but the shower of prime age workers, and this is when they get a little bit of wagging their fingers a little bit, share of prime age workers in america has not been rising for a long time. in fact, it's higher across the board than in europe. life examine fancy is shamefully behind other rich nations. and they're right about that. here's interesting thing though, article admits that america is leading its peers ever further in the dust. so i came away thinking americans that think that europe is always doing it right and we should somehow be emulating them, they should probably read this article because i am so sick of talking about how europe does everything right particularly taxes and social issues. we're a free mission, and sometimes we're free to do dumb things, right, liz? liz: if anybody doesn't like it, there are lots of flights to china. charles: there's a lot of them. liz: we are leading many artificial intelligence, we are

leading in electric vehicles. come on, now. charles: yeah, i'm with you. liz: we are amid head. count mean we can't criticize -- doesn't mean we can't criticize. the markets are, you could say they're holding steady, but they have given back earlier gains. regardless, this, what you see on screen, is no small feat considering over the weekend first republic, which was swooning badly curl this hour on friday, remember? became the mission's second biggest bank failure ever, was seized by the government and finally bought by jp morgan. all if in a single weekend. dow jones industrials had been hire, down right now about 10 points. the s&p up 3, the nasdaq down 5. russell is about flat to to slightly lower. keep in mind though with the nasdaq, the nasdaq is 19% out of the bear market that we have been seeing all time. all you need is a gain of about 29 points. so we're waiting on that, see if the nasdaq can exit bearer story. the star stock of day, jpmorgan.

what you see, this gain of about 2.33%, this is a reflection that the market believes ceo jamie dimon got a very good deal by sweeping in to buy the majority of first republic's assets and assume all the san francisco-based bank's deposits. terms of the keel, jpmorgan -- among other terms, there are a whole bunch of ohm -- but they where write a check for about $10.6 billion. in return, jpmorgan gets $92 billion of first republic's deposits and assumes $173 billion worth of loans. jamie describing it, those loans, as pristine, good quality ones with people who have very good credit ratings. the ten banks who followed jpmorgan in mid march by depositing a total of $30 billion to stabilize first republic get back their share of that money while jp hover began will eliminate the $5 billion it had thrown into the pot. all 84 first republic branches are open today because jpmorgan got them as part of the deal, a

deal dimon says he did not seek out but does stabilize the nation's smaller banks which were subject to severe stress when silicon valley bank collapse ared in mid march. >> i think the banking system's very stable. you guys have reported already on uns of regional banks who -- tons of regional banks with good results, modest outflow. a lot of that's because of quantitative tightening. it wasn't because people were having runs. there are so many banks offside this way, and i think there may be another smaller one, but this pretty much resolves them all. this part of the crisis is over. liz: we can only hope. but shares of some regional banks do not look stable at this hour. right now we're looking at new jersey's valley national bank losing about 17.8% at moment. st got a $4 billion market cap, it's hitting a 5-week low earlier of 779 -- 5 2- week. we're now at 7.71 at the moment. this year and as w at -- it's lost about 29% this year.

metropolitan bank, yeah, a that one is down 16.6%. it's got a much smaller, $300 million market cap, it's down 51% year to date. and zions bank out of salt lake,st the losing about 3%, down 44% year to the date. so you do wonder is system now clear? to the man who does some of most intense and detailed u.s. bank research on wall street, david smith of autonomous research. david, equity investors are watching very'king eagerly to to know whether this jpmorgan deal puts a lid on the regional bank crisis. what do you think? >> well, we can't say for certain, but i do think a that this does help put a lid on things. you know, first republic, you know, had been really viewed as the last remaining bank where i think there were severe worries a that they would go under after svb financial and signature bank had already failed. you know, among the larger regional banks you're seeing a

little bit of pricing pressure this afternoon, today. but, you know, not any real severe moves. i think, you know, for the larger banks, you know, this should hopefully be the end of things. liz: okay. but i don't know, it looks like when you see some of these names down 17%, it does a make you wonder whether they're getting swamped by the same, i guess, guilt by association that first republic did. first republic, of course, started to really a falter badly after signature bank and silicon valley bank which, of course, was the first collapse mid march. and everybody was saying, well, they have suched good quality loans, and yet people were pulling deposits right and left. >> yeah. you know, we saw with first remix and also -- republic and also with silicon valley there can be a feedback loop that emerges between positive outfrae stock prices, cause investors to sell the stock and seeing it down so much makes more

depositors concerned. but, you know, i don't think we're really seeing much of those same issues. i think, you know, in large part there's some other chronic issues going on. they had emerged as a potential buyer for some of the silicon valley banks assets, and i think there may have been speculation they could make a play for first republic, so we are seeing a bit more of a selloff in banks that people had thought might get to purchase first republic assets at a discount. jpmorgan emerged as winner of that deal. there are some other banks that are seeing relatively more of a selloff because they would have gotten the attractive keel and ended up -- deal and ended up not going to them because jpmorgan had bid the lowst discount to the pdic. aides liz -- liz: david, how do you do your research? i'm interesting to -- interested to know how you look at whichever banks you do cover whether it's zions or comerica.

tell me exactly what you do. do you look at the loan portfolio? are you skypeing through every detail -- scraping through every detail to make sure these banks are safe and sound to be able to sit here and say on the air i think that we're pretty much through in thisesome. >> sure. i mean, myself and all of my if peers looking at a wide variety of things. obviously, the banks publish sec football financials, the information -- financials, the information that they give out to the broader community, you know, during earnings calls and things of that nature as well as industry trends such as the data the fed publishes every week. ultimately, you know, the issues that brought first republic down were a very severe mismatch between its assets and liabilities. and and as interest rates rose and they had to pay more for their deposits and other funding, today had a lot of cheap fixed-rate mortgages on their books, and that squeezed

their earnings. so that's one of the reasons why i'm not particularly concerned as to any other, you know, large banks of that size going down in the future. liz: well, the large banks are getting bigger, and now i'm just wondering, as are many people watching, jpmorgan got the nod, not p pnc, not fifth third to buy first republic, and the bigger banks are getting bigger. is jpmorgan now ooh too big to fail? >> well, look, yeah, i think jpmorgan is one of the number of banks designated as globally systemic, so i think people have viewed them and a number of their peers as, you know, too big to fail for a while now. but at the same time, you know, there's a lot in place that would make it extraordinarily difficult the for jpmorgan or any other large bank of that size to fail. they have a tremendous amount of capital. they have a large amount of loss-absorbing debt and, you know, loan reserves on top of that. so, you know, are they, you know, too big to fail?

you know, i think that's, you know, certainly the widely-held view, but there's a lot in place that makes them very safe and sound as well. i view any issues as extraordinarily unlikely. liz: david, thank you. let's hope extraordinarily unlikely. thank you very much, david smith. as if the first republic if story were not big enough, we've got the may federal reserve meeting around the corner. [laughter] yeah, the 2- day interest rate meeting kicks off tomorrow and, well, 1 day, 22 hours, 51 minutes and 17 seconds we will know fed's official decision. will it pause its fast pace of monetary policy tightening in four decades? not likely. right now the very latest fed funds futures on your screen show the markets are putting about a 91% probability on a 25 basis point rate hike. that would be its tenth rate move in a row. >> what will make wednesday's announce and news conference so

important will be the signal the fed might give about when it will pause, possibly in june? but can they pause? and how should you invest ahead of a possible disappointment? let's bring in she terra investment management's chief investment officer, gene goldman. gene, i want to show our viewers the pact that the s&p right now is virtually right where it was a year ago. it was at 4175 the first day of may last year, we're at 4170 right now. and if you stretch it out to two years, 4167, very close are. what's the case to be made at the moment for investing in the broader market and stocks right now? if. >> liz, first of all, thank you for having me back on your show. liz: sure. >> great to see you again. listen, something we've been saying to our advisers and clients, we're worried about the markets near term, the uncertainty about the fed, about potential recession, high valuations, and we're also worried about earnings. if you have a recession, and we

do think a recession is coming in the third quarter, usually during a recession earnings fall on average 19%. we're seeing earnings fall this time only about 13%. so to your question too about this market, the s&p 500 is up, what, 8%, 8.5% this year. it's not been a healthy market. the markets have a.i. fever. anything touching a.i., fangs, they're buying the stocks. you look at the s&p 500, up 7.5% in the first quarter driven by 10 stocks who drove 87% of the return. and this market's been in the rage bound between 3900-4200 for a long time. not a very healthy market right now. liz: no, i know, but the nasdaq is getting very close to exiting bear market territory. wednesday we get apple earnings and, speaking of earnings, we're more than halfway through the first quarter for earnings, the picture's brighter than many thought it would be. 78% beating eps, and that's exceeding 7.7 regarding the estimates, 73% is have beaten revenue, on revenue. so, i mean, this is not a bad

picture here. could apple sort of lift the entire marina of boats, so to speak? >> that's a lot of variables aching place. [laughter] we think about the fact that, you know, earnings have been better than fearedded. if you look at the stocks that have beaten expect aations, they've done pretty well. companies missing have not done too badly. we think that the earnings season's been okay, but what really worries us is past this first quarter. guidance, second quarter and third quarter. and as we start heading toward that potential recession in the third quarter, credit tightening. bank loan surveys are showing increased -- liz: yeah, true. >> -- tightness. liz: so what about the, gene? can the fed even pause whether it's june or may? i mean, inflation is still alive and kicking. we've got the april irk sm manufacturing purchasing managers -- that's a lot of, that's a big name, but it came in hotter than expected, and its prices-paid component, that's an indication of inflation.

it spiked unexpectedly from march's 46.9 to to the 53.2 the in april. >> yeah, that's a great point. so what you said is perfectly -- the fed, whenever they sniff a recession, the fed will usually cut rates. they can't do this right now because inflation's still a little too high. highest since july. our expectations for the fed meeting, three things for wednesday. number one, the fed raises that 25 basis points. that's expected. number who the, the fed will start to hint that they're going to to pause. and -- but at the same time they're going to -- liz: so do you buy socks now in. >> i would be sitting on the sideline right now. i do worry about it because the third point, and this is the most important, is the fed funds rate is going to be at 5.08 at -- especially with powell making lots of verbal gaffes. liz: yeah. and, by the way, he'll make those gaffes, if he does, right

here in this hour on wednesday -- [laughter] that's to when the news conference is. folks, you can't miss i. gene, good to see you. thank you very much. >> talk to to you soon, thank you. liz: so, yeah, jpmorgan's takeover of first republic may have regulators thinking the banking crisis is done and dusted, but wait til you hear what berkshire hathaway vice chair charlie munger is warning. the business genius has seen and survived many a market disaster during his 99 years. and he is making a new prediction about the tornado of turmoil he he sees coming next to hit u.s. banks. munger maims the ma canary -- names the canary in the skyscraper. that is next. closing bell, 47 minutes away. "claman countdown" is coming right back. the dow is down 26 points. ♪

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balance sheets are stuff ised with bad loans many of which were made to half-themty and troubled office buildings as well as shopping centers su saying, quote: a lot of real estate isn't so good anymore. every bank in the country is way tighter on real estate loans today than they were six months ago. well, how bad could it get? in some cases it already is getting bad. "the wall street journal" reports today that brookfield asset management's los angeles office division, dtla, is faltering. five of its six office buildings face foreclosure, and twof its mortgages in default. how bad is the picture starting to look for commercial real estatesome let's dive in with the carroll organization's founder and ceo patrick care roll. -- carroll. welcome, thanks for coming on. enter thank you for having me. liz: your thoughts on what charlie munger is warning, that a banks may have made it through the march crisis, be i many concern but many of them are

about to be swamped by loans to commercial realtors. >> yeah,st it's something i've been getting calls about all day. charlie munger and warren buffett are obviously, you know, geniuses. so, but the scary part is they have a lot of exposure to the banking sector. and, you know, the last down turn in '08 they were the ones that stepped in and saved a lot of banks, ask you're seeing banks fail right now and them not step up, so that tells you, you know, there is some distress the out there. you know, the commercial real estate market really has four main sectors. industrial and multi-family housing are doing very well. and i think will continue to do well. what he mentioned is the office and the reail the sectors which are going to the face a lot of trouble going forward. you have demand coming down prosecute the office sector -- from the office sector the as you have more and more people working from the home, lower valuations due to interest rates going up, and there really is ally quid fit -- liquidity freeze. i don't know anybody that could

get an office loan to buy an office building right now. liz: therein lies the issue. all the real estate rates are lower today not by a huge amount, but some of the commercial real estate stocks, that becomes the big question. how are they positioned, what are they doing? specifically regarding what you just pointed out, if they have big exposure to the office buildings? so, for example, we know that the according to morgan stanley more than half of the 2. 9 trillion in commercial real estate mortgages need to re-fi by 2025. that's got to be a looming point on calendar, and banks must be if concerned. who's got the exposure, is the question. >> well, i mean, you mentioned some mix publicly-traded -- mix hi-traded reits. the largest other than of office buildings in new york, their stock is so low, it's roughly the equivalent of one of their buildings, 1 vanderbilt plaza.

their whole stock is basically worth what that building's worth. so the stock market's giving zero credit to to the all their other office buildings. it's going to come down to a liquidity, capital markets thing. and, you know, supply-demand. real estate depends on supply-demand and capital markets. in the office sector you have drastically dropping demand, and you have no capital markets. you can't borrow, you can't refinance. the valuations are down. soyou go to refinance, you have to bring so much more equity to the table than you have previously, and now you're paying higher interest rates, the numbers just don't work. liz: okay. so when you go back to, say for example, brookfield and the problems they have, you can out multiply that when you talking about some trophy buildings in new york, los angeles, chicago, boston the perhaps? i mine, this is starting -- i mean, this is the really starting to hoe the cracks.

we haven't seen it full blown yet. when do you expect that we might and what's an investor to do? >> well, i think the timing's going to coincide with when these loans come due. the fact that you see brookfield and blackstone handing bakkes on buildings in major, major cities, when i got in the business of investing in the office sector and gateway cities was the most institutional, the most, you know, deemed safe investment. that's shifted drastically over the years. multifamily is now a huge part of that investment, you know, range of what institutional investors look for. so, you know, if i were looking to invest which i i always do, i would focus on the housing sector -- liz: not the distress thed -- distressed office buildings? if. >> a lot of these lenders are not in a position to take back office buildings. and so what i see happening is all this distress coming, these loans come due and i think

they'll extend these loanses. but again, if you see brookfield and blackstone, just think about, you know, the family that owns one or two buildings or the mom and pop group that the own one or two buildings. i mean, they're dead in the water. liz: we'll continue to watch it. and you're lucky, you're more exposed to the, as you say, multifamily homes, and that seems to be the healthier part of it. patrick, thanks. >> thank you. liz: we are coming right back as we look at the dow jones industrials still down about 28 points. s&p flat, nasdaq lower by 13. ♪ ♪ i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this. [kid plays drums]

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liz: the biden administration's new mortgage rule has officially taken effect today. the new plan from the federal housing finance agency gives borrowers with riskier backgrounds the better rate. this, you can imagine, is causing much consternation among those who feel they should be rewarded for their hard-earned higher credit rating. jeff flock is at a home for sale that's about to close in princeton junction, new jersey. jeff. >> reporter: and happy that they've got their mortgage already, liz, yeah. the idea behind this new rule is that, you know, you want to bring many if lower income folks into the, you know, home-buying world. that's the way to generate generational, you know,

generational wealth. that said, it comes, it appears to come at the expense of folks who have kept their financial houses in order, for lack of a better term. the government says this is not their intent. ache a look at the message -- take a look at statement from the federal housing finance authority. they say, quote: higher credit score buyers are not being charged more so lower credit score buyers can pay less. that's what they say, but take a look at these examples. we just have been illustrating this today, i think it makes the point. if you have, for example, a 640 credit score, that's below average, you put 20% down on a $350,000 loan, before today you would have paid over $10,000 in fees. today, starting today, less hand $8,000. now, if you had a 7. 40 credit score, that's a very good score, you'd pay before today less hand $2,000, today over $3,000. and if you factor in other costs

associated with it that have been tweaked, as to say interest rates tweaked a bit, over the course of a 30-year loan if you have a 740 credit scoreing you're going to pay about $30,000 extra. not fair, say a lot of folks. and also we talked to a former freddie mac or fannie mae official who said he thinks this actually may have a chilling effect on some low dollar home buyers who now might not be able to get into the market. he explains why. >>st going to add to demand from lower income, higher risk borrowers. a that command is going to drive up prices -- that demand is going to drive can up prices mt. neighborhoods those buyers are shopping in because the supply of homes in those neighborhoods haven't change -- hasn't changed. if you add more demand, keep the price the same, the price has to go up. that's economics 101. >> reporter: the notion, liz, of bringing more folks in on the lower end ebb of the financial

tier into home ownership, i think everybody would agree that's probably a great thing. penalizing, though, folks that have done pretty well with their finances, a lot of people don't think that's a very fair way to go. liz: i would agree. >> reporter: sounds reasonable. liz: i killed myself for a good credit rating. [laughter] you're supposed to get rewarded for good behavior. okay, i guess not here. jeff, thank you. >> reporter: i'm not sure the you're getting rewarded. liz: i know. what are you going to do? 28 minutes before the closing bell rings. the markets at this moment in the red. not by much, but they had all been hire. the dow jones industrials down 27 points, high of the session a gain of 159. the s&p, let's call it flat. it had been up 17. nasdaq, well, that's been in the red much of the session but had poked up into positive territory by about 34 points. it is now down 12. we had talked a lot about or worries swirling around

commercial real estate business, but what about personal loans? sofi stock moves post-earnings may be reflecting that concern right now. shares initially popped after sofi reported 43% revenue growth in the first quarter and a narrower than expected quarterly lost. the fast growing personal finance and bank app says personal loan originations climbed 46% from the same quarter last year to $2. 95 billion. well, you would think that's a good thick, people are going to sofied another the their loan business. but the stock is now down 11.5% after a report from jpmorgan said that the sharp rise in personal loans on sofi's books may be a harbinger of future losses given recessionary concerns and that investors may view growing loan portfolio as a warning of losses going forward. norwegian cruise lines sailing past estimates for first quarter revenue, adjusted loss per share was also narrower than expected.

the florida-based company is forecasting 2023 adjusted earnings above summitses citing the phased ramp-up of cruise voyages. and if you don't know what that means, i don't either. but it's enough to get the stock up 8.5% right now. let's looked at general motors, it is the revving higher as morgan stanley upgrades the stock from hold to the a buy and raising its price target are from $35 to $38 it's at 33.53 right now. stock the you could say revving or just humming up, up 1.5%. the investment bank says the automaker faces challenges in its transition to evs, but that shouldn't stop investors from buying the stock right now. and in a much-awaited move, soft bank's chip architecture firm arm has filed for ap an ip o. now, this is a big one, the largest ip, to of the year. -- ipo of the year. there's been a dry spell, certainly, but it is a big one. the nasdaq landed this listing. arm, which builds the

architecture upon which some of of thest semiconductors build what they want onto the chip, is seeking to raise between $8-10 billion. while arm plots out its public listing, arm customer on semiconductor stock is on today after a first quarter earnings beat and an upbeat forecast. how do you like that segway? if up next, we a talk to the ceo about market demand for electric vehicles because that was a big component for their numbers and whether that that will lead to more gains for on semi's ev chip business. closing bell, about 24 minutes away from ringing. now the dow has kind of doubled its losses from a minute ago when i mentioned it, now down 50 points. today tuned, we are coming right back. ♪ ♪

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liz: chinese ev maker li auto scoring record monthly sales in april, stock is up a third of a percent. he's the number, sales rocketed 516.3% year-over-year driven by demand for the l7 suv, that is the rival to tesla's model y. and shares have been outpacing tesla's over the past 52 the weeks. tesla has dropped nearly 45 while li shares are up nearly 5%, but both should take note of this: there's a new poll from the university of chicago's energy policy institute the finding that nearly half of u.s. adults citing the high cost as tear number one concern saids the unlikely they would purchase an ev as their next vehicle. but try telling that to on semi. the chipmaker saw revenue there their auto segment jump 38% year-over-year during the first quarter, and that in turn helped propel the chipmaker to beat on both the top and bottom line. as we look at the stock and see exactly what's been going on,

tock's up 8.8%, joining me now on semi president and so owe haas sane el-khoury. great numbers, certainly. what do you make of that poll? >> look, i think just like with any new technology adoption, there's first barrier of entry. but one thing i will start with is our investment, performance in the short term is fundamental with the fact that evs are going to happen, evs have started happening. we're going to see about a 50% penetration just by the end of the decade. so -- very long as far as how we're going to benefit from from that market. and, look, it always starts with that, you know, potential barrier that you talkedded about on price. but as that technology proliferates and we're already seeing it prohiv live rate, you know, you talked about li awe otto already, a that adoption's going to proliferate and be multiple price points. now, there's another thing that is the required for that

technology and the lekly by cas- [inaudible] we need infrastructure readiness. you know, charging infrastructure which is another thing that the on semi is trying to -- we announced a very good quarter -- liz: well, yeah, i'm glad you brought that up. it's not just the evs themselves, it's the charging stations. and we know the u.s. government has put a lot of money into building out the infrastructure for a bunch of basically, checks all boxes kind of charging stations so that anybody can just drive up, and and that will speed up ostensibly the adoption of evs. let us talk a little bit about how your silicone chips work. they have silicone carbide which is different from the typical microchip that happens to be out there propelling different parts obviously ev structure. -- obviously e -- of the ev structure. exactly what can your chips dosome. >> so fundamentally it's a very different material than

historically silicone. you can get much better efficiency, drive more power and, therefore, it is the perfect technology for traction. for vehicle traction. think about it as a v8 equivalent engine. you need the best performance and best efficiency in order to get from point a to b the midwest efficiently possible. most historicallyst the gas mileage. silicone carbide maximizes that. what we do is we create that technology. so on semi actually not only creates the chip that goes in the car, we create the material that the chips are based upon. and that's been, you know, part of our great performance this quarter is we're ahead of our plans, of our internal plans in both material creation, in the semiconductor, the silicone car carbide side all the way to module with. you can understand there's a lot of power, we're talking about hundreds of kilowatts that we

provide our customers. that module, there's a lot of complexity and a lot of technology, and we're able to provide that as well. liz: we don't usually automatically invite people to come back on. we say, oh, we want to continue to follow story, but we would like to see as your earnings progress throughout the next or current quarter if you continue to see this kind of growth. will you come back many. >> absolutely. absolutely. we have a great story, great future and i love talking about it. liz: okay. investors, stay tuned for that this. haas sane el-khoury, thank you so much. we are coming right back with charlie gasparino and market guy rue bob doll. ♪ -- bob -- guru bob doll. ♪ ♪ salonpas lidocaine flex. a super thin, flexible patch with maximum otc strength lidocaine that contours to the body to relieve pain right where it hurts.

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♪. >> okay, so that must have been the fastest purchase of a bank since, i don't know, bear stearns in we did talk about jpmorgan's come-from-behind win for first republic but it wasn't the only bank submitting bids during the frc fire-sale. charlie gasparino next on the bank that lost out and why. charlie? >> yeah. liz, that bank is pnc. we should point out "the claman countdown" exclusively reported last week,

i believe monday of last week that there was likely receivership in the offing for first republic. liz: fdic take over of the bank. >> that they would be taken over. this is from sources involved in some of the earlier bank, earlier bailouts of frc. we pretty much nailed it. if you, you know, used our information to trade, you did pretty good today, particularly now that jpmorgan is buying it. here is what i do know about this process. it is an interesting process. there were about five or six banks that were looking at this. most of them did not put in firm bids. from what is came down to at the end was jpmorgan's bid versus pnc bank's bid. here is where it got interesting. people at jpmorgan yesterday, i tweeted it out as a matter of fact, that they believed it was a good chance that pnc was likely to win this. they believed that because pnc is regional bank.

not adding to -- jpmorgan is actually in many of the markets that first republic is in including new york city. so, federal government also was a little wary of jpmorgan getting bigger. they are the biggest bank in the country. on top of that there is something known as the deposit cap. if you have a certain amount of deposits you can't get bigger without sort of checks, a dozen federal agencies checking off on it. so there was a real issue. jpmorgan then went in there, knowing it was behind the eight ball so to speak on pnc, put in a very aggressive bid. they argued that the deposit issue should not because this bank was in receivership. first republic corp was taken over, immediately transferred over to jpmorgan or whoever would win the bid. apparently the deposit cap doesn't apply to receivership banks. that was enough to win the deal. they put in a very aggressive

bid knowing the deck was stacked against them. they came out the winner. from what i understand, the word was given to them at 3:00 a.m. in the morning. they were pretty surprised that they came out ahead. now they own first republic corp. the bigger question going forward, liz, are there anymore first republics out there? what is banking regulation going to look like going forward? are we growing to going to have series of forced mergers which essentially is covering -- essentially saying deposit insurance covers everybody's deposits if you keep merging these things, your bank goes under you do have an out if you can find a buyer with total deposit insurance and these are big questions that regulators will have to ask going forward but right now this is in jpmorgan's hands and there is a debate whether there is more left out there. back to you, liz. liz: which we have talked about a lot. charlie monger says problems ahead, not necessarily about that but something that could trigger it, would be commercial

real estate loans going bad, who knows. >> right. liz: thank you, charlie. the regional bank crisis notwithstanding one of the most widely followed investment strategists on wall street is bearish on stocks for some key reasons. for right now, speaking of the bank crisis, we s&p regional banking index at the session lows for the moment. crossmark global investments, chief investment officer bob doll is here with some tweezers to pick out of the pile some really special stocks. let's discuss start first what has you concerned besides the banking crisis about investing in equities right now, bob? >> pes and es. valuation and earnings. my screen tells me the stock market is selling over 20 times earnings, trailing earnings, almost 19 times forward earnings. i think those estimates are too high, even if we don't have recession, liz. look at first quarter numbers, they were better than expected. liz: indeed. >> but the full full year number

the s&p is lower than it was when we started quarter as analysts know their numbers are a little bit too high. the pe too high, earnings a little suspect. here at the high-end of the trading range i'm a bit cautious, liz. liz: we were looking at the s&p over the past year. it is virtually where it was exactly one year ago. it is kind of stunning. of course there were points where it was much lower during the year, much higher. hopefully if people bought at lows that would be very nice that said, when you're picking individual names, what must be on your requirement list right now, bob? >> cash flow and earnings predictability, because i think the economy is going to have some trouble, i want to know those, both those things are in touch for me. doesn't mean the stocks won't go down but they should go down less than the market, if in fact we move to the lower end of the trading range or lower at some point. so give me cash flow and give me earnings that i can sort of count on. liz: cash flow comes from the

toll takers, right, the mastercards of the world. you also like cigna and adobe. talk about the cash flow on each of these, why you feel earnings can be counted upon quarter after quarter? >> so, the hmos, including cigna, had a great year last year, up while the market was down a bunch. struggled in the first quarter as they have corrected but, cigna selling 12 times earnings and i think that given the breadth of businesses they have they continue to bring money in the door. technically the stocks don't look great, it may take some time. in the case of adobe, as they broad the software applications into areas related to the cloud and other creative areas, they're just extending their business with higher margin operations that have good cash flow. so there are a couple of the reasons why we think those stocks probably deserve some

attention. liz: such a novel thought, profits. but people need to be reminded over and over. bob, i'm just looking at the target rate probabilities for the may 3rd fed meeting. now we have 93.5% probability that we will see a 25 basis-point hike. this is actually an old number. it was climbing, but right this second it is at 93.5. when you look at june, let's bring up june, because, that is where you start to see the possibility of a pause. do you see the fed pausing in june? >> i think there is a good chance they pause but i don't know what the next move is going to be x months from now. will they raise them again because inflation is nowhere close to 2% or will they in fact lower them? what the futures curve, expectations are, they get to 5% next week a couple month later, oh, we really didn't mean it. they start cutting. i don't see the cuts coming this year, liz. liz: is the bond trade still

hot, talking short term t-bills with yields in some cases? there is the 17 week t-bill about 5.1%? do you still like parking money there? or did you ever? >> i think having money at that part of the curve makes sense, if you're like me a little nervous on equities, you have seen bonds do reasonably well and yields come down. you have the inverted yield curve, front of end of the curve with that high percentage. look i say to people, long term cash generally underperforms but here in the near term, have a little. it is okay. liz: it is okay. i get that, bob, wonderful to see you. thank you very much for coming on today. >> thanks, liz. liz: on a little bit of a interesting monday. i won't say manic. the dow is only down 30 points. we have the s&p slightly higher by one point. tomorrow, big, big get here. we have pfizer's ceo. he will discuss earnings. pfizer's proposed covid-19 vaccine deal with the european union. and its dividend increase.

you don't want to miss albert borla on the "claman countdown." the dow, the nasdaq finishing in the red. keep in mind on the nasdaq, it really only needs 29 point higher for a close to exit bear market territory. could that be tomorrow? we know one thing the federal reserve begins its two-day meeting tomorrow. wednesday is the day we get the big announcement at 2:00 p.m. eastern what is expected. then of course the big news conference where we wonder will the fed signal a pause? [closing bell rings] i'm sorry every day you have to watch "the claman countdown." you just got to do it. thank you so much for joining us. that is going to do it for us. larry kudlow is next. stay tuned. ♪. larry: hello, folks, welcome to "kudlow," i'm larry kudlow. so, huerid