looking to build up and go public eventually, you talk to them about where capital is coming from now this is a very interesting discussion this morning with a lot of companies in biotechs talking about how the ira, the investment act, is going to impact potential investment in biotech. what are you seeing? are you seeing that looming pressure of potentially having their prices cut by medicare already impacting investment >> i think this conference is about biotech investment, very early stage and so the real research to commercialization path and so pretty early on and the more exciting part of the inflation reduction act is the money going into fundamental

research and one of the things the united states has that is second to none is the fundamental research platform and the ira gives more money so there are moves going on to land the money by all of the states including the massachusetts community here and mass general which is one of the great research platforms and it's more about that there are large companies here, but more it's about the companies and their problem is will the capital markets open back up and provide capital for them >> are we seeing that yet? you have seen many ipos. >> as the economy stabilizes, and it stabilizes and as people take stock of what happened over the last couple of years and then it will get back on track and there are big pipelines and these are exciting companies and it leads investment bank and he grew up in health care and these are wonderful companies and think the process to where they are and where they'll get through. >> you talk about as the economy opens up, we've got the fed

meeting starting tomorrow. they're expected to announce a decision on wednesday. where do you think they should go should they pause at this meeting and does the economy really depend on that, do you think? >> depend on it? >> woe're a big american econom. whether they're taming inflation so they needed to tame inflation and that was a serious issue >> if you look at what happened you see inflation tip over and start to come down it's not over and it's still high relative to the long term target of 2. the current rate environment basically holds and maybe goes up more this year being the fed funds rate and they start cutting rates in march of next year because they've won the battle inflation they say inflation target takes through next year and they get closer where they want it. >> do you see them pausing, skipping and then raising again? >> there's a lot of views when

you talk to the fed over the years, and i've been ceo now in my 14th year everyone thinks there is a master plan and they do it very much data dependent and they use the word often if you look at the circumstances right now, the labor market has gotten less tight and the inflation is down, and they've got to measure the impact of all of the things that have gone on as it goes through so i'm using the example of 1984, paul volcker paused after continental illinois to make sure the disruption because you've seen lending capacity in the banking industry come down and they pulled deposits out of the industry by design and that's why deposits shrunk so i think they can take a pause on that and most people will and that's what the market is saying, but they can't say i'm done because they don't know because they need the next set of data. >> kelly wants to jump in here >> brian good to see you again you raised the point i was going

to ask about when we saw ray dalio saying that at some point we'll have a financial crisis or "the wall street journal" writing that powell has to choose between fighting inflation and a bank event, if you will you sound on the one hand, concerned that we should be taking it more seriously, but on the other hand saying it's not going to be systemic enough, that we can keep resuming the inflation fight, and i just wonder if you can elaborate a little bit on that and which one the fed should give more weight to right now >> i think at the end of the day, we have a recession predicted for starting the third quarter, and first quarter of next year and that's a mild recession and that was the amount of stimulus put into the economy in connection with the pandemic both fiscal and monetarily and they're adjusting that out of the system so the strength of the american consumer and if you look at our consumers, they are still

growing spending and albeit verse you a 10% rate, and so the economy is slowing down. they're guiding it down and it will be a soft landing and our economists think it will be a recession and a mild recession and unemployment moves up in mid-4s and that used to be full employment honestly and it's not quite the disruptive thing and will that ultimately have an impact on financial services and of course, it does and the reality is it will come down, too. and the people employed and people are spending more and companies will have revenue and it will be okay and what you're seeing that happening and you're seeing the impact on inflation appears to be enough now that they're winning the battle against the american consumer which is a hard thing and they continue to spend a lot of money and it's just they're slowing that down. >> i want to ask you, as clients and customers have noticed in an era where they're anxious about deposit flights and i'll quote from a tweet asking if i could

ask you how you offer .1% interest on checking and savings accounts the viewers saying i just take my money as soon as it hits and send it to marcus, your competitor, where they offer 4%, 5% what's your philosophy and what should we read into the funding situation at b of a? >> every day we -- we help our clients manage their money and some of that is transactional money and savings money we put in the market for them and we have $4 trillion in investment assets, too. it really depends on the customer and the product and the service, but we have a lot of no-interest checking and low-interest cheing which is moving through pem's households every day and same thing, small business, medium-sided business and our job is to put the clients into the market and we have $1.9 trillion and cash on top of that that we have to put in the works and the fed idea

and hand it back to the fed, and we raised posity moneyen solutions and that's what we've been doing for years >> brian, i want to bring it back to health care. this is the time of year where large employers are ney gosch yating with drugmakers and on what they'll offer next year there's a lot of excitement about these diet drugs that started off with diabetes, but really helped people lose significant weight loss. a lot of employers have been reticent to really pull the trigger and say yes, we'll pull for weight loss. we have a big drug potentially coming from lilly at the end of the year in this category. what are you doing as you try to balance keeping costs down and yet at the same time, trying to give your employees access next year will you be doing that for weight loss drugs? >> i think the prescribed drugs

and we handle them and they go through the process and you need to take a step back and say what have we wanted to do for a long time more than a decade ago we made a decision especially for the broad base of our employees to keep the flat care flat, and no increase in premium around that point in time and we dropped it that day and they still paid their 250, we've taken maintenance drugs and got this for free and therefored down the cost. >> if you look at the number one health care plus, it's largely going to be around heart-related and obesity-related and health-related issues and hypertension and things like that we have a high interest in managing that and that takes behavioral management and it takes dietary management and when there are biometric

screens, we pair them with a counselor to help them maintain the weight management program and we have a great fitness program in the company and all of this just to let people manage their own health and it's their decisions and as they come on screen and understood for the right applications, of course, they'll be in the system, but our goal is they have to pair those with all of the other things that we do to make it make sense >> one of the other drugs, in fact, on one of the sessions people were talking about the drugs to combat alzheimer's, that medicare is being cautious about how it's going to pay for them, but they're out there and it's not necessarily just an old person's deez. a a lot of people may want to start using it as preventive is that something you talked about and how are you able to maintain prices so low when prices are rising for you as an employer >> the interesting thing is that one hasn't come up as much as

the diet one sort of is front and center in the near-term, but again, it goes back to the whole cycle. you're trying to maintain health we spend about $2 billion on health care expenses and we're self-insured and we have the best interest in getting the best outcome for our teammates and $35 billion in compensation for all those wonderful teammates ahead. so the idea is it's not the big of the cost and it will not change the course of history so we want better outcomes so whether it's a knee replacement or certain cancer treatments or someone's advanced-stage company to help people maintain their diet whether it's doing the mail-in thing so the drugs are always coming to the house and we see the compliance go up dramatically and we pushed the compliance those are all techniques and i'm not sure the alzheimer's ones come out and the diet one so to speak will be the more interesting thing and at the end of the day the tradeoff will be interesting and the impact will

look at the cost benefit and it takes a health care team to look at it ten, 20 years down the road the real long term benefits will change the teammate and their family members and that's the interesting question >> brian, if i can just indulge you with one more macro question while we still have you. can you talk about current loan demand now that we're a few months out from the svb and because such an important indicator this is, where are you noticing some weakness and how would you say your own standards are in terms of historical degrees of tightness? >> so i think if you look at lending standards overall, by the surveys and if you look at the reality that loan demand is lower and the consumer space, mortgages are way down as you would expect those rates went up to adjust to this number as a mortgage rate and if you look at the cars, same thing

the rate structure went up and that's what the fed was intending to do, it's slowing down lending and the demand slowed down and what's been more interesting is that the economy has clearly slow down and you've seen in the middle market space in mid-sized companies up to 2 billion in revenue and you're seeing the line usage and the usage of the line of credit and it was still 10% or 15% below where it was pre-pandemic and it had fallen much more than that and now it sort of flattened out which means they don't have as much to do with the money. you're seeing the effects of -- everyone says you're tightening your standards and that goes on with times like this, but the reality is the company has a loan in place and can use it because the cost to credit goes up and the demand for their activities is not as high. they're slowing down to use it which means the economy is going

tries twice and kind of goes to why you're eager to be, ask you guys are at the 10% cap before they can buy first republic. should we consider you eager and willing to go above that threshold if federal regulators agreed if other banks needed rescues? we all see the data every week and there's growing usage of some of these emergency facilities would bank of america possibly be available to help a bank that isn't able to make a go of it in the next couple of quarters? >> so i think there's a couple of pieces. first, for 30 or more years we have not been able to make a deposit acquisition by the law at 10% and we passed that threshold a long time ago, but we go above that and we'll grow through that because we do a great job with the clients and customers. will we acquire something? it has to be a failed bank and we would acquire it through the

fdic process and many people don't employ, but we sold first rep republic a few years ago and others might and we'll take a look at it and that will come down for the irk transes and the good news is industry is strong strong and great shape and a lot of the worries and there are unique business models that fell out, but the reality is the rest of the company is in great shape and they're out there making money every day. >> brian, just to close it out we're in a new section of boston that 23 years ago didn't exist a lot of health care companies are down here. it's a hub, but we have 18% vacancy rate in offices in boston how is the real estate loan market working and is that going to recover or are we never going to see full occupancy in new areas like this where they're still building >> i think the impact of the workplace changed and the work

from home and hybrid, or whatever model you want to use is still being felt. it's a bit of a slow thing and when i took over as ceo in 2010 we had 130 million square feet of real estate and now we have 60 to 70 and that was just to reconfigure it it and companies will accelerate those efforts if we're working three days a week out of seven and that means two outside of seven days and this occupancy will be lower and so you have to start to pack and stack as we call it and continue to drive in and so that impacted, it's slower than people think because leases have to come up and combine with that one and so that demand is higher what you're seeing now is frankly, the move is repopulating the office space and there will still be more hybrid and flexibility as there was as a current policy before at our company and other companies, but you're seeing collaboration. >> if you're trying to have

scientific collaboration, they need to have common -- and it will take time to catch up with it and the good news is it's less than a couple of percent of office space and less than a couple of percent of bank of america and i wor ary about it n the grand scheme of things and not for our company. >> thank you very much thank you for being here. >> i hope you're enjoying the conference and there are great companies here and doing exciting things to help people live great lives and you can walk the halls and hear the buzz >> bertha coombs, brian moynihan, thank you very much for your time. bertha, we'll see you tomorrow with another exclusive from that conference, eli lilly, david ricks, boy, aren't they in the middle of two very, very exciting opportunities health care right now, alzheimer's and weight loss. meantime, the muni market continues to be challenged by high treasury interest rates and some pocket of regional concern,

but if history is any indication, demand can soon outstrip supply as june, july and august sees large redemptions and it could be returned to investors this month alone and despite munis coming off the worst performance since 1986 he's head of muni fixed income at neuberger berman. welcome. thank you for joining me here. it seems like i read another bad stat about the muni market why do you think there's so much difficulty to get investors to stick with it? >> it's great to be back on the show 2022 was a really, really rough year in the market and that rattled people, but you have to look at where we are right now and the last time we spoke, i said income is back. i think this is a tremendous time to buy muni bonds for a couple of reasons. first, the fed is almost done. the second point is may, as you point out was a rougher month in the market we had a lot of supply and we had worries about the debt

ceiling and that pushed muni yields higher and rid now intermediate muni yields are up 3.5% on a tax law, yif give lent bases. >> this would be over a longer period of tame >> look, i have maturities anywhere from one on 15 years and the a good time for investors to listen to the mupis pal bond portfolios. we're focusing on the 14-year part of the curve and i've been buying that in the intermediate fund and you get the aaa over 3% right there and as that bond rolls off the curve and becomes the 13-year bond it has the highest expected return throughout the muni curve. so we really, really love that play. >> i love it focusing on the 14-year part of the curve and that's exactly how you can cherry pick.

as everyone sitting at home is doing this on treasury direct so i think this resonates more than ever what do we say about the general credit quality issues, whether it's in terms of regionals or type of operations what do you think is safest or safest given the risk and where might you say those high yields are more of a warning flag stay away from them? >> i think we're entering the period of slower economic growth from a position of strength. muni markets and credits benefited from a stronger economy. benefitted from all of the federal aid. so when things are slowing down you want to come in from a position of strength so i think that's something that investors should really remind themselves of. i like essential purpose revenue bonds in this environment and a couple of other things that i think are good for investors to focus. toll road credits and people have changed how they commute into office, so you're seeing toll roads used muchmore >> e on, you are, even work from home because when people do go

into office they are choosing to go that way. another area that was a refcory trade, travel upon if if if dprou look at a chicago, o'hare, and dallas got worth you picked up additional spread to open those names and it is a very, very credit. one area that i'm more cautious on is the mass transit sector. >> absolutely. >> because while ridership has bounced back last year it is very unlikely it will go back to the peak levels. >> more debt issuance or what are their options? they'll need help, external help and new revenue streams away from just the fare box we've seen a new budgetary policy, and the politicians are asking how do we support the system because they are critical to the overall economy. >> maybe if people wanted to get real risky they can say i'm going out there. they're going to bail us out and i'll pick up the 10% yield and

i'll get a bailout and it will all be fine. >> it's baskpossible i hear people say the name thing about puerto rico and the bonds and we believe this bond can get to its destination >> good stuff, tom it's good to see you back. jimmy is joining me from neuberger berman today the hunt for yield continues and its quest for returns calpers is ramping up the risk and where thpeion nde nsfu is looking to put $5 billion to work next.

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network's got you covered. [please confirm requesting back-up.] -changing route. -go. roadblock ahead. ...back up, back up... reverse! reverse! next level moments, we're 30 seconds out. need the next level network. [north corridor, hurry!] -coming through! -or 3, let's go. the network more businesses choose. transplant received. at&t business. welcome back to the exchange about ten years ago, in an era of rock bottom interest rates and wealth inequality post financial crisis, real estate

citoons in manhattan looks to the skies. but they couldn't have foreseen how different the world would become as these buildings went up, including covid-19, which turned new york into a ghost town vornado reality was one of the view company to see returns on its building, but it's now facing headwinds from its huge commercial real estate portfolio. the stock sliding 25% this year. the battle to change the new york skyline, the focus of a new book out tomorrow, billionaire's row, tycoons, high rollers and the epic race to build the most exclusive skyscrapers. pleased to be joined by katherine clark, and also robert frank to discuss spill, people want to hear everything i want to know which building is which. >> there's a map in the book, so hopefully that will help you >> you need that map now you have a good map. >> now i'll know which one should we start with >> let's start with 220. it's the one that has defied all the odds despite the market turmoil, it

just keeps posting report sales no matter what >> this is the vornado property? >> yeah, it's a limestone tower, the smallest of the bunch. sort of designed to replicate 15 central park west which was one of the most popular buildings. ken griffin bought there for $250 million, lots of major names. >> how many of these people stay i feel like everybody buys these towers they live in them for a day or don't even go there, and i don't know what happens. robert, fill us in >> that's the thing about 220 that's so unusual. new york always has it building, the building that everyone who is a billionaire has to live in. now it's 220 and it's interesting you had these five towers. three of them i think are actually taller than 220 and yet, what do you think it is about 220 that made it the it building >> i think it was the developer.

he really took a very unique approach to marketing these building he did no marketing essentially. he said this is a private club this is a country club i'm going to really pay attention to who gets to live here and it had that velvet rope effect >> and he didn't want foreign buyers he really didn't want the russians >> that seems to be who propped up this market for the past 10, 15 years >> that was the temptation >> exactly, but then the building gets the reputation of being empty and dark, and he really wanted it to be wealthy americans and be very exclusive. >> who vets the buyers >> my understanding, i think you have this book, he vetted them he had -- you had to meet with steve ross, and he had to okay you. it was really interesting, you talk about the former buyers these buildings are really visual representations of foreign money. foreign money built them and foreign money that bought them now you have got the mansion tax, you have this new rule from treasury that looks into money

laundering, so it's harder to stash your money in one of these towers and you have got foreign money just isn't coming to the u.s. anymore. plus, we have higher interest rates. so what do you think is going to happen to the prices at which many of these foreign buyers bought versus what they can sell for today. >> we're already seeing it so much of this trend was completely predicated on the notion that these foreign buyers would keep coming and that the supply of them was endless, and tons of chinese buyers, russian buyers, and now we're seeing them sell at significant losses, sometimes 30% up to 40%. >> what's happening to the developer snz. >> they're in different positions depending on where they started in the cycle. the developers who came in early maybe got a little bit intact, whereas the people who started later in the cycle are left holding the bag. 111 west 57th street, the most recent of the buildings, as of october of last year, they said

it still wasn't 50% sold >> i remember when bill ackman bought the top of 157 for $100 million, he told me, andi'm sure he told you, i'm going to sell it for $500 million >> wow >> in five years what do you think based on the other sale comps in that building, that $100 million property is worth today. >> gosh, don't put me on the spot he totally changed his plan too. >> not $500, though, right >> no. he totally changed his plan when he bought that, he outfitted it for a foreign buyer. he put in an indoor swimming pool, he put in a retractable window that opens onto central park and a couple years ago, he said i'm going to make this a little more homey, a little more somewhere i want to live >> i didn't realize the market changes -- i know my husband isn't watching, i'm getting this for him for father's day >> the apartment >> i thought she meant that too. >> we appreciate it. the book comes out tomorrow. thank you for your time and for

joining us >> it's that point in the cycle. the country's largest, biggest public pension fund is planning a multi-billion dollar push into venture capital. what does it mean, what does it signal for tech investing? that's today's tech check with deirdre bosa >> i guess, kelly, it further underlines this idea that the tech trade has come roaring back we have seen that happen with the magnificent seven, in the public markets this handful of mega caps is leading the way. now we're seeing at the earlier stages the fact this is calipers, the country's largest pension fund, that's significant they're saying they underallocated, underinvested in venture capital over the last decade, so now they're trying to catch up and have a cohesive strategy going ford. when we talk about whether there's a bubble or not, two ways of looking at it, perhaps this is more sustainable because we have the generative ai shift, or perhaps not because money is

pouring in at a quick rate that i don't think anyone anticipated last year when we saw the tech downturn >> my knee jerk reaction is you're chasing a godecade that doesn't exist anymore, but to your point, there is this huge excitement over generative ai, so listen, you know who this is great news for, obviously, anyone in the silicon valley start-up world now these are a ton of dollars because they always set the agenda, this is a ton of money flowing into those areas >> it's going to make other pension funds sit up and say do we need to allocate more to this type of alternative investment it's part of their private equity strategy. what they found over the last decade is venture capital has had better returns versus the pi-out method, and i see your point and hear your point loud and clear about the next decade, and a potentially higher interest rate environment. can you recreate that? when you think about the field as well, you're taking on debt as higher interest rates

so i don't know. it's up for debate >> they're like all of us as investors. i wish i had been in that. i'm going to chase it now and hope for the best. deirdre, thanks very much. we appreciate it deirdre bosa reporting for tech check. that does it for the exchange. thanks for your time don't go anywhere. a very busy "power lunch" starts right now. indeed it does, kelly. kelly will be over to join me in a moment welcome, everybody i'm tyler mathisen coming up, there new bull market stocks continue to creep higher little by little especially technology shares there's something about this tech driven rally that's different from previous times. could it be what finally slows the rally down plus, from shorts or short stop to shirts the yankees legend derek jeter getting in the clothing game we'll talk to him about that new venture. also about baseball. does he like the pitch timer, the clock? is it going to attract