Transcripts For CNBC Squawk 20240703

Historically a tricky month. How much, though, does it have to do with the turn were starting to see and the data . The calendar itself, sure. The data are what they are in terms of performance but its want been bad when you have the market up, 10 or more. To me thats one of the things you keep in the back of your mind. The seasonal weakness was mostly felt in august. Either the turn in the data or just the fact that were not being able to escape the late cycle back drop. At least psychologically. When you have employment down to 3. 5 . The fed has been tightening for a year and a half,ist time to wonder, how much longer can the cycle last . Theres not much to observe in the numbers, aha, its here, the soft landing is a fantasy, its not going to happen. As many have said in the jobs number is consistent with a soft landing. Who knows. Consistent with descending into Something Else . I think the biggest risk in the near term is that longer term yields keep going up, and not just because the economy is stronger. It becomes this little indigestion problem for the stock market. You see small caps getting hit today, industrials being hit on that. In general, earnings estimates are headed up for this current quarter. All of that seems to be offsetting and in terms of the lags and everything that people are consumed with, its still a matter of somebodys judgment call on how this cycle maps to prior ones. Deutsche bank talking about this is a dangerous sixmonth period. Thats when recessions have happened relative to the first rate hike in the past. I dont think the first rate hike is the starting point to start counting. Its actually when the fed starts to cut that you have to start to worry a little more historically. Of the list of event worries im seeing for september, Student Loans will start creeping up. Uaw, Government Shutdown and then the supply of bonds of all kinds, which you already talked about. Exactly. All that stuff is absolutely out there. Its right in the middle of the table. They all push in a similar direction, which is restraint on growth. Well see if we started this quarter, indeed, at 5 gdp pace, maybe that restraint is not going to be the fatal blow. Hard to know. I think it is a good reminder that recessions happen when lots of things go bad at once or you get a big shock. Its not just like, well, its time. You dont just look at your watch and decide its here. After 525 basis points exactly. Some people think you do. Its a matter of how that manifests. Yeah, i think thats true. I love the chart from deutsche because on the far righthand side is the 1983 and 1994 tightening cycles. If we followed those, no recession until 2029 because thats how long it was when you finally got a midcycle slowdown. Im not saying we got it but its a good debate whether that was really lags or not. Bank of japan said lags can be 30 years. Exactly. His best line generational lag. So good. Thank you, mike. Mike santoli. Speaking of a slowdown, our next guest expects a u. S. Recession to start early next year though he believes it will be short and shallow and sees plenty of opportunity in the second half of the year. Joining us is Principle Management head of investment, principle has over 500 million under management. What are you exactly positioning for . Good to be here. You said short and shallow. I think mike was talking about this. I think the fed needs to turn up the air conditioning now. They have been helping the economy because it was overheat coming out of covid. And i think we all expect them to stop this pace. I think whats been tricky in this economy has been sort of mixed signals. When you look at the labor data, it continues to be extremely strong, but when you look at the macro indicators, the inverted yield curve and other statistics you see, they kind of conflict with each other. Our view remains its a much more tricky economy to manage and you need to be a little more innovative managing the risks going into the latter half of this year and particularly next year when we do see a lot more opportunity. Because areas of the economy are less susceptible to rates while others are historically the same . Yeah. Ill give you a statistic. So we at principle, we are one of the largest partners for small and Medium Businesses in america. Not just america, all over the world. One of the things you see is we have wellbeing index. Compared to last year where half of Small Businesses were growing, twothirds of the Small Businesses are growing right now. You see this momentum on the small and Medium Business side. On the large side you see a lot more headwinds. What it is, its a lot more tricky. Our view is the Small Businesses will continue to do well. There is more growth happening there. I think another area we talk about is it is traditional between growth and value. We see international becoming the value play for investors. Whats really happening is valuations and emerging markets have stayed low and continue to be low. As we come out of the short and shallow recession, there is opportunities there. I think in the u. S. You need to be a lot more discerning but there is momentum going into quality growth in the u. S. You think the fed is done. The fed is going to pause. We do think somewhere around q1 or q2, you could technically see what is called a soft recession. But this traditional view means collapse in economy, collapse in stock prices, its not going to happen. Is it enough to get them to cut or no . I think theyre going to stay for a pause and going into the beginning of the year theyll look at cutting. My analogy would be turn up the air conditioning as they enter winter, they raise the heat, which is to say they early next year . Early next year, q2, q3. Theyre not expecting to go that soon . They arent. But you just our view, the fed looks at a lot of things. They look at employment numbers and other factors driving the growth. The cost of dent has gone up substantially. That is going to, as you were discussing, the industrials are going to be heavily effected. Thats a large part of the economy. The Manufacturing Sector is going to get affected. They will look at all the data points. Does that mean your russell over the s p or value over growth . That would be were definitely russell over the s p, international over u. S. In certain growth areas. However in the u. S. We would choose more quality growth over momentum because thats where we see the most value. You pointed to emerging markets before. Were starting to see real weakness out of europe and chinas been very disappointing. Yeah. Thats a fair point. When we Talk International we take a global view. I would say india is a very fast emerging story. I think if you look at parts of asia, particularly places like vietnam and thailand, they continue to do well. I think theres parts of latin america, brazil, were extremely bullish on. There are parts of emerging markets. Is it obvious gee crow politics are the biggest deterrent to going into latin america . Well, look, i think valuations create an opportunity. I think geopolitics is priced into a lot of these stocks. Having said that, i think the rate environment in these markets, its a lot more stable than weve had in the u. S. Brazil is a good example. I think stability of rate environment, start of growth, that is steady, creates opportunities for investors. I think the key thing is going back to the value discussion, i think there may be value in em but you dont want to get trapped in the index. You want to find right opportunities in the right sectors. If you are expecting this recession early next year, which im not sure is consensus at this point, are you a buyer of treasuries, of fixed income, because thats not priced in . Thats a great point. I would say were a buyer of highquality credit. Particularly high quality credit because it has a little longer duration. So, if the rates do adjust, you get a good risk reward. We believe the start of speculative credit has had a run up. It needs to correct. I would say Investment Grade credit is compelling because it has duration lift and the credit is well priced. Im told theres a deluge of investment deals coming today and the market is ready for it. Thank you very much. Glad to be here. Thank you. Lets turn to the ipo market today. Arm revealing new details about its upcoming debut. Leslie picker has been watching that all morning. Softbank backed arm is asking for a market cap as high as 52 billion as it starts selling ipo to investors today. Its actually quite expensive when comparing it to earnings of its peers. Represents about 100 times trailing earnings for its fiscal year through march. 100 times. While the comparisons to different years, that relative value is about double arms chip designed peers. Synopsis is trading around seven times. Its more akin to nvidias valuation, which has soared more than 250 times this year. Nvidias price to earnings is about 116 times trailing earnings. Arms revenue declined about 2 in the quarter through june while its net income was cut in half. Still the scarcity of ipos may drive more investors to demand shares and customers such as nvidia, amd and google have indicated interest in buying 137 million of the ipo, which implies a smaller float size by about 15 of the total offering size, guys. Can you talk about the prospectus and whos interested in having a piece of this pie and whos actually committed . Its interesting the way its worded, carl. As you mentioned, theres a distinctions between interest, which is nonbinding and a whole host of corporate customers they list in their prospectus as having given indications of interest in buying that ipo. Its 735 million worth. But theyre nonbinding. This would be amd, apple, google, nvidia. Normally what we see with cornerstone investors, oftentimes when theres a corporate, say, pepsi, with the instacart coming down the pipe, with he get more of a private placement. Its more of a sure thing theyre going to buy shares at the ipo price. These names are on the cover. Theyre very well known companies. It would be hard to see them truly back out of the deal unless they saw a final ipo price that was way out there. You can feel somewhat dmfrtable they will buy a stake. It doesnt necessarily go into detail about who is firm committed and who is saying theyre interested but not yet committed. Its a big moment for softbank, even as you said, leslie, theyre retaining 90 . 90 , yeah. Talk us through the investment. They took it private for how much and when . And this value is, what did you say, 50 billion, so theyre up a bunch, right . Yeah, they would definitely be in the money. They took it private in 2016 for over 30 billion. Obviously, this implies quite a significant increase from those levels at a fully diluted valuation it would be 55 billion. They did buy back the 25 they didnt already own from their own vision fund last month. So, this is kind of an internal deal. It may signal something to the market about getting a discount relative to that because that valuation was 64 billion. But, you know, at the end of the day, what really matters to your point, sara, is what they took it private for back in 2016 relative to what it ultimately debuts at, which will be significantly higher from those levels given the range they put out today. Another angle thats interesting is they didnt list in the uk, even though this was considered a National Champion and i would think a black eye for uk ipo market and their stock exchange. Yeah. There was a lot of discussion about where they would list. London, of course, being a potential candidate there. Ultimately they did decide to list in new york, which weve seen kind of a trend of European Companies doing increasingly more so lately. To your point, being a National Champion, its history, kind of as it was started in 1990 as this very revolutionary company that was creating the designs for these chips that would go in smartphones, which in the nipts was also revolutionary. So seeing it come to the United States is definitely noteworthy. Leslie, thank you. For all of the information on arm. That was a lot. Appreciate it. After the break, the Senate Returns to washington as deadlines loom on votes for bills related to the budget, child care and insurance. Well break down what it means for investors. Plus, td cowen naming top backtoschool picks as they indicate it will be a needs over wants kind of season. Well get to some tseamofho nes when squawk on the street comes right back. Age on your own terms. Retinol overnight means. The smoothing benefits of retinol. Are now for your whole body. Plus, fastworking crepe corrector diminishes wrinkled skin in just two days. Gold bond. Champion your skin. Your shipping manager left to find themself. leaving you lost. You need to hire. I need indeed. Indeed you do. Indeed instant match instantly delivers quality candidates matching your job description. Visit indeed. Com hire the power goes out and we still have wifi matching your job description. To do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. Congress back in session with a lot on its todo list. Our next guest does expect them to pass a cr but the House Freedom caucus could cause drama along the way. Raymond James Washington policy analyst ed mills. Great to have you. Ive seen a lot of people talk about the risk of a shutdown and its not necessarily acute. How concerned are you . Im concerned, but, you know, i think there is two things here, carl. One, theres a path forward. You can do a short term extension, allow republicans in the house to complete their work on the individual bill. Theyve only passed one so far. What the House Freedom caucus doesnt want is a deal that jams them up into the december holidays. Do that, get funding for the hurricanes, the wildfires in hawaii, and live to fight another day. The second thing, and probably more importantly, you know, back in june were probably at a ten if we defaulted on a scale of one to ten. A Government Shutdown for the markets is probably about a two. If it goes on a really long time, about a three. In terms of magnitude, the market cares less about a Government Shutdown, and i think there is a path forward here. Interesting. Raimondo will be on with jim cramer tonight to talk about her trip. I wonder, is there a sense it changed the color of the ties right now between the two countries . Carl, our call all year long was the Biden Administration was trying to deescalate a lot of things in china. Not walking back any of the tech restrictions. This is the small yard, tall fence, National Security driven agenda. The commerce secretary is supposed to go to china and sell u. S. Goods. Thats what she did. There was a contentious meeting, we hear, with their own minister of finance in commerce, but i dont think thats going to deteriorate the overall relationship. What we still need to get are the tech restrictions that the Biden Administration put out last october. We probably get that in the next week or two. That could be headline negative for semiconductor, semicap equipment. That, i think, is what Market Participants really fear right now. Should we be talking more about trump . Latest wall street journal poll saying support for donald trump now up to 59 . Another headline the poll finds in a 2024 election test, biden and trump are tied at 46 . I know its early. We dont know who the nominee is on the republican side, but considering he came out recently and said hes going to impose a 10 across the board tariff on foreign imports. Its an important point. We put our election preview last week. What we said is the most likely scenario right now is a rematch of 2020. You usually dont see these level of leads in a primary and that person does not end up getting the nomination. I think in september were going to focus once again at the Ronald Reagan library on the 27th theres the second republican debate. Does trump show up there . Does anyone start going into his lead . Absent that, you know, in that headtohead matchup, incumbent president s usually win reelection unless theres a recession. So, a lot of those focus on economics are going to loom really large in 2024 because you can go down the list of all of the issues post the election that are really important. You mentioned tariffs. Theres taxes, regulation. Its endless how important this election will be. On a specific area of regulation, i know youve wriven written about cannabis and the designation. Some say that move alone, the move was groundbreaking. So, the hhs is going to recommend a descheduling not a descheduling. A rescheduling from one to three, which is opening up potentially more medical research and allowing for congress to potentially pass what we know as the safe banking act. Theres been a lot of false hope for this before. This is a movement that would probably expand out the availability of cannabis in the United States. Does it get that early recognizedthrough regulation . That seems unlikely. The most likely scenario is something that would make the transactions and payments and Capital Markets more legal than it is today. Thats why i think thats important. Yeah. Well, the stock certainly reflects what a hard slog its been on regulatory change. Its going to be a fascinating fall. Talk soon. Later this hour, a road map to Bank Consolidation in the u. S. Meredith whitney making the case for why regulators can be the heroes the sector needs. Watching airbnb and blackstone, higher after the s p announced some reshuffling will see both names join the s p index before the start of trading on the 18th. Replacing Newell Brands and lincoln national. Stay with us. What ai will do for them. Were excited about what ai will do for business. Introducing watsonx a platform designed to multiply output by tailoring ai to your needs. When you watsonx your business, you can build ai to help coders code faster, Customer Service respond quicker, and hr handle repetitive tasks in less time. Lets create ai that transforms business with watsonx. Ibm. Lets create. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to use predictive monitoring to address operations issues . We can help with that. Can we provide health care virtually anywhere . We can help with that, too. Is it possible to survey foot traffic across all of our locations . Yeah absolutely. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Welcome back. Time for the story abroad. Well start with the european close. Stocks are in the red, well off session lows. Energy among the big winners along with material stock on this bump up were seeing in Brent Crude Oil prices. Novo nordisk dethroning lmh as europes most valuable Company Thanks to weight loss drugs it manufacturers. On the data front, eurozone activities dropping at the steepest rate in nearly three years. Also abroad, Australia Holding benchmark Interest Rate study for the Third Straight month. We cant talk global without china, Service Sector with slowest expansion. New business from abroad fell for the first time in 2023. One bit of positive news out of china, country garden, which has been the worry de jour did pay the bondoukou upon, narrowly missing default. We have to pause for novo nordisk, because the one thing people want more than dior and Louis Vuitton is weight loss drugs. It will be available by prescription from nhs and also for purchase. This is a stock that has tripled since the end of 2020 on these blockbuster results of the drugs. The ceo on last week and talked about culturally what it means for hes worked there for decades. Since he was a very young man. Its changed the way the danish and how people thinkabout working for them. Its almost a premium. Oh, you work for novo, its a huge point of pride. I believe it. They used to be a big player in the insulin market, but this ha cat catapulted them to new heights. Apparently theres already wait list at some private pharmacies in the uk with thousands of thousands of people. Nasdaq has managed to barely go green. Well watch that. Lets get a news update with silvana. Good morning. The impeachment trial for republican Texas Attorney general ken paxton began this morning. The gopled texas house voted to impeach paxton in may. Now their counterparts in the state senate will decide whether to remove him from office. Paxton is facing several accusations, including bribery and the abuse of public trust. President biden announced today jack lue is his pick to be the next ambassador to israel. The president tapped him for the office as tensions between the u. S. And israel rise over Prime Minister Benjamin Netanyahus judicial shakeup. Lew was also secretary of the treasury and white house chief of staff. And Chinese Police detained two construction workers they say made a shortcut through a centuries old portion of the great wall of china so they could get to work faster. Police say the duo caused irreversible damage to the wall, which is a unesco World Heritage site, carl. Thank you. Still to come this morning, td cowen is asking, do you really need it . Laying out its top backtoschool picks. Walmart, ulta, tjx among the names theyre bullish on. Nextgen health care, to take it private. Well ask Orlando Bravo joining us thursday at post 9 on this show. Good night hey corporate types. Would you stop calling each other rock stars . Youre a rock star. You are a rock star. No more calling coworkers rock stars. Look, its great that you use workday to transform your business. But it still doesnt make you a rock star. So unless you work with an actual rock star. Hi, im ozwald. Hello ozwald. Pam, you are a rock i wasnt going to say it. Cowens backtoschool picks are grabbing our attention. They point to walmart, kohls and ulta as consumers prioritize needs over wants going into the fall. Joining us is oliver chen. Good to see you again. Is there a screen you can use to emphasize needs over wants . Well, what were thinking about is consumers are really gravitating towards essentials. So it is all about needs. Needs in particular, food, essentials, grocery, even beauty is considered an essential good. And ul that is a great example there. At walmart we like the grocery exposure and this company is benefiting from inflation. What we look for ahead is disinflation. Were worried about warmer weather. Were also worried about student loan exposure. So, there are puts and takes to the consumer. Keep in mind on the positive side, theres a tight labor market. Theres 700 billion on the sidelines. However, delinquencies are going up. Many crosscurrents. Bottom line is, needs over wants. Any parent whos helping their kid get ready for the year has been in the shoebuying business, which continues to be really traumatic. Depending on what chart you look at. How are you looking at some of those names . We think about promotional levels. Promotional levels are normalizing. Higher promotions in apparel. Apparel has been armor promotional category. Entry price luxuries such as 200 to 600 is under pressure. Our call is really thinking about essentials and market share leaders as well. And consumers are definitely looking for value. Theyre also shopping later. So, its a stretched out Holiday Season as well. I dont get, oliver, how the kohls pick fits into the needs over wants priorities right now from the consumer. Kohls has a new ceo and that ceo is specifically making lots of great changes in terms of moving cash registers that werent used, adding gifting, focusing on opening price points and also, sara, keep in mind, s sephora has a store in kohls as well. Theres a Management Change there and were looking forward to differences and getting into new categories such as home decor and pets. Those have been popular categories as well. I havent heard much from the new ceo so im interested that youre interested in it. He has a background from burlington as well as Traditional Department stores and hes going to leverage that to drive more speed. Kohls already has a nice free cash yield, off mall, and they have partnerships with amazon, under armour, nike, some very good brands in the store. It is a return to the store this year as well. Were seeing encouraging traffic at most retailers. Thats a big positive for physical retail. I was also wondering about it because of all the warnings we got from macys and nordstrom on Consumer Credit and rising delinquencies going into the fall when we are going to see the resumption of these student loan payments. Seems like a tricky mix. Yeah, sara, theres a lot of caution here. A lot of people dont know how much they owe, for starters, or who to pay to. The positive thing is your credit wont be impacted for a year. Were watching that. On average the exposure across our sector is about 15 to 20 . And it is higher at ulta and target. These are main caution points and its been embedded in cautious guidance as well. You really have to be careful and think about a consumer whos shopping for what they need, whether that be Beauty Products as well, essentials, food, or turnaround stores such as kohls. Do you think concerns about student loan repayments are overstated or well grounded . Yeah, i think theres a lot to be determined. I think there is cautious optimism in terms of how Companies Issue guidance. Theyre well aware of their consumer exposure here. We really dont know how the consumers will behave because theres many come complication who to pay and when to pay. That will add caution, and the warmer weather. The good situation in retail, inventories are running about six points below sales. So, having slimmer inventories gives more agility for retailers to test, read and react. Thats a positive. Also supply chains are getting easier, transport costs. That should be easier for management teams to really control their supply in the face of uneven demand. October will be a month to watch. I do expect it to be fairly volatile in terms of the traffic promos and also the Consumer Trends for sure. That deadline creeping up pretty quickly. Welltimed call. Well see how it plays out. Appreciate it. Oliver chen from td cowen. Up next, Meredith Whitney on a road map to constructive Bank Consolidation in the u. S. Shell join us at post 9. Goldmans David Solomon will sit down with david faber this thursday. 4 00 p. M. Eastern time live from goldmans tech conference in San Francisco. Only at vanguard, youre more than just an investor, youre an owner. Our Financial Planning tools and advice can help you prepare for todays longer retirement. Hi mom. Thats the value of ownership. fan 1 there ya go thats what im talkin about josh allen is this your plan to watch the game today . hero fan uh, yea. I have to watch my neighbors nfl sunday ticket. josh allen its not your best plan. But you know what is . Myplan from verizon. 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Call the number on your screen. Why dont you call aag. And find out what a reverse mortgage can mean for you . [announcer] call right now to receive your free noobligation info kit. Call the number on your screen. Welcome back. Lets get to the financial sk tore. Our next guest calling on regulators by encouraging consolidation among Smaller Banks which would keep lending. Joining us is Meredith Whitney, welcome back. Good to see you. So good to see you guys. You went deep on this report and it caught our attention because people arent really talking about Bank Consolidation. Why did you decide to look into it . For 15 years now since the credit crisis, people have been talking about the banks getting smaller. And the top four banks have gotten smaller. They stopped lending. Their market share and lending has collapsed. So, they originally ring fenced the top 14 banks to get smaller. And they increased capital reserves, they increased regulatory scrutiny, incredibly expensive and really discouraged lending. So, now theyve ring fenced now has gone from 14 to now 34 by adding 20 new banks to the list. And what this means then is that the 20 new banks, or at least the 9 traditional banks, will surely decrease their lending. What does that mean to the overall system . The 14 banks control roughly 60 of the fdic deposit and slending market. Now 34 banks control 75 of the u. S. Fdic deposits and assets. That means, then, 75 of the market is going to contract or continue people are going to lose access to credit . People will have access. It will be more expensive and move outside of the Banking System. What that means then, and here is the real opportunity for regulators. And i feel like i have the david bowie song we could be heroes in the back of my mind. You have 75 of the market control market share with 34 institutions. That means 25 of the market is controlled by 4200 institutions. And so as the banks get smaller, the small banks have to get larger. And what i did in this report is talk about whats different today. So theres no existential credit threat. And for the Smaller Banks, and i picked the best small banks to be the consolidators within the industry, and they also interestingly, very well executed, theyve all done m a before so they have the skill set to do m a and integration successfully. They all have high loan to deposit ratios, which is the opposite of the top banks now and will be the progression of the new 20 banks going forward. And theyre positioned exactly where the u. S. Growth is. So, every 60 years in the United States, the last 250 years, youve had regional growth. So, you think about the Industrial Revolution being the northeast, Banking Centers developed within the northeast. You think about the power revolution, Banking Centers developed along the middle atlantic and further out to the coal regions in the west. Then you look at the manufacturing revolution and youve got banking hubs in the detroit area, throughout the midwest, and then you have what i call the leverage revolution which brought everybody to the coast. That was our last economic revolution. What is clear today, the new economic revolution is clean energy, reshoring, manufacturing, and demographic migration. And thats happening in the south. You look at the gdp Growth Numbers in the south. They dwarf the coast and dwarfing the north. This is where banking hubs should be. The six banks that i chose, five banks i chose, all have strength and all have diversified earning screams, diversified lending basis and diversified state concentration. These are the natural regulators will look like heroes because if they allow these banks to consolidate or get bigger, get economies of scale, keep pricing down, keep lending inside of the fdic regulated to help the economy. Which is safer for everybody, youre naturally progressing to where the next Regional Bank hubs should be. Theyll be buyers . Theyll be buyers. These six are . Theyve been active. The names . Bank of oklahoma, youve got First Horizon, which by the way td hold their deal, you have synovis, ozarks and pinnacle bank. These are either bank of oklahoma has a big stretch into texas and throughout the west. But primarily southern. Pinnacle has a great market share within nashville. Nashville has outgrown most of the country, as has texas. Theres no comparison to texas. The texas Regional Banks are, to me, not as compelling as the banks ive identified that already have activity in texas. By the way, the big banks are in texas. Theyre in these areas. So, theres no threat of taking away their customers. Actually, they would encourage this. For every at t and tesla and the Massive Companies that support those infrastructure. Those are who banks with Regional Banks. So, the tone can change and the regulators can be responsible for strategic growth, for economic acceleration and a really sound Banking System. But the question is, how realistic is that because the Biden Administration hates corporate consolidation . Its hard to imagine none of these banks have over a 50 market share of deposits or 100 basis point market share of deposits or assets. So, actually, i would think the Biden Administration, and all of the regulators who are trying to walk within the lines of guidelines of the Biden Administration, would actually this is actually accomplishing that mission. This is increasing regulation. You cant argue that companies with under 1 market share of the total system are going to be in any way a competitive threat where you have 75 of the market already concentrated. My other question for you, and the sort of challenges that, are the banks really looking for deals right now because were in a period where a lot of them are worried about credit conditions, its already been tight and have been preparing for tighter regulation and higher capital ratios and we just got off this Regional Bank crisis. Is now really a time for them to be out shopping for deals . Absolutely. Expenses have gone up for all banks, from compliance, and also technology. Its incredibly expensive to invest technology to update and integrate your systems. So, yes, banks always want to consolidate. But the rhetoric from d. C. Has been, particularly with the td First Horizon deal, and as approvals have gotten longer and longer, its been discouraging. This is where regulators can really come in and provide a smooth path for consolidation because this is a winwin for everybody. It also brings on a different skill set for regulators. Instead of saying, you shouldnt do this, they could say, well, we want to participate in the growth and actually moving the Banking System forward. I think its a really romantic idea that regulators, and young regulators, would want to be a part of. Have you pitched this to fdic or treasury . I have consistently. I have for the last 15 years. Maybe someones watching there today. I think now im going to get a lotmore aggressive with pitching. So, before it was a different scenario. And i think now theres more of an interest than ever. Remember, i live in d. C. , so ive got plenty of time close proximity. To talk to regulators. Thank you for coming to post 9. Thanks for the bowie reference as well. Coming up after the break, from cash burn to burning man. San franciscos got to be happy the latest talks about mass exodus are not focused on their city. You got this. Lets go. Gobble gobble. Ive seen bigger legs on a turkey rude. Who are you . Im an investor in a fund that helps advance innovative sports tech like this Smart Fitness mirror. Im also mr. Leg day. 1989 anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq100 innovations. I go through a lot of pants. Before investing carefully read and consider Fund Investment objectives, risks, charges, expenses and more in prospectus at invesco. Com. You may have seen the images already. Thousands of stranded burning man attendees finally making a mass exodus from the festival after intense rain flooded the camp sites and caused footdeep mud. Our kate rooney has more on the story and is the tech check. Over Labor Day Weekend some people heading to the beach and the u. S. Open to burning man. Artists, celebrities and more recently tech moguls and investors. The desert in northwest nevada where this is held saw downpours, a dry lake bed turned into what some are describing as a muddy bog, a foot deep. The event organizers told some of the 73,000 attendees to shelter in place and at one point shut down the exits. I caught up with a person who got married at the event this year. He told me after getting over the, quote, mini panic attack of being stuck most people just embraced it. It was not a lord of the flies situation. So some decided to escape including deejay diplo, comedian chris rock, posted a video saying they riched a ride. It is really known for bringing in this tech and Business Elite crowd which might have something to do with burning mans bay area roots founded here in San Francisco in the late 80s. San franciscans are disproportionately in tech. You see larry and sergei from google out there. So all these folks, a lore that when it just became more in the norm in San Francisco than elsewhere. Definitely more than norman. It normally doesnt have internet access. They used musks star link. Back to you. It has been a mess. Kate, thank you for that. Coming up after the break, the battle between charter and spectrum continuing. Customers without espn, the nfl season just days away. The late othe goatnsstn osnetiio in a moment. Every day, businesses everywhere are asking is it possible . With comcast business. It is. Is it possible to use predictive monitoring to address operations issues . We can help with that. Can we provide health care virtually anywhere . We can help with that, too. Is it possible to survey foot traffic across all of our locations . Yeah absolutely. With the advanced connectivity and intelligence of global secure networking from comcast business. Its not just possible. Its happening. Power e trades awardwinning trading app makes trading easier. 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Com hire charter locked in negotiations with disney over a carriage agreement for its channels including espn which is impacting more than 14 million spectrum customers. The battle could have big implications for the future of cable. Julia boorstin joins us with the latest. Woor are the two parties right now, julia, and whats at stake . Right now theyre at an impasse. Disney and charter with continuing their battle and negotiations and charters 15 million subscribers remain without access to abc and espn, theyve missed out on the u. S. Open as well as College Football and now both sides are appealing directly to consumers. Last night disney launched a new consumer focused campaign to push people to its own tv bundle, hulu with live tv including espn and nbc. They are working with customers to help find alternative ways to watch disney programming, offering 30 off fubo tv for two months including nfl red zone and espn and that offer sent fubu shares spiking this morning up 6. 5 . Right now pressure is building for the return of monday night football next week. What may be different this time is charters ceo says they are willing to give up abc and espn for good if they cant make a deal. Jpmorgan saying, quote, losing this cash flow could impact disneys willingness to bid for nba content and to launch a dividend as the company has indicated. And, of course, there are questions about how many charter subscribers will permanently switch tv providers because of this disruption. Charter also sells broad band so theyre not just a paid tv subscriber. I was looking at the commentary over at bofa. If this posture, meaning charters, were extrapolated across other video distributors, we believe it would have a devastating impact on the media group. Charter is really using this moment as a referendum on the future of television saying we need the Media Companies to join us. And if they dont, its not worth the cost especially since consumers can get some content a la carte. The industry has changed so much in the past five years that its impossible to see this as a black and white thing. It will be interesting how the bundle holds up and what role sports plays. It does seem like a key issue is the fact that iger said espn will go direct to consumer. Its like a strike in a way, the entire ecosystem thats developed out of streaming. Julia, thank you. Ism services tomorrow. Lets get to the judge. Carl, thanks so much. Welcome to the halftime report. Im scott wapner. Front and center this hour the month ahead for stocks. What it will hold for your money. The Investment Committee sizing all of that up. Joining me josh brown, joe terranova, jenny harrington. Check the markets first and foremost as we get back to business in september here. Weve been negative for the session. Jenny, september is historically week, coming off a bit of a pullback in august. 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