Jpmorgan, citi, wells fargo, they all reported earnings. All appear to have been fairly strong. Were going to break down the quarters. Plus blackrock now managing nearly 10. 5 trillion in assets. Were joined exclusively by chairman and ceo larry fink. That will be later this hour. Were also watching the semis this morning. Qualcomm, intel, amd and nvidia all moving lower ahead of the open. China reportedly telling its Telecom Carriers to phase out foreign chips. I want to start with the banks and the downturn in the market as well. Earnings season kicks off with the likes of jpmorgan and wells fargo and citi, for example. Mike, id love to just turn to you quickly, just get a sense on the market as well. Yeah. Its been an interesting day yesterday with that move up in apple shares, particularly, as the day went on. Obviously, moved the nasdaq appreciably higher. What do we think is behind some of the weakness were seeing beyond these bank earnings, which, at the worst, are a mixed picture . I dont think its bank earnings, necessarily, the catalyst. Yesterday, the indexes were rescued by not just apple bouncing on some reports about some a. I. Macbooks and whatnot, but nvidia going up 4 becauses this the market we have. When we get nervous about macro and yields and inflation, and we have had a 10 pullback in nvidia and some of the other a. I. Stocks, well, the market, when it gets defensive, actually goes into the growthy, secular names. So, i think that was yesterday. What we have now is a market that has been sort of chopping around, very familiar levels, for about four weeks, and i think no matter what you thought heading into this week, the picture did not get any less complicated with what we learned this week. In terms of inflation being sticky, repricing the feds path, bond yields going up to multimonth highs. I dont think that we have to have a strong, specific rationale for why gold is going vertical to say, maybe when gold is going vertical, things arent necessarily as settled as wed like them to be. Going to test the lower end of this s p range, and geopolitical upset is obviously in the mix. You have oil rising. This has been a feature of this market, especially ahead of weekends where normally you have the volatility index backing off because youre going to be closed for two days, and today, its popping again, and its obviously a volatile mix. On a limited basis, at least, but then we had the if, you know, hopefully theres no escalation of any sort, monday, you have a relief trade. Theres the sterno report that israel is preparing for a direct attack from iran on southern or northern israel as soon as friday or saturday, according to a person familiar with the matter. Irans been public with the threats. You have, just to reiterate, mike, you have Brent Crude Oil above 91 a barrel, Wti Crude Oil surging at the same time where the dollar is surging and gold is surging, and usually, those things dont happen together because gold and oil are prices in dollars. They usually go in different directions. Theres definitely a safe haven flight right now, and i would also mention that treasurys are catching a bid today as well. Its not like high rates are spooking the market this morning, because treasurys are getting bid. Yeah. And of course, as we were sort of kbicombining here, banks ande broader market, ill come to jpmorgan, not the numbers themselves, more the comments on the media call from jamie dimon. We already got a sense of this from his annual letter, which came out early in the week. But you know, he, once again, is saying, listen, im not predicting a recession or no recession. I dont know what the future portends of all the things that were talking about. But he does continue to say, sara, his own personal belief is things, you know, the price in the markets is probably too happy, and i think the chance of bad outcomes is high is higher than other people may think, not projecting them, just saying they may have to you have to look for a potential range of outcomes. Im working here off a transcript thats not exactly word for word accurate. He cites exactly what hes worried about, which are persistent themes he has been worried about. The Global Landscape is unsettling. Terrible wars and violence. He mentions that again. Continue to cause suffering. Second, he says there seems to be a very large number of inflationary pressures, which may continue. And he says, weve never fully experienced the effect of quantitative tightening on this scale. He has been warning about this for years. So far, the market hasnt really felt it, the move from 9 trillion to that was from the earnings release, not this media call, but yes, thats right. But he sort of highlights the three buckets that i think theyre worried about. If you look at the overall earnings numbers, though, i mean, they lifted Net Interest Income forecast. Maybe the street was looking for more on that, given how much weve pared back fed Interest Rate cuts, but that seems to be one of the primary areas of focus here for banks. It is. And i think you also have to emphasize how much jpmorgan, the stock, has outperformed Everything Else in the group. Up 15 this year. And i mean, over the last two years. Yeah. Its basically, you know, ahead of bank of america. Bank of america is the closest comp. Its got, like, i dont know, 75 percentage point outperformance in the stock to that point. Double the market cap of b of a with 40 more assets. It tells you the market has decided that perhaps because the ceo is always worried about what could go wrong, even as things look good in the business, theyre willing to say that this is the bank that survives almost, you know, any environment, and so thats the context in which you back off 3 when you dont raise net interest margin, you know, guidance as much as people were thinking. 89 billion is the new nii forecast, and i guess it was 90 billion in 2023, but thats still better than the 88 billion that they previously expected. There was also a reserve release, which means that credit looked better than they were anticipating, and so thats a part of the story that continues to really support both the banks in general and the overall, you know, economic outlook. I mean, i think the banks the reason we have to focus so much on the net interest piece of it is its really the main swing factor, along with Capital Markets and deals, and thats been really active. Massive Corporate Bond issuance in the First Quarter, jpmorgan gets their share of that. Weve got some ipos. Thats good, but the market doesnt usually pay a lot in advance for that. Its not like its a Growth Business overall, banking. Its not a Growth Business. To your point, they have a return on equity of 17 . I mean, you know, just to put it in perspective as to why, to mikes point, jpmorgan gets such a premium to many other banks, i mean, citi, which is working its way through this massive restructuring, and youve sat down with jane fraser a couple times, sara. Were talking about r. O. E. Of 6. 6 in the First Quarter, not to mention wells fargo at roughly, lets call it, little over 10 . So, that just does put in perspective why there is a willingness, mike, to pay more for jpmorgan and or at least the dollar of earnings, more on a multiple basis. Mike put it well. The bank analyst at wells fargo said, jpmorgan is a call option on a more hawkish fed in the shortterm. Capital relief from basal iii, and best in Class National deposit share, and thats sort of why jpmorgan has gotten a premium, even though you said banking, not a Growth Business. Really strong results from both citi, i noticed up 32 in Investment Banking and jpmorgan, which was up double digits as well. 27 , the Investment Banking. A year ago, i mean, First Quarter of last year was as bad as it gets. Youre absolutely right that thats a good swing factor. Its just that the banks no longer participate they dont want to have great leverage to a really booming u. S. Economy as much as they used to. A lot happens outside. Theyre overcapitalized. They cant do wild, risky stuff as much as they used to. I think theyre just more steady, which is a good thing for the system, you know . You would think so, although something theyre arguing about, certainly, the next round of potential capital requirements. Overshooting. They feel like its overshooting. We talked a lot about private credit as well and the market share its taken in terms of an area that used to be quite profitable for many of the banks, that they are sort of fighting back on to a certain extent through lower pricing, basically, financing in terms of deals and the like or the large credit needs of so many companies, private credit, obviously, i mean, weve covered it pretty closely this last year. Taking up a lot of loans. Alternative asset managers, apollo, on from there. Aar. Ares. H hps. It just goes on. Theres an interesting divergence shaping up between the big banks and the Regional Banks, and this idea that the more hawkish fed or fewer Interest Rate cuts is very helpful to the big banks, and while it is helpful to the regionals too, they get hit more with bad loans and bad credit quality and issues with deposits. And their deposit costs go up. The longer that the fed stays at 5 3 8, and thats what youre getting in money markets, the harder it is if youre a bank to compete for deposits, and thats been its not so much like a deposit flight issue. It raises your costs. But yeah, the Regional Banks, the selloff in bonlds, it creats more focus on the ones that have a little bit exposure in terms of unrealized losses. I think its much more about, you know, if the economy hangs together, theyre going to be fine. Theyre trying to hold these prices that are well above the march 2023 lows. Yeah. And before we go, just to come back to the broader markets again, to refresh people, we are going to look for a down open here, but you know, mentioned apple at the very top. I mean, that was i think that was the biggest move. Apples seen, what, 11 ill leave it to you. I dont want to Say Something i think it was many years. 4 daily move, yeah. And again, it just shows you how the market gets very twitchy on these days when its decided that its going to just since last may. Okay. Im sorry. I thought it was even longer than that. Its a pretty good size move in a twoplus trillion dollar company. Again, this has been the rotational yesterday was a weak day in the markets. You had most stocks down, but the index managed to hang in there. Alphabet and amazon also, though, as they both sort of i mean, amazon in particular was very close to that 2 trillion mark that we sort of follow. You pointed out nvidia as well. Do we expect followthrough . Yesterday at the end of one of our shows, i forget which one, mike, we were talking about the douring is the word you used as opposed to the broadening theme weve been stressing for the last few months. Its definitely flagged quite a bit. Thats when higher yields bite is on the majority of stocks. In fact, if you looked at sort of equalweighted s p relative to the market cap weighted, its back on its lows, more or less, so its not as if theres been a lot of progress. And you know, if youre an index owner, you kind of dont care. The overall market hangs in there. I think you have to sort of stack up what we know and what we think we know. Its a bull market. The strength and persistence of the bull market in the fivemonth run we had off the october low is of the sort that usually means its not the end of it. In other words, its persistent, 6 to 12 months later, so you know all those things. What you dont know is what happens in between, and there has to be some giveback. Were in one of the top 12 or 13 longest stretches in the last 80 years without the s p at least touching its 50day average. All it means is the market is up a lot, hasnt backed off much. And there are a few other negative catalysts we didnt even mention. The semis, theyre weak, especially intel and amd on this report from the journal that china continues to crack down and is trying to wean the Telecom Providers off of american chips. And theyre doing it. And they have set a deadline. The cpus in particular made by the likes of amd and intel are very important. And it extends beyond telecom as well into the pcs that are made and provided for in china as well. But you can see the weakness in particular, i think, amd, down as much as 3 . Phase out by 2027 is the headline. And then the only other sort of negative data point from china was the export data. I dont know if you saw. Down 7. 5 . And that is worse than it has been, and also, its worse given that there was some optimism lately on china, particularly in terms of exports. This was a downside surprise. Imports were also down 2 , so just speaking to the persistent weakness in chinas economy, and just when, you know, just when some of the Hedge Fund Managers get a little bit more bullish on china, we saw outflows in japan for the first week last week, and inflows into china, disappointing data. Its kind of the new widowmaker trade is the pick the low in chinese risk assets. Hard to do. Well see. All right, weve got a big morning on tap here. Blackrocks ceo, larry fink, will join us exclusively here at post nine on a big earnings day for him and for financials in general. And in the next hour, nike going for gold. Weve got an exclusive interview with ceo john donahoe as they unveil their new olympic kits. Taking a look at futures here as we head into the opening bell. As we mentioned, down session, dow down almost 300 points ahead of the open. Nasdaq futures, down 1 gin back yesterdays big tech gains. More squawk on the street straight ahead. You know whats brilliant . Boring. 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Our timetested fixed income suite, backed by over 145 years of risk experience, helps investors meet their goals. Pgim investments. Shaping tomorrow today. My name is oluseyi pgim investments. And some of my favorite moments throughout my life are watching sports with my dad. Now, i work at comcast as part of the team that created our ai highlights technology, which uses ai to detect the major plays in a sports game. Giving millions of fans, like my dad and me, new ways of catching up on their favorite sport. Blackrock reporting financials and also that it has record assets under management. Theyve now reached 10. 5 trillion as of the First Quarter. Company also posting a 30 jump in its profits. Ceo larry fink will join us and well talk about the numbers and the overall economy. 10. 5 trillion is a pretty big number. It is. I can remember when it was below a trillion, i think. I can go back a long way. Fixed income, interestingly, was the largest inflows, i think, at 42 billion for the quarter as opposed to equities. Steady inflows. I think he characterized it as 76 billion net inflows in longterm, so noncashtype funds. Yeah, its moving right along. Obviously, the markets helped in terms of getting the overall aum up, and the company is built to be somewhat agnostic as to what asset class, what strategy, active passive, retail institutional. I think thats very much by design. They just sort of capture it, and i think thats by design. Theyre using their scale to their advantage where there is earnings lefrmg in the model because it doesnt necessarily take more people or costs to manage an extra 60 billion in a given quarter. 62 billion inflows for etfs. Thats the ishares business. Obviously, thats strong as well. Strong but lower fee. Thats the tradeoff. They did benefit, obviously, from performance overall of the market and therefore performance fees fairly strong. Although you can see a mixed reaction. A number of the analysts saying, generally, i would say, a positive take on the quarter, a bit better than anticipated. Margins came in fairly good on lower expenses. Its already at 20 times earnings. Its kind of its certainly got the markets respect in terms of being a quality business, so its not as if there have been times blackrocks traded cheap. When people hate the market and theres outflows, it actually has gotten pretty cheap, and its not been the case, because we have had pretty strong markets, and theyre right in the middle of it. Alternatives, also, attracted some money there, 11 billion in alternatives. You know, larry fink has been, i think, way out front on the inflation call. Jamie dimon has also been saying sticky inflation, but fink early was talking about fiscal stimulus, just permeating the economy, no recession. I remember when he was on with us last year, talking about, i dont see a recession because we have had so much fiscal spending, and by the way, thats going to make inflation sticky. Its an interesting time to talk to him on a week where cpi surprised to the upside, and has made investors rethink the entire rate view. A number of wall street firms, today, mike, are saying its not going to be until december that we get a rate cut. It could be. And that would be one cut for the year. Exactly. And so, that i was sort of dangling that out there, starting a few weeks ago, about this whole, were in the opposite version of 2015 where the fed wanted to get off zero, they wanted to punctuate a whole fed cycle, and they couldnt. The economic numbers were weak. Inflation was low. They didnt have the basis to do the multiple cuts that year that they anticipated a year earlier, and finally, in december, without the economy telling them they should, they raised rates by a quarter percentage point