good morning i'm sara eisen with carl quintanilla live from the new york stock exchange. bank earnings, jpmorgan, citigroup and wells fargo kicking off the season downside risks are receding but we're not out of the woods yet. that is the thesis for ubs and alli mccartney she'll join us next. graycroft founding partner dana settle on the firm's new partnership with coca-cola on a

vc fund and the state of venture capital. markets, meantime, benefiting somewhat from the financial reporting that came out earlier today. tech took a while. began to play along here nasdaq's up 33 nasdaq's first close yesterday above 14k since april of '22 just a sign of the week they put together, the bulls put together. >> it seems like the pain trade continues to be higher as we've seen pretty much all year long the news has come in on lighter inflation overall and better economy. that's been a good risk for stocks risks, the economy could be better than we expect or inflation is rearing its ugly head for now, the market is focused on the good news we have more with consumer confidence last hour. >> biggest increase in sentiment since '06 and the biggest increase in expectations in the last couple of years we'll get to retail sales and housing numbers.

we'll get a better fikt of how the consumer is feeling. >> quiet period for fed speak because the fed meeting is next week and then the bank earnings which are the big story. wells fargo, jpmorgan and citi all reporting. let's go to leslie picker who's been digging through the releases and listening to all the conference calls what are your takeaways. >> quite volatile activity this morning. all three beat, all three raised guidance and all three off their premarket highs when those numbers first came out higher for longer rates. a clear tailwind for the three firms as they boost their outlook for net income on a slew of calls this morning, questions from analysts and reporters alike on essentially the lag effect of higher rates on the economy, on loan-making, on the ability for consumers and businesses to absorb the higher cost of financing.

jamie dimon said loss rates have time to normalize. citi cfo said he's saying payments come done and savings rates come down. wells fargo said their confidence is more from deposit pricing than loan growth the firm saw weakness in certain office properties with commercial real estate portfolio causing them to increase their allowance for credit losses by $949 million office represents 3% of their total loans. investment banking and markets broadly came in -- well, in line or slightly better than firms were guiding that might bode well for goldman and stanley, who report next week obviously, a huge drop-off in both of those groups the overall banking sector, excluding jpmorgan, has been under pressure this year with some of the largest underperformance relative to the s&p for quite some time. and despite the initial optimism from this morning's print, a more muted tone from executives and the significant economic and

regulatory uncertainty has really tempered some of that excitement as we can see in today's trading, guys. >> yeah. particularly state street here, comments on interest margin taking some wind out of the early morning sails. leslie, thank you. a lot more to come in the days to come. when it comes to finding value, our next guest sees bonds becoming more attractive than stocks bullish on gold and oil. she joins us with her least preferred view on equities joining us, alli mccartney happy friday >> yeah. >> you've been on alert for most of the year on potential risks we mentioned at the top of the show that you see some of them receding is that right? and which ones >> well, look, most of the conversations that we've had and that have been dominating the financial media for this first half have been about the precariousness and the murkiness of the data. you talked about everything from university of michigan cpi, ppi,

bank earnings, health of the consumer it's not murky right now it's overwhelmingly positive so, in a way we have a market that seems to have, whether for emotional reasons or for quantitative reasons, anticipated that, and is quite priced to perfection i guess the good news here is that the data is starting to show the positives that exist in this economy the economy and the u.s. consumer and u.s. household seem to be like the little engine that could at this point to your point, i don't think we're out of the woods yet the expectation going forward is that we continue to see progress on inflation, although likely, as every guest you've had on this morning has pointed to, it is less quick and less what have you done for me lately, than we've seen a little bit. we'll continue to see slowing growth and i think the real question right now is around the

uncertainty and the timing and effect of 5% and what looks like will be somewhere between 5.25% and 5.50% of rates that puts bonds with the kind of rates that you can get when you're talking about, you know, going out one to three to five years in the, we can tell you and we can show you the expectation whereas with equities, there are a number of things that have to fall in place to make the next six months look like the past six months. >> which is what, primarily, for you to be recommending to your clients to either add more exposure or stay in? >> so, for equity markets full stop, let's say for the s&p, certainly on an equal weighted basis to continue to outperform, the fed -- inflation has to go the path we think, it has to go down, go down quickly and the fed has maybe one, maybe two more rate hikes and then goes the other way. second, this widely predicted u.s. recession has to be full on

canceled we stick the soft landing, we move on, the labor market capitulate, the fed market says, okay, we're reversing course third, all of the -- the last six months have been the best half -- the second best half we've seen in 20 years, largely driven by optimism over ai and that seems a little precarious i think what really, really has to happen, sara, is that what we've seen since june 1st with cyclicals slightly outperforming tech and ai is we have to start to see that and we have to go from an economy and a market that has rewarded and charged multiple expansion to really showing earnings growth. and i think we'll start to see that in 2024, but there's no reason to believe that we're going to see that in 2023. >> how would you gauge sentiment right now among your -- higher net worth clients? i said the pain trade is higher. is does still feel that way. it feels like everyone is a little negative. >> i think everyone is a little

negative there's also this fomo, whether it's around ai, whether it's around inflation, whether, you know, it's around crypto kr currencies there he goes, my dog in the back people are a little bit confused when you have the following three things happen at the same time, i can give five -- i think our savings rates right now are over 5%. i can give 5% in short-term cash markets have really rewarded me for staying in them. and bonds are telling me i can lock in somewhere between 4% and 6% potentially with capital appreciation should rates go the other way. it's hard to get people to take any risk out of cash at some point that's going to happen you saw that in the banking numbers with deposit rates coming down. so, my sense is this summer is going to be a time where both institutions and individuals are really taking stock of what they have, where they're invested, have they reallocated based on

the first six months of the year and then come september, because again also the july meeting is sort of a foregone conclusion. the september meeting is anybody's guess and data dependent that i think we're going to see a pretty quiet summer where the vix stays pretty low and then when we have sort of back to school, back to work and we start to have more of an understanding of is inflation capitulating, how are people feeling about the path forward, then i think you'll start to see more people leaning in and doing so with conviction as opposed to out of fomo. >> i wonder, when we start to get real nonfinancial earnings in a few days, how you're going to process the next couple of things one is the spread between cpi and ppi and the lower input costs, the effect on margins, and then the dollar, and the tailwind that may not show up in this particular set of prints, but definitely in q3 how much of a tailwind is that going to be, at least for multinationals >> look, we've been saying for quarters at this point it will

start to be a tailwind instead of a headwind and we've been wrong. i think everything in a sense, whether you look at ubs or anyone on the street, the last six months from a whole host of things, we all had a view that opec was constraining supply and that would affect oil. everything has sort of been an anti-consensus to this point i think what starts to happen is we start to see a little more, quote, unquote, consensus sort of what you would expect as an economist to start playing out in the numbers i think that the dollar will start to help u.s. companies, absolutely now, the question is, again, does that help earnings in a sustainable way or is it really sort of a quarter by quarter, the dollar is going to either be a headwind or tailwind but you're not actually increasing the sustainability and the margin going forward and i think that's what we have to start seeing. we have to start seeing the cpi and the ppi look -- that companies can make decisions because they understand where the cost of labor is going,

where their consumer can afford, and what their input costs, and month to month has really been, in a sense, a coin flip. there's not been a lot of predictability for c-suite teams. that's frustrating for investors and the c-suite teams. >> that's maybe why they set the 4x aside we'll see how much it impacts the next set of numbers. >> exactly. >> have a great weekend. >> nice to see you both. >> 60% of kre reports next week, the regional banks. >> oh, man. >> that's a fun stat. after the break, graycroft and coca-cola teaming up on a new sustainability fund. we'll discuss next take a look at shares of unh rallying on the back of strong earnings, raising guidance, best dow performer. up almost 7% with your hearing, if you start having a little trouble, you're concerned that it's going to cost you money. to this day i only paid what i had to pay

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coca-cola out with a new announcement this week the beverage giant and eight of its bottling partners are teaming up with famed venture capital firm graycroft to launch a $138 million fund to invest in sustainable supply chains. the gop holding six hearings this month to combat corporate sustainability efforts joining us to discuss the launch and state of private markets heading into the back half of the year, graycroft co-founder,

dana settle. great to have you on the show. welcome. >> great to be here. >> how does the new fund work with coke and the battling partners and is this unique i don't see announcements like this from big companies every day. >> yeah, i mean, i think it is pretty unique. we've been imimpressed with coca-cola and their bottling partners in terms of getting this fund off the ground it was really their vision and they came to us. it's an area we had spent a lot of time on historically thinking about where the opportunities existed for venture. and as we really spent time with them, the opportunity to partner with the coca-cola system, to really deploy solutions that are going to make an impact globally is incredible and i do think it's unique. >> what sort of companies do you -- are you guys going to invest in and what sort of returns do you expect? >> so, we're looking for venture

returns. you know, that really is first and foremost from our standpoint you know, why they've come to us and why they wanted to look at doing this as a venture fund you know, i think if you look at where venture capital can make a real impact, it is on finding opportunities to have compounding growth in sectors that have huge opportunity and, you know, i think when we look at investing and things that are inevitable, the planet has finite resources, and i think a lot of things are going to need to change. coke has done an excellent job at identifying where there are opportunities to decrease their carbon footprint those are the areas we're going to focus on. >> so, we're thinking -- they've been working a lot on bottles, plastic bottles, that sort of thing. is that the focus? is it on environment >> so, it's really everything in their whole system if you think about packaging, the overall supply chain distribution, cooling, eating, there's a number of areas that

we're sort of prioritizing and as we go we'll look at where the world is -- where there are the biggest opportunities to actually impact their system so, out of the gates it's focusing on, like you said, sort of packaging, it's focusing on the overall supply chain distribution centers, cooling. and then -- and that's the things that can be commercialized today for the fund we'll look at things that can be commercialized today, deployed throughout the system and where these partners have all come together to look for opportunities where they can deploy them globally and then also in the earlier stage things, looking at really exciting technologies that may be early, but can have a really significant impact >> what about the overall trend for fund-raising right now, dana, how difficult is it?

>> well, it's certainly -- i think it's no secret that in venture capital the overall fund-raising environment has certainly shifted pretty dramatically but the opportunity set is incredible i think that's why we're so excited about this, because the opportunity to really invest in an area that we think will drive outlier returns, both in terms of the core sustainability but also where it intersects with our core funds where we're investing in ai and software solutions, where those things can actually accelerate change and also in consumer products and that's where the packaging piece comes in at the earliest stages. >> yeah, i mean, the startup, it must be a tough environment for startups when it comes to getting funding, exits with the ipo market do you see any signs of change that things are starting to open up >> we're optimists i think there are some glimmers of hope around the ipo market. there have been a couple of ipos in the last couple of weeks.

and i think as a lot of these companies that have been around for quite some time mature to the point where they're still growing but are cash flow positive, those companies will likely look to the public markets. i think there's some great companies that are approaching that stage and we have some of those companies in our portfolio we just had a terrific exit announced a couple of weeks ago and closed formally this week in a gaming space i think that's a significant m&a event. again, great companies will always find funding and will have great exit opportunities. and will grow into huge, independent companies. that's really what we're looking for when we back them. >> great companies and ai companies, i wonder how much the hype and enthusiasm around ai is counteracting some of the weakness you see in the market. >> yeah, well, certainly -- i don't think you can underestimate the significance of ai. and it's interesting because i

think you hear a lot of hype around it, but it is transformational generative ai, specifically. the way we think about it, in our core portfolio companies, we have companies like a company called isertis, and they've been working closely with microsoft and other partners to imbed ai into their core platform that's going to really fundamentally change the way they work with their customers and so or in the advertising space, a company like mountain digital a couple of years ago acquired brian reynolds marketing agency and they have been essentially rebuilding their stack with ai. and i think there's a lot of exciting things that can be done with existing companies and certainly there's a flood of startups looking to capitalize on the opportunity >> it's good to get some color from you, dana appreciate you coming on >> thank you thanks so much for having me. >> dana settle, graycroft

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european markets after notching five positive sessions following the u.s. germany slumping after wholesale producer prices reported down nearly 3% from last june that's good news it's the sharpest decline in nearly three years telecom a drag on the markets after nokia cuts its 2023 outlook and eriksson outlooks fell flat. we turn to beijing china central bank telling reporters consumer prices may fall in july while they claim there's no risk of deflation, all eyes are on q2

gdp, which will break overnight on sunday. we have a heavy data week for china, carl, which the weakness in china hasn't really spilled over, necessarily, to broader emerging markets and to the u.s. economy yet. but something we have to be on guard for as the second biggest economy, especially with low inflation numbers and how much they're willing to stimulate. >> nikkei has a piece china is willing to lose its title to it is biggest exporter to the u.s it will be the first time in 15 years they're not the biggest exporter to us they're inviting a bunch of foreign investors to china for a dog and pony to say, look, welcome, we're open for business we need the fixed asset investment because it's beginning to bite. >> change in strategy. they're clearly attuned to the risks to their economy seems like lighter touch for tech companies, people are reading into and the tea leaves around the thawing relationship we don't know exactly, but the fact that yellen was there and

lincoln and now others are coming it's a signal, right, and something a little less for the market to worry about, that confrontation between the u.s. and china. >> we'll see if we can get touches on communications. let's get a news update. >> ukrainian military officials say forces shot down 16 iranian-made attack drones a 17th drone hit a utility building causing damage and injuring at least one person meanwhile, the pentagon confirmed u.s.-made cluster bombs have arrived in ukraine less than a week after president biden announced they would be a part of the most recent aid package. millions of americans are bracing for potentially record-breaking dangerous heat this weekend in phoenix, temperatures are expected to reach 118 degrees. in california's death valley, they may top out at 130. the national park service is urging visitors to death valley to avoid hiking after 10:00 in

the morning and to carry extra water. india is hoping to earn a spot as one of the world major space powers the country launched a spacecraft to the moon this morning in front of huge crowds at its main space port the rocket is expected to reach the moon in late august and deploy a lander and rover before the never explored lunar south pole back to you. >> thank you very much. coming up, piper sees a compelling entry point maybe for ulta real break down the call with the analyst. the cfo of wells fargo coming up on "squawk on the street." dow holding onto a 100-point gain thanks to unh ♪ (upbeat music) ♪ ( ♪♪ ) woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ )

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powering higher this week. it's not just because of amazon and its prime day. courtney reagan with the details. >> good morning. amazon's ninth annual prime week did fall mid-week but despite making up 38% of all online sales, according to insider intelligence, amazon isn't what drove the etf this week. during prime week amazon shares were up 0.4% the i by etf is made up of global companies it's having the best week since november of 2022, up 13.5%

compared to the broader xrt retailer etf which is up 2.5%. it's the second straight month of gains, up more than 10% for the month, 30% year to date, which means it's the best year since 2020 remember that, when online shopping was the only option for consumers for at least part of the year during the depths of the pandemic within the ibuy etf only three names are negative, and all international online players the top players are carvana, affirm carvana has gained 31% this week after saying it expected exponential growth in ev sector. buy now, pay later player affirm is up 32% on the week. it is an option on amazon so maybe prime day did play a part. adobe said users using buy now, pay later grew 20% compared to

last year, making up 6.5% of all e-commerce orders when it was a payment option carl >> appreciate that we'll talk a lot more about retail in the coming days. that bullishness in retail extending to ulta. piper reiterates overweight, implies 20% upside for the name. joining us is piper's carin wolfmeyer. do you think there's more to go? >> yeah, absolutely. this is an investment year for ulta they're investing in workforce, investing in their stores. we'll see great growth from these investments, but also, the broader beauty category continues to crush it. ulta is well positioned, whether we're in a strong market or kind of a weaker economic environment. they have -- they span across

prestige and mass. they're hitting all price points, also in target, growing their unit base. it is an impressive growth story and also we'll get some good margins out of this, too. >> can you talk about share shift and what's happening to ulta versus, say, el at the moment >> yeah, yeah. ulta, i mean, it's really the strong innovation we're seeing in the mass category you have brands like elf that are rapidly innovating and ulta carries elf and it's seen good demand for brands like this that are having heavy invasion, heavy uptake, mostly by social media and gen z as well. we're seeing innovation in this mass category. ulta offers this while capturing share from other retailers that may only have the prestige category. >> isn't the concern with ulta, and you know this more than i do, it's had such a strong streak of growth already and that when you look in the future, that might be hard to maintain, especially if the

consumer weakens and the labor market weakens >> yeah. i mean, it's definitely a concern. prior to covid they were growing 100 stores a year. now they're averaging about 50 stores a year. it is one of the biggest questions, how is ulta able to continue to grow above the market if unit growth is falling, if we're in a pressured macro environment? it really comes down to their strong loyalty membership base their loyalty numbers make up about 95% of all sales and they are not only digging in penetration within their existing loyalty members, but they're adding additional loyalty members via target membership, and also what we've learned recently is they've been able to reactivate several lost guests maybe a guest they had lost during the pandemic, their target partnership and bringing in more brands into their stores has allowed them to reactivate those lost customers and bring them back into the platform.

so really it's going to come down to this really rapidly membership base. >> finally, i mean, would you call it a stretch to get to new highs? if not, how do they do that? how do they get back there taktly >> i don't think it's a stretch. the top line is going to slow a little bit we'll see a little bit of margin pressure from these investments initially. we have other supply chain h headwinds. definitely some margin pressures we need to be cognizant of that being said, in this looming environment of recession, we look for names that are well positioned in hedge funds and that's ulta beauty as we think of longer term, the investments they're making in supply chain, in revamping their stores, we will start to see those bony fits start to come in in the coming years and really take ulta to new highs.

>> interesting definitely we're in a market where people are looking for fresh ideas. appreciate the idea on this one, on ulta. korinne at wolfmeyer, thanks. thanks to high are rates and collapse of svb, venture is drying up. takie a look at shares of at&t they're falling again. jpmorgan downgrades the stock to neutral due to slowing growth drivers. multiyear lows back in a moment 76% of 23andme health customers surveyed reported taking healthier actions. because they know health isn't just a future state. health happens now. start your dna-powered health journey today

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venture capital loans, all be evaporating in silicon valle after the collapse of svb. we discuss that in our "techcheck." >> carl, thanks for that it's part of the vc funding winter money is hard to come by, but the debt markets especially. tough spot for a startup that needs to raise money and doesn't want to raise equity. >> absolutely. you've got the economic back drop, is really the big picture. interest rates going up. it's a lot more expensive to service loans. startups were using debt instead of equity. if you're a founder, you might not want to give away 5% or 10% of your company. you might say to extend my runway i'm going to take out a loan, it's cheap, you have silicon valley bank, they have great banking relationships.

fast forward to this year, you don't have that. >> you may not want to raise equity one thing we've been talking about, you don't want a down round. it's not good for employ morale, for management, for your existing venture capitals that have invested in that. sometimes they're unfavorables i was talking to one this morning who said he doesn't advise any portfolio companies to take on debt because it can be a so-called death spiral, if you take it with these unfavorable terms, you'll burn through it and you can't necessarily pay it back. the incentives are different april lender wants their money back plus interest an equity holder wants the company to grow to get higher and higher returns. >> debt is cheaper so they don't necessarily need as high of returns as private equity lenders. debt, they might say we don't need that higher return, but you're safer loans are easier to get in that sense. we talked about this, people have been really anticipating that this is going to happen

founders have been knowing, debt's not going to be available. pitch book has data this week showing overall deal volume down 68% -- actually, that's deal value. volume down 40%. you're seeing it fall off a cliff here the other side, potential silver lining, you you might see startups get scrappy they talk about age of efficiency, they don't have options so you're starting to see quality startups shine here. they will still have access -- >> they can raise debt a lot of lenders want to see cash flow, they want to see profitability. it's those one in the earliest stages that are suffering the most i was wondering, kate, i was talking to a few people figuring out who stepped in for silicon valley bank. they were the savior for the early stage startup ecosystem environment. they were getting warrants or options. it wasn't this typical loan. they were getting something out of this venture debt.

>> you get convertible you start as a loan and the upside for silicon valley bank is this was going to turn into a slice of the company at some point. it was a unique model. jpmorgan is actually looking like one of the banks that's going to come in they reported earnings this morning. they hired about a dozen bankers in the past week or so and said svb had this monopoly. we see an opportunity here, even though it's a high-risk business, jpmorgan has the scale. >> absolutely. it raises the question, how much do they want to go into the earliest stages that may not make that much sense for a big bank back to the point of the big gets bigger in this environment. the banks, the tech companies, the startups. >> m&a might be another -- >> good conversation we'll hand it back over to you. >> thank you cfo of wells fargo coming up on the other side of this break. don't go anywhere.

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>> yeah, you know, as we said earlier in the year, what we really needed to start seeing throughout the year was what was going to happen to deposits. both the level deposits, the mix of deposits between noninterest bearing, interest bearing and any pressures you would see from a competitive point of view in terms of pricing so, as we've had more time go by, we've got more confidence that, you know, we were going to realize more than what we originally thought and i think but more broadly when you look at the results, it was really good growth in net interest income, which you highlighted, good growth in fees, controlled expenses, sort of dropping to the bottom line and you look at our capital levels, our liquidity levels, still very strong. we were very pleased with the overall quarter. >> what about deposit pricing. there's been a lot of talk of that how is it remaining so low and can you keep it that low when there is competition we've seen deposits moving into places like money markets that pay a higher rate.

>> yeah, well, on the commercial side of the business, you know, pricing has been quite competitive for a while. and i think that will continue, you know, to be the case you know, we don't see trends accelerating in any meaningful way but it's definitely been competitive. on the consumer side, we raised prices last year, the end of last year, and have really flowed thatthrough to customers. but that's certainly seen less pressure competitively at this point. you know, but what you're really seeing in the deposit base on the consumer side is people actually spending their money. so, the biggest draw on deposits across at least our client base is the activity we're seeing, you know, across the economy, which i think bodes well for, you know, the overall economic environment, at least so far >> mike, you know, the street's been fascinated all year long with the drawdown on excess savings and all these projections based on past savings rates. i wonder how you're thinking about that and whether or not it ever truly fully gets drawed

down whether that essentially ends up as a cushion the consumer keeps in storage because their mindset's been changed by the past few years >> yeah, carl, i mean, that's a good question. i think when you look at in aggregate, the excess savings we saw, you know, a lot of people think that will get drawn down in aggregate by -- at some point by later in the year or year end. wh what you really have to do is drill into that a little bit and look at customers that are either low -- lower wealth or income levels versus customers that are higher up and i think what matters most is sort of like each individual situation. and i think the folks that are on the lower end of the weight scale are already feeling the pressure and in a lot of cases, probably already spent that excess savings. and the cumulative impact of inflation over the past couple of years is definitely having a bigger impact there. where you're likely seeing still a lot of excess savings is probably on folks that have higher income levels

and in some cases, that may -- as you point out, may be for a long time or, you know, they may recalibrate how much they're going to keep going forward. i do think you have to look at it in both parts of the consumer base >> you're obviously setting aside money for bad loans, mike. what do you expect in terms of the credit environment and especially in commercial real estate >> yeah, well, i think you first have to start with the economic environment. and i think, you know, for the most part, you know be, people -- most people would say that it's much better than you would have expected at this point in the cycle and employment's strong, which i think bodes well you're seeing still good activity out there across -- in most sectors of the economy. and so what that means so far is that on the consumer side, you know, you're seeing actually quite good credit performance. some slow, gradual deterioration off historic lows in terms of chargeoffs, but overall, still very, very strong. i'd say particularly, you know, for where we are in the cycle.

on the commercial side, you know, most customers -- most companies are still doing quite well, too. all that excess liquidity they had during covid, i think, has set them up pretty well to dea with an economic environment so, what you're dealing with now in the commercial real estate, particularly office, real estat particularly office, is isolated to the office portfolio or the office sector. and really that's all the thing we all see in terms of the return to office, trends are different. you're certainly seeing that impact a lot of different properties and more broadly now than it was two, three or four quarters ago across-the-board in different cities it is going to come down to property, individual situations, individual properties. we still see owners and borrowers quite constructive in cities that have poor

fundamentals reinvesting in properties and other situations where that doesn't make sense. so we haven't seen that translate into substantial loss yet. we will see weakness over time the allowance we had in the quarter, that reflects that we expect there to be different stresses that come and look at individual situations and a bunch of different stress sken areas to make sure we felt good about it >> tighter bank capital rules. vice chair barr's speech earlier in the week was referenced saying it's great news for hedge funds. said they're probably dancing in the street is the industry speaking with one voice on that front? >> the direction of capital appears to be up, and you can see that in reports that are

there. i do think that the devil will be in the details of the rules hopefully we'll see those rules quite soon but i think as you increase capital, they will have real world consequences, and that has the potential to move more activity outside banks and that does help other people like the ones you mentioned but i do think we have to see the details and how it will impact the businesses. >> are you saying it will impact your appetite to lend? >> i think that's unclear at this point i think we really have to see how it's going to impact each of the businesses i think it's certainly going to increase operational risk capital. it's going to impact some parts of the capital markets businesses, depending on where you are. and so i think there's a number

of things there. it's really hard to generalize the impact it's going to have. although there's been a lot of reporting on it, it's a complicated set of rules that we have to see the detail i would assume this rulemaking will be quite a number of pages we have to go through and be thoughtful about likely as you push capital up, that does have impact in certain businesses and exactly what that is going to be is hard to call right now. >> it's been a while but we were definitely talking about a chase regarding operating expenses, fighting for labor, trying to compete with fintech i wonder how you're thinking about any reversion on that front and whether or not, for example, spending on i.t. is under scrutiny as we know financials are a huge buyer of those services >> first you have to really make sure that you're investing in your businesses over a cycle

so starting and stopping an investment cycle is never a good idea and technology is what we do and financial companies do we'll continue to be steadfast in terms of our commitment there. some of the competitiveness you've seen broadly across the employment market has gotten better attrition has slowed in most areas of the company that's helpful wage pressures are lower than in the past you still have to make sure you're compensating people competitively. there's still a good market out there. it's a different environment than we saw maybe a year ago >> you get this question all the

time, what's left for to you do to remove the fed asset cap. >> as you know we have a number of things we have to do across all the commits with the regulators and the framework we've got. we're happy we've completed a substantial amount every day making progress, and that will be the case until we're done >> mike, thank you for taking the time as always following the results, we appreciate it wall street is buzzing about threads and this drop-off in growth since its very strong debut. details on that after the break.

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know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for cash. even a term policy. even a term policy? even a term policy! find out if you're sitting on a goldmine. call coventry direct today at the number on your screen, or visit coventrydirect.com. what is buzzing this morning? not meta's threads app not as much. new data showing a drop-off in growth and engagement following the red-hot launch when a record 100 million users signed up in five days.

now reporting declines in both daily active users and time spent on the app as well still a long way to go to conquer the twitter lead it's been a week or two. >> well, since saturday. dau is down 20 and time spent down 50. they did break the internet when they launched, but i guess until they launch something that's not algor algorithmic. >> there was a lot of excitement going into the launch. it's still early just amazing strength we've seen now, what, five days in a row for the s&p 500. up 3% this week. the nasdaq has broadened out and now knee deep into earnings season >> a good few days between the

spread i was looking ahead to next week bank of america tuesday, morgan stanley, schwab, hasbro, lockheed you said how many regionals? >> 60% of kre, the regional bank etf. people are still curious about the profitability and the business of regional banks and what's happening with the deposits >> huge story. let's get to frank holland and "the half. thanks a lot, charles. welcome to "the halftime report." front and center this hour, the kickoff to earnings with the s&p 500 hitting its highest level in more than a year as a result the big banks start off strong we will discuss those reports and debate if earnings season will be enough to keep the rally going as the next fed meeting looms large. joining me for the hour jason snipe, joe terranova, jenny harrington and bill baruch first a check of the markets looking at the dow, the s&p, the nasdaq and the russell the dow, s&p and nasdaq higher, but off their highs of the day the russell moving ler