tom: kbw index on the back of that story. year to date, the index a compiler of regional banks and major lenders down 30% year to date. yesterday another big hit, down almost 4% around the terminal linked to the likes of pacwest. western alliance and first rising. how do regulars respond to this? we will get another -- will we get another weekend of bail outs or failures of these banks? and asia, a different story. relative optimism coming through as investors in that part of the world a look through the banking crisis in the potential of a pause from the fed and possibly cuts by year end. soccer dollar a boost in that region and that index, the benchmark getting .4%. the financial sector has been one of the outperformer's in asia over the last few days. futures in europe gains of .4%. stateside after losses yesterday, futures pointing up by .4%. manus: it's interesting to reflect on rather -- whether it is rates. jeffrey gundlach says the fed will not raise again and the rates market, there is huge pointing going on out ther

kbw index tells the story across regional banks yesterday with the drop of almost 5%.re do you pin the blame, is it on broader sentiment and short positions across these regional banks? a reminder that financial stability is back and focus on the federal reserve on a day they need that rate decision and we expect an increase. the mainland is closed for a holiday but the bloodletting, futures in the u.s. are pointing to modest gains appoint 10% after the s&p closed down by over 1% yesterday. the optimism coming through when comes to the earnings picture. manus: two good results on the banking side. economists are calling it stagflation light for 2023. persistent inflation could threaten to expose a number of market mispricing's. who better to answer and define stagflation than paul donovan from ubs. good to have you with us. this at a fair representation of what we might get as soon as this year, stagflation light? what would ubs define as stagflation light? >> i don't think it is a fair representation, to be honest. you got to recognize inflation has slowed and in some

bancorp and more joining me now to discuss is christopher mcgrady of kbw good morning. >> good morningve us a sense. what led to the downside to the regal banking sector >> we thought going into the last weekend with first republic remaining in overhang, we thought an orderly resolution, which is what we got with jpmorgan, we thought that would be a clearing event for near term sentiment, and what you saw on monday is some of the banks trading better we're trading on deteriorating sentiment again and that's what brought banks down yesterday. >> it's interesting. it's negative sentiment. i think a lot of people thought things were stabilized after the first republic deal. we had q1 earnings for all the banks including the regionals. what did you see when it came to q1 earnings? what's your take >> we moved to that position last december. really, it was a call that earnings had peaked. now, what we've seen over the last three or four months is we've seen earnings estimates get cut by 12%, 13%, 14% on average. in that fully round trip, the earnings revisions went higher last year. wit gou

that is regional banks, look at the kbw, off of a whopping 5%. every stock is lower and where you go for the safety? the yield is down, reversing the losses that we saw in the of bond market from yesterday and crude is down a whopping 5%. as that a signal -- is that a signal or is that a reaction? jon: to your point, questions about the regional banks breaking into the edf announced, you are saying names like western alliance and a series of volatility holds down in the neighborhood of 23 and 16%. not at the weakest levels but sizable drops. zion, some of the analyst commentary, maybe there was a desire to hear more from the fdic on deposit insurance plans going forward, whatever the reason ahead of the fed decision we are seeing a lot of jitters within the banking sector. alix: the conference we heard tcw ceo discussed the importance of the sector. >> if you look at companies with 100 employees or less 70% of their commercial and industrial financing is dependent on banks with less than two hundred 50 billion in deposits. 30% is dependent on ban

he is with kbw.en lyons and jordan cassidy and others. i thought they would be a little bit of a recovery. lisa: people are looking for a bogeyman. that is what we have seen consistently. regionals is a place is going to happen. tom: just in general, yeah? we are back to 49% in new york city back to the office but that is not help commercial real estate. lisa: you think people are sitting at home worrying and fretting? there are monumental shifts in the economy. with respect to regional banks, there is a question around profitability. there is a question about competitiveness with deposits. it is a ball of angst leaving people without a sense of what is under the hood and a lack of confidence in regulators to give a since they have a handle on this. tom: i would also go to scale. if we say each and every bank, except for the big ones, is going to be a smaller institution, you have to spread your technology expense, your labor expense. all the fixed costs across a smaller banking platform. i think tha

with the regional banks because i think it gets cheaper as the year goes on so, have we seen a low kbw no, we haven't are we going to see the low some time in the fourth quarter i believe we will. that also might be the case of reits. if you're a contrarian buyer, wait for it, it will come, but there will be a lot of pain between now and then. >> what happens between now and then to trigger that more fallout on the economy? >> fallout on the economy but talking about the loan losses in the banks that's not really happening yet. you've seen deposit outflow to a tune of $1 trillion, but you haven't seen the insolvency that comes as a result of losses in the bank balance sheet number one, number two as it relates to reits, we're talking about the reits, you see commercial real estate devaluation because the simple truth is when you were in covid and rates were zero, everything was in the moon, 17 million treasuries were trading negative, remember that, carl? >> oh, yeah. >> yeah. during that period of time, real estate got bid to the moon, as did some growth technology stocks and now all

i mention how the kbw finance bank is higher. we've been watching as the regional lenders ticket close to that technical level in the potential of it falling below it 2007 peak. it took more than a decade for that gauge to recover. with the first republic bank failure and the solvency fears of regional lenders, we are seeing it very close to that redline. let's discuss with mark cranfield in singapore. we are watching banks closely because we are told you cannot have a bull market when banks are falling. tell us about how crucial the sector is. mark: it's extremely important to the broader market, in fact to the global financial indices as well. investors will be looking at warren buffett had to say over the weekend. he was fairly critical of the bank management in the united states, saying some of these things knowing on in terms of risk management was there in plain sight. these were not risks which suddenly appeared. you can imagine other people will be concerned as well. although we had late bout on friday, it has been a torr

kbw bank index trading at its lowest since 2020. the fed hikes, the ecb hikes, we are worried about the course of global investing. vix is up above a 20 handle. are we still going to see a benefit in crypto because it is aside from the traditional world of finance? we are at the 28,000 level but the fact that we're up above 1%. ed: the downside movers on earnings, qualcomm is down 4.91% . we are going to go deep on these earnings later in the show. etsy gave a good forecast but investors are not buying it. it's the regional banks story playing out. you look at pac west, western alliance, two catalysts driving those stocks. pack west denied a report, western alliance people are talking to investors trying to work out what is going on. is the idea of communication. what is the health of these banks? first republic was not speaking out that because the jitters. but we have commentaries from these bank but it's not helping these stocks. caroline: i note this is a continued global conversation. the ecb rate raised today and the u.k. depo

you can see the kbw bank index getting hammered. the conversation was what stocks are the short-sellers going to put around to see where the other crack sare. on the flipside you of the two-year down. earlier we saw a strong bend to the bond market. this selloff really moved over to europe. we saw some buying, repositioning and once we got those banks moving over we saw the yields moved to the downside. gold also playing the same today. you mentioned bp, i mentioning crude. is this a signal or reaction? is it reaction to a banks and credit tightening that will lead to a stagflationary environment or is this all reaction to in general we are seeing light pressure and volume. guy: i do not know. there's probably a combination of factors coming together. the moves we are seeing in the market, let me just pull the data into what we are seeing here as well. we have the fed tomorrow in the ecb on thursday. we've been waiting for a final read on what the ecb will be doing. eurozone headline, that's a little more than the market was anticip

which reared their heads again with aggressiveness estimate across the kbw index, the banking index of, relief coming through from the earnings picture in the gains of .5%. in germany, we are tying in the autos picture, gaining .5%, a beat for porche. the ftse 100 gaining on the back of what is happening with basic resources adding 44 points back above 7800 for the u.k. index. the ftse 100. let's have a at sectors with a focus on autos, banking and basic resources. gaining .6% despite recession concerns emanating from the u.s. and beyond globally. energy gaining .6% after the softness coming through from oil. we know there are short positions built up around brent and wti but a bit of upside coming through for the commodity picture at least so far this morning. autos 5/10 -- autos .5%. travel and leisure up by .3%. european banks as i mentioned seeming to have withstood the global banking tremor fairly well. majority of lenders reporting a beat and first quarter revenue was several continuing their share buybacks plans. unicredit, bnp paribas, lloyds bank reporting a beat on net income

in terms of the banking sector, the kbw index down a little over 1%, close to 2%, on the back of concerns emanating from pac west and some of the other regional lenders. jay powell thanks largely the banking crisis has been contained. the reporting suggests maybe that is not quite the case. those concerns remain prominent. that is the index in terms of the banking sector, yesterday down 2%. across asia, a bit of relief. one of the best sessions in about three weeks across the asian benchmark. china coming back, japan remains on holiday but a decent session in hong kong, gains of .5% across the benchmark. european futures downside of about .1%, the ecb decision weighing on the earnings picture. u.s. futures pointing to gains of .2%. after closing yesterday in the red. powell keeping the door open to a pause, but pushing back on the rate cut scenario. manus: our guest who we will catch up with shortly says we pause, and pray, is what he is looking at. there is no pause at the short end, it collapsed, the rhetoric from powell was around tightening of credit. the two-year collapsed to 16 basi

kbw bank index, treasury secretary janet yellen may be hinting at further deals, and a needed in theanking sector. they drop 1.5%. individual movers, we have seen apple managing. one of the biggest, most impactful stock on the green. it is helping big tech in general. cisco bouncing off of erosion in market capitalization yesterday. amazon down 1.4% as we worry about the inflationary consumer environment. let's dig into the macro picture. i want to give you a perspective on the hill. debt -- gop debt ceiling negotiators, leaving a closed door meeting with the white house. representatives soon after it began. really throwing the status of how we avoid a u.s. default into doubt once again. kailey, what were we expecting to come out of today's discussion? kailey: the until we got these headlines crossed within the last hour and change, it was feeling much more positive. the mood music seemed more optimistic. speaker mccarthy was talking about having a deal and principal by the end of this weekend. that seems to have changed as of this morning. then negotiators on behalf of the speaker l

for context, you saw the kbw index down further yesterday, and those problems remain significant. pacwest falling by a record. the spanish ibex currently gaining 0.7%. they are betting as well that the ecb is coming through with 20 basis points, but they are also looking at some point later this year to be turning as well, so you saw that bet moving in german debt yesterday. the ftse gaining despite the pressure that will come through in iron ore and the mining sector. in france, gains of 52.7%. -- 0.52%. let's look at the front end of yields. for the week, you saw the yields coming in at 20 basis points. little unchanged, below that 4% level we saw a few weeks ago. futures in the states pointing to gains after the losses of yesterday. the poll between the markets expectations of cuts for the terminal rate versus the commentary from jay powell saying that they will continue to be data led in terms of the pace of any future hikes. the consensus seems to be forming that we are in because territory for the fed. get a softer dollar, the worst week in a month for the greenback. brent a

kbw up. this is all about a bounce back in regional banks. maybe people find the dip today. the vix pulling down almost three points. we decided were going to go long into the weekend. it looks as if risk sentiment is rallying in crypto. a little bit of a push back. in the micro, is there risk on sentiment they? is it earnings? ed: there's a lot of dripping bond earnings. lips touching a record low on that stock. the outlook for revenue is not driving with investors. paramount 24 hours ago had a loss. warner bros. the discovery out with a surprise profit of streaming unit even though legacy business doing advertisers fly. then again you talk about the banks, pack less of the most on record, 84%. i am not seeing much rationale on the bloomberg or in the reporting. it may be buying the dip situation. will dig into that later in the program. there is one clear name moving to the upside and that is apple. look at the game on apple shares. strength is the iphone and services. growth in both units although low growth, 1.5% for the iphone. 5.5% for the services. before .8% gain the

the kbw bank index having a positive day up 3.81%. on the week all of these indexes are lower.ter. sales and earnings declined year-over-year. much better than feared. here's the reaction, up 4.5% on the day. the rest of the indexes are lower on the week. it's an interesting bifurcation we are seeing today between the date in the week. as for the year, we are having some outperformer's. what we are looking at is meta-. many of the cap tech stocks including apple and pink and purple s&p 500 barely positive on the year. you can see that magic cap tech is doing well. as for some of the big mover's on the day. let's take a look at the big banks. we had to clients of the size yesterday, pac west sharply higher. this appears to be a crisis in confidence. there is more confidence that pac west could find a suitor to take it over. you see the shares rebounding. the second quarter outlook for sales. demand for overall rideshare is quite strong. they are sacrificing the near term for the long-term. carvana is talking about the profit guide up 34%. at 1.2 years ago it had been a $172 stoc

names and kbw bouncing we had good results from western alliance with the increase of deposits whichs a welcome development given the focus on u.s. regionals here in europe, we are focused on individual company earnings let's get to the indiviex all names trade in the green dax up 1.3%. we are seeing auto names like mercedes and volkswagen. and then the jeffrey epstein case brought to the jpmorgan chase bank and that being settled. cac 40 is up 1%. we are seeing the likes of renault at the top of the index. ftse 100 is up .50%. a couple of names like burberry. that is dragging the ftse 100 on back of disappointing sales growth in the u.s. bt with not a couple of good days that name is down 7 points this morning. in terms of sectors, this is the breakdown. autos up 1.6%. tech is up 1.2% real estate is down. heading to the u.s. session, we are looking like another positive session is in the cards. moderately so. s&p down and nasdaq is opening in positive territory. it is thursday, which means it is jobless claims day, so keep an eye on that and existing home sales data. >>> global debt

in fact, the kbw index was up.s it is interesting to pay attention to those to see how the market is reacting now we see the deal one of the things and differences this time around is they did -- the fdic seized and sold the bank immediately with the hope of preventing uncertainty. >> we are looking at regional banks which is lower in the pre-market i want to get back to the deal why did the negotiations take so long why the until the 11th hour? >> it is a great question. these issues are not necessarily simple we are not talking about acquiring the equity or corporate debt in a clean transaction. this is something that went into receivership they have a lot of assets and loans are under water because their business model was making loans to wealthy individuals some of the jumbo mortgages which are under water by current standards. they took out loans from the federal reserve at higher interest rates than they are generating on the loans. they are looking at an unprofitable situation and it gets to be messy you hav

we are up by 1.5% on the nasdaq with the kbw bank index is falling, 4.81%. the ripple and repurcussions coming from first republic still being digested as we worry about the strength of the financial system. the two new yield spiraling -- the 10 year yield is spiraling -- 10 year yield is spiraling down. we are not searching for safety, we are looking for risk assets in bitcoin. maybe this is also linked to the banking turmoil, the worry about the solidity of your normal financial system. up more than 3%. we have come back from the 30,000 level. dig into the micro. ed: the ripple of that, there are few movers on the upside in the technology sector. i found two, in xp -- nxp semiconductor, one of the best performing stocks on the nasdaq 100 and the only mega cap in the green this tuesday. you mentioned crypto, that is supporting crypto related stocks like coinbase, higher by .8%. it had been higher after the company announced in international derivatives exchange. u.s. regular digits are ongoing. western alliance, another regional banking, lower. we continue

kbw regional peaking index, why is up? i do not know. maybe reversing some down we saw last week.real conviction, volume is light. no conviction, to year yield stuck trading around that 4% level. despite fed talking about maybe we are not going to see cuts until 2024, it is steady as she goes right now. guy: it is steady as she goes when it comes to the data out of europe erie today, we got the european commission upgraded forecast. they are speaking the same language. a lot of the data are at the moment, which is we are going to see growth stronger. we -- the european consumer is a anomaly at the moment and is surprisingly strong. you've got the flip side, inflation is stronger than anticipated. as a result, we are seeing inflation forecasts being upgraded by the european commission. the blue line is the average forecast of economists. white line is commission forecast. the expectation has been rising, rising, rising. the commission is taking up a little bit it's expectation for 2023. 5.8% forecast, a touch higher. it tells you the ecb might have to do more. that is the challenge

jp morgan higher, kbw bank index higher. other regional banks still under pressure.eard from they jp morgan ceo saying we are getting closer to the end of the banking crisis. the cfo is reassuring investors this is far from 2008. but the question is as we get closer to the federal reserve meeting today, let's look at this chart which shows what market is pricing in. investors expect another 25 basis point rate hike. the biggest question for the market, will those small banks be able to handle higher interest rates, tighter financial conditions? let's look at prude market and positioning. it can provide a picture, an overall macro story. basically saying investors, hedge fund managers, traders expect recession. they expect lower demand for crude. this chart shows physicians for uti. it was down for the first time in a month. this is a big reversal from the optimism we saw after open -- opec decided to cut -- it is a big week for central banks and we have jobs data this friday. alix: china pmi also disappointing, joining us there -- ethan, that minette -- let's start w

the let's start with 2-year notes on top of the kbw index. there's the chart.e what's driving the short duration into higher prices and it's been a bank to a normal more trade and poil si. now look at how this has been affected in 2-year note yield. we've seen minus 35 to minus 5 it may be the least inverted when it's only 37. thes would have been done. five 1/4 is nervousness in another mogul in the treasury complex, the debt issue. the highest yield close, what has that done? whoop for yourself at the close, back to you. >> rick santelli, thank you for that. >>> ahead on "power lunch," the dow down 300 points. declined -- >> we've still got an hour and a half of trading left to go, kel. >> we do if you told me this is what it was going to do,we're waiting for apple earnings we to have a stable environment. what about a.i.? we'll be back with more if you're on "power lunch." how's the chicken? the prawns are delicious. oh, i have a shellfish allergy. one prawn. very good. did i say chicken wrong? tired of people not listening to what you want? it's truffle sea

all of the stocks in the kbw bank index are lower today.e of the worst performers, packed west and western alliance both down double digits, dragging the index overall down by 4.5% as trading gets underway. guy: let's continue the theme. very much, indeed. you have western alliance down 25%. let's go to brevet -- to beverly hills right now. the person you want to talk to at moments like that is sonali basak. she is at the millikan conference. stavanger, we are seeing a resumption of the price action on the downside. it is the vibe in beverly hills. or we pass the worst of this banking crisis or is there more still to come? sonali: we have no now we may not be out of the woods here. we even have some executives saying there might be a second leg to this banking crisis. there is a lot of words about credit quality, and we have two guests here to talk about credit and equity and what it means for asset management. i'm standing by with bennett goodman, the executive chairman of hunter point capital. and abbey college stein, hunter point ceo. be

coming up, the kbw ceo joins bloomberg tv at 4:30 p.m. new york time. this is bloomberg.nak appears to have backed down on his conservative the pledge to cut net migration. that could lead to a new disagreement with right-wing tori's. reporters traveling with him to the g7 summit in japan have asked him whether he stood by the party promise on migration and he declined to repeat a commitment. china has kicked off a european tour aimed at roque ring piece in the war between russia and ukraine. a top chinese diplomat met with ukraine's president, volodymyr zelenskyy, and he told zelinski that ending the war would require all parties to build up trust. ukraine said it will not accept proposals that include the loss of territory. hungary will block further european union aid to ukraine. that is because of what the hungarian foreign minister calls an increasingly belligerent attitude on the part of ukraine toward hungary. one of the complaints is ukraine singled out hungary's largest bank for doing business in russia. global news, to any four hours a day on air and on bloomber

remarkable how the market is performing with all of the head winds we have in front of us you look at the kbw bank index which is 24 banks. it has $1.2 trillion in market cap. that index is 25% below its 200 day moving average think about that that's not dragging the s&p 500 down in the last 20 years every other time that index was down as significantly as it is currently the s&p has gone down along with it there's clear resiliency i absolutely think the price that you pay for combatting inflation has to be an economic contraction. i think we are in the middle of seeing that. it's only going to intensify in the coming quarters. you have a lot of consumers who are still relying on the debt and money factors of two and three years ago. and really are not aware of the waterfall they are about to experience when they go back and try and extend the maturity whether it's on a car lease or a car loan that's all coming ahead. i don't think we can expect to josh's point, on the distortions in the labor market. i don't think post pandemic we can expect any of this to be normal because nothing has been

the kbw is down 30% over the past month $400 billion has left the banks system but to jeffrey's comments earlier powell put a more do muchish spin on it we're not anticipating, we're not sure, but we're looking to hike more. powell gave this impression that we may be done here. that was kind of the impression. let's listen to what powell actually said. there's a sense that we're, you know, we're much closer to the end than the beginning as i mentioned, if you add up the tightening through various channels, we feel like, you know, we're getting close or maybe even there >> reporter: yeah, he's suggesting, scott, that maybe the funds rate is where they need it to be right now, given the situation of potential tightening down the road i want to bring jeffrey back in, too. the market did move when the fed chair said their own forecast doesn't call for inflation to come down all that quickly, and in the fed chair's words, quote -- in that world, i don't see rate cuts. we're at the lows of the days now. maybe the market doesn't like your commentary either, jeffrey, that it's a bad time now for

. >> let's do the transcript now, okay i'm at the meeting hey, look here, jay, i've got the kbw downtever it is down today. >> 7.5%. >> 7.5% today. look at what happened to the january fed funds rate, it fell by 20 basis points it's ridiculous. i don't know if they have that chart to >> what are we down to roughly >> 4.40. so the gap has widened look at that >> that means by january -- >> by december that's why we use january. >> seven months away they think the funds rate, which they will raise above 5.5% tomorrow will be down to 4.4%. >> randy, does somebody come forward and say hey, you know what, is this something that should be cause to pause, or somebody else says we're not going to be messed around by today's gyrations in the market. >> exactly the people who say we need to move ahead, we have the big picture problem is inflation and if we just move to respond to the market movements, we will be pushed around and won't solve the problem. they're going to go back to late '70s when they paused too soon the last time inflation was this high in the u.s., we had interest rates at d

result of this he could be the leading candidate given just the growth of wealth, but then you have kbwthat ted pick might be a more likely choice because he runs the institutional group which is sales and trading, investment banking and so forth and is credited with turning around their business and has seen more that turnaround candidate in the sales and trading, investment banking sild of things. >> leslie, good stuff. that's leslie picker joining us. we'll continue to game it out, no doubt, over the months ahead, of course. of the three on the show today you own morgan stanley what do you think? >> it's our financial exposure, the regional banks end of last year, the lending side of it i like -- this is very prepared, like the green bay packers handing the reins to aaron rodgers from brett favre pick or saperstein will likely be one of the two. do they take saperstein in order to maybe spread him thin maybe pick is the leading candidate. >> do you care either way as a shareholder? >> i don't i like the direction of the company. gorman has put them 13 years at the helm in the right s

kbw lists several among others analyst argue the need for consolidation is there but the will may nothe suite. regional banks, for example, the 13 billion td first horizon deal that broke last week over a lack of a regulatory timeline, and the first republic situation showed first-time buyers may be rewarded for waiting for a bank to fail before acquiring it, guys >> so what happens just the big get bigger? are we talking about the biggest banks now that we have this precedent? >> that's the key question here, and we are in a wait and see mode before there's more clarity on that front. while it would be beneficial for a greater mna environment to create consolidation among the regionals, they are currently in a situation where they are not sure they will get the approval so doesn't make sense to spend the time and approval to go down that road without more certainty on that front. >> leslie, thanks. what wall street is buzzing about, certainly something we can ask secretary janet yellen about, and a reminder she will be on this afternoon on cnbc at 4:00, talking about the debt ceiling

. >> joining us, kbw thomas show is with us you said it's an important day and you have some ideas on what it would take to restore confidence. >> absolutely. if we've learned anything, and chairman powell talked about it yesterday hoping the first republic resolution would bring confidence and find stability, i think what we learned now is this turmoil is still rolling. and i think it won't stop until we build some stability into the system and also i think it's remarkable is the regional banks have done very well. last night western -- not their stock prices, but western alliance last night put out an interperiod release saying deposits were up, they're executing on their plan to sell assets, building capital everything the market and investors should want, but that hasn't taken the heat off the stock or off the bond prices, by the way. the bond prices have been seeing turmoil as well. investors are very nervous i think what they're nervous about is the fact that silicon valley lost 75% of their deposits in 36 hours there's not a bank in the world that could really sustain that i th

the kbw down more than 1% here. we are looking at these names and so much more. so let's get right to the floor show. joining me right now, david treynor. let's get to it, david. are you paying more attention to the fact that the fed says inflation is still unacceptably high or this looming debt ceiling? >> i think it's the more about the fed. look, i love the sensationalism of the debt ceiling, liz, but i think we've seen show before. it always ends the same. we're not going to the default. it makes for good media, makes for lots of clicks, but 59 the end of day i think it's more of a distraction, and i think the eye's got on the on the fed. that's going to to really move markets. i think markets are underestimating what the fed's going to do in terms of raising and keeping rates high, and that's something obey attention to, for sure. liz: okay. as an investor, you're not selling into this market, are you? >> certain stocks, for sure. i mean, there are plenty of super expensive stocks that remain in the market. i mean, nvidia's an obvious one. we did a reverse d

for more on what that could look like, we're joined by david conrad, banking analyst at kbw thank you for being with us. i wanted to ask you about what the fdic came out with in terms of the fees that will be charged toen banks to cover the insuran fund, and i would imagine the large banks, not much of an impact, but there's probably a middle ground that would see an actual impact on earnings. >> yeah, i think it's pretty management we just kind of did the math recently, you know, actually my coverage, i think, is paying about 75% of the total fees, but it looks to be around 4% each of the next, in '24 and 2025. we kind of estimated it would be 3%, so, relative to our expectations, it was pretty close and pretty manageable. >> i wanted to ask you what your thoughts were also when it comes to where we are in this crisis it feels like it's stabilizing, according -- if you take the word of a lot of officials out there, you know, it's contained, but if you take a look at how the regional banks are trading, it is not. when you look at what pacwest said just a few days ago, on may 4th, said

but there's doubt the kbw nasdaq regional banking index.t's a basket of still solvent banks similar in size to those that failed, has now dropped 25% since early march, when the fate of the nel failed, silicon valley bank became a matter of concern. tom baker, ktvu fox two news. okay we got a little bit of a wintry pattern with us. not just today and tomorrow or the next day, but really right through this week and into part of the weekend. let's take a look at the model. this is the satellite. with some ice attacks drawn in. i'm going to put in the jet stream. there's the trough right there, right. that's that that trough that i just threw those. you don't expect that this time of year that deep anyway, so all this rotation in here is the weather system, and the problem is, it's kind of going to get separated. that weather system it is going to get separated from the jet stream to the point that it's just going to linger and as it lingers is going to continue to do this. bring scattered showers what it did today, with very cool temperatures

. >> right, so, working well together let's look at the kbw just after the hike today it's down another 2% today you talked about zion -- sorry, pac west that was out there, zion was down big, so, not working so well together i think that's the issue and that's why a lot of people i was talking to, i've been talking to saying the fed should not have hiked today, and now they're just another quarter point into the hole with the banking system so, i think, you know, they've dug the hole a little deeper here >> do you think it was bold of him, and i mean that sort of loosely, of him to say that -- rate cuts aren't in the cards? i mean, given that there's a lagged effect of the hikes that they've already done, there's the unknown tightening that is yet to come from credit conditions because of the banking crisis, which seems, i mean, you mentioned pac west, we're witnessing another unraveling of yet another regional bank, so, you know, the credit tightening could be even more than what we expected when we thought the banking system was sort of -- has stabilized. i don't know, it just seems

to fall but severe pressure on pacwest, western alliance, both down 20%, and taking others with it, kbw regional bank down 40% we were talking with mike santoli the last hour about the surprise hike out of australia where we thought there would be an extended pause. you couple that with eurozone cpi, there is inflationary worry, and in others, deflationary worries >> so, the question is, what does fed chair powell do and what does he signal? there's plenty of evidence in the banking system and these ripple effects and concerns there's reason to be cautious, right? everyone's expecting a credit squeeze from the banks pulling back on lending. it's not clear the contagion is over every day we see sharp drops in other regional banks on the other hand, to your point, inflation is sticky and they don't want to be the ones that let inflation get too high and not do enough about it so, i think that risk for the market, carl, is clearly they don't signal they're pausing as the market is expecting. here at milken i've been talking to a lot of big investors, nobody i've spoken to expects the feder

up over 360 so if one of the reasons stocks are up today is because banks are doing better, pacwest, kbw index, what is going on with the yields if you look at week to date of bunds, they closed down ten-year, even though the ecb is hawkish and raised rates the dollar index, it isn't quite there, but very near one-year lows but to be fair, it is still above 100, which is considered pretty rich. speaking of that, let's find paul. >> hey, rick. >> one question i want to ask you. and that is what is most important thing investors that are watching right now that have positions in equities, what should they be most concerned with or paying the most attention to should it be inflation, should it be the fed? should it be debt cerealing? or should it be the slowing economy? >> i think right now we moved past the inflation unless something crazy happens next week, really forces the fed's hand, i think now we're moving to the broader economic indicators you were talking about. >> is that one of the reasons you think stocks are doing so well on the vix and it is so far down today in. >> they love

that's remain the kbw nasdaq regional banking index. that's a basket of still solvent banks similar to those in size that failed, has now dropped 25% since early march, when the fate of the now failed silicon valley bank became a matter of concern . in other words, those banks are solvent but still has a group. they're down 25. reporting live. tom baker, ktvu fox two news. it sounds like one of the keys here was that you didn't see that that same level of panic among depositors with first republic bank compared to what we saw with silicon valley bank. true but earlier like last week, there were some pretty big lines and all of these offices, and that's because they were bleeding so much money and that's what really caused all of this simply because they didn't have the underlying capital to pay all of those depositors and something had to give and it was the independence of that bank. don baker reporting live force in walnut creek, tom. thank you. the school was in session today across the oakland unified school district, as negotiation

you see the kbw index there.owest level since october 20 let's talk to a trader what a day, do you have a minute >> of course >> when we look at 50,000 puts today on pacwest, what did it do to volatility? how does that figure into the one-two punch of the fed tomorrow and regional bank nervousness? >> gives short pause for a little bit, but we're going here into the fed meeting as if the ball is sticking out there this is well stelegraphed. hedge fund positioning is short now across the board i'd say it had a blip effect. >> jamie dimon was saying, we can take a breath now. he is one of the best bankers in the world. is he a little early is he incorrect? is there too much in front of the fed meeting? >> the reality is, it's a self-fulfilling prophecy if there's a run, it can keep on going. banks at the end of the day have a tail on them particularly the regional banks have 70% of exposure in commercial real estate, as that starts to decay. it's a function of time. it can get ugly, right at the end of the day, the

dutch, the regional banking etf 's are hitting one week lows, the kbw, et cetera, that speaks volumes because one week ago pacwest and western alliance were getting killed on those reports they were explor ing, you know, strategic options to stay above water. dutch, what has to happen before this is over and stops affecting the broader market? >> well, i think, you know, my message is that this too shall pass. we do like zion's bank quite a bit because they are conservatively run outfit. they do a lot of sba loans so they aren't taking a lot of risk with their balance sheet. they aren't making silicon valley-type loans. they have 11 states that they're in in the western united states. i think for this to pass, we do need to have somebody stabilize things and, you know, the fdic approval, proposal is out there and it's something that i know that you've been discussing and, you know, i'm a free market guy, so i believe that making stupid decisions should have some consequences; however, i also don't think that a company that's sitting with a billion or 2 billion or 3 billion in cash at

the kbw nasdaq regional banking index. that's a basket of still solvent . still operating banks similar to those in size, that of those who have failed, has now dropped 25% since early march, when the fate of the now failed silicon valley bank became a matter of concern, even though these banks are operating, and they're healthy. they're down. 25% is a group reporting live. tom baker ktvu fox two news time. do you think we've seen the worst of the banking situation industry, or do you think more of this type of thing is to come i think these banks are going to be looked at a lot more carefully now, and i think they're going to be a lot of rules that were relaxed to them during the last presidential administration, and this and this administration is going to have to try to tighten them up. the other thing that's really scary, and there's no way to put too fine a point on this. all this commercial real estate that's not being occupied because people are working remotely or there have been layoffs and all of that stuff that represents a 22. trillion dollar in

you know they're more friendly, i think, but there's doubt the kbw nasdaq regional banking index. that's a basket of still solvent banks similar in size to those that failed, has now dropped 25% since early march, when the fate of the nel failed. silicon valley bank became a matter of concern. tom baker, ktvu fox two news. debt limit. talks are intensifying. as treasury secretary janet yellen warned the us could default as soon as june 1st. in a letter to house speaker kevin mccarthy, yellen said the country could run out of mo their debt limit bill, which would expand the country's borrowing power. but trims federal spending. senate majority leader chuck schumer won't put the gop plan to a vote. show the american people how the default and on america act would cut critical funding to nearly all sectors of american life. this is all politicized operations by this administration. we're delivering. president biden has invited all four congressional leaders to the white house next week to discuss the debt limit, but the clock is ticking on negotiations, since there are only eight leg

the kbw index down 7, 8, 9%. liz, it's not over by a long shot. when you have treasury bills yielding 5.20 and banks paying 1% and the ease -- this is the thing that powell said he can't understand. and what he doesn't understand because he didn't mention it is how easy it is to move money out of banks into markets right now. st the never been the case, and they have to factor that in, and it's going to continue to be a problem. liz: peter, interpret why you believe the fed tightened rates 25 basis points this i'm the. >> because that's exactly what the market expected them to do, and that's what the fed does, what the markets expect. but it's not going to do anything regarding bringing inflation down. you know, the elephant in the room with respect to inflation is the fiscal policy. the debt, not the ceiling, but the fact that we're running these massive deficits. and until the federal government reduces spending, these quarter-point increases are going to be completely ineffective. and the problem is powell refuses to call congress out and menti

for more, we want to bring in the ceo of kbw, a stifel company, and, tom, thank you for being here >>ere things stand. it feels like we have gotten some of the worst of the banking turmoil. when you have someone like jamie dimon saying there could be more troubles ahead, that makes us sit up and pay more attention. >> whether or not we get a recession or not, i think it will feel the same way the economy is slowing, the surprising thing is that credit and the banking industry, the credit costs have essentially been zero for so long. it is inevitable that we're going to have more credit expense going forward. also, we're dealing with the surge deposits that are still leading the banking system that was happening even before we had the recent bank failures. so banks are going to have fewer deposits to lend out i think that the credit tightening story started six months ago even before these bank failures, so this is happening right in front of us right now. >> you think bankers figured this out at this point now that they have been stressed in these ways and are they changing their beha

the kbw bank index, 21 shares of heavyweights in the financial sector, all were down. take a look at after hours trading for apple because we are seeing upsides in trading, up more than 2%. those results were pretty solid, but the question is whether the bar was already set low, right. >> exactly. we want to dig deeper into these earnings without tech reporter mark gurman, who has been parsing through the numbers. -- with our tech reporter. who has been parsing through the numbers. >> apple set low expectations for the quarter, the cfo said in his outlook that this quarter would go more smoothly than last quarter, a 5% decline. it was a 3% decline, that's how you beat that. in any other climate or context a 3% decline in revenue -- a year of revenue declines would not be pretty. this time they did well. if you look at the sales on iphones that was up, and they had a favorable compare for the iphone because last quarter they did pretty well on iphone sales despite supply chain challenges and they could not produce any apple pros. in terms of wall street forecasts they b

perhaps index level looks one way but kbw regional index down 20% year to date. this is not been a consistently range bound market under the surface. tom: amy wu silverman -- what is going on beneath the surface. the bigger picture. the peak of 2021, how far down are we? the answer is we have come back a long way but still we are beneath where we were. nasdaq down 16%. we got further to go to hill. jonathan: do you want some games? nvidia of 100%. meta up 105% year-to-date. it was all about the name change. on the equity market we are just about a positive. going into the weekend looking for more gains positionally. yields on the bond market just about unchanged. if you want more excitement look to europe. for all the talk things are starting to unravel for the long since trade -- consensus trade, records high. lisa: take those narratives and stuff them in the market and get unpredictable response. looking at g7 talks as president by the looks -- gathers with other leaders. hopefully we get messages, not only with respect to u.s. and debt ceiling, but also trade,

these banks have been hammered in this week through thursday, the kbw regional bank index down more than 12%. phenomenal research, interesting quotes from the south side. we believe the banks are having their gamestop like moment where social media is amplifying nontraditional approaches to assessing solvency. this creates a self-fulfilling prophecy at stock prices which leads to more questions. tom: shortselling was out there yesterday with a vengeance. i think there is a lot going on here than just trading dynamics in shorting and where is the tick role to help everybody out. i will take the point that the character of negativity on wall street has completely amplified by this modern technology. did you see the bramo move? in the studio here. and on camera. lisa: we are trying to get to the weekend. i have very loud body motions. i think, this is something we saw with the financial times yesterday. reporting out western alliance was looking for a buyer. shares crater. western alliance said there is no truth to the story, you guys are pawns of some short seller trying to make ain't. thi