board. fed chair powell wrapping up day one of his system. he'll be before the system tomorrow nvidia, $887, a gain of better than 3%, so the march towards $900 continues there microsoft, that is green, as well apple, it's hugging the flat line i'll see you on "closing bell. "the exchange" begins right now. welcome to "the exchange." i'm dominic chu. here's what's ahead on the show. fed chair jay powell not ready to cut rates yet our next guest says the biggest risk he sees now is the fed waiting too long to lower rates. openai fires back, publishing elon musk's emails. what he wrote and how it may change where this fight goes next and there's a new fomo trade

emerging says one analyst and it's not too late to get in on the action he is here with the trade and the upside of this industry. now a check on the markets the major averages are rebounding, but the chart of the day right now once again goes to new york community bank corps. believe it or not. down more than 40% so far on reports thousand that the bank is seeking a major capital infusion from outside. and that's where we are going to start with these green markets, a very deep red picture, and leslie picker has the details on nycb >> so it appears to be that this would be an equity capital raise, and that they reached out to a variety of investment firms. my understanding in talking with a couple of indirect sources over the last few minutes or so is that this is likely a lot of these conversations are more in the private realm opposed to public investors and that they have been going on for quite sometime, because one of my big questions was, why is

this coming out on a wednesday typically when something like this happens, it would be pulled together over a weekend because if it does leak to the market, something like this could happen you could see shares down more than 42% so it sounds like these conversations have been ongoing. that was something when the company hosted a conference call earlier last month, after moody's downgraded some of its credit ratings, the chairman at -- the executive chairman at the time newly appointed, ultimately became ceo last week. but at the time, he hosted a conference call withable abnaly and said everything was on the table in terms of shoring up confidence in the company. so capital raise is certainly something that people have been questioning for quite some time. and analysts, at least one analyst put in a report that, you know, it was possible that an equity capital raise could be coming there are other options, as

well, that they could consider but at least according to reports from "the wall street journal" and reuters, this is one that is in focus right now, and a raise at these depressed valuations, $1.86 a share, would be obviously dilutive to shareholders at these levels since they have plummeted so significantly this year. >> that bit of news, like you said, would make a capital raise much cheaper for somebody who would look to come in and inject that capital at these depressed prices you covered a lot of these regional banks and the failures from last fall these are some of the levels kind of below that $2, $3 per share mark, where there starts to become speculation, at least about deal talks, right? about maybe who is going to come in and buy them, what it could look like. outside of a direct infusion from an outside source, is there a chance this gets taken over?

>> i haven't heard anything about actual takeover talks at these levels i mean, there are a whole host of regional stocks that were a dollar a share during the crisis ultimately they rebounded and still with us today. so it's really difficult to tell kind of which way the fork in the road goes for new york community bank but obviously, it's a dire situation. it's one in which, you know, there are likely a bunch of investment firms that play in this area, are taking a look but there are asset sales that would be on the table in order to tighten up that balance sheet a bit more discussions with investors it sounds like a lot of those are involved in private investors at this juncture so we'll see what happens. but it's obviously a very precarious situation, and a plummet of 42% today makes things more challenging for this company. >> we'll watch those shares for sure leslie, thank you very much.

we want to get to the other big market story so far right now, that's fed chair jay powell wrapping up day one of his testimony before the house financial services committee reiterating that he expects interest rates to come down this year, but isn't ready yet to say just when. steve liesman is here with more on those details day one of the testimony formally known as humphrey hawkins. what did we learn headline wise, steve? >> i think the headline is the federal reserve is -- the chair sees the economy continuing to remain strong, sees the labor market continuing to be strong, as well. but also he sees inflation coming down, and this that context, he said that he's -- he believes that interest rates can come down significantly over the next several years not just this year, but also next year. he also, i would say, dom, put the bar not as high as maybe we thought it was he said they're just looking for a bit more evidence that

inflation is continuing to come down and also in that context, we're looking for better inflation readings -- not better inflation readings than we have had, just the same ones we've had. i don't know if we have that bite, if we could run it, guys if not, i think i'll just paraphrase it, dom >> okay. just paraphrase it for us here >> just that, he said we're looking for a bit more evidence, the same inflation numbers we have, not better numbers we reiterated what he's said in his press conferences before, that the fed can begin cutting before the inflation rates get to 2%. >> so that's the remark that was getting the most attention there, one of them steve, stick with us here. also joining me on the conversation is the chief investment officer and a cnbc contributor. and mark zanldy, chief economist at moody's analytics

peter, i'll start with you just because you're sitting next to me the comments, the takeaway here is maybe, trying to, again, temper the expectations that the market has the market's been tempered over the course of the last three to four weeks, arguably has anything really changed with that picture >> nothing today i think powell just reiterated what we heard from a lot of other fed members. he's juggling some complicated stuff here it's not just okay, we raised sharply. we're going to tweak here and there and cut a little bit i mean, two-year inflation break evens or 50 basis points over the past month gasoline prices are at the highest levels since early november container shipping prices have jumped so i mentioned that, because goods prices have fallen sharply, but now are at risk of rebounding again, while the service side could continue to moderate with rental prices. the point being that there's a lot of confusing mixed messages here i don't think jay powell, it's

in his interest or really even can push that much ahead in terms of expectations, because he doesn't even know i think he does not want to start cutting rates and watch inflation rise right back up in his face again, and he -- what's being restricted right now the markets are not being restricted if you have a commercial real estate loan, yeah, you're being res restricted but the restrictive or not restrictive policy, it depends on who you are >> mark, the central bankers in america, and even fed chair jay powell today alluded to this, that the strength of the econom is what is leading to the ability to be a little more patient with regard to the ability to cut interest rates or have to cut interest rates does that still play out now, given this transitionary, confusing data that we have? >> well, my view is the economy is resilient, it's fine, it's

okay, but it feels soft to me in some key places. the job market in particular you look under the hood. for example today, we got data from the job opening labor turnover survey. you can see hiring rates are way down from where they were, and across the board, across all industry hours worked have fallen sharply, really back to levels you don't see except in a recession. the only thing the labor market that is keeping it together is layoffs are just extraordinarily low. it just feels very fragile to me and then the financial system, all this discussion around nycb, that's symptomatic of a broader set of stresses on the system, that goes right back to what the fed's doing. so it's a balance of risks it's a matter of judgment. in my view, the risk is now higher that the fed is going to keep rates too high, too long, undermine the economy and the

financial system a and to what end? in my view, they all but achieved their target at 3.7% employment, inflation is coming in nicely. exclude the cost of shelter, and we're back to target and then some so why why maintain this tight policy in the context of an economy that, you know, is, i think, a bit fragile. >> steve, can you put the risk/reward story on it for us i understand what mark is saying i also understand what peter is saying but there's a conversation that's being had right now among all of these central planners about where the greater risk lies is it the fact that we could set ourselves into a deeper recession, or is it that inflation rears its ugly head in a fairly significant way all over again what's the balance of scales right now? >> dom, you're a reporter, you have two smart guys making good points on this, and you end up

in the middle here on this i think -- i like peter's point, which is something i've been talking about for a bit, which is if it ain't broken, how much fixing should the fed do to the funds rate right now i don't know that i see all the fragility that mark sees we may have had a bout of economic weakness in january that might have been more weather related and one-offs than we had actual gathering weakness in the economy. and i also think that the fed's litmus test for cutting rates is not that heavy right now we talked about that a second ago. the idea they want a bit more evidence i think they're going to cut, but i think they're going to cut modestly and see how things go i do think the bigger issue here begins whether or not the fed can do the monetary policy walk and do the regulatory chewing gum at the same time

by that, i mean can they work with the banks, and i mean the treasury and the federal reserve both and other bank regulators, to get them to shore up their balance sheets and make sure this office real estate thing does not become systemic risk, while they take their time and do what just the economic fundamentals suggest they ought to do for interest rates so i don't know if that's possible but if they are, indeed, working as the chair says behind the scenes with the banks, we can maybe take that off the table and say, you know what there's going to be losses and risks, maybe some bank failures here, but that does not become a systemic issue that should drive the train when it comes to monetary policy. >> let's add another layer to this everybody stick around, because where the rubber meets the road is in the bond market and interest rates let's bring in rick santelli for a closer look at the move we are seeing in yields so far today, we are seeing a bit of a move higher in government bond prices, and a

move lower in those yields >> absolutely, dom you know, we could all talk about the stronger economy, but the stronger economy at a period where we have so much debt, would most likely have a larger effect on what's going on in longer rates but everything has been going down say anecdotal evidence if you please, but some of the spat of weaker data is what many investors are hanging their hat on they're making a bet that will continue if you look at 2s and 10s on one chart today, we're making our low yields of our session around the weaker data, whether it was aep or the benchmark revisions, the one traders paid attention to was last month, went from over 9 million to under 9 million. you can call it anecdotal if you want, but there's been a lot of weaker data and we've been cascading lower. boom, right before low, the new york community bank story hits the wires, and that's what moved

the market look at the timing of interest rates against that stock before it was halted. the timing matches up perfectly. and i agree with everybody today, the line that all of my sources found the most interesting is, we don't need to see 2% to start easing you could say what you want about that comment, but when you put it together with almost likely the highest rates are here, most likely we're going to cut this year. if it seems as if steve liesman deems this dovish, it's hard to argue with that. jay powell certainly seems like he's looking for any excuse to find that doorway to walk through on the easing front. finally, if you look at the longer charts, one month on 2s and s10s, we're a little longer term than one month on 10s based on where they are set up now and we haven't had any big debt auctions debt auctions next week, you'll see the influences, because a lot of the good news is built in

the market this weaker database is going to be imperative to keep these yields down where they're at >> rick santelli, thank you very much if that wasn't enough in terms of layers for you, we have more to lay on top of that mortgage numbers came out this morning, and demand shot up even as rates didn't move that much for mortgages. diana olig is here to tell us the context around that story in housing and why people seem to be transacting a bit more. >> and still, mortgage rates remain stubbornly high, above 7% and still there now. the average on the 30-year fixed is 7.03%, according to mortgage news daily and it didn't move last week so demand for mortgages from home buyers shot up 11% compared with the previous week 8% lower than the same week one year ago one note from the mortgage bankers association, fha loans

drove a lot of it. these are loans often used by first-time buyers because they have lower down payments so it showed how sensitive these buyers are, because rates didn't go up. so they also pointed to new listings in fact, there were nearly 15% more homes actively for sale in february compared with a year ago, and homes priced in the $200,000 to $350,000 range grew by 25% from a year ago, outpacing all other price categories so we're now looking at the highest inventory overall since 2020, the start of the pandemic. so the big question, dom, will all that new supply take some of the heat off of the home prices, which are still hitting record highs. >> this is the ka anyconundrum. let's bring everybody back into the conversation peter, i will start with you here again the housing dynamic is one that is going to perplex and make the

fed's job that much harder shelter costs you mentioned and mark mentioned it, a higher percentage of some of these inflationary stories is it enough, this dynamic, to get the housing market going to bring some of those transactions back and net-net, will that be good for the economy and the rate picture going forward >> so add what diana said, you need a lot more supply you think where is that going to come from? i've been saying you need baby boomers to start down sizing i don't see any other massive amount of supply that can come from, other than that area, in addition to new builds so i see this existing home market that could last and for every new home that's not bought, a new one -- or a new buyer buying an existing home, there's now paint, carpet, flooring, or stuff that's not transacting in, because no one is moving. so this is a very difficult

situation. even lower interest rates, i'm not sure if that will make the difference on the supply side. >> mark, how pivotal is the residential housing market and its unlocking, its unfreezing to the next step possibly, hopefully, hypothetically higher for the u.s. economy >> dom, let me answer the question a little different way, bringing you back to the fed if you look at inflation, and if inflation is above target because of the cost of housing services, you want to get that down to peter's point and you need more supply, and the way you get more supply is you ease up on the banking system you bring down interest rates, allow the yield curve to become more sloped, so banks can extend more credit to the multifamily developers talk to any multifamily developer, particularly in the affordable part of the rental market, the biggest problem is getting any credit at all at an interest rate that makes economic sense if you're at the fed, you think

how do i want to get inflation back down to target? i need to get more supply. and the answer isn't higher interest rates, it's lower i'm not arguing for aggressive interest cuts. let's just quarter point each quarter to get more supply and get inflation back in the bottle >> steve, you keep kind of moving your head around here i feel like you're chomping at the bit right now. what do you think? >> well, i just want to point out how much i love diana and how great she does covering the real estate business but it's only one component of the economy. and i don't think -- it's an important component. i don't want to down play it but i want to point your attention, dom, to the business round table survey today it came out, it's up double dim -- double digits. sales expected sales cap ex,

both up double digits. so when i look at the outlook for the economy, that places another big factor for me in what's the -- what the fed ought to be doing and what the outlook ought to be. and there's notion out there from bostic, which is a little more hawkish here, which he said he's concerned about this pent up exuberance that's out there this business round table survey kind of goes along with this pent up exuberance issue, which is something that the fed has to watch out for. when they start cutting, is there an avalanche of investment that ends up stoking future inflation? >> diana, last word. >> i think there's an incredible amount of demand lenders are telling us that sellers are buying down mortgage rates to get that buyer from 7% to 5% so i think you're going to see this wave of demand if we do start to see those rates come down, and it's a wave that i don't think the builders are ready to handle.

>> great conversation. we could go hours for this one peter, mark, diana, steve, thank you all very much. we'll see you hopefully all again soon by the way, don't miss steve's exclusive interview with the cleveland fed president right here on "the exchange" tomorrow, 1:00 p.m. eastern, given everything we talked about today, it's going to be a key interview, must-watch tv coming up, openai is firing back at elon musk's lawsuit, releasing some explosive e-mails contradicting what he has said about some of the inner workings over at openai we'll break it all down. and look at microsoft's latest ai head winds up next. plus, we're in the midst of the biggest biotech rally in nearly a decade, according to jefferies. we'll look at the fear of missing out trade taking place in that industry and where we might see more m ja&a in the ner

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that's wall-to-wall wifi on the xfinity 10g network. welcome back to "the exchange". the fight between elon musk and openai has entered a new round with the startup publishing a trove of bombshell e-mails from elon musk himself, and a microsoft engineer sounding the alarm about the company's ai tool co-pilot. so let's tackle all of it with our deidre bosa. also steve kovak steve, we're going to start with you, and the latest on these emails just how important, significant bombshell, if you will, are they >> very bombshelly, if that's a word what these emails show, and these are internal emails between elon musk and openai executives, from 2016, 2017,

showing elon musk contradicting many of the things he alleged in his lawsuit last week. that includes, you know, in the lawsuit, elon musk says openai needs to remain a non-profit organization in the emails years earlier, he said they need to be a for profit organization, or let -- he says let me take it of as ceo, absorb it into tesla, which is also a for-profit organization and saying you guys need to raise a billion dollars yesterday in order to achieve what you want to achieve so all of it flies right this the face of many of the most important allegations here he believes that openai should go back to its original mission of being a non-profit organization but if you're an openai lawyer, you're going to be giddy to ask him why he said the opposite before he left the company >> exhibit abcd. >> this is discovery before discovery happens. >> musk is mentioning

alphabet/google in some of these emails, as well. >> there's four emails, and he mentioned google 12 times. what this really tells us is back then, and he says when google was worth $800 billion in market cap, they seemed uncatchable. what elon musk says in these emails is that google is so far ahead, that it would be nearly impossible for openai to catch up with google if it doesn't have the right tools, the right funding, et cetera he points out, he says - >> so we talked a lot about how google has pioneered generative artificial intelligence technology but more recently, has botched the rollout of its key flagship product, which is gemini so this raises a lot of questions that investors and onlookers have been asking in recent months. is the management the right

management to lead google in this incredibly important era? and elon musk's e-mails are a reminder years ago how far ahead google was so to be at this position when it's seen as lagging behind is remarkable >> seen as lagging behind. there's a company that it's lagging behind, and that's microsoft. let's talk about that more cnbc spoke to one microsoft engineer who is warning about the risks of the company's ai tool this is co-pilot deidre, co-pilot is the successor, the next iteration of kor cortana. what is the danger and what is the flagging being done right now by some of these people like the engineer at microsoft? >> right so let's be fair when we get a new generative ai chat bot, there's problems since chatgbt came onto the scene, there's problems with

misinformation, bias, full-on hostility. we talked about gemini's problems, its image generation, by diverse in situations that don't call for diversity this is the latest and centers on microsoft's flagship generative ai product, co-pilot. this amazing article that was written, this report at cnbc shows that there's even internal concern. she talked to an insider at microsoft that has been called red teaming, casting out the chat bot and finding what's remarkable about this is entering a simple prompt, like pro choice, is bringing up disturbing images. when we talked about botched rollouts, it's people talking about cherry picking, looking for things and trying to almost trick the chat bot into saying things it shouldn't be saying. in this case, very serious. just asking for pro choice is bringing up some disturbing images. so google has a problem on its hand, and unlikely this is what we'll see from my chat bot.

it reminds us how early we are, and these bias, misinformation problems are going to be with us throughout -- for the next few years. that's going to be especially important in a year like this, which is an election year. >> steve, last word here. there was such a race to get out of the gate for these things, that people wanted to plant their flags so quickly in this process, that you could argue some of that rush to market is what led to some of these early stage, early inning, because that's what it is, mess-ups. >> right. >> is there a feeling right now that the artificial intelligence rollout that we're seeing could be hampered in the public view because of such public mishaps that have happened with the biggest players when it comes to rolling out artificial intelligence? >> yes and no. it's not just about the mishap and the fact that you put in this prompt and you get some nasty images back or maybe some people felt that google's gemini -- what you should be

paying attention to here with this microsoft case is, this engineer has been flagging these issues internally through the proper channels for, i don't know how long, but for a while. he wasn't being listened to. microsoft again, he put it out publicly. microsoft told him to take it down. he was reporting it internally as you're supposed to. nothing happened. the fact that this person felt he had to go to cnbc and tell them, the fact that he had to go to the ftc, write a letter to microsoft's board, tells you when this started a year ago, we had microsoft and everyone saying we're going to do it smartly and safely, telling us that we're going to be safe and secure and so on and so forth. but when their own internal people are telling them, these are problems, these are happening, these are against our policies and they do nothing until it gets reported in the press, that should lead skepticism every time one of these companies come out and say we're doing this safely, just trust us, because it just takes

one example to prove you guys aren't taking it seriously internally. this is emblematic, it's not just a microsoft problem, in this rush to get things out, they're willing to put some of those positions aside in order to get it out faster and quicker and cheaper. so it's -- i have a heavy dose of skepticism moving forward when you hear these companies say we're developing ai responsibly, because we have evidence they're not. >> next chapter, more news to come tomorrow on this. thank you very much. coming up, retail earnings roll on with american eagle, victoria and victoria's secret. that's all ahead in "earnings exchange." rylee! from rylee's realty! hi! this listing sounds incredible. let's check it out. says here it gets plenty of light. and this must be the ocean view? of aruba? huh.

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the rebel's assaults on red sea over israel's war against hamas. new york governor kathy hochul is enlisting the help of state police and national guard following several high profile crimes in the subway system. she said this will add up to 1,000 more people to the teams that are patrolling the subways. new york prosecutors dropped their case mid trial against the three men accused of conspiring to possess hand drafted lyrics to the "eagles hotel california" after e-mails prompted the defense to question the trial's fairness. dom, back to you. >> tyler mathisen, thank you very much for the news update. coming up, biotech stocks are up 50% from their recent lows. so how can investors still get in on that health care trade? outh, mi us st has some idea abt atcongp. has no idea she's sitting on a goldmine. well she doesn't know that if she owns a life insurance policy of $100,000 or more she can sell all or part of it to coventry for

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welcome back to "the exchange." the s&p bioetf up 26% after years of underperformance. our next guest says we are in the midst of the most pronounced biotech rally in over five years, but he also says it's not too late to still get in on the trade. joining me now is jared holtz, analyst at mosuho securities. thank you very much for being with us. the biotech sector was maybe due for a little bit of a bounce. it's been such a terrible few years since covid. but take us through what's been

driving it, and why there is still more upside in just certain parts of the market. >> dom, thanks a lot for having me. yeah, so i think, you know, looking back on the past few years, it's been a very challenging backdrop for biotech. this has been one of the worst spaces in really all of the equity market since mid 2021. mike we barely seen any positive activity for any pronounced period of time until very recently. and i think for that reason, we're finally getting this index flat over a multiyear period, whereas so many other areas in the market obviously including the s&p, have done far better. i think when you consider the risk factors that we have spoken about before, with respect to drug pricing and other elements of the business, the amount of companies that comprise the index being verimy mplentiful, of these risk factors are much

more well understood and we can continue to move higher from here. >> okay. so now that the perhaps context around covid, which was kind of behind that surge from 2020 to 2021 is done, we're now left digesting glp-1s and the new trends there, and the skyrocketing valuations we have seen for companies like no novenovemo nortis. where can you get in? >> just given the excitement and appetite that investors have for this one area, there are a bunch of small-cap biotech stocks thats as have drugs in the glp-1 category, terms pharma, there are other ways to play obesity, and yes, we have seen this category explode, you know, the

combined value for these obesity drugs, if you add novo plus lily, is probably north of a trillion dollars. so there's definitely room for more players here. i think it's just going to come down to the investment needed to move the drugs through, and how they're going to eventually compete with the two large-cap pharma players and just the, you know, looking at manufacturing alone and going to market, very expensive. but there are other, you know, ways to play the group. those are two right off the bat, but there are many others. >> let's go glp-1 aside, let's set that off the table for a little bit. is there anywhere else in biotech that's promising behind glp-1? >> yeah. i'm kind of excited about alzheimer's disease. we don't talk about it that much relative to, you know, the weight loss drugs. but you have biogen out there with an approved drug.

you have eli lilly coming on line later this year. this is another massive category. i think it's been kind of plagued by various fits and starts along the way, you know, in terms of market development and data. now that we're going to have two major players creating this market over the next few years, this is one that i would kind of look at and say we're not really paying for it. we know there are an abundance of patients out there and we'll have drugs that treat this, albeit probably not perfect yet. but we're kind of in the first inning of what could be an interesting alzheimer's disease buildout. it's just not as interesting for investors right now versus the glps. >> jerald holtz, great to get your thoughts. come to see us again soon, sir. speaking of health care, don't miss our interview with cigna ceo david cordani tomorrow 1:30 p.m. eastern time. so from the drugs in biotech to the insurance side of things,

it's all interconnected. coming up, financials are sinking on reports that new york bank community is seeking a cash infusion. and jay powell addressed the proposed rules surrounding capital requirements in his testimony earlier today. we're going to dig into all of those topics coming up next. at pgim, finding opportunity in fixed income today, helps secure tomorrow. our time-tested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. pgim investments.

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welcome back to "the exchange." new york community bancorp shares are still halted for trading, but they were downmore than 42% before the halt on reports it will seek outside capital to try and shore up its balance sheet. joining me now to discuss me is chris marinac. and hugh song. thank you both for joining me. hugh, you've don some expensive reporting on this, the most recent of which has been about some of the deposit states that are at nycb right now. what is this newestdevelopment and how does it frame the discussion? >> i think it speaks to the questions that are out there, right? the last thing we knew from them is their deposit base was stable. there are now questions whether parts of those will leave given the ratings downgrade from friday.

today, we had a headline that said they're out seeking capital. they need a capital injection. while that's not surprising, the absence of word from nycb to context yuli yulize what that m there's concern that regulators are forcing their hand saying you're in the midst oh of a view about your material weaknesses and whats that that brought up, and perhaps do you need to back fill that hole with capital, or is there some other cause for concern? i think until we get definitive word from nycb, there's going to be this reaction from the market, which is all news is bad news. >> we're almost a year removed now, roughly a year removed from the regional banking crisis that we saw last year. during that time, when some of these lenders, who are, you know, embattled but not at the stage nycb is right now, talked about asset sales, focusing on core assets, what type of

announcements do you foresee in the coming days, maybe weeks with how you can shore it up absent a straight-up cash infusion from an outside equity source? >> that would be a huge boost of confidence. you could see the stock violently react to the upside if that happened. one thing leslie picker said, she heard there were private sources of capital out there. just to give the viewer out there some context, there was a deal several months ago, pac west bank of california, another wounded entity from last year's chaos, so pac west needed about $400 million of private capital to get that deal done. so there is the understanding there are private equity players out there, lots of dry powder, who are comfortable with this asset class, who are waiting to potentially inject money into and own banks. this would be the cohort of folks that this deal is being shopped to, dom. >> so chris, let's bring you into the discussion here. you have, and have been bullish on this name, nycb, for a while.

this has been jarring for a lot of regional bank investors out there. can you give us your thoughts give tp headlines? >> thsure. the company mentioned this that all ideas were on the table back on february 7th. they said that they had $37 billion of liquidity on top of the $23 billion of uninsured deposits. so if all of the uninsured deposits land at the bank, they have plenty of coverage. some of the deposit outflows occurred, which i think would take time, but say they happened today, they have excess liquidity to cover those, too. so it's not a good situation to have that much deposit outflow if it occurred. i don't think it's occurred at all. the company really is prepared to do what it takes to run the business in a better fashion. i think what it needs right now is time. time to get the 10-k out, time to explain what has or has not happened. and then foresee what the best

alternatives. i look at capital as comfort capital. not something they have to do. under a stress test this year, they would have to have about 7.5%, maybe less. so there's a good 200 basis so there's a good 200 basis points of potential [♪♪] your skin is ever-changing,

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switch to comcast business mobile and save big with up to $500 off an eligible samsung device with a qualifying trade-in. don't wait call, click or visit an xfinity store . welcome back, the week of retail earnings continue victor secret.

here with our trades, lee munson president and chief investment officer, thank you for being here, starting with burlington, lower on the year but up 81% from october low, bank of america launching the strength of off-price as burlington spends on new opening and higher clothing cost. what is the trade on burlington? >> i like this stock. i think longer-term the issue is this is the poster child or creative destruction. 500 stores over he next five years doing this by buying up the stores from bed bath & beyond. that's what the story is, increasing footprint 50% over the next few years. if they can do it, great, what's happening in the past is they are value oriented people, the clients and customers have been having inflation rise faster than wages. when that flips and wages start rising faster, we will be good to go. this is a great story longer- term. not sure if there is a short- term trade.

>> american eagle outfitters off of its fifth positive week in the last six, citigroup with increased demand overall, but especially as the retailer looks to expand gross profit margins, what's the take on american eagle? >> my daughter loves it, the kids and teenagers love the brand, they are making the right moves but i don't like competition this is risky business. as they remodel 15 more stores, look at the last 10 years, the stock is not given too much value. tomorrow they will have the investor conference and they will start talking about how they increase shareholder value. there is only one way to do this which is the buyback. i want to wait, listen tomorrow and see that show me the money because again this is retail, you have to make the right moves to survive. >> finally on retail, victoria's secret on pace for its third straight down week, wealth off october lows, wells

fargo focusing on brand strength with outsized growth in its fragrance business as the company cuts cost with better inventory management taking hold. what is the trade on victoria's secret? >> walk away, like all the teenagers do as they walk through the mall. just take your teenage daughter and bring her to the store and say is this a brand that is relevant for the next 10 to 15 years of your life? the new stores of the future, 70 plus, how do you have the makeup counter with insincere product line not saving this dead and dying retailer. it is competitive, but i would walk away. i don't care about a bounce or short squeeze more about some idea of private equity coming to buy a dying brand and turn it around. take a walk. >> okay there is the trades, harsh, if you will from lee munson. thank you very much, we will talk with you later. that does it for the exchange,

no green across the screen with the tao up 90 points, again we are waiting on what will happen with the fed book, "power lunch" picks up coverage next after this quickre, th bake dow is up 97 points. we will see you tomorrow. trading at schwab is now powered by ameritrade, giving traders even more ways to sharpen their skills with tailored education. get an expanding library filled with new online videos, webcasts, articles, courses, and more - all crafted just for traders. and with guided learning paths stacked with content curated to fit your unique goals, you can spend less time searching and more time learning. trade brilliantly with schwab.

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glad you could join us. the fed tear powell tells the market to hold your horses, we are not ready to start cutting interest rates. we will dig into the details of the beige book which is out to now. >> another bombshell report on the problems of ai, the microsoft copilot designer creating questions of violence or sexualization, we will hear more and see what microsoft is saying and doing. first, a check on the markets as stocks are rebounding falling yesterday's losses. we have averages in positive territories with the nasdaq leading the way, s&p up by .5% and the dow adding .2%. we are watching shares of new york community bank, the stock has halted after losing half of its value on reports where it is seeking a cash infusion. much more on this, coming up, let's get to the big