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us. charles schwab reporting the stock is on pace for its biggest gains since july. the ceo is moments away. >> later on, we'll get reaction to what we' learned so far from the banks and what to expect as this week gets started. first, take a look at the markets. stocks are in the green as we kick off a busy week of earnings. oil kind of muted right now. today's move higher coming as we prepare for what's historically been a bullish period for the market. let's bring in cnbc senior markets commentator mike santoli. you think seasonality is playing a role? >> it's definitely in backdrop. this is about when it kicks in, mid-october. it's the start of the year with tailwinds. also friday, you had this kind of buildup of anxiety in this nonspecific way. the volatility index ended at like 19.5, even though we had a half-percent decline in the s&p. obviously a lot of the

geopolitical issues are on people's minds as well as, you know, i think just in general, you know, what's going to happen with this instability in bond yields. nothing really happened to change things. we have the seasonality, the ability to focus on micro fundamentals, corporate earnings as opposed to macro for a little while. i think that explains a lot of what we're seeing right here. and you have cleaner positioning going into this period, meaning people have really curtailed their equity exposure to some degree going into the space. >> one of the bull arguments the last couple weeks was there would be a wave of short covering. is that still what we're witnessing? >> i think that's part of the story. i don't think it's explicitly short cover, meaning the types of things that are rallying are the heavily shorted stuff. but, yeah, whenever you have the market relax a little bit, that's part of the issue. to me it's much more about the message of the fact that you had very active, new shorts being put on throughout september. that's something that can get worked off. it just reflects generally, i think, the positioning with regard to, you know, what's been

going on and whether we can handle it. >> as far as earnings expectations, they've been rising as growth has come in a little bit better. how is the market treating the earnings that do well? >> yeah. so far, okay. we don't really have quite the critical mass of reports to say we can generalize about the statistical significance of it. >> say pfizer. it's surging today. >> absolutely. >> schwab has turned around and is higher today. >> completely. the bar is not that high. you've had numbers come down. the economic surprise indexes were really positive throughout all of the third quarter. that should theoretically give you that beat rate that you look for. so far the response is okay. people looked back at the last two quarters and say nobody gave credit for the beats. maybe that is changing this time. >> mike, thanks. pretty interesting open to a monday. let's look at the bond market. we've been watching it move higher, of course, bullish on some high expectations.

we'll see if that momentum reverses next year. mark, good to see you. do you expect the 10-year to once again test that sort of 4.88 level? >> well, the 10-year could test it because growth in the u.s. has been stronger than anticipated. we think in the next year the 10-year will fall as growth continues to slow in the u.s. >> what is your year-end 2023 and maybe 2024 target on the benchmark? >> well, look, i think this is a great time for people to get their portfolios more in balance, because we see positive returns across cash, bonds, and equities. so, you know, when we look out towards the middle of next year, we can see the s&p 500 probably about 4,500, and we could see the 10-year at about 3.5. >> 3.5.

am i reading this right? do you see maybe a downslide scenario on the 10-year the below 3.00? >> yeah. i mean, if we have a hard landing, you know, you get back towards long-term inflation rates, you could get lower than that. >> so, mark, why are you so convinced that bond yields will make a turnaround here? everybody is expecting growth as the fed hikes catch up to the economy, yet yields continue to move higher. >> yeah. i think, you know, when we analyze it, if you look at this, there's a lot of noise, well, supply and demand is an issue, and certainly supply is higher, and that's a concern. but the bond vigilantes, you know, are not really going after the united states here. it's not like anybody's worried that the united states is going to default, credit default swaps

for u.s. are stable. if you look at inflation rates, you know, longer-term inflation rates have not really moved recently. they were a cause for bond yields to move earlier in the year. and what that leaves us with is, you know, high, short-term rates, and then this view that the u.s. economy is stronger. so, the marginal buyer was somebody who believed that the u.s. economy was going to enter a recession this year, and that person perhaps stepped away in the past few months, and that's led the longer-term rates to go up. but as inflation remains under control and gets closer to the fed target, maybe the fed can start to talk a little bit more about stabilization of rates and lower rates, and that should take some of the pressure off the long end of the curve. >> but you don't think we're near doing that at this point yet, right? we had firmer cpi readings, inflation expectations ticking

up for 5 and 10-year at the university of michigan. >> yeah. i recognize the sentiment data today, but i think the broader story of inflation slowing and the u.s. economy slowing will ultimately trump some of these shorter-term factors that have driven rates up recently. >> if all this is true, what happens to the dollar? >> well, you know, we have been believing that, say, europe -- the euro was going to do better for a long time. but when we listened to what the ecb was saying and the fed was saying, now it's really unclear who's going to be cutting first. so, the dollar -- you know, we're neutral on the dollar versus the euro because of the geopolitical concerns and also a much more unclear picture about who's going to be cutting first. so, right now, i'd say neutral on the dollar. the currencies we like are some

of these more commodities-focused currencies, like the canadian dollar or the australian dollar. >> interesting. dxy holding 106 today. mark, appreciate that. interesting outlook. we'll talk soon. thank you. in the auto sector, the uaw strike is now one month old. jpmorgan saying the work stoppage has cost ford and gm half a billion dollars each so far, and the worst is yet to come. phil lebeau is with us now. ford's executive chairman says it's time to get a deal done. what does that mean? what happens next? >> well, sara, this is the first time we've heard from bill ford. he doesn't talk a whole lot, even when there's a chance to speak. he leaves that up to the ceo, jim farley. but he's felt like it's time for him to say something, and that's why today he called reporters to the rouge complex in dearborn, michigan, very historic part of ford's, you know, legacy. and he basically laid out what he believes needs to change.

first and foremost, they need to get a deal done with the uaw. he didn't give us any updates on specifics there, but he said that toyota, honda, and tesla, they're the strike winners the longer this goes on. the acrimonious talks are hurting the economy, not just ford, but the economy overall. he says the strike impact is widespread. here he is. >> shutting down that plant harms tens of thousands of americans right away. workers, suppliers, and dealers alike. it hurts the communities that depend on these local economies. if it continues, it will have a major impact on the american economy and devastate local communities. the supply base is very fragile and will start collapsing with an expanded strike. >> what prompted bill ford to start talking today likely is that plant he was referring to. he said that plant, talking

about the kentucky truck plant, which the uaw went on strike last wednesday night. that is ford's largest plant in the world. it is by most in the auto industry, by most estimations, the most profitable auto plant in the u.s. and as a result, that's the big impact that ford is facing right now, 42%, approximately 42% of ford's u.s. production shut down by this uaw strike. by the way, we're waiting to find out when is the next time that the uaw and ford negotiators will be meeting again. guys, back to you. >> i mean, where are we in terms of the economics of the deal? and what would be financially untenable for companies like ford? >> ford has said they are at the limit. now, what is the limit in terms of a dollar amount? the company won't say. it says that it can move around things within the financial offers that have been made, but they are at the limit in terms of how much they can offer the

uaw. and we know that one of the main stumbling blocks here is what happens with ev battery plants. these are plants that are planned, that will be built over the next several years. will those plants have workers represented by the uaw under this same master contract with ford? or is it a case where, because they're joint ventures, they'll be respected perhaps by the uaw if the workers vote for that, but not under this contract, which would be far different. that is one of the key stumbling points. >> got it, phil. thank you. phil lebeau, keep us posted, as always. schwab kicking off what is another busy week for bank names. trading volumes leading to a revenue miss. but the stock has turned around and is moving higher, and, in fact, is the best performer on the s&p. walt bettinger joins us on the other side of the break. egypt refusing to let americans and other foreign nations avthugthallee roh e passage without an aid agreement.

apple is a lagger today. i fiphone demand in china is we. analysts writing iphone sales are down high double digits after adjusting for launch-time distance between the 14 and the 15. they do add the tracking of the 15's resale price in hong kong supports the weak demand that is detected in their industry checks. the stock is breaking the 50-day moving average and for a while was the only dow component that was red at the open. >> up almost 400 points on the dow right now. it's been a strong session. speaking of, look at charles schwab. the stock is turning higher despite missing revenue expectations, on pace for its best since july, up more than 5 5%. joining us is ceo will bettinger. good to see you. >> hi, sara. good to see you. thanks for inviting me back on the show.

>> of course. so, talk us through the results a little bit. if people were worried about lower deposits, it sounds like on the call you offered some soothing words of things improving as far as the overall environment. what are you telling investors? >> well, the economic environment is challenging. we all recognize that with equity markets depressed and interest rates at highs for many, many years. we don't want to down play that. but we can see some light at the end of the tunnel at schwab. we saw client cash realigning out of our bank sweep offering, which is the largest, most important part of our cash aligning. it actually turned positive in month of september. so, we're optimist ek about where things are headed in the long run. the short run is still a fairly difficult environment. >> right. that was a concern going in about the cash sorting and the fact we've seen the step-up in interest rates even further, causing some or your clients to

move from the bank into money market funds, the sorting issues. are you saying it was worse during the quarter and it's gotten better lately? >> well, september was an excellent month for cash realigning and diminishing. i think that what's important around this entire discussion is we want clients to do what is in their best interests. and if that means moving cash out of our bank suite product, which operates principally like a checking account, into higher yielding options, that's something that we encourage. we want them to do that. again, we're in a long-term perspective here. we recognize in the short run that it might affect our economics, but that's okay. the trust that we build with clients by encouraging them to do the right thing pays off for us many times over in the future. >> yeah. i mean, there were also questions about the levels going in and whether the higher interest rates would cause the capital ratios to decline and then lead to some securities portfolio losses.

what are you updating investors on that front? >> well, our capital levels continue to grow, and they build throughout the third quarter. we remain substantially above all regulatory minimums for capital. i think what you have to bear in mind for context around this interest rate move is that, when interest rates go from, say, 1.5% to 4.5%, that's a 300% jump. that has a big impact on the value of bonds. when they move from, say, 4.5% to 4.75, that's about a 5% move. so, when you put things in context, the type of moves that we've seen of late don't have anywhere near the impact on the value of bonds as what we experienced over the prior 18 months. >> we're look at the daily average trades today, a lot of discussion about sort of suppressed interest in equities as people find it easier to just park money in money market accounts. can you talk about how that's affecting the trader side?

>> sure. well, we saw in the third quarter investor sentiment move from positive, or what we call a bullish sentiment, into a bearish sentiment. and so, when investors begin to head in that direction, you see a slowdown in trading. that's sort of natural and something we've seen over the history of our firm. that is the environment right now. it's tough for investors. their bond holdings have declined in value, and equity holdings are for the most part down for almost all investors. but they remain loyal and consistent, trusting of us. i think in september they brought about $27 billion in core net new assets into the firm, which is a pretty remarkable number given where the investing environment is overall. so, it bodes well for the long term. >> investors are also very focused on this integration that you've been doing with td ameritrade customers, converting them into schwab customers.

it's been, what, three years since the deal? where are you in that process, and what's the risk of further attrition, as you noted that was happening a little bit? >> sure. sure. well, we're about 80% of the way through. over labor day we converted about $1.3 trillion in assets. that's one of five groups we're doing conversions on. our next one comings up in november. the labor day conversion alone would have been the largest integration in the history of our industry. just to put into context how well it's being received by our clients, from the beginning of this integration to today, we're averaging about 45 client complaints for 1 million accounts converted. that's an extraordinarily low number. again, just to put it into a frame of reference, during the meme stock environment, complaints averaged about 200 per 1 million accounts. so, as you can see, our approach of taking the best of both, the

best of the platforms from ameritrade and offering them along with the best of schwab platforms, is really paying off in terms of client sentiment. and they're willing to stay with us. >> what about on the expense side? a billion dollars of annual savings you announced, incremental. i'm sure investors would like to month v know more color about how long that's going to take and where it's coming from. >> sure. it's broken down into two parts. about half of it will be realized throughout principally 2024, which is as we shut down the brokerage platform from ameritrade and are able to close off a lot of the technology that we've continued to maintain while operating two brokerage systems. the other half will be realized principally here in 2023 with a significant chunk coming from real estate decisions that we're making, given our hybrid work structure, as well as some reductions that we'll have within our overall workforce.

>> finally, what do you think is the problem with shares? the stock is down 40% this year, and i know it gets lumped in with regional banks, the unrealized losses, the concern about deposit flight. we've gone through some of those concerns pop you're updating them, saying it's getting better. what is the disconnect here? >> well, i don't know that i could be so arrogant as to claim that there's a disconnect. the street is balancing short-term environment versus long-term. and in the short term, as i led off by saying, it's a tough environment. rates are very high, and the equity market is not exactly encouraging people to put money into it. so, in the short run, you can understand where people would be hesitant. but i think from the long-term perspective, where we're positioned in the fastest growing parts of the market with leading market share position, now with the combination of ameritrade, we really arguably have the best platforms in all key areas -- best for

self-directed, best for traders by offering the sink-or-swim fwat platte form to all clients, the top platform for custody of i.r.a.s. i think our positioning is ideal, and i'm confident that will reveal itself as time goes on. >> what's your expectation for what happens with rates next year and how that will impact schwab? >> again, that's such a tough prediction. i think for us, higher rates actually work out quite well because, as clients begin to further reduce their movement of cash, we're able to reinvest it at much, much higher rates. higher for longer is good for schwab. >> which goes against the current narrative many the market, walt. we appreciate you taking the time, talking through some of these issues. >> thanks, sara. always great to be with you. thank you. >> you, too. walt bettinger, ceo of schwab. a bunch of other financial names will be reporting in the next, say, 48 hours -- bank of

america, goldman, morgan stanley. we'll talk about how to get positioned heading into those prints. programming note -- do not miss cathie odwo.

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no obligation. you know medicare won't cover all your medical costs. so, call now and see why a medicare supplement plan from a company like humana just might be the answer. pfizer, one of the big earnings movers of the day, shares up despite a big guidance cut of $9 billion with demand for covid treatments and vaccines falling off a cliff.

jefferies is part of that turnaround today. they say sometimes you have to zig when others zag. they upgrade the buy, target 39, bullish on pfizer an's innovati pipeline, noting that cost cults will make eps targets a little more hittable. the stock is down, as you can see, about 35% for the year to date. but friday's guidance was not pretty. >> no. sort of kitchen sink, kind of a clearing event. two hours into trading. let's go "post to post" with bob pisani for a look. >> 50 points in the s&p, just off the highs. we have a day when the yields are up and the stock market is holding up. this has been happening a little more recently, and it's very good news because we're at the high end of a recent trade arrangement for s&p for one month. a lousy september it was overall. what's helping is tech is not going down anymore. if you look at some of the big

software names like snowflake, essentially these names are sideways in the last two months. you might think that's not enough trend, but sideways is good with interest rates up in tech. software is holding up. salesforce, big dow component, also essentially sideways the last couple of months. again, that's a real victory. just holding up is fine. i'll tell you what worries me -- look at vanguard. this is what you want to watch. this is the vanguard megacap etf. it's got apple, microsoft, tesla, nvidia, all the big-cap tech. this is 5% from the new high. we're moving up here. 4% now essentially from a new 52-week high. that's how well that sector is doing. i'll tell you what worries me a little. the banks are not spectacular. citi friday ended on the lows of the day, down again. you pop up, high on friday in the earnings, and you slowly decline and end negative on the day.

you open down, that's not a good trend here. we have a lot of other bank companies reporting, bank of america, but there's no bounce here. there's no -- we're 4%, 5%, from the 52-week low in bank of america, and that's a pretty modest pop there considering there's a lot going on this week. the news from banks were not bad, necessarily. there's no buying interest right now. we'll get a lot of the regional banks this week, including regents financial. 5% or 6%, 52-week low, back to where it was in march. we have the same situation with zients, and we need more buying interest. we know deposits will be down. we know all this. yet people are not trying to pick on the low end of the market right now, the lower end of the price range with these banks right now. that's a real weak point in this overall strong market. carl? >> bob pisani. let's get a news update with

our pippa stevens. >> the number of people killed in the israel/hamas war has risen once again. government officials in gaza say there are now more than 2,800 people dead and nearly 11,000 hurt. meanwhile, israeli officials say more than 1,400 people have died in the violence. according to the u.s. state department, 29 u.s. citizens have been killed, and 15 remain miss being. >> the pentagon is sending a second u.s. aircraft carrier strike group to the eastern mediterranean as israeli forces prepare for a potential ground invasion of gaza. the "uss eisenhower" is expected to take between a week and a week and a half to reach the region. the nuclear-powered carrier has 5,000 sailors and will be joining the "uss ford," which arrived in waters off israel just days ago. and the white house said president biden is postponing a trip to colorado today to hold meetings on national security. the announcement came just hours before the president was set to leave, and it comes as he is

weighing the middle east. the latest on the ground in israel and gaza is coming up next. we'll talk to former u.s. defense secretary billcohen as well.

an israeli ground invasion of gaza continues to appear imminent as the humanitarian crisis there deepens. jay gray is in tel aviv today. jay, a lot of focus on this rafa passage that would allow some foreign nationals and americans to get out of gaza. >> reporter: yeah. you're absolutely right. we've heard a lot of back-and-forth about that passage opening, but we haven't seen it to this point. in tel aviv, we're in an

open-air market in the downtown area, which normally would be teeming. the iron dome is doing its job, and the rumble of missiles that had been thwarted from this city. we've also seen military choppers buzzing through as well as fighter jets on their way to gaza. but it's that crossing that you talk about that so many are focused on right now, egypt saying they won't let any foreign nationals out until supplies go in, including fuel, medicine, water, food. to this point, that hasn't gone in. we've seen crowds continuing to gather at that border. they have throughout the weekend, but they have nowhere to go at this point. there have been back-and-forths, including this morning where we were told at one point there would be a cease-fire and things would open up. that obviously did not happen, and the israeli government has said that they never pretended that that would happen, that we didn't hear that from them, that that wasn't something they were working on at that point. we know that secretary blinken

has been on the ground throughout the region and is back in israel now working on the diplomatic side of all of this, carl. but to this point again, no real movement from and a lot of frustration being felt in tel aviv by those who were watching this situation very closely and wondering when potentially some type of ground assault may begin as well. >> all right. thank you for the update. in tel aviv, jay gray. for more on the conflictened what to expect in a potential ground invasion in gaza, former secretary of defense bill cohen. it's great to have you. israel has stated that the goal is to eliminate hamas. is that doable for them? is that what you expect to happen? >> well, we don't know if it's doable, but it's mandated that they try. hamas cannot continue to exist militarily or even from a political point of view. you cannot have a terrorist organization dedicated to your elimination, your annihilation

on your border. so, going back to status quo is not an option. i think the israelis will have to go in. a lot of people are going to die as a result of this, innocent people. this is the nature of war. but the israelis have said we're not going back into the gas chambers again. you're not going to kill us a second time. so, unfortunately i feel a sense of outrage what happened with the hamas killings, so many innocent israelis. i feel a sense of anger that the israelis allowed it to happen or failed to stop it from happening. and i feel a profound sense of sadness of how many people are going to die, all those who have already died, and how many more will die. this is not a happy situation. >> no. we're wondering about the larger forces in the region, as well, potential involvement of hezbollah, potential involvement of iran, and others. what is the likelihood, do you think, of this becoming even broader? >> i think the possibility is

very high that this could spread quickly. you've got a fuse that's been lit over there. you've got countries, now possibly hezbollah in lebanon, you have syria, you have iran, and all of the countries in the region have something at stake here if the fuse continues to spread and light. every kcountry in the region ha something at stake. all those great, stable, uae, bahrain, saudi arabia, they all have something at stake here if this continues to spread. so, this is not just a regional conflict or a statewide conflict. this is, in my estimation, could potentially be a global conflict, because if the price of oil spikes, as some have predicted it will go as much as $150 a barrel, what does that do to the world economy? if you have a recession or depression, then all bets are off in terms of how that plays out. so, there's much at stake.

this is not just about the israelis. it's about the security of the entire region. it's also -- there has to be a plan here for the palestinians. two-state solution is off in the distance, but it has to become a reality. and we have to make sure working with the arab countries in the region, that they're serious about helping, the palestinian authority gaining respect, gaining economic support to make sure that they have a viable state, as well. otherwise, there's going to be war going on forever. so we have to use diplomacy. we also have to make it clear, israel is not going away. this is not a question of to be or not to be. israel is to be. >> speaking of diplomacy, i'm wondering what kind of marks you would give blinken so far in his travels. the president appears to have canceled a trip to colorado this week. more speculation about whether he goes into the area wednesday or thursday, perhaps. what would that do? >> well, i'll tell you, tony

blinken, antony blinken has been terrific. i think his statements, the passion that he has stated, his viewings, his philosophy, his identification with the israelis, and also with the palestinians. he's reaching out to mahmoud abbas. he's reaching out to the qatars. he's reaching out to those in the region with so much at stake. so, i give him very high marks. i give the president high marks for the way in which he's conducted himself and the presentations he's made and the passion he's expressed. he wants to see a peaceful solution to the israeli/palestinian situation. i give them both very high marks. i must tell you, pretty hard times ahead. >> so, the pentagon has dispatched two navy carrier strikers, we know. what is the reality or the likelihood of the u.s. having to get more involved in this conflict? as you say, there's a high likelihood it broadens fourth places like syria and iran.

>> well, the reason that the president has ordered two carrier battle groups is for deterrent purposes. that is a very powerful force that's now being assembled there. i don't think there's any country that wants to go to war with the united states. therefore, as the president said, just don't. the president has also said don't because this kind of firepower that we have assembled, in addition to what we have well beyond that, would devastate all of those countries in the region. so, we don't want to see that happen. therefore, we must make sure hamas cannot survive. if it stays next to israel, there will always be war. we have to have a palestinian authority that has backing by the palestinians, the arabs in the region who have given lip service, in my judgment, some money, but never fully engaged with the palestinians to say, no, we're going to hem you become a separate, independent

state that is at peace with israel. they need to commit to that. >> bill, thank you very much. we certainly appreciate your commentary today. >> thank you very much. >> former secretary of defense, bill cohen. last week we mentioned that companies were donating to the humanitarian relief efforts, israel and gaza. ceos have stemmed up condemnations of the attack. doug mcmillan taking on the rise in anti-semitism, as well, saying on linkedin the walmart foundation will be donating a million dollar to the holocaust memorial museum to educate the dangers of anti-semitism. following corporate actions and ceo responses. meantime, more on the street's reaction to schwab. a look at morgan stanley. t both medicare and both medicaid, i have some really encouraging news that you'll definitely want to hear. depending on

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a market flash on snap. julia boorstin has that. >> shares are surging, up 9% after the company's internal growth targets, the company confirming that the numbers were circulated internally and they are, quote, stretch internal goals only. they include aiming for 20% year-over-year ad revenue growth, 14 million snapchat-plus subscribers by the end of the year, and $500 million in non-ad revenue. they're targeting daily active users in the fourth quarter of 2024. it is worth noting that last year at this time a similar memo leaked, spiegel saying the company aimed to grow to 450 million users by the end of this year. as of their last earnings they're at 397 million, so, so far it looks like they'll come up short. but look at snap's one-year stock chart. it has been a roller coaster 12 months. the stock is down about 5% in the past year. quite a roller coaster. the company does report its quarterly earnings a week from tomorrow.

carl? >> julia, thanks. julia boorstin on snap. let's dig back into this big week for bank earnings following the volatility you saw from the regional banks earlier this year. our next guest says stocks in the space already have a lot of bad news priced in, but questions remain about regulation, deposit costs and credit. tom michaud is here. been dying to know what you thought of friday's action overall. >> that was really interesting because the market has really low expectations for what interest rates are doing to their earnings, yet almost all of the earnings that came on friday, they beat on net interest income. i think that's one of the underlying themes, is there's a big headwind to earnings because of these higher rates, but the pace of deterioration is slowing, sort of that second curve. and you saw it in schwab's earnings this morning, meaning they missed numbers. you think the stock would react poorly. but the management team talked about how it got better as the quarter unfolded and even better yet in october. and so, that's what investors

are looking for, which is where are the inflection points on the pressure from rates going up as much as they did, as quickly as they did. >> we just talked to walt on the quarter. he said not only is the cash-sort issue getting better, it feels like the sentiment is so negative on these stocks. is it justified? >> it's overwhelmingly negative. i think there are trophies that are on sale right now, and there are individual stocks that should be bought. >> is schwab one of them? >> i think schwab is a long-term winner, absolutely. i think they're in a temporary moment and they're going to manage their way through it. there could be volatility to earnings. as a matter of fact, our analyst does like it with a $69 stock price and doubled down during all the turmoil of the spring. so, the view is there are multiple valuation metrics you can look at. stocks are down. bank stocks are down 25%. the market is up 15%. you can look at the relative p/e multiple to the multidecade low.

we came out with a new measure this weekend. if you look at -- take credit out of it, you look at price to pretax, preprovision earnings, we're almost getting to the point of global financial crisis levels. so, these stocks have a them. >> does the sort of suppressed nature of goldman sachs, are they all stories, individual execution-related stories? >> i think they are. we filed 210 banks, more than anyone else, i can talk about the median bank the reality is there are going to be examples who are bearish very fired up on the quarter. credit hiccups we'll see in the coming weeks. banks take a bigger hit to their bond portfolios than others. when you look at what's in place right now, at least in the case of the big investment banks we're waiting for the capital

markets to restart, it's going to happen, it's been taking longer than we all believe. we think in the dialogue from these managements everyone is staying invested in the space, they're not cutting head count like they would have, myself included i think a term on capital raising is going to happen. >> in your notes, increasing regulations, i wonder how much overhang is on this group. jpmorgan devoted a few slides to it in its presentation. >> when you look at it, the u.s. regulators have elected at least, what, jpmorgan said to give them a 30% premium capital ratio relative to what they needed to get and so it's quite extraordinary, and on that one, sara, we're reaching a tipping

point on banks versus non-banks, watch the s&p 500, pretty soon you're going see a lot of these non-bank lenders start making leadership positions in the s&p 500, that's something our analysts wrote a note on this morning. it's come zmg like private equity. >> like kkr, we've identified them all as s&p 500 candidates. they're probably going to replace banks. blackstone had $120 billion market cap, these are not small companies and when the regulation changes on the bank, we've talked about the mortgage market not one of top five mortgage originators today are bank. it's all due to regulatory changes. these changes have implications. they're slow in development. it will affect what the industry looks like in the future. >> tom, great to talk with you.

>> great to be with you. i'm going to give our three top picks. u.s. ba in, corp and pinnacle financial. netflix and tesla on deck. we'll oklo ahead to those results, next. you founded your kayak company because you love the ocean- not spreadsheets. you need to hire.

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through power outages with unlimited cellular data and up to 4 hours of battery back-up to keep you online. only from xfinity. home of the xfinity 10g network. midway through the bank earnings season, megacap tech reporting, bigger effect? that's the focus of tech check. >> no short, tech will have a

far bigger impact, while the banks have kicked off the earnings season it really gets under way later this week with netflix and tesla. financials make up 13% while the magnificent 8, that's the seven plus netflix, they account for nearly 30% of the index. barron's points out that banks are less a reflection of the u.s. economy. while big tech has led this year, hits or misses could lead to outsize moves. nvidia could contributed to 1% in the quarter. meta, nearly 1%. alphabet and microsoft half a percentage point each. a unique way of breaking down the megacaps into two groups, the spicy three and the garpy

four. through their p.e. multis this year and two years out. the green line represents the spicy three, tesla amazon and nvidia. less main stream strategies. all of them have spent years being questioned or doubted by the street. typically more volatile and they can be the wild card this earnings season. the orange line is the garpy four, meta, microsoft, google and they're characterized by more reasonable p.e. ratios. still elevated compared to everyone else. growth at a reasonable cost. now, what both groups have in common is a.i. hype, a theme once again this earnings season, what i'm watching this week and next, guys, does a.i. start hurting stocks instead of

helping them that could happen if the new investment in technology starts threatening the year of efficiency which investors applauded in the first half of this year and the whole question of a.i. budgets, some concern building there, too, hope that '24 would be a year that this got back to normal and companies would start to spend again. >> all right, thank you very much. meantime, the market continues to show broad strength, carl, up 350, in the face of rising bond yields yet again. nothing extreme on this point. but it is a factor out there. >> indeed. 1% gains here on the dow and the s s&p. 1% on the nasdaq. got the vix both 18. some chatter as mike said at the top of the hour whether or not this is the beginning of the

seasonal strength that we've long been waiting for. economic data tomorrow, gas prices are factored in, they don't account for inflation adjustment in those numbers, but we continue to see the economic signals not pointing to a recession, so you've got the soft landing, is that a good thing or bad thing for the stocks. >> west coast wapner in beverly hills. let's get to him again. >> carl, thanks so much. welcome to the halftime report. live in beverly hills. we're on the hunt for opportunities beyond stocks and bonds today. special guests coming up later this hour and on closing bell this afternoon include an exclusive with billionaire investor todd boehly. rob sechan is here with me on site. josh brown, shannon saccocia and joe