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Big jobs number tomorrow, but for now 10-year, 406, lowest in five weeks, a roadmap begins with regional bank stocks mixed after embattled Lender New York Community Bank Corp, secures that billion-dollar cash injection. Stephen Mnuchin, who led the race, going to join us exclusively in a few minutes. Plus, shares of Novonortus, they are hitting a new high early trial data of an experimental obesity drug, another one showing that it may be more effective than would go V. And big tech struggles, Apple, while those shares are looking for a bounce after a six-day sell-off, Tesla, similar story, no longer one of the most valuable S&P 500 companies. Let's begin with NYCB's billion-dollar equity investment, led by former Treasury Secretary Mnuchin's firm Liberty Strategic Capital. He's going to join us in a few moments. Jim got some clarifications today, some more data on deposits, the percentage that are insured and so forth. Yeah, I think it's important to know that when the former Secretary of Treasury did a previous deal, IndyMac, which was a deal involving a bank that was really one of the worst-run banks in the country, came in, had the bid that was best for the FDIC, the cover bid, the second bid that was much lower, it ended up making a lot of money, and that's being dredged up again, it's somehow against him. David, the reason I mention that is because the risks are maybe bigger here, if only just because we're dealing with so many rank-controlled units, and the law changed in 2019 to make it so that those who think this is going to be a quick win for, may be completely ill-advised, I think you're talking about multi-family. Yes, because that is a preponderance. 44% I believe is the number of their loans, that's, yeah. But to me, it looks great, multi-family, until... Right, because multi-family in New York, which is where this bank does a lot of its business, is actually, you'd imagine, quite strong, given rents are at all-time highs, and things of that nature. But to your point, if you can't raise the rents and certain of their portfolio of buildings, then when people are going to have to come to refinance at a higher rate, it could be difficult, something we're going to ask. Wait, they got this little window from 2025, but did you think it was curious? There's no loss-sharing agreement with the government. No, no, no, I'm just saying this is a private transaction. I'm just saying that I already read stories about it's a giveaway, because there's been such a dilution. I mean, David, this bank was 48 hours from being a New York non-community bank. Although the deposit flight was the one characteristic that it wasn't as horrible as it thought. It wasn't as horrible as it thought. As bad, always hard to know exactly, but something they talked about in the conference call that began at 8 a.m. this morning. So, you know, the stock price may have been collapsing, which it did, but it wasn't clear that the deposit base had... No, that's true, and that's why there's not fear. Mnuchin's firm, along with, you know, a number of other significant investors, and includes Citadel, a firm called Reverence, which is run by an old friend of mine, Milton Berlinski, who once ran financial institutions at Goldman Sachs, and they've done a lot of these sort of difficult type of financially focused deals. They're doing great. I mean, it's 1.05 billion overall. It's common and a preferred. Now, it's a pipe, remember, so it's got to get registered. They're not in this for some quick trade, but by the way, when you buy at 2, and then they have warrants for 60% of that value at 2.50. I mean, they're in the money looking great already, Jim. I know. So far, so good. Obviously, they've replaced a lot of the board with their own... I mean, Mnuchin's on the board, Berlinski's on the board now. Yeah, it's big on him. It's some serious hitters. And so, they'll be in this for quite some long period of time, but started off pretty well for them, as an investment. Now, Danello has said something this morning, too. I wanted to get your feeling on this. He said, "NYCB now has a fortress balance sheet." Yeah. How do you feel about that? So, it's similar to JP Morgan? Yes. Just that we're often criticized. Look, JP Morgan is the gold standard. I think this is terrific to you. It could be a workout for everybody. I'm just saying that unlike Andy Mack, this one could be a little dicier. We don't know. Now, they're saying there's a concern of the conferences going on, 'cause they're under running standards. But, David, in 2019, when the law changed, you used to be able to renovate these apartments and be able to-- Right. And then increase. And then increase rents. And then the New York state legislature moved in. Right. And they think everybody should just be able to-- Yeah. Well, I'm just-- You never have a rent increase. I am-- I'm not saying necessarily defensive about Mr. Secretary. I think he did a great job, whatever. But I'm just saying that there are articles to say, you know what? He got in there. He got a great price, whatever. And the best price would have been if you let it go. If you let it go. Uh-huh. Well, no, I'm saying if you-- He came in in the middle of the day. This thing could have gone to one. He could have done his deal. I'm just saying that it's not through-- By the way, middle of the day, Carl, this thing was down 42% on reports of an equity race. And then ended up, I mean, it had a-- It's almost like a 70% rollercoaster day. 70% reversal during the course of the day. Yeah, kind of like a polished chariot. A Kingston Dominion, have you been to them? No. Or do you think it's more like magic? Magic magic magic. To your point, Jim. Eric Rosengren, former Boston Fed President yesterday. Bank continues to struggle. Very difficult to do a capital raise when the value of the CRE portfolio would be very difficult to ascertain given the exact changes in laws that you're talking about. Exactly. And that's why I am saying that you put a billion dollars in. And let's say you have as bad a loan portfolio as what signature had, which they bought. A billion might not be enough. Now, they feel like it's very well capitalized. And I think that's something we have to ask. Mr. Mnuchin, how do we know a billion? Have we gotten in there and looked at the books? I mean, this was not necessarily a little-- How many hours do they have here? The good news is we're going to get a chance to do that less than 10 minutes from now. Talk to Steve, so. It's going to be excellent. Stay tuned. Meantime. Previewer. Excellent. Stay tuned for our excellence. In the meantime, Novo Nordisk surging to a record high. The company announces this phase one trial for its experimental obesity pill. They show our participants averaged 13% weight loss after taking the drug for 12 weeks. That's just the oral treatment this time. Could be more effective than Wagovi, Jim, and McCreedon. Is the name we got to get to know? Okay. Now, there's another company, Eli Lilly. Now, Eli Lilly is non-promotional as Novo Nordisk is promotional. Eli Lilly has a pill that's pretty far along. At phase three, they could have it. They've got the same safety profile. It doesn't lower the weight as fast. Some people feel that you shouldn't lower the weight as fast. Other people feel like if you don't show fast weight loss, then people leave the pill. But I really want to make everybody understand that if you sell Lilly down 10, by the way, on the eve of when they have what I think is going to be a very positive redel on their dementia drug, I think you're just realizing you're just splitting hairs here. Eli Lilly has a great product. David, they don't. When you go to Eli Lilly, let's say you go out with them, or you spend some time on them. Here's what they'll tell you when you ask them about-- when you ask them about a zep belt. They'll say, "Well, no, could you just give me a little comment?" I mean, you always sometimes just want no comment. You don't want the blank stare. The blank stare says, "Are you out of your mind? You're going to tell you anything?" And I like that about it. But I mean, that's just reinforces the market seems to be two companies, period, right? It's Novo and Lilly, Novo and Lilly. Thank you. After Pfizer blew it. Well, people are going to say Viking. I mean, it's Viking. I prefer. Well, no, they can't take away the pills. People got sick from it. Well, that's sub-optimal. Now, David, as between-- I want to be sure that you understand. I'm going to make you a bet. Thank you. As between Viking, the cruise ship company, and Viking, the therapeutic company, I'm taking the cruise ship because the cruise ships are red hot. I don't know if you've seen the Norwegian numbers lately. No. I mean, Norwegian, so it's next door. But I do know Norwegian and Carnival. All of those stocks have been amongst the best performers. Carnival had a really good year in Australia as well. Royal Caribbean has been the best. No, I'm not okay. I'm being a little of the seizures, but Viking did a big, big fundraiser. Okay. And everyone's off the back of the face, too. Right. Yes. If you deal with the FDA, the FDA is not anxious to say, you know what? We need a third company in there. I know. We've never heard of them. We have no idea. And it seems like the creation of Wall Street. You've said that a number of times. Well, because the FDA is a serious alphabet. For a fresh people's memory, it was only a couple of weeks ago. Viking Therapeutics reported a very favorable phase two trials for its own GLP1. Yeah. And the stock soared. One doubled, more than doubled. Good. And Jim's point has been that-- Well, there's-- You've got two great drugs on the market already. Right. And they're hurried to approving a third. Yeah. They did three for migraine, which, surprisingly, did have a-- after they had already had one from-- Right. From Biohaven. Now, Carl, there's three agencies that begin with a letter F in federal government. There's FERC. There's the FTC and the FDA. See, two out of three, not good. Two out of three, not responsive. I think FERC has really bought the reservations, become one of those agencies, it's anti-oilingas. FTC, I'll leave that to David. The FDA, this gold standard, has not changed through any administration. So they're not going to prove-- ever since the Little My, we're the best. And I just really think that we have to be careful saying, "Oh, they're going to like Viking." They love Lillie, because Lillie has a great safety record. There you go. As for a novo, that's an all-time high this morning, and a lot of pieces lately, Jim, just talking about how it's changed, not just the Danish economy, but the European economy. Oh, look, Frank Holland had an excellent person, too, he was sitting about the new magnificent seven, I guess it's the foreign language version, Steve McQueen, to the double, or do they use subtitles. But what I found is interesting is it starts with the LVMH, and we forget, they have-- they've got companies over there. Schneider Electric. You know, Schneider? I do. Schneider. I like Schneider. Schneider. Schneider. Look at me, Schneider. Mr. Bigshot. Wasn't Schneider, though, like the super or something on a sitcom in the '70s? One day at a time, Pat Harrington. Is that what you're talking about? Is that true? Yeah. See, that's incredible to me. Can I just tell you some of Mnuchin's movies were named good? Yes. Well, what's the Ben Affleck, Argo? No. A accountant? Yes. He's an accountant. Okay. And the star of that, besides Affleck? Bernthal. Oh, you and Bernthal. Brother-in-law, you and Bernthal. Anyway, I'm glad to know that what was his name, Harrington, thanks, Schneider, in one day at a time. One day at a time. But you're talking, Harry, let's get your back on scratch. What about you, Schneider, the French company? No, I'm just saying it. What's your point? My point is, is that people are gravitating toward Europe. You've got the ECB being very benign. You've got some European companies that are doing far better than what was once our magnificent seven. Although data direct yesterday, Jim, non-US stocks underperforming S&P by a full standard deviation. Well, you've got to look. There's Japan. There's some of Europe. And then there's kind of the rest of the world. I do think, by the way, Japan will be. I feel like I blew it. I just weren't buffing buying it every single day. And I'm focused in on accidental. Accidental, accidental. What do you think, here? You've got that same briefing I got just in this, Joe surviving? Yeah. I'm reading stuff about NYCB. Well, because you know what we have coming up, because the absolute interview coming up. Yeah. But David, I'm just poking in this Europe. The reason I'm focusing in Europe is because no one nor is this now more than 500 billion. When we come back, we'll talk to the former Treasury Secretary about this NYCB and about investment. We'll get to Rivian Tesla, GE, Boeing, some retail in a moment. Support for this program is provided by Chevron. Demand for energy is projected to continue rising in the future. To help keep up, Chevron is increasing their US oil and gas production. 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Not FDIC insured, offer no bank guarantee, may lose value, not insured by any federal government agency, not a deposit, investments involve risk, principal losses possible, distributed by four-side fund services, LLC. As we've been discussing, we're keeping an eye on shares of New York Community Bank. The bank did raise more than a billion dollars in equity from an outside investor group. Joining us now in a CNBC exclusive is Stephen Mnuchin. He's the former U.S. Treasury Secretary, founder of the elite investor behind the Capitol Infusion, Liberty Strategic. Mr. Secretary, great to have you this morning. You know, you decided to put as much as I think it's 15 percent of the capital in your fund into NYCB. And I guess I have to wonder why, when only a week ago, management identified material weaknesses in the company's internal controls related to internal loan review, and analysts will still point out that the business model is still very much overweight, some of the least desirable parts of the commercial real estate market. So why is this a good investment? Well, first of all, it's great to be with all of you here today. This is a business I've known well for a long period of time. So we looked at a long time ago, potentially emerging one West with New York Community, so I've been following it. And more recently, when they did the Signature Bank deal last year, I followed it as well, which I think was a very attractive deal for the company, and particularly bringing the two franchises together. So at the end of the January, the company announced some issues associated with cutting the dividend and increasing reserves. I reached out to the company and began a diligence process in case they wanted to increase capital. And it was really at the end of last week that we moved forward very quickly. So I like the franchise a lot. It's a top 20 bank in the U.S. with very attractive markets. It's got a great branch network. Unlike the banks that had problems last year, this business has 80 percent of their deposits were are insured, so it's got a very stable deposit phase. And the issue was really around perceived risks in the loans. And with putting a billion dollars of capital into the balance sheet, it really strengthens the franchise, and whatever issues they are in the loans will be able to work through. And bringing Joseph Hodding in, who I worked with very closely, and one West, and that is controller, you know, I think there's a great opportunity to turn this into a very attractive regional commercial bank. And you're confident that they have effectively recognized some of the risk within the portfolio itself. I mean, again, in reference to the fact that they did cite, and we know that there seem to have been material weaknesses in some of their internal controls in terms of reviewing loans. Do they still have a ways to go there? What gives you the confidence that that loan portfolio is as strong, or perhaps as worthy, at least as you seem to indicate? So let me just say, Sandro, who was the chairman, and, you know, did the Flagstar deal. When issues came in, Sandro took over as executive chairman, and stuffed into the CEO role, and really did a great job in a short period of time, really on this. And we did extensive diligence on the large loans. You know, the bank will look at the reserves, and we'll make sure over time it has the appropriate reserves. That can be done through a combination of our capital and earnings. We cut the dividend down to a penny a share, so we're going to retain almost all of our earnings. And we think the asset side is very manageable. The bank has today about 11% tier one capital, about 10% CET one. And if we need to take more reserves in the future, which we'll carefully review, we clearly have the capital base to sustain that. All right, Mr. President, it's great to have you one. Thank you. Do you want to go over some of the portfolio issues? One-fifth of these loans are tied to New York rent-regulated multifamily. That law changed dramatically, since many of these apartments were lent to. You do have a lot of criticized loans, including $552 million, you know, potential loan losses, involving a co-op, involving office space. What makes you think, in light of the fact that this company, I will be willing to say, is offering some sub-optimal financials, that you really have a handle on how bad this bank is. Well, let me just say, I think that co-op loan was really a one-off situation. And I think they've either sold it or they haven't committed to sold. I don't know if it's closed yet, but that was really a one-off situation. Look, we understand what's happened in the rent-stabilized market. There were a lot of people who bought these properties with the idea that they could convert them in raised rents, and they're not going to be able to. But there's a lot of people in this portfolio that didn't. A relatively small part of the portfolio are large loans with 100% rent stabilization. When the bank made these loans, they were very low LTVs. So I think there's a lot of cushion in it. You know, the good thing is, you know, look, I think interest rates are going to come down over the next two years. The great thing about multi-families, unlike office, they have cash flow. With lower interest rates, that's going to help a lot. And there clearly will be some problems in the portfolio. There's no question about that. And we've taken that into our account in the underwriting, and that's why we raised a billion dollars a capital. So, you know, any issues the bank has with needing additional reserves and problems, we'll be able to deal with. Okay, Mr. Secretary, we know that some of the loans had already been previously signature. Since old, they had a hard time getting $0.70 for a lot of these loans. Again, because of these 2019 law changes, and we know that there are starting in 2025, a lot of what I can just say that have to be some sort of refinancing. Are you taking that all into account and feeling confident that maybe the value of real estate is better, or that maybe the 2019 law will not be as prohibitive for the rest of the properties? I mean, I'm not taking into account there's any changes in the law. So we understand the law and the impact. Let me say the bank was very smart when they did the signature deal, which was an assisted deal. They left the bad loans with the government, so you can assume those were the worst loans, and they were sold at distressed prices to, you know, real estate funds. So, you know, I think that was a great transaction when they did it. They got cash. They didn't take any of the bad loans, and look, we're going to work through these loans over time. I mean, I would just put this in perspective, and again, these are approximate numbers, but when we did the deal yesterday, I think the tangible book value was about 665 a share based upon the closing price last night in the warrants. Tangible book is still 620 a share, and, you know, the stock is trading at a significant discount to that. So, look, Joseph and I have done this before with the bank that needs to be rebuilt. You know, we're going to retain earnings. We're going to build reserves when we need to do that, and, you know, we got plenty of time over the next couple of years to really rebuild this franchise. And look, we like the multifamily business, so there's a time to work through this. And I will just say, look, probably the biggest problem in the portfolio is the New York office. There's about three and a half billion of office. We've looked at two and a half of the three and a half billion. We've taken into account what we think needs to be done, so I would say, you know, the office portfolio is the one that, you know, we will work out of the quickest. The multifamily portfolio, look, you know, Fanny and Friday are refinancing multis. I know over the last month or two, a lot of loans refinanced away from the bank. And we can reduce that multifamily portfolio over time. Yeah. Well, you mentioned office in the two and a half billion that you've taken a look at. What are your expectations there? We all know where things stand in New York in terms of only 50% or so people showing up more or less most days to work and therefore what the landlords in particular of, let's call it, A, minus to B, properties are looking at. Look, on, you know, on multifamilies that have cash flow and lower interest rates, you know, you can work out a lot. On New York office, where you have empty office buildings of Class B, there's a reason why the values are down a lot. And I don't see New York office, particularly Class B, working out and, you know, getting better in the future. So that's not an area. You know, we've taken that into account. It is a limited part of the portfolio. We have a lot of flexibility. We have the ability, as I said, to build reserves as we need it. You know, we can work through that. And, you know, look, this is, it's rare to be able to come in and buy into a top 20 bank in the U.S. in great markets with great branches, terrific private wealth management teams that came from Signature. I'm looking forward to visiting with them next week. And you know, this, I believe, is going to be a great franchise over time. Mr. Secretary, I imagine lots of opportunities cross your desk. I wonder if you'd entertain a question about the degree to which you see stress or duration risk across the spectrum of regional or community banks right now? Well, there's no question that higher interest rates and credit losses have an impact on, you know, kind of regional banks. And, look, maybe there's opportunities for us to do acquisitions over time. That's something that we don't really plan on, but we'll look at. You know, at one West, when we bought IndyMac, we did two follow-on acquisitions with the FDIC. And the good thing about being a bank is, if there are assisted deals to do, it's a lot easier to do them as a bank than as a private equity firm. So, you know, we'll be looking for the right opportunities if they exist. Yeah. Did the FDIC air in giving the Signature Portfolio or, you know, passing it along to NYCB, given it took them past that $100 billion mark, which brought more regulatory scrutiny and requirement that they didn't seem to be prepared for? Well, look, there's no question, you know, at the time they wanted to do a deal quickly. It was important to stabilize the deposits. I think they did a good deal with New York Community Bank because, quite frankly, it strengthened the New York Community Bank to put that franchise. Obviously, if JP Morgan had wanted to buy it instead of buying First Republic, they would have bought it. But, no, I think the FDIC did the right thing. And, again, I think you see this as we were able to raise capital, we were able to stabilize the bank. I honestly had extensive conversations with both the FED and the OCC over the last few days, and they've been very supportive of us moving forward with this investment. Stephen, was there another bidder or anyone with a covered bid and also, are you going to change the name of the bank? It is a great bank in the Midwest. Or are you going to want to be even more of a regional and just focus on New York? Well, I can't comment on the other bidders. There was a group of capital that we brought in into it. Some of the people like Milton Brelinsky, I've had a long-standing relationship. He was my partner at Goldman Sachs. In a short period of time, people came into the deal very quickly. We upsized the deal from what was going to be about 700 million to a little over a billion. As it relates to the name, New York Community Bank is the name of the parent. It's not the name of the branches. The branches are Flag Star. And Joseph and I and Sandra will look at whether we should rebrand the parent and/or rebrand the branches. But the branches are not New York Community Bank. You're already up nicely on the investment. Obviously it hasn't even closed yet, but one would expect this will be a long-term investment for you. You're on the board. You mentioned a couple of years. Is that your expectation? I see a lot of upside in this investment. We look at this as a three to five-year transaction. It could be longer in the case of one West, we held it for six years. But there's clearly a lot of work and a lot of upside over the next few years. The other thing we're excited about is we've brought a lot of new people on to the board. Joseph will be on the board. I'll be on the board. Alton Pawalski who worked with us at one West and was previously at Paulson. He had been a senior person at the FDIC. So he brings very significant regulatory experience along with Joseph and I. And again, as I said, I think there's a lot of opportunity to build out this business. It's a unique franchise. And not everybody wants to be with the top three or four megabanks. No. Understood. But given the long-term nature of this deployment of capital, is it your intent to stay in your current position? I ask that because of course your former boss, Donald Trump, running for president again, could well end up in that seat come November. Would you rejoin a new Trump administration have asked? Well let me just say on this front, it is my current intention to stay and run my business. That's what I'm focused on. You know, I've obviously spoken to President Trump, I've seen him recently and given him a bunch of views on the economy and some strategy issues. You know, if the president called me up down the road, of course I'd have to take that call and consider it, but it's my current focus to build out this business. Alright. Well, that leaves plenty for a conversation for another day, Stephen, but I appreciate you taking time this morning. Thank you for joining us. Great to see you guys. Jim, as we let the opening go here, thoughts on that conversation? Well, look, I've got to tell you that I think that we had a black hole developing here. It was not affecting the other banks, they were going crazy. It's so different from last year. There's such faith in the banking system. This is what I've been telling the price, and frankly, if you hold over, I don't think we're going to hurt the rest of the bank, we're going to be surprised, David, the strength of the banking group during this period of the turmoil of a very large bank. Yeah. No, it has not hurt nor crept over nor was ever seen as systemic during this period of significant weakness and concern. Obviously, it may not be through that, but excuse me, it was interesting hearing the Newtons take in terms of the portfolio itself and how they can work through their problems. Carrie, volatility hasn't really budged in the face of all this. No, I didn't think it. He was the one who brought up, look, he is concerned about the commercial real estate, but in many ways, this was a bank where there was no run. The deposits are very firm, and he mentioned the insurance, and I want to contrast that when everyone knows he made a lot of money in the Indy Bank fiasco, where he came in and dealt directly with the FDIC and a loan sharing agreement. This is so opposite. They got capital risk. I think you're referencing, again, to a pipe just to explain people. They put money in and he's up immediately, but we know that at the same time that's not the goal. The three to five year transaction that you got out of him, I think is probably the most seminal thing we have. Yeah. I mean, three to five years. It is a pipe, but obviously has certain registration rights associated with it. It hasn't yet closed, although they don't think there's going to be any issues whatsoever in terms of-- Who are the other bidders, Dan? The other bidders? Yes, he can say the other bidders. No, I think he was referring to other people in his investment group. I wasn't sure. Because I thought that this is-- There's got to be someone who might want to see this, how they've seen it. Selling stock at two bucks was not ideal, right? You're right. But we'll keep an eye on shares of NYCB. Plenty of other things to keep an eye on. Yeah, but it's just an amazing moment. One of the best bank rallies I've seen in my life is occurring as this fiasco is unfolding. Yeah, especially on the big huge banks at JP Morgan all-time high yesterday, speaking of-- Tesla, yes, we'll get to Tesla. But Jim, all sectors green, materials, industrials, GE, this investor day at conference. And they spoke to a lot of it. Aerospace. I hope it linked. I mean, they've got an incredible book of business. Remember, 70% of the book is that renewable once you've serviced the engines, and he gave you a very long-term outlook. That was incredibly hot. This is a '28 outlook. Free cash flow is terrific. Sometimes, David, you just want to just literally applaud someone who took a stock, a company, that was, frankly, in shimps and really created GE Healthcare has been an incredible stand out. You know I'm a believer in burnover because of the power that's needed for data centers, which has to, to some degree, rely on that gas because they're growing so fast. But this is the gem of the ocean. This is just a beautiful play. Even the fact that Boeing is under fire, we got to name the 25 names, I mean, that was just, that Boeing is, the Justice Department does not like Boeing. This is going to become the pure play. Listen to Greg Hayes, this is one of the RTX, that's too much defense. GE didn't break out his defense, business looks very solid, and again, it's, it's that same kind of refurbished renewal, which is new to be. Well, you've also talked about, right, about burnovo, which is the upcoming best feature, that comes in April. That's soon. Right. How does the stock, I mean, the free cash flow is that already incorporated in? In, in, in the stock price, the expectations there. Okay. That's a great question as I say no. You say no. I say no because I think the people are beginning to realize that the, don't forget they own about 13% of GE Healthcare, which has been just monstrously good, that maybe there's just more wealth here. The burnovo presentations were incredibly strong. We call a lot of what's coming down here is that if you had gone two years ago before you realized the Jensen Wong Revolution data center and drag on the, the grin, you might have just said, oh, this is like a Flotsam and Jefferson wind company. I hope they can build things up in Jersey. Instead, what it really is, is a company that is going to be part of the reindustrialization of America that we're having, it's based on on data centers and on the electric grid. They are going to be the premier company to be able to buy if you want to reform the electric grid, other than they're perhaps eaten, which is another fantastic. Speaking of Nvidia, Cracks above 900 this morning, Jim. Miss Zuho goes to a thousand. I was waiting for that. Don't forget Jensen's keynote is on the 18th. Yeah, I'll be out there to see Jensen. You are going to go. Yeah, I've got to. I mean, it's a pilgrimage and many people are, are taking it. I think that what's important to be able to realize is that this is his piece was, it was done virtual, but he is in a deep dive mode, Jensen. I mean, he's just not like a lot of other executives. He's going out everywhere. Of course, he's doing sovereign AI. So this week was the mode to healthcare AI. But what he's really doing is trying to stretch the three, trying to create the three to five year vision that I think makes it so people feel very excited about a thousand dollar price. A lot of the time people are starting to pick apart the socks because there's a healthy population of both under performers and over performers. Micron today, Stiefel goes to buy 120. Very interesting. That's cyclo. You always have to get ahead of a cycle. That stock is either the best performer in the SBA or worst performer for several, during several times. And Sonja Munrocho was not bullish at 65-68, which is when you had to buy it. That's because he's not a hype artist. I think it might come down to Broadcom. David Hocktan has some very good exposure and he's a good partner of Invinia, but they'll report tonight. And during the summer, they didn't have enough AI and they had too much. Too much cell phone. Now Qualcomm, which is a lot of cell phones, has been red hot. Can you tell me what? Broadcom shares up 121% over the last year. You can see it right there. No, no. My chart shows up right there. You see it right up there. How well is it? We're talking now, it has a $640 billion market value. Far above Tesla's, by the way. I'm still kidding. We're trying to go in. We're talking now about one of the largest companies in the U.S. market by far. You need the point. So give me a preview on earnings tonight and what's going to matter, do you know? Well, I just think that people have to recognize that Hocktan, as aggressive as he is, is very straight on the copper squad. If you go back to the September comp score, he crushed the stock by just saying, "Listen, we still have a lot of businesses that are not on fire." If he does that again, then the people who's recommended by it today are going to be able to buy it. I think they should have waited to hear what he had to say because Hocktan is not a promotional man. And he also is, I think, someone who put together a company that happened to do, I don't want to say it got lucky that it had a connection. But there are other companies that do AI, Marvell Tech? That's another one. You're going to see that. They also have Tianjin, so they have the optical part and they report tonight. So these are two companies, Marvell and Brookan, that are not on the fringes, but they're not wholly this. Yes. And those are the two diciest, and I like them both. Meanwhile, we have a new potential AI catalyst, as Microsoft confirms this event on the 21st, called New Era of Work, which will focus on the Surface 10, the laptop hardware. Well, that's going to be interesting. I think that the stock I'd heard by some chatter that they're co-pilot, which I usually sense when you think it's fabulous, is not being adopted, well enough. And when I hear these stories, I think, well, what kind of survey did they do? Did they speak to the CFO? Did they know that this is maybe, instantly, maybe the most popular product, David? The Microsoft's ever had! Co-pilot. Co-pilot. Oh, it's fantastic. Well, we've been talking about it for some period of time already. You could make an argument, though, Jim, that move up that we saw, and you can go back a little bit later last year, was in part because of the excitement around the introduction of Co-pilot. Well, but I think that what happened was they were only, some degree in ignition, they initially came out and said, "Look, this is a product that's going to be ... it's going to be enterprise. Not realizing the thirst, the demand that individuals have for all these products. You're putting the anthropic product that I keep piping, because younger people have discovered that. Everything anthropic." Well, Co-pilot is just another generative AI spot, right? A lot of people feel that we're playing with Facebook, and they're playing with Instagram. Okay. Facebook being for funny dudies in Instagram. I get it. I get it. Just because you've got a great haircut doesn't make you younger. No, there's no getting younger, sadly. Oh, you're doing that father, no one beats father time rap. It's like you're tired of that rap. You are? Yeah. Really? It's going to be a thrill of manila between me and father time, I'm telling you. Speaking of thrillas and manilaas, how about ... It goes father. And that flicks Mike Tyson and Jake Paul live AT&T Stadium, July 21st, yes. Really? Just got confirmed. Really? Yes. Mike Tyson is my age. Isn't your age about to change? He's got a much, much better right. More punch. You have a punch. He could even just look at you. You once gave me an Hawaiian punch, a live global sports event, as the evolution of their model continues. Isn't it? For Netflix. You're two years older than your close age? Wait, wait, wait, wait. I don't want to talk about it. I want to talk about it. Ambose fever. Ambose fever. Yeah. Believe me. It's making me sweat just thinking about it. I'm going to have to step off and take off the jacket. Maybe we ought to go back to the things that are happening in the market. Can we do that? We'll do that. Maybe they don't need to do that deal. Maybe the FTC is like, hey, you know what? Everyone did well. See you later. Look at that stock. It's Nvidia-like. That is quite a move there. Isn't it? You've made the point many times that you think in some way the case against the deal is misdirected in the sense of, while Albertson and Kroger do amount to a decent share, they don't come close to Walmart's share of supermarket and the competitor, certainly Kroger would say, is not Albertson's, which they want to require, but is Walmart and Costco. Look, Costco reports tonight. The two biggest groceries, Costco and Walmart, run rings around everybody. I would tell you that Kroger needs that halved. For the overlap, they've already got a very, very good plan, which is a store that you have never been to and never will be, which is pigly-wiggly. I think that it makes sense, but the FTC, I mean, like I said, this is when the agencies really dig in. It's election year. They don't know if they're still going to be around. Well, there is news. They're swinging for the fences. Nearly 50 Democratic senators and representatives sending a letter urging the FTC to look into oil and gas mergers. We've been talking about the likelihood of scrutiny on that phone. Even when we subpoenaed. Interesting. Thank you for bringing that up. I look forward to that. Well, since you know more than everybody. I remember that morning I walked out and some guy was, yeah, I was, it was years ago. I was like getting in my car or something and he like put it on the windshield. He's like, this is you, David Traber. Here you go. I'm like, thanks. What? Oh, it's a subpoena. Can't be subpoenaed? Yeah. We got rid of it. It was for nothing. It was some weird message. David, you've been served. I mean, you've been, how many times? I don't know. You've been served. I served one night at Friday at 10 o'clock. I said, are you kidding me? I know. That person didn't, it didn't fare as well as the thought they would in that tussle. Oh, all right. I want to talk, I want to actually talk oil and gas, not regulation, but joint operating agreements, because we did get news yesterday and then a follow through today on this important dealer we're watching in oil and gas, namely Chevron's deal to acquire Hess. It's 1.05 shares of Chevron, remember, an all-stock deal. By the way, Hess' stock hasn't done much, you know, the deal would have break. It's not clear that it would create a lot of downside for Hess. That said, it's still an enormous deal and an important one and there is a significant feud going on between the two companies at the top of that chart there, namely Exxon and Chevron, over what is really in this joint operating agreement in terms of what the rights of first refusal are on Guyana, of which Exxon owns most, but less than 50%, the giant Chinese company Scenic, and then you have Hess in there in the middle. It's like 25, 45, 35, I think I got my numbers right, roughly. We call it, or 30. Hess today responding to the fact that they're going arbitration. We said that this was a possibility last week when we covered this story. It is now happening. It could be four or five as much as six months before we get a ruling here from an arbitrator. For its part, Hess says we believe the right of first refusal doesn't apply. We remain fully committed to the transaction and obviously disagree with the interpretation of the agreement. However, there's something to be said for it being reverse triangular merger, which means Hess doesn't actually ever go away as a corporate entity, in which case, then you could argue there's no real change in control. But the problem in part that the market has here with trying to understand the risk of the deal is we're not going to see the language. Language is not being released. Come on, both sides agree and release the language so we can make our own decision because when you talk to Darren Woods or you talk to Exxon, you get the following, and this was one of their senior VPs at a conference yesterday. He said the JOA contract, in this case, was developed based on the model JOA. We understand the detailed language. We wrote it. We understand the intent of this language of the whole contract because we wrote it. I think most observers in this industry would understand our reputation for rigor attention to detail and contract language, and they are extremely confident that their preemption rights exist, and they would intend to preserve them. Now, if in fact they win an arbitration, Jim, Chevron goes away. So Exxon never gets a chance to use those preemption rights. Chevron has made it clear. We lose, and the language is seen in favor of Exxon, that they do have the right to actually buy what Hess already owns of Guyana or make a bid on it. We're gone. It's not as though once they close the pioneer deal at Exxon, they're going to just buy Hess. But again, the senior VPs today says, "Listen, I don't know if that transaction is going to proceed or not. That's in their hands." But if that transaction does not proceed, there is potential value down the road for Exxon mobile. That option value is really, really important. So meaning, hey, if we have an opportunity to put this deal to bed, we have option opportunity to buy Hess in the future. Okay, so let's put this in the context of people at home, even big corporate that emanate people. David, is there some sort of weird bad blood here between Hess and Exxon? You know, this is highly unusual behavior, almost not frickin', I would say. Going in, there was not an expectation. They operate together in certain other areas. But clearly, this is unexpected, I think, on the part of Chevron, and that Exxon would be doing this, Exxon Fritz part says, "Hey, we have these branch and rights in our opinion and would be derelict in our duty to our shareholders if we didn't actually try to assert them." Well, I am astonished at this. It's unexpected and quite, I don't want to call it, let's just say it's unexpected, and it's an unexpected level of hostility. It is interesting. This is an industry that I think a lot of people call who don't pay that close attention to the business feel that it's just a slap at the oligopoly, they all get in the room and they figure what they want to do. They'll probably be attacked in the state of the union with that. We haven't, when was the last time they haven't been attacked a couple of days? But there's no love loss. I mean, I can't believe this. And so, you know, like Mike Worthy comes in peace. Darren Woods. Yeah. You know, he's an engineer, man. He's just like, "Listen, this is what we think we got, and we're going to assert our rights." Now, again, we haven't seen the language that is at issue here, which would help us or certainly help experts understand who really has the better case. Maybe both sides will agree to make it public if they believe that, but otherwise, we're going to sort of be in the dark a bit in terms of trying to ascertain really what that language says. I mean, I'm timing back by whatever and timing back stuff just goes up, up, up, and I just think that this is one where you're not in the permeate, baby. Really quick, Jim. We've got four names in specialty retail up five to eight percent, Burl, B.J., Big and A.E.O. Yeah. I did this incredibly interesting reorganization, and it's about time, I'm glad to see they did what they do. A big, big, a lot of people felt what Big was one of its last legs, A.N.F. came right back. And Burlington is the fair haired. I mean, right now people feel Burlington is, it's among Ross, Burlington, and TJX in terms of close out. I think that people should recognize Burlington. It's really interesting. Because Burlington is the equivalent of the Dollar Tree Dollar General, the group. When you go to Burlington, it's pipe rack, it's long lines, it's not necessarily, it's a place that you feel like you're getting in bargain. If you had to read through this, you would say that the consumer is downbeat, because that's where you shop, and the consumer's downbeat. Right. All those names doing well price-wise, the exception would be VSCO today. Yeah, just a major miss. Bad cadence. I mean, one of the things that people have to recognize, safety with footlockers, say, "Footlockers are big because Mary Dylan said, 'Look, we had a good Thanksgiving." Right after that, it just went all downhill. Victoria's Secret had a couple of weeks that were just, I don't know what happened. I guess people just didn't go. I defer to my colleague. David, what did happen if Victoria's secret? Oh, well, Jim, I can't discuss it. No? No. All I know is I always go back to Sycamore and that deal they had. Wow. It would have been the greatest deal, and they called it off, and then the thing soared. Remember? They also did some things that didn't really work out Sycamore now. At Victoria's Secret? Yeah. But I just think that the mall is a dicey place because Ralph Lauren had unbelievable numbers, and then you go next door, and there'll be a company that just didn't attract anybody, footlocker, the champs was bad. I have a smallest position I have in that. My trust is that because I believe in Mary Dylan so much about it for what she did with Ulta, but so far, not so good. Apple down, Tesla, you're kicking out a small game so far. Really? Yeah. And all of them. Yeah, they were up 0.25%. So much for Camelot, huh? The lowest passing. Just moon and cone here. It's not a lot of the snow and Camelot. Camelot? Camelot. I actually saw it when it came back. Learning around? Look. I saw the original. Really? Of course you say. I saw Jerry Orbeck and promises promises. Very nice. Before he was a Disney king, rest in peace, Jerry. Best. As we go to break, go watch Bonds today. Of course, Powell, day two. In front of the Senate today, we'll get Mester at 11.30. Bonds were in line later this afternoon, consumer credit, Fed balance sheet. 410 is up a little bit from the 406 we had earlier this morning. Be right back. Support for this program is provided by Chevron. Demand for energy is projected to continue rising in the future. To help keep up, Chevron is increasing their US oil and gas production, and they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations. Helping supply energy that's affordable, reliable, and ever cleaner. That's energy and progress. Learn more at chevron.com/meetingdemand. We want to wish a happy birthday to one of the most beloved people on Wall Street and a very familiar face to CNBC viewers. That's our passion. Art, we're keeping an eye on your health, looking forward to the resumption of your morning notes. No doubt, Jim, he would have a lot to say about the action we've seen in markets last few weeks. There are a few people that you have to read every morning and know you are scared to miss, because their history here is kept by one person, not me. I've seen his way through all kinds of aeons and epics. I remember speaking to him during the crisis of 2001, and it was really, he was the clearest head there was. And in '87, and in '08. Oh, the panic of '08? I mean, art. Yeah. When it comes to the market, it's a singular voice. At the right, we don't have enough people who have perspective to know that every day is not a perilous game. Meantime, Dallop 1.90, holding around 51.40, we'll take a short break, be back at a moment. Let's get to Jim and stop trading. Yeah, okay, so look, one of the things that is really intriguing to me is the housing, but both remodel and renovation as well, blue. And Sherwin Williams, the evidence lab, UBS, goes to hold the buy, and it's at 52 week high. And that's very important, because the actual home business is not doing well, but the new home visits, Lenoir's been doing very well in total, and then the renovation. Look at that. Paint sold very well at Home Depot. I do have ASEC, which is decking in Fortune Brands, which is some very sophisticated. I don't want to call it plumbing anymore, it's much different than that, but my surprise gas is one of the turnarounds, great turnarounds. And even as good as Abercrombie, I have gapped tonight. Ooh. Yeah, I have gapped, and I just think the gapped is incredibly exciting that last quarter was just magnificent. If they can turn that juggernaut around, this guy is just dynamite, and he's just, he's just dynamite. I mean, I can't wait to speak. Well, they got David's attention at banana, so that says something else. Yeah, David, that's the one I know you told me you thought you were going to a Latin American country cooperative, it's actually a division, but the thing is that he's turning, he's turning old Navy around. Can you imagine? And GAP has a very fresh look, if you've been to GAP lately, it's Chris, David, is that sort of a use? It's Chris. Okay. I have not been to a GAP lately. They're hard to find. Look, they had the GM. Remember when they were on every block? Why? Why? Why? Why are pants is a big thing? Why is this doing very well? You're going wide again. Do not rule out GAP going to, yes. I may take it to a high of 30, and that's a Creme de la Cramer. That's my new name for that. I look forward to that, Jim. Like evidence left? Creme de la Cramer. I've made money tonight, 6 p.m. Apologies to the booth because you did see Chairman Brown getting the session underway. We're going to take you to Senate banking and day two of Powell on the Hill after a break. You've been listening to the opening bell on CNBC's Squawk on the Street. All opinions expressed by the Squawk on the Street participants are solely their opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information Squawk on the Street participants consider reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Squawk on the Street disclaimer, please visit cnbc.com/squawkonthestreetdisclaimer. 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