Transcripts For CNBC Closing Bell 20240713 : comparemela.com

Transcripts For CNBC Closing Bell 20240713

Orders thats weighing on the dow nasdaq about 4 itself today s p up about 3 , sara. Weve got big news coming up on todays show. Wells fargo ceo joins us to break down the Small Business loans and impact of pandemic on the bank then later, well speak exclusively with the ceo of Carnival Cruise lines as a they take a huge hit. Carnival shares down about 75 this year. Well have the ceo if and when the industry can get back on its feet with 59 minutes left of trading, lets focus in on the big stories. Wilfred has the news on the Bank Earnings meg with the treatments and vaccines and Steve Liesman wi k34e7b9s from two fed officials. Gl they had opened hirer this morning, jpmorgan and wells fargo. Provisions for potentially bad loans spiked 8. 3 billion for jpmorgan, 3. 8 billion for wells fargo. Even that was not the worst case the ceo said could be higher over the next several quarters relative to what we took in the First Quarter while Charlie Schaffer said it wouldnt surprise me to continue to add to reserves. Heres jamie dimon on the unpredictability of the months ahead. This is such a dramatic change of events there are no models that have dealt with gdp down 40 . Unemployment growing this rapidly. And thats one part. There are also no models that have dealt with a government which is doing a ppp program which might be 250 billion, might be 550 billion unemployment where you know, it looks like 30 or 40 of the people are going on unemployment, but higher income than before they went on unemployment what does that mean for credit cards or Something Like that or that the government is just going to make direct payments the people so this is all in the works right now. The company is in good shape we conserve our clients but its happening as we speak. I think people are making too much of a mistake trying to model it when we get to the end of the Second Quarter, well know what happened in the Second Quarter on reopening of the economy, dimon said quote, hopefully it will be sooner rather than later, but it wont be may june, july, august, Something Like that. All banks trading lower like trade revenues and Wealth Management despite the market moves. Bank of america, citi, Morgan Stanley on thursday. Some significant declines, particularly in ligt of the fact that the rest of the market is is higher. And in light of the fact that this has been one of hardest hit groups energys hit a lot harder, but banks are in the bottom rung so is it the pessimistic view in those loan loss reserves what is it that the market is focused on fact theyre worried about making profit with Interest Rates near zero . I think its slightly the opposite in a way. Its the fact that weve got a big increase in loan provisions and earnings score suggested that it could get worse from that and the interesting just point out for the Broader Market on that, so were trading down because of fears that there are going to be more failed loans made by the banks in the quarters ahead than expected those loans are made to all sorts of sectors, yet the banks are are the only stocks trading down if that is the cause and just go back to that point that theres so much urn centiuncert as to when the economys going to open and which company is going to suffer the most today, the banks are feeling the heat from that, yet all other sectors are Higher Energy and banks, the two sectors in the red much more on the banks to come cfo of wells fargo will yoin us shortly. Every day, were getting new di tails op the health care industrys battle against the virus and today, two Major Pharmaceutical Companies say theyre teaming up on a vak sein these are two of the largest vaccine makers in the world. Usually known as competitors theyre teaming up the to Work Together on covid19 vaccine each is supplying different technologies theyve used on other vaccines before and if all goes well, they say they plan to start phase one trials in the second half of this year beyond that, if they continue to go well, they say they could have a vaccine available in the second half of 2021. This follows other os like m moderna who said and of course theyre already in clinical trials, if that goes well, they could have doses available for high ris b k groups Like Health Care workers this fall Johnson Johnson whose cfo joined us saying theyre still on track to start human trials in september of hair their vaccine. So these timelines are faster than ever before some are expressing some skepticism one say iing that oneyear timeline, that looks optimistic to him he thinks its going to take longer for us to get a vaccine, but this is an unprecedented situation and a lot of folks are talking about regulators being flexible well have to see how it goes. And so many resources from these Big Companies are going into it. Thank you. Meg, dont miss jim cramers interview with glaxosmithklines ceo tonight about all of this. Two key fed officials out with new comments about the pandemic and taking a different tone. Steve. The st. Louis fed president and chicago fed president both talking b about things fed officials never talked about this time, the need for Massive National testing both saying if they want the economy to recover, what appears to be needed is a Massive National testing regime and in that case, theyre saying a v shaped recovery could still be b possible not sure anymore that v shaped is their best case jim bullard making a cost benefit saying if the economy is costing 25 billion a day to close any amount we spend on testing below that would be worthwhi worthwhile widespread testing of everybody in the economy would put an end to this crisis. And would you know basically end this whole episode we cant get that right now, but this is costing us 25 million a day, so things that didnt seem possible today become possible and Charlie Evans from chicago calling for what meg was talking about, saying we need a Manhattan Project for a vaccine and both of those are saying essential to get the economy running gru ing again. After the break, well speak in a first on cnbc interview with the wells fargo cfo about the impact of the pandemic and how his bank is handling the governments Small Business program. Wells fargo is down 4. 6 as we stand. S p 500 up 2. 7 . Back in a couple of minutes. We see a billion more people breathing free. We see access to fresh food being the global norm, not the exception. We see homes staying cooler, without the planet getting warmer. At emerson, when issues become inspiration, focusing core strengths to create a better world isnt just a result, its a responsibility. Emerson. Consider it solved. To go beyond ordinary etfs. And strengthen client confidence in you. Shrewsberry. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Woi felt completely helpless. Hed online. For a prospectus containing this information. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. 49 minutes left of trading a check on the markets for you hire across the board with the dow up about 466 points right now. About 550 at the highs of the day. S p 500 up 2. 7 . Lets check in b b on Market Movers number of Energy Companies moving chesapeake announcing a 1 for 200 stock split. Increasing share price to a dollar to keep its New York Stock Exchange listing exxon mobil mobile borrowing another 9 billion in debt and valero warning it might report a First Quarter loss as demand for gas plunges with people off the roads energy and financials, the two sectors in the red right now wells fargo shares lower after reporting quarterly results. The bank setting aside nearly 4 billion in loan loss provisions. The cfo, john shrewsberry, joinings us now. Very good afternoon to you thanks for joining us. Thanks for having me. I feel like theres a sense on the calls that provisions are going to get much worse in the quarter ahead. The stock opened higher. Its now down by about 4. 75 similar theme comeing from jpmorgan is that fair do you think provisions for bad loans in q2 could be bigger than they have been this past quarter . Hard the say. I think that the economic forecasts are changing rapidly at least over the last several weeks theyve been generally been getting more steadier ra rather than softer those are meaningful inputs into how people are calculating future expense the big question is when the economy will reopen and when people can go back to work and go back to spending money and Consumer Spending is is down markedly year over year and that has an impact so there are specific areas like energy, et cetera you were talking about just a moment ago where there were some id owe sin cattic things that have happened. Were just foreshadowing what might happen as a result of an elongated economic trough. I think we do our best to capture them in real time, but if the economy is going to remain closed into the summer, through the summer, et cetera, then presumably, things could get worse. Well pick that up as we calculate. Totally get theres so much uncertainty and its hard to predict and put specific numbers on it. If i look your total reserves ratio to loan at the moment, that only increased to 2. 1 . And 1. 2 might be high relative to the good times, but given the dramatic impact were facing on the economy, if you came out with only 1. 2 of your total loans going back that would be a massive win, wouldnt it . Well, it depends. In our own severely adverse case for our stress test we submit as part of our annual process, at least the last time around, our nine quarter losses were about two and three quarter percent. Thats a more severe set of economic circumstances than were currently imagining here and incidentally, each quarter, we do take charge offs as they occur, which you would add to the amount of the current provision for whats likely to happen over this year, this year plus next year so could it be higher . Perhaps. We have our Loan Portfolio looks a lot different than some of the other big because we have an overweight on jumbo mortgages, which tend to be the more affluent people and more modest ltv. We have an under weight on credit card receive bables and credit card tends to be b the source of some major losses in an environment like the one were imagining. There are other areas for sure, but at least if youre comparing from bank to bank, thats probably important john, sin wre about those los provisions, way more than were talking about earnings and revenues, between you and what jpmorgan reported this morning, its more than 12 billion to cover defaults on the economy. Can you yus hejust help people o dont follow banks to understand what those numbers are about an whether they project pessimism this is the First Quarter for a new accounting standard for loan loss provisioning for banks, which is more than any of your viewers want to hear about, but it does change the approach. Were now, the its a life of loan estimation of loss. Previously, it was a shorter period of recognition in the allowance calculation. So these numbers are bound to be a lilt bit bigger than they would have been previously youre really going loan category by loan category. And estimating the probability of default, which is going to be higher and higher unemployment and lower gdp world and then loss given default, which tends to be very high for unsecured types of credit like a credit card i mentioned and it can be low for secured types of lending and i would put modern day mortgage lending in the category like that. And you know your estimation of where unemployment goes sh, gdp, stock market, all those things matter on a regional basis as well so National Banks tend to have their whole portfolio broken up in regions of the world and the country. Were talking about the top level numbers, but the details really matter and you know, on as i mentioned, in our own severely adverse calculations of our own annual stress testing process, we under those circumstances could imagine losses over a little bit more than two years amounting to about two and two quarter percent. Think about that as the total amount of Loan Portfolio that gets written off during that time frame were sitting here today with the writing on the wall but the economy not having gone quite into recession, measurable recession yet, it seems a little conservative to assume this nine quarters from now, were going to live through something as severely adverse as that probab my follow up to that, isnt the massive unprecedented fiscal stimulus plan that, or relief plan we just got out of washington, more than 2 trillion, designed to keep businesses in business and people employed . Are you saying were still going to see widespread defaults. No, im saying certainly we dont plan on stimulus and as you say, weve gotten it so thats definitely an off setting benefit that people will be picking up in the math either onan imagined or realized basis as people receive those payments and for example, under the ppp plan if they keep people on the payroll that otherwise night not be and for consumers who are receiving these payments directly, if they get out there and spend them, that will have a huge benefit this isnt forecastable. And will pick up with the passage of the next week, months as it happens. John, the fed has temporaril lifted the Asset Capital on wells fargo to help you with Small Business lending i wondered whether youre disappointed in the way with which the fed labored to get to that decision. It came two or three weeks after you guys initially requested it. They made very clear that it was only temporary they also ensured that you will have to give any profits from the ppp program the charitable causes as opposed to make money yourself were you disappointed they made that so difficult . Not disappointed at all were glad we got to Work Together on something that ends up working out in a way that can benefit our Small Business customers. We own the fact that we have the asset cap. The fact that we have to do the work necessary for it to go away and it was constructive that we ended up where we did and would it have been better if we, wells fargo, had caused it to happen a couple of days earlier, that would have been helpful, but were in the position now of processing massive numbers of these ppp indications of interest, et cetera. So were looking forward to the benefits of that for our Small Business which i agree is great for the Small Business clients of which you have many indeed, but i guess youve settled with the sec. The doj. Should this not really be now a moment when the fed should be considering lifting the asset cap permanently . We are working hard to create the circumstances that allow them to consider that and, the board feels that way charlie feels that way and the Leadership Team feels that way so it will happen in due course when weve delivered what we need to deliver to them and in the meantime, were making it work we have a trillion Balance Sheet so we can support a lot of customer activity and what were talk iing about at the margin. It would be great if we had created an outcome that allowed that cap not to exist today, but it does and were working with it and we have as you pointed out, created a work around for the ppp and main street loans that we can originate now in size that said, john, there was a moment on the call where charlie, your ceo, kind of suggested that your dividend is even safer than perhaps some rivals because of the asset cap. Because you have fewer internal uses of your capital because of the cap and therefore, the use of the capital the return to hair holders is even more assured. Is that fair that the dif dividend has less likelihood of being cut . We dont have this opportunity of redeploying internal generated cap it will for internal purposes to make more loans and so given that, our capital levels are probably less under stress than others because were not growing at the same rate some others might be, so yeah, i think you can conclude that. John, thanks so much for joining us terrific. Thank you. The wells fargo cfo, the stock down about 4. 8 as we stand. 38 minutes left of trading after the break, chinese buyers spent millions of dollars at one highend retailer when it finally reopened well scs etdiuswhher it was a one off or a sign of a quick rebound for the entire luxury market there are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Ever somethings gone mogotten into the office. M, i hear you. Feels like theres no barriers between departments now. Do you think everyon

© 2025 Vimarsana