Transcripts For CNBC Street 20240706

Risk per file in the market, and were not seeing any indication for the moment of worsening in our cost of risk. They post 2. 8 billion, doubling its profit as they tell cnbc euros banks have weathered the storm. If you look its basically the same for the large banks, whereas in europe its for all central banks, and that is why theres absolutely no Systemic Risk in europe european leaders give a lesson as chipmaker inindivinindividual i ion starts construction. Nvidion says they mortgage stauft. We must reduce and invest into our deem because the Semiconductor Industry doesnt stand still. And there are fears amid the First Republic Bank Collapse and the fed looks at a tenth and final hike hi, there, everybody, a warm welcome to street signs. This morning were off to a strong start in terms of equity trade. The stoxx 600 is rebounding about 0. 5 , not enough to make up for the losses we saw yesterday, but a decent start nevertheless yesterday the main benchmark dropped 1. 2 , the worst daily performance in over a month. It broke a threeday win streak and it came as fears came to the street side and weighed on trade there and in turn in europe. Now today a focus on both sides of the atlantic turninging to Federal Reserve which will include a twoday policy meeting today. The market is expecting a tenth and final rate hike. How will they respond . Thats certainly top of mind for investors and how they signal around whats to come after todays meeting. Turning to the different markets here in europe, its a pretty broadbased rally. Every major region is trading in the green. Ftse 100 is up 0. 1 . The ftse up more than 1 theres one stock at the heart of that rally, and that is unicredit. You can see what the spread lolook looks like on the downside were seeing a little bit of downward trade in autos and travel and leisure, but clearly its higher this morning. Heres the picture youve got unicredit out in front, 6 , the best performing stock not only among the banking names but in all of europe this morning. Interesting outside of unicredit were seeing stable credit it wasnt just the regional lenders that took a sizeable hit. We saw a plunge. The big lender stateside also traded lower this stability in the european Banking Sector is notable. Lets dive into unicredit. The Company Posted a more than 60 jump in the revenue in the First Quarter during my strong commercial momentum. The atlitalian lender raised it guidance joumanna is in mulan it looks like a pretty stellar result. Its pretty telling, julianna its a strong show of support for the Investment Community, and why wouldnt they be pleased. The bank posted really strong results. They beat on net interest income, on fees, cost discipline, and also raised the guidance for the year in terms of what theyre planning on distributing to investors. Remember, unicredit had had a policy of distributing 100 of their profits to the shareholders that has been a huge appeal for the Investment Community and is one of the reasons why the stock has performed so well. At the beginning of this year, even if you remove today, the stock was up 30 versus the performance of about three percentage points. Were talking about a huge outperformance today only adds fuel to the fire here and when i spoke to the ceo, he said that they have been surprised to a certain degree about how strong their net interest margins had been, and i wondered whether or not this was going to change in coming months given were probably heading toward the end of the hiking psyching into ecb. He said in their minds they do think net interest markets should peak toward the end of q2, beginning of q3. Remember, this is a key issue we talk about in the context of banking stocks their deposits have been stable, and because of that, they havent had to raise deposit rates as much as they had anticipated toward the end of the last year, which has meant juicier margins for them on the Macro Economic environments, there is no risk they dont see risk of deteriorating cost of risk one other very strong element to pick up on, julianna, is theyre sitting at 16 percentage points. Of course, this is partially one of the reasons why theyre able to do so many share buybacks and give so much back to the investors. And then i thought perhaps also this could open the possibility of some m a domestically lets take a listen to what he had to say. Its important to say that the share buybacks are an outcome. Theyre not an input the bank is massively improving its profitability and capital generation we felt we would generate 4. 5 billion a year in foreign capital. Were generating 7. 5 billion per year so that is allowing us to increase share buybacks and increase our distribution while being prue confident and increasing base capital that we have why distribution versus m a versus anything else because we believe as a Strong Management Team that our stock is cheap so if we need to invest on capital, were better off investing it in our stock that we believe is cheap sri warding. Our residuals are continuing to improve, rather than m a that we find expensive. So its not a question of m a and share buyback. Its a question of what is the better Value Proposition, and it sounds to me it comes back to a question of value but at the same time, you are sitting on 16 cte one ratio what conditions would you need to see so, i wouldnt put in capital to play with given that its not mine, it belongs to my shareholder. But i would say the following. At the moment, we are increasing distribution while increasing capital as well. Very few people are doing that and were doing that because the environment is uncertain and we dont want to take too many risks. But were also doing that because that means we can keep our distribution going for a long period of time, ie, if were funneling our distribution while increasing capital, even if in any given year we miss, we can continue making it so thats the basic scenario if we were to come to a scenario where we could put in respect buy earnings of the same quality of the earnings that we have internally and at a similar price and transfer to the bank, we would look at m a, and i do believe our shareholders would be happy about it. But until we see that, we dont do that. We either see banks that trade at our same multiple but are very tight on capital and that are not conservatively provisioned as we are. All we see banks that trade much higher than our multiple, and still have some of those issues some of when we look at the numbers, buying our shares is the better opportunity. Very clear. Well, ain the last couple of months, there has been a lot of m a activity we saw jpmorgan. Ubs acquired Credit Suisse for very cheap prices. I just wonder to your mind whether you think we are going to see more of these types of acquisitions of banks that are being acquired at very cheap targets. I do think that those situations are very different from what you have in the rest of europe at the moment. So in the u. S. , it is about distressed banks being rescued i dont see any distressed bank being rescued in europe. I do think that in the u. S. , judging from yesterday, there may be more, but this is the stronger bank rescuing the weaker bank with a Value Proposition that works for both the taxpayer and the shareholders of the buying entity in europe we do not have anything obvious at the moment, so that kind of m a is not occurring. If you look at switzerland, m a occurred for exactly the same reason. Distressed and stronger. You may say more in the u. S. , in my opinion in europe, that kind of acquisition is not going to be the driver of consolidation. I think the ceo mentioned a couple of things that are really worth highlighting here. The first is he does not see any distressed banks in europe that is quite a strong statement. He says judging from yesterday, there might be more stressed situations in the u. S. , but he is not seeing it happening in europe so that is one point, i think, that is noteworthy, coming from the ceo. The second point was with regard to the buybacks, and thats the fact they had been increasing earlier on but he does say investing in our stock at this point is a better proposition than looking to take that capital and invest it elsewhere, ie, potentially m a deals where its a lot more expensive. Reading between the lines, certainly their door is open to m a activity, but it sounds like theyre waiting for a more attractive Value Proposition, and this is a bank thats been linked up to a number of local banks. One bank is on its own trajectory another bank that a lot of papers are talking about is bpm. Theres not a conversation that a deal or tieup is going to happen any time soon, but, of course, they are sitting on a tremendous amount of capital, and they have the firepower to do it should they decide to go down that route. Joumanna, thank you so much a story to unpack and look forward to thank you so much for that reporting then from joumanna. Lets shift attention to france where bmp has recorded quarterly net profit of 4. 4 billion euros. Thats more than double a year ago. Boosted by the sale of its u. S. Retail division. Charlotte is joining us in studio for a bit more on this one. Charlotte, definitely reporting a lot more revenue as well so its starting to look fairly healthy. Yes and results are basically above expectations as you say, the profit, 4. 4 billion. But stripping away those gains, in february, selling bank of west, 16 billion, the net distributed net income, 2. 8 billion, theyre looking at different parts of the business by bank of pariparibas. Again, assuming a picture to what weve seen in previous quarters at bank of paribus. In the banking kugz the revenue was up 6 . The retail income is slightly weaker compared to the other part of the business because of the french Mortgage Market is being different to other markets because they have fixed mortgages for many, many year, for example. As i said, the cost of risk was lower, down 1. 4 , operating expenses slightly higher with higher costs up 5 overall i had a chance to catch up with the ceo of bank of paribas, and we discussed the results of the bank. It basically forms the bedrock of the bnp paribus theyre up by 5. 3 a Company Leads to 1. 5 points. As you know, the group has a solid balance sheet. Cost of risk remains low common equity to 13. 6 . All of these are in the concept. 2. 8 billion euros and an earnings per share of 19 euros basically it is the performance of our businesses creating a strong growth at 4 . Ips, 0. 6 . All of this leads to 5. 3 of the growth of the group i mentioned earlier. Thats basically in a nutshell the strength of the delivery of bnp paribas. Lets try to drill into that a little bit youre looking at commercial banking and services i think from analysts were expecting in this quarter that it would offset some weaker ones, some of the weaker french retail prospects it looks like they were both resilient. Yes, indeed if you look at cpbs, theyre serving our clients with a diverse set of promises. You saw a good momentum for the commercial banks and Strong Performance of the specialize businesses, particularly if you take that into consideration also look at the steep and increasing client acquisition of new activities so that is why all in all the cpbs had a very Strong Performance with 6 revenue uptick. You look at the revenue up 4 , we saw it performing well, of course, a high Interest Rate. Equities down 19. 5 . Again, similar to what weve seen in previous quarters. Do you see the trend to continue for the rest of this year . Listen, our main impact is that we now have a full set of krfss in cnb, and were there to serve clients. Were solid like basically no one else, and were there to serve. Therefore, were present and you have seen the pickup overall, and so were there to continue to serve and to continue to have our market share stepping up. That was the cfo for Bnp Paribas Bank interesting timing there for them now benefiting from the gains of that sale he said he didnt see any Systemic Risk when it comes to banks in europe. Finally bnp paribas said they reconfirmed the target they gave in february, seeing net income to grow by more than 9 per year to 25 and an increase above 20 . Finally bnp paribas confirming the buy sback, going green and red. Certainly the numbers were slightly above expectations. A watch factor. Not just the earnings. Charlotte, thank you so much for the breakdown and that interview. We are going to take a short break here on street signs, but when we come back, we are going to be talking about breaking new ground. Stay with us we will be right back. Hi. Im shannon storms bador. When we started selling my Health Products online our shipping process was painfully slow. Then we found shipstation. Now were shipping out orders 5 times faster and thanks to shipstations discounted rates were saving a ton. Honestly, we couldnt do it without shipstation join over 100,000 Online Sellers who get ship done with shipstation go to shipstation. Com tv and get 2 months free. Ususivivenenesess,s, e eququatatioion. N. Tatal l mumusisic]c] welcome back the ceo of infunyun has told europe they must stand up to the sem semiconductor space. This as they began construction on their new 5 billion dollar facility tapping into funds from the eus new c. H. I. P. S. Act announced in response to the u. S. s Inflation Reduction Act aany ta joins us now for a little more on this story. Its oa big, big investment. Reporter yes, exactly. The reason behind that and the swift implementation of the investment is theyre seeing chip demand going strong for many, many years to come if you look back at a longer time, perhaps like 20, 30 years, the chip industry was undergoing loads of cycles. We have the super cycle demand also heat pumps are actually in need of loads of semiconductos especially those at infineon theyre called Power Semiconductors different from memory semiconductors. When i spoke to the ceo of infineon yesterday, i asked him how he sees the situation on the market when it comes to scare tell of components perhaps take a listen to what he had to say to me. Right now you have oversupply in certain areas like memory products, and other areas were still in shortage. Some of the shortages will pay out. However, in terms of power conductors, weve seen for years issues and were trying to best improve our supply in order to serve our customers as best as possible. How much are you concerned about higher input prices versus higher commodity prices, and how important is it to source them exclusively as well for you because of the scarcity of certain commodityies . On the commodities side were setting up of course, its a burden on our on our business at the same time here the sectors get more and more expensive, and we need to pass this on to our customers, but i think its understood that semiconductors while invests so much cannot be or need to have a fair price. Yeah, the pricing would be my next question given that theres still shortages in certain managements. Would that mean you have higher power pricing going forward, meaning you could raise prices i think were striving for fair prices. Were going for longterm commitments with our customers and therefore try to balance things there are spots in the market, so called Major Sourcing where things are basically determined every other day, but thats for infineon, a very small focus our focus is longterm agreements, for example, with the automotive industry. Reporter so the dhee claired plans by the European Commission is to boost production of semiconductors in europe substantially. Currently 10 of production comes from europe and that should actually grow to 20 by the year of 2030 and here comes the european c. H. I. P. S. Act in play because, of course, many other jurisdictions, especially the United States, are deploying a huge amount of subsidies in order to lure investment into their region, and now europe has come up with their own plan. I also called up the Prime Minister and i had to ask him how important the european c. H. I. P. S. Act is actually for the decision to have those huge investments. Translator the european chip cycle the gamechanger in the world of lelectronics. Now europe can start over again. We can see that in many areas of the world. Europe was very reluctant for a long time and also concentrated on their own Market Competition happens globally it was a very important de decision reporter its the biggest class of semiproduction protection in europe we have universities, we have the institute, which is doing Groundwork Research here on the ground, but we also have other Big Companies producing. It has a longstanding tradition that reached to boost semiconductors thats go back to the ger. It was also decided by the infineon ceo, which is one of the reasons why they initially cave here to dresden. Thats fascinating stuff. Thanks so much for the comprehensive reporter. Were going to break down more of todays earners. Thats coming up after this short break. Welcome to street signs. Im Arabile Gumede with Julianna Tatelbaum in london. Joumanna is in milan these are your headlines. Unicredit surges to the top of the stoxx 600 after the italian lender recorded a profit the ceo tells me the worst of the banking crisis is over. We see a much more benign risk per file in the market, and were not seeing any indication for the moment of worsening in our cost of risk. They post 2. 8 billion euros in First Quarter doubling its profit as the ceo tells cnbc euro banks have weathered the storm. If you look, its basically done for all large banks thats why theres absolutely no Systemic Risk in europe. European leaders give their blessings as chipmaker infineon starts construction on a new 5 billion construction in dresden. The ceo tells cnbc europe must stand up to global competition. Its not about striving for subsufficiency, but rather reducing one side of dependency and what is really important, that europe also invests into r d because the Semiconductor Industry doesnt stand still. Fears linger over the health of americas regional lenders in the wake of First Republics collapse with attention returning to how the fed responds today with investors eyeing a tenth and final hike. Well, its a bit of a recovery mode for the stoxx 600 as European Markets were down quite substantially. 1. 2 across the board for a lot of indices in europe we followed on with negativity and the threeday win streak being broken when it comes to the stoxx 600. But today, a bit of a pivot. As we get into the European Market segments, this is pretty much what were looking at generally a positive trend across the board, perhaps one sitting in the negative. Youll see there is a sense of positivity coming through across the board as you can tell generally. Food and beverage on the up, more than 1 higher. You have seen the likes of the oil and gas having gone a little bit lower yesterday, continuing 1 into the weaker trading picture on that front. Autos, half a percent weak owner that front generally most sectors are higher, sitting in the green here are the winners and losers on the stoxx 600 unicredit being the big one today, having come out with its set of numbers, which have gone better than anticipated. You have signify dipping more than 10 with air france also down more than 5 today. The general picture really is seeing the traveling and mining sectors really hit a bit of a lull as well, the trading picture across the board now, stellantis did post a 14 First Quarter rise due to a boost in shipment and improvement of the sem conductor. The carmaker says it will expand its battery ev offering this year with nine new vehicles. The group confirmed its fouryear guidance on the back of the strong quarter. Also porsches operating power jumped 25. 4 delivering a Record Number of vehicles it rose 18 in the First Quarter boosted by a large increase coming through from china. And lufthana has reported an improvement. The German Airline says it is looking toward the Summer Season to improve the overall earnings picture, expecting demand for Holiday Travel to increase the group confirmed its full year guidance. Here are your european airlines. Easyjet going higher, but lufthana going down the back of the numbers we just made note of air france france is 5 weaker overall on this board. Now, Deutsche Post dhl came in weaker it struck a confident note on how the firm is set to handle the downturn. On the express side, we have our most expensive fixed costs we were able to flex down the asian capacity by 15 to match the development. Were seeing on the forwarding side obviously demand is weak. You can see 17 decline in our air forecast of volumes. That is, i guess, roughly in line with what the market is seeing so the market is also buying rates are also coming down i would say its a general normalization with ups and downs, and for us the positive thing is we have super experienced management teams in all of our divisions so it ee not the first market normalization were seeing we have gone through downturns before i think we know how to act in this environment and that ultimately gives me the confidence that however the second half of the year will play out eventually, we will be able to adjust the networks in an appropriate way. Rupert joins us thanks for joining us this morning. Yesterday i think a lot of investors were caught off guard by the renewed turmoil in the Banking Sector we saw some pretty sizeable selloffs pacwest dropping nearly 20 . Metropolitan bank dropping nearly 20 how do you expect this nurture moil in the Banking Sector to affect the feds thinking . Its a fact theyre considering, but in terms of whether theyll change the decision today, everyone expects them to hike rates by 25 basis points but as always, all the emphasis is going to be on what do they say at the press conference. I think the fed is going to want to has got a very fine line to help in that, you know, because of what you just mentioned in terms of the continuing stresses in the regional Banking Sector, its still very unclear how this is going to unfold. No one expects systemic contagion anymore. Its caused a significant drag on the economy that definitely is going to continue in terms of other questions theyre still thinking about, how fast is inflation slowing, how fast is the economy slowing, the data is all over the place i think its going to be datadependent in terms of where rates go from here. Let me just pick you up on that point about the data kind of being all over the place. Yesterday the j. O. L. T. S. Johns report got a lot of attention. It came in weaker than expected. The labor market is cooling. I mean, do you think, looking at the data, even though its been all over the shop that inflation is coming and realistically the fed could cut rates in 2023 . It certainly looks like were definitely going to see a recession. Were not certain that the recession is going to be deep enough to get the fed to cut rates given we think that they can get pretty sticky. What i think the fed wont want to do is sort of reinforce market expectations. It could affect rates in the second half of the year. Every statement so far has been were not going to cut rates it depends on the policy, the stature. Rupert, you made note of it quite a bit when it comes to the data weve spoken about the jobs market a little bit more its become a little bit more about inflation. Does that risk its credibility somewhat because inflation still isnt where they want it to be. I think that main concern is still inflation. The big question is to what extent will they tolerate a mild recession if inflation is still sticky and that is still very uncertain. You know, whats the trade off for the fed in terms of how big a rise it is in terms of the labor market, we have you know, as you mentioned, Job Vacancies expected this week but only last week we had news of inflation would be hard again, there are definite signs the labor market is slowing. Is it slowing fast enough to get wages back under control as fast as the fed wants this feels look like a pacman effect if i can call it that when it comes to the banking saga to the United States with these regional lenders that we move from one lender to the next, and the next weakest link if you want to call it that. Jamie dimon saying were near the end of this banking crisis would you agree in any way, or perhaps a little more of the dominos to fall here in terms of the smaller regional banks, i dont think were at the end of the process yet partly because a lot of the strains there for these banks in terms of deposit outflows, the only way they can really sort of remove that threat is by providing deposit insurance, which theyre not going to be able to do thats not going to happen the other thing which is on the mind of the regional banks at the moment is the regional commercial bank. Again, that sector is in decline and is going to remain in decline. In terms of it posing a Systemic Risk to the economy overall, i think theyre down enough in terms of response to prevent that so, you know, its going to continue its all going to spiral out of control. I think generally those fears have gone away and jamie dimon is right. Rupert, let me ask you. You are an investment strategist after all. What would actually drive the next leg higher in equities . What would actually drive equities higher from here . Theyve been incredibly resilient despite all the risks actually materializing. To be honest, were in a bearish mode at the moment equities have been sort of resilient. Were struggling to see what will drive equities higher in the next few months, lets say the next would be inflation, that it comes back down as fast as the fed wants dont need a recession to achieve that the fed may be able to cut rates without there being a recession. In that case, you would get what the market is currently assuming earnings goes up the danger is the only reason the fed cuts rates in the second half of the year is you get this recession you get this recession that earnings will come under pressure even though in the Current Quarter theyve held up a lot better than people thought they might. Rupert, let me shift your attention a little bit to europe inflation is still on the high side, very, very much so core is probably the inferior on that front but youre seeing the stability following the banking crisis in march. Do you think a call for perhaps an even larger banking hike is in the cards or do you think theres still fears that maybe the contagion might continue as well does the ecb hike by 50 . I think its highly unlikely. I think 25 basis is much more likely and im not sure the reason why the only reason its 25 is because of the National Sector as we saw in the Bank Lending Survey out earlier this week, there is a marked frightening Credit Condition and a willingness of banks to lend and a willingness of banks to borrow there are already constraining forces on the economy. Im not sure with the ecb what would exacerbate that. In one way, the tightening Credit Condition, which the ecb wants to bring about is clearly now happening. Inflations nowhere near where you want it to be, but im not sure theyre going to do 50. I think its pretty unlikely i think in terms of where the market is, unlike in states, actually that they do 25 on thursday and 25 the next month is probably about right. I would pause and see how it goes. Yes, so many permutations rupert, thank you so much for the time appreciate it this morning Rupert Thompson is the investment strategist and chair of Investment Company at Kingswood Group as well. A quick checkin on oil prices, which have been fairly interesting. We have seen oil extend losses after plinching around 5 in the previous session that was yesterday. Investors even pricing in, of course, expectations of more rate hikes from the United States as well then as in europe recessionary fears still seeping into the market. Both benchmarks closing at their lowest, the 24th in the previous session. Were also expecting earnings out of shell tomorrow. Brent down around 2 73. 87. Coming up on the show, investors are expecting another quarter percent Interest Rate hike from the fed today, but will it be the last . Well discuss next my name is Ashley Cortez and im the founder of the stay Beautiful Foundation when i started in 2016 i would go to the post office and literally fill out each persons name on a label and now with shipstation we are shipping 500 beauty boxes a month it takes less than 5 minutes for me to get all of my labels and get beauty in the hands of women who are battling cancer so much quicker shipstation the 1 choice of Online Sellers go to shipstation. Com tv and get 2 months free give your Small Business one Tech Solution shipstation th that checks all the boxes. Rs its all here with the comcast business complete connectivity solution. Peace of mind with cyberthreat security. The power of the largest, fastest reliable network. Plus, save up to 75 a year with comcast business mobile. The complete connectivity solution. From the company powered by the next generation 10g network. Get started for just 49 a month. And ask about an 800 prepaid card. Comcast business. Powering possibilities™. Welcome back to street signs. As of now, all three of the majors are implied to open higher after a sharply higher open yesterday all three sectors ended in negative territory, about 1 of losses a piece the big sector, the key banking index lost 4. 5 . Pacwest plunged north d nearly metropolitan bank also we also saw some interesting action in treasury markets yesterday. In the short end of the curve, the treasury bills, we saw a spike in yields, and this largely to do with the debt ceiling, concerns over a debt ceiling deadline this morning were seeing yields move lower across this short part of the Treasury Curve longer dated yields yesterday moved lower. That, of course, on the back of investors dialing back expectations around fed rate hikes after weaker than expected j. O. L. T. S. Jobs report heres the picture the 10year trading around 3. 4 , that as the fed comes firmly into focus, arabile. Irn deed. The fed is expected to issue a quarter rate hike. A 25point raise would take the target range to 5. 25 , the highest level since mid 2007 our respondents expect the u. S. Central bank to stay higher for longer with most forecasting high rates for the next eight months Steve Liesman has the story. Hike and then an extended hold above 5 is the message from the cnbc fed survey, but theres considerable opposition among respondents to the rate increase at all. 1 100 think the fed will hike in may. But 59 think the fed should not hike due to banking troubles 77 say by june the fed will be on hold, and 7. 8 months is what is believed the fed will hold at the high rate. Heres what the projected half to go. By december 2023, its still at 4. 87 with that decline reflecting some belief then it goes down in december to 3. 91 . Barry knapp of ironsides writes a 5 policy for longer will accelerate the bank deposit beta thats the movement in and out of banks with deposits, forcing more banks to shrink their assets 69 of respot dents have lower their forecast by an average of 0. 4 because of concerns about tightening lending standards in fact, 96 say banks will tighten their lending standards. 4 think it will remain unchanged. Forecasters have lowered their expectations for that and increased their expectations for employment that will begin in september Steve Liesman, cnbc, business news. Regional banks have continued to fall despite jpm jpmorgans takeover of First Republic bank. Its one of the factors driving contagion fears. Joumanna, this has been something weve continued to look at. We look at march and how the next penetrable drop was about commercial real estate and how much you have in that sector really these regional lenders are suffering on the back of a lot of that. I mean one tick to look at even some of the numbers just yesterday when you took a look at some of the shares. We spoke about pacwest, western alliance also being a key part of those but really just regional banks with up to 250 billion in assets, holding about 1. 1 trillion dollars of commercial real estate loans with maturities through 2027. All of those really, really in trouble. Oh, the stats are really staggering you can see why theres such concern around regional lenders when it comes to commercial real estate i read a report from jpmorgan. Small banks hold 4. 4 times more exposure than larger r peers, d so clearly its a significant percentage of the exposure at the small lenders, and when you think about the commercial real estate sector right now, not only is it dealing with higher rates which would always be a sector, on top of that youve got to legacy of covid working from home and the elevated rates unrelated to higher rates. A double whammy of sorts if we see a massive value, it could be detrimental. Yeah, high exposure if there are hair cuts in the loan sector, which is very possible because of the factors we just mentioned, this is going to be a high risk contagion, and the next penny to drop will be imminent perhaps this part of this crisis isnt actually over. In fact, its how do you ensure that it doesnt happen again from here on end so what kind of happens then is it a case of greater liquidity ora case of the fdic stepping in again, which they probably wont be able to do here in this case . Is it going to mean the bigger lenders are going to have to step in a whole lot more as well as they continuously have thus far . I think the crisis itself is going to need a high look in and them dealing with the debt ceiling as well on the other end. So much to look at for them. It will be fascinating to see what the fed says when they deliver their policy decision. Yep so for more on the sharp declines across regional u. S. Bank stocks, check out cnbc. Com. Lets get a final check on European Markets this morning were factoring not only the fed pricing and whats in store from jay powell, but also reacting to earnings. A number of big names, unicredit the standout after delivering a stellar set of results theres a picture for you of the major indices. Were trading higher, nearly across the board the only one in the red, the spanish market, ibex 35, a touch down after the sizeable amount yesterday, stocks dropping about 1. 2 u. S. Futures, weve got all three of the majors looking to open higher after a down day yesterday. The s p, the dow, and the nasdaq dropping 1 apiece that j. O. L. T. S. Jobs report adding that the labor market is cooling, dialing back their rate expectations for the fed and considering when the fed will think about cutting Interest Rates. Well, we will hear a lot more on that topic from jay powell today that is it for street sieps. Im Julianna Tatelbaum. Im Arabile Gumede. Do stay tuned to cnbc because Worldwide Exchange is up next. upbeat music woah. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. Hi. Im shannon storms bador. When we started selling my Health Products online our shipping process was painfully slow. Then we found shipstation. Now were shipping out orders 5 times faster and thanks to shipstations discounted rates were saving a ton. Honestly, we couldnt do it without shipstation join over 100,000 Online Sellers who get ship done with shipstation go to shipstation. Com tv and get 2 months free. As a business owner, your bottom line is always top of mind. So start saving by switching to the mobile service designed for Small Business comcast business mobile. Flexible data plans mean you can get unlimited data or pay by the gig. All on the most reliable 5g network, with no line activation fees or term contracts. Saving you up to 75 a year. And its only available to comcast Business Internet customers. So boost your bottom line by switching today. Comcast business. Powering possibilities™. This week is your chance to try any subway footlong for free. Like the subway series menu. Just buy any footlong in the app, and get one free. Everyone loves free stuff chuck. Can we get peyton a footlong . Get it before its gone. On the subway app. This week is your chance to try any subway footlong for free. Like the subway series menu. Just buy any footlong in the app, and get one free. Everyone loves free stuff chuck. Can we get peyton a footlong . Get it before its gone. On the subway app. Is the jobs market finally cooling off . What it could signal for the economy. Analysis, friday, 8 30 eastern. Its 5 00 a. M. At cnbc Global Headquarters and heres your five 5. The fed prepares to raise Interest Rates for the tenth time since march of 2022 what theyre telling clients ahead of the release. And speaking of the fed, its not just wall street, but nine straight hikes hitting main street in a very big way we facbreak down the rising cos with consumers and oil is coming off its worst day since january, but dont expect the prices at