good tuesday morning i'm melissa lee with mike santoli. setting the agenda today, debt ceiling drama. they weigh in ahead of biden's meeting with mccarthy today. the ceo of coty beauty is with us. and later, cnbc's annual disrupter 50 list revealed the ceo of chime, number 15 this year, will join us this hour. markets sitting on modest losses so far. you see the dow down marginally and the s&p 500 off by one-third of 1%. nasdaq with sloppy results from paypal and skyworks, partly to

blame. congressional leaders headed to the white house to try to reach a deal to raise the debt ceiling. janet yellen raising the warning in a conversation with our own sara eisen last night. >> failure to raise the debt ceiling is really saying if the president and democrats don't agree to these draconian cuts, we're going to do something to bring enormous harm to american households that rely on the government and need -- and need to have jobs >> with us now, american enterprise institute economic policy analyst and cnbc contributor, jimmy and mark zandi. great to see you both. jim, i'll start off with you how do we get to compromise when neither side wants to compromise >> well, i think in the end, both sides will want a compromise i think what's important here is that, one, both sides are talking finally. and, two, both sides believe not

raising the debt ceiling would be very bad. and probably are unwilling to try to play a game where it's not raised and there's a market fallout but they can blame the other side i don't think that's what either side believes. that's all great news. the bad news is it's not obviously what the path is, the direct path is to getting an agreement. you can say, yes, there will be some spending cuts or freeze over a number of years, but that path is not obvious at that point, which is why i think people should still worry. >> we're working with janet yellen, you know, x date as soon as june 1st. that's sort of a span because of the nature of the government's finances at the same time, that x date is fine, but we don't need a default in order to get a credit rating downgrade i don't know if that's something the markets are factoring in >> well, i don't think they're

discounting a downgrade, no. that would be truly catastrophic because it's the treasury's rating is downgraded, lots of downgrades will occur. anything -- any institution that's backstopped in any way by the federal government will be downgraded i think jpmorgan, chase, you know, fannie mae, freddie mac, municipal government, you know, that would be a real mess. no, i don't think anyone's thinking along those lines, nor should they. i think that would be very, very unlikely, hard to see that happening. i should say, melissa, i don't speak for the rating agency, just so listeners understand that >> mark, just to follow on there, how would you model, if at all, the economic impact right now? all we're really seeing is these ripples in the bond market where people will demand more out of yield out of a one-month treasury yield because of a

potential delayed payment. that seems technical and mechanical, but at a time when banks might be tightening up on credit, does this become something material >> mike, i think it becomes material very quickly. you know, june 1st, june 8th, you know, the x date when treasury can't pay all the bills on time is early june, you know, that's coming fast so, if in the next few days coming out of this meeting we don't get a signal that lawmakers, as jim said, do want to come to terms and increase the debt ceiling in a timely way, i think markets will react more significantly i would go as far to say, mike, it may at the end of the day be necessary that markets react because without some turmoil in the markets, without some bad days in the equity market, without some increase in interest rates, some problems in the foreign exchange market, lawmakers may not be able to generate the political will they need to sign on the dotted line and pass an increase

we may actually have to see that turmoil before we actually get to a place where lawmakers can agree to increase the limit. >> i hope not. >> yeah. i was going to say, it's really fascinating because almost everybody who comes at it from the finance side would probably look back at 2011 and say, you know, we understand markets panicked, we understand we had a potential debt downgrade that did come to pass on the u.s. government in retrospect, it doesn't seem smart to panic if you brought the top, you broke even seven months later. it was a big buying opportunity, and yet it's hard to say that if we actually go to the date, the political cal include lus is not going to be, the markets will freak out and the other sides will get the blame. >> yeah, i think that is a too clever by halfway of looking at it if you're a politician. listen, one can imagine a scenario where the biden administration says, hey, we want to raise the debt ceiling the republicans are the ones adding these stipulations.

so, if there's a market shock, which pushes the economy, perhaps, into a recession, they'll blame republicans. i don't think that's necessarily obvious. if you're the president who has bad poll ratings and doesn't need a recession heading into an election, that is a political highwire act, which i don't think the biden administration wants to do. and i think neither side ultimately can be positive of how the political chips will fall >> if you had to read the tea leaves when they come out of the meeting, what will you be listening for in terms of hope they're reaching some sort of common ground? >> yeah, i think talks about a further meeting. in an add yl world, both would agree on short-term extension. i think that's doubtful. anything positive that moves the ball even incrementally would be good news. we could be in a situation where the house is unable to pass a

bill and no negotiations incremental progress, i'll say that for now. >> thank you. >> thank you. boeing orders delivery numbers for april crossing moments ago. phil lebeau has those numbers for us. >> take a look at boeing moving higher the order with ryanair in terms of april order and deliveries, they broke out net orders of 13 aircraft, april deliveries, 26 airplanes the backlog stands at 5,343 planes i mentioned the second piece of news, it was about an hour ago in arlington, virginia, at the boeing headquarters that announced a major order with one of its biggest customers, ryanair. the total order, up to 300 737 maxs, 150 a firm order and then an option to buy another 150 the total list would be $40.2 billion.

as ceo dave calhoun and michael o'leary both said on stage, a significant disagreement a huge day still for boeing and ryanair. back to you. >> boeing still holding onto a 2% gain in the morning on its shares. turning back to the debt ceiling between political uncertainty in washington and rising recession risks, the rest of the year, where is the best place to be positioned potentially defensively? we're joined by joanne feeney. it's good to see you this morning. i guess that's the first question do you actually feel as if defense is the correct posture for an investor right now? >> good morning, mike. it certainly is challenging time these days it, investor. we talk to our clients, we have some with a longer-term focus and they're eager as we've seen the market be eager to get back into technology and higher growth stocks and we still see opportunities in that space. on the other hand, folks in

retirement, some of our clients are more concerned making sure their cash flow is being generated off portfolios that's an area we found several defensive positions, where we've added to them recently because of the higher degree of uncertainty that we're physicianing right now on the recession front, on the debt ceiling front. >> and what would some of those be i assume right now, there's a little bit of a tailwind if you had somebody who wants to make sure you have cash flows in the fixed income side. you have that squared away on the equity allocation, where would you look to put fresh money? >> we like to look to both sides, what we offer in our balance strategy is an opportunity to hit a 3% yield or 4%, even 5% yield in sort of even these kind of market conditions pulling in some fixed income and also giving investors a chance to see their portfolio appreciate over time by putting a lot in equities. some examples in the tech space, broad com offers a very

attractive dividend. qualcomm, even though it's at the bottom of its cycle, could offer appreciation, and in consumer, whether it's mcdonald's and health care, tj maxx, smaller dividend but these are defensive positions in face of potential recession risk or a bit of volatility around the debt ceiling although my colleague is putting out a note today to clients talking about the game of chicken involved and how there are lots of ways for this to be resolved in a way that is far less than catastrophic >> joanne, what is defensive these days i think that's sort of the question a lot of investors are asking themselves as they witness big cap tech see inflows whenever there's banking turmoil. you're talking about mcdonald's. mcdonald's or apple. they're virtually the same forward pe what is more defensive >> well, that's a tough one to parse, right more defensive classically it would be a company that would

be -- see less volatile sales and earnings over the course of a cycle. in particular, recession mcdonald saes a good example of that, obviously, be has shown io have such loyalty among its customers, and particularly the high-wealth customer base it serves that it is likely to remain resilient during recession. i think investors have it right. apple and mcdonald's are both defensive. in health care you have defensive positions because there's not a lot of discretion you can exert if your health needs demand. >> joanne, i think len nar is another one you think is atrack ty, which is interesting and highlights how this is a bit of off-rhythm cycle in a way where you have housing bottomed, those stocks are in favor, trading

with yields, and typically if you were expecting a pretty high probability of a recession, you wouldn't necessarily think home builders were the place to be. >> yeah, certainly it's become controversial and we've gotten a lot of questions about it. we've been positive on lennar for a long time because it serves an area of the housing market likely to see growth over many years they build and sell entry-level houses and one step up from entry level. part of the community in the united states that needs homes are the millenials, the younger folks, the ones trying to get as much as they can for as little money as they can, particularly with higher mortgage rates what we've seen over the decline with higher mortgage rates is folks shifting downscale getting a little better bargain. maybe leaving off some options on their houses that would have driven up the price in the past. even though we could end up in a recession, we think a lennar, which serves that lower end of

the margin, given the low inventory in the housing market, the reluctance of current homeowners to put their house on the market because they would have to trade up to a higher mortgage, we think that will keep demand resilient for a company like lennar for many years to come. >> the chart is impressive seems like you have some company thinking they have a way out of it joanne, good to talk to you. thank you very much. joanne feeney. >> you bet. still to come this hour, beauty company coty which sells brands like kylie cosmetics and gucci has surged. paypal sliding deeper into the red despite an earnings beat we'll look at that move and whether some investors would rather own block. what names are most and least exposed to chatgpt joanne feeney just mentioned two of them. "squawk on the street" returns in two minutes there are some things that go better... together. like your workplace benefits... and retirement savings.

with voya, considering all your financial choices together... can help you be better prepared for unexpected events. voya. well planned. well invested. well protected. no, no, no, no, no, no, no. vthere's a problem. with my paycheck. it's short. someone messed it up? i'm in the middle of nowhere. ♪ unnecessary action hero ♪ was that necessary? nope. neither are paycheck problems. with paycom, employees do their own payroll. no problems, no surprises. [narrator] schedule a demo at paycom.com and make the unnecessary, unnecessary.

welcome back take a look at coty, a beauty company that sells products including products from marc jacobs raising guidance for the fiscal year for the second time joining us for a closer look at the first quarter in a first on cnbc interview, coty co-founder. >> good to see you. >> you saw strength in a lot of different geographies but i wanted to focus on what you see

in the north american consumer and over the past couple of months as consumers are digesting what's going on in the banking crisis. >> yes, indeed, what we're seeing, which is in a way explaining our 11th -- in line or above expectations. we just posted 15% growth for the quarter. 16% coming from our prestige business and 12% coming from our consumer beauty division it's one of our fastest growing regions in the world on the consumer beauty side, cover girl is posting double digit growth now since a few quarters and is really the brand that is, you know, reinventing itself quarter after quarter, leading the clean beauty innovations and consumers are looking for cleaner options when it comes to their use of makeup but also in the area of --

sorry, in the area of fragrances i'm sorry, i have something in my throat. when it comes to prestige, i can tell you that our brands are also doing fantastically well and you may have heard me speaking earlier about what we call the fragrance index that's the experience why the u.s. prestige fragrance market is 60% below the levels of 2019, which is unprecedented this can be explained with the conjunction of gen zs, people coming in from the hispanic community who are newcomers to the fragrance category, exchanging on social media about what is the latest fragrance that people love, what is the latest ingredient that's trending so, all of these explains, of course, the performance of the market, but moreover, the overperformance of coty as a prestige fragrance market. >> i'm trying to get a sense of what the pattern of consumer spending has been over the past

two months have there been any pullbacks, particularly when you're talking about a fragrance that costs $100 or more per bottle, you know, that's a small luxury. >> that's a small luxury, but indeed you have to compare it to bigger luxuries and bigger spendings. and consumers are probably giving up on bigger spendings but not on this kind of luxury specifically on the fragrances again, the fragrance index, we tried to understand why this new generation of gen zs, men, coming from the hispanic community are coming into this category we hear consistently a story around mood-boosting, feel-good products, things that allow you to escape from the daily life. this has no price, i have to say. >> that's true there's no price too high to pay. what are you seeing in terms of your business, how it's tracking in china with travel-related demand, things like that we did see estee lauder have

some trouble along those fronts. >> in china, the company is starting from a low base in a way, this is a great protection for the company so, we have mainly upsides coming from this country, hopefully in the near future indeed, q3 was a quarter where half of it made with lockdowns and the other half was back to, i would say, more normal activity, but what we are seeing in q4 specifically during the month of april is level of sales above 2019 levels. this is great news for our business given the white space we have there. you may have heard we launched the first, i would say, skin care launch of coty as a brand, which is off to a very good start. consumers love the formulations, they love the princely heritage of this line, and the conversion we are seeing today in point of sales is quite high. >> some analysts would say

you're underpenetrated in skin care is this still an opportunity for you, in your view? >> yes, this is the biggest white space for coty this is clearly an area the company can find its next growth as you know, it's skin care is the only category where there is almost no limit in terms of pricing and you think about china, the biggest part of the market is above $200 this is the fastest growing part it's almost 40% of the market growing by 40% so, this is an area where we believe we have our place. we have three brands that are going to compete in this area, lancaster, just reinvented itself in the last month and a brand called orveda. >> great to speak with you sue nabi. >> up next, we're looking at fintech valuations as paypal falls after reporting its

results. palantir, read more about the quarter on cnbc.com.

how? how do you choose? how do you choose the ones you save? he's coming for you with everything.

dom! can't save 'em all. shares of paypal shrinking after they cut operating guidance and earnings last night. deirdre bosa digging into it. >> the earnings weren't great, but they weren't a complete disaster the focus is on margin contraction. there's another way of looking at paypal's fundamentals which is put them next to rival block. digital wallets, in terms of free cash flow, gross margins, basically profitability, paypal looks to be the better play, yet it trails block in terms of valuation by a mile. block's forward price to earnings multiple more than double of paypals.

something hindenburg noted, block has extensively relied on nongap adjustments to report growth despite weakening metrics. the flip side, i was talking to an analyst that covers both companies, and i asked him essentially where are investors shunning paypal? he said, quite simply, block is the more innovative company. jack dorsey has made a more viral product, something that hindenburg has questioned, but that innovation argument, that can be seen in the top line growth as well block expected to grow revenue faster this year it's an interesting debate it sets up. for the first half of the year, investors looking at the profitability. in the fintech space, they're kind of valuing revenue growth higher >> for sure. you know, dee, it also strikes me that when you have this area, let's be honest, these are commodity services i mean you know, i can send you

cash the same way no matter what service you use. so, when that's the case f you're paypal and kind of the incumbent and you have a little more market share to give up than gain when everyone else's market, it is maybe that also explains part of the valuation difference because if you look at paypal's report, they say, well, we still are -- three-quarters of e-commerce vendors still have the button on there. that's more market share to lose, not gain. >> i love you bring up that idea of commoditization because i think this is a question that sort of the entire fintech industry faces you look at affirm when buy now, pay later looked innovative but now everyone is doing it bay in 2021, paypal had a market cap of $350 billion. it was worth more than all but one of the major banks today it is worth less than all of them. it kind of tells you that maybe these things have been

commoditized you see the rise of zelle. now you go into your existing app for any big bank and you can do that in seconds it raises questions on what the future valuation looks like. can they ever reach these levels, block or paypal? it's a good question i think the fintech industry right now is wrestling with that, investors. >> can it buy the growth at one point they were looking at pims. are analysts saying they have to do something like that >> they can buy the growth but i think it's this impending question that -- the irony is a lot of these finteches, square, now block and paypal pushed these banks to do more innovative things and now they're coming for their lunch yeah, sure, maybe in the short term paypal can buy that growth, they can make an acquisition to get those numbers up but longer term, is this just a commodity

>> that's absolutely the conversation visa and mastercard continue to have massive premium valuation for the rails for whoever is rolling along them >> they have done such a good job in protecting that moat and those rails. that's a hard business model to argue with, even at one point you thought block and paypal could challenge that. >> even if some day there will be pressure on fees. that's been the story for a long time hasn't happened much dee, thanks a lot. talk to you soon. up next, piper naming its top picks to play the banking turmoil. cnbc is celebrating asian american and pacific islander heritage throughout the month of may. here's keto's founder and ceo. >> as a woman of indian heritage in the tech sector where funding is really limited and more so venture capital, recognition is extremely minimal. what you have is your power to believe in yourself.

and do not lose your vision or your mission because that's what makes you who you are. and achieve all those goals by remaining as steady as you can and never quitting you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

quick shares on underarmour.

investors concerned about the decline in gross margins which was in large part due to promotional pricing driven by excess inventory outlook for revenue and eps came up short of expectations that stock giving up 5%. time for a news update by contessa brewer. israel targeted jihad group in gaza with targeted air strikes that killed three senior commanders palestinian health officials said 13 people in total were killed, including the commanders, their wives, several of their children and others nearby those attacks in densely populated residential areas set the stage for a new round of heavy fighting. russian troops paraded through red square in a scaled back celebration for russia's victory day. the country's annual holiday marks the defeat of nazi germany. russia is nearly 15 months into its own bloody invasion of ukraine. vladimir putin spoke of a real war being waged against his

country. he's speaking to rally the russian public. and novavax shares are surging after they said their vaccines target both covid and flu with a strong immunoresponse to the viruses and they unveiled a cost-cutting push which includes reducing 25% of its workforce. >> up 39% at the moment. thank you. let's take a deep dive into a note catching our attention. piper sandler finding value in some value in financials despite regional jpmorgan, u.s. bank and fifth third to ride out the wave joining us, piper sandler managing director, scott sievers. i know you've been focused on just the equity market trading dynamic that seemed to be driving the narrative in regional banks

you're saying essentially a lot of the dislocations in the stocks are really no longer really tethered to the underlying fundamentals? >> that's right. thanks for having me, mike yeah, the volatility in the states hasn't come down the way we hoped it would have a few weeks ago. what really changed over the last several days is sort of this unhinging of fundamentals from reality you know, it seems generally speaking when we talk to our banks that there's not the same kind of panic or agitation around customers there was in early and mid-march. it's more or less business as usual. you know, deposit trends industry wide have stabilized p our thinking is we unhinged a little more than we would have hoped and in the rubble of this blood-letting we let some good names go by the wayside and we think there are opportunities for patient investors to pick up some names. >> the three you have highlighted today, fifth third, jpm and u.s. bank corp are really not the ones that have

been most blasted in terms of the stock market reaction. they're not trading at the most massive discounts to tangible book value essentially you're still migrating towards, i guess, a little more quality representatives of the sector. >> undoubtedly first with jpmorgan, that's an ironclad safety name we tried to give a little bit of an optionality to investors. that's a name that's held up well and we think will be a real winner from this smas. by contrast, however, a couple other names, even though they haven't been the real pressure points like we've seen in some specific names, they are down quite a bit. usb is down a third since all this turmoil started in early to mid-march. great name historically. very good risk profile very good earnings and revenue stream over time maybe dealing with or contending with the same sort of capital questions that you'll have probably throughout the states as new regulation comes into play this should be a good story and a good chance to pick up a very strong name over time. >> how do you factor in new

regulation and, perhaps, the forced capital raise or trying to bolster liquidity when it comes to u.s. bancorp do you have a sense of what that additional capital requirement would be >> great question, because because i think we're alley trier to contend with that for the industry at large. u bank corp did a deal just prior to the onset of all this turmoil. as a condition for that approval, they made an agreement with regulators that they would move up to or be ready to move up to a new stratification for regulation by the end of 2024. usb has a six-month lead on everybody else out there in rebuilding its capital i think they'll probably add 25 basis points or so a quarter to their regulatory capital ratios over each of the next several quarters and get where they need to be, certainly in time i don't think we'll see necessarily forced capital raises i think what you'll see is a

pause on repurchase, a lot of internal capital building. so, you know, we'll husband a lot of our earnings, pause share repurchase and be diligent on what happens with balance sheet growth to try to keep the denominator in check as well. >> scott, i don't know exactly what the conversations are like with clients right now, but i can imagine you could say, well, deposit flight has slowed down, it's not a crisis moment, things have stabilized. on the other hand, what's my hurry to buy these stocks? you only have to get through so many things. they're going to be building liquidity, loan growth looks like it's tightening up. and you also have this idea that all these banks are going to want to look very flush and cash heavy and not be extending out the risk curve meanwhile, we might be heading into a little bit of a rec recessionary environment as well. >> mike, i think you just summarized every conversation i've had over the last three weeks. it's a great question. and that's why we're so focused on sort of patience for

investors and the idea the market is going to reward over probably the next year or so really balance sheet safety and strength, perhaps at the expense of earnings and growth and, you know, that's fine this is a system that really relies on safety and soundness there will be winners and losers in our hope, relative outperformers, even though this is going to take some time for the industry to get through what's really kind of a half dozen real headwinds that are here or looming on the horizon. >> scott, i'm not sure if it was you or a colleague of yours at piper writing about pacwest yesterday, but essentially saying that, you know, you continue to believe that equity manipulation if unabated presents a risk to the -- basically the recovery for the sector what role do you think equity manipulation, short selling is playing in how these stocks are trading? >> i have no idea if any market manipulation is actually

occurring. they might feel emboldened by how the recent failures have played out banks are unique from their confidence with investors and clients. we clearly don't have that now and rebuilding it won't happen overnight. the other thing in my mind is contagion risk if you were to say circuit city 15 years ago, when that went away, best buy, amazon didn't topple because of similar fears. when a bank goes down, it tends to lead to fears of further failures to that end we can't have a situation where we allow these self-fulfilling prophecies to occur. the stock goes down, that makes depositors more jittery and then you have an actual problem and survivability problem. if a short-term ban is necessary to allow the industry collectively to catch its breath, i hope it doesn't come to that as free market policies have been successleful over a long period of time, but we need

some sort of a time to kind of air out some of these issues and let them unfold. >> yeah. who knows, maybe there will be some time to have the fdic come out and, you know, clarify some things, some actual official policy moves to raise the deposit limit or something like that yeah, every time one goes down, into receivership, there's always the bank that's the next worst, i guess that's the problem with the stock market. >> that's right. we just need cooler heads. mike, thanks again. >> let's hope for those. appreciate it. thank you. and as we head to break, join technologists at the virtual financial adviser summit on june 15th scan the qr code to register or visit cnbcevents.com/financial adviser.

a little over two hours into trading. let's go post to post with bob pisani for a look at what's moving. >> we are in a very, very narrow trading range. the problem is we're having trouble generating moves to the upside getting some momentum going, this debt ceiling overhang sort of weighs on the market right now. we really need to resolve that in the absence of that what's been moving is defensive names we've seen health care hold up

very well. we're seeing consumer staples hold up really well. merck -- health care is doing well merck is not a new high but trying to break out to a new high had a great quarter. started at $106 april 1st, up to $119 lily, cardinal health, they're all doing well the momentum is there but not a lot of tremendous breakouts. same with consumer staple names. here's procter & gamble right here it had an incredible quarter about two weeks ago. and the stock popped up here it's been in a downtrend recently it's had trouble hitting new highs. it was 156 or so five or six days ago it's been moving down a little bit, $154. that's not a big move to the downside, but you see the point here great numbers and still having trouble sustaining the breakout once the earnings report came out. walmart has been a stalwart helping the dow out for a while now. it's generally been pretty good.

it was $145 and now $153 up 4%, 5% for the quarter. same thing, no new high here it's trying to break out it has a few points but it can't quite make it there. melissa, that's the problem right now. even in the defensive names, can't really break out because it's still not enough people -- too many people on the sidelines. and then a lot of the other money is in large cap tech stocks right now that's holding the market up. cyclical names don't have a big bid. energy, materials, industrials and banks, you see the kbe down again today. melissa, back to you. >> thanks. after the break, fintech company chime is looking to disrupt the traditional brick and mortar bank. the ceo joins us as part of this year's disrupter 50 reveal.

♪ (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.

welcome back cnbc revealing this year's list of disruptor 50 companies. chime coming in at 15. ju julia boorstin from san francisco. >> i'm here with chris britt, the ceo and founder of chime this is chime's fourth year on the list given the number of fintechs ha dropped, toll us what makes chime so much different.

>> thanks so much, julia it's great to make the list. and we made it, we're not even an ai company. go figure. it's a great honor and i think chime is different than a lot of other companies in that the way we go to market is with a very aligned consumer business model, so we're not a bank. we're a consumer fintech, and we help consumers manage their everyday money they use us as really a primary bank account, which is a real differentiation verse us a lot of other companies that may help a consumer with the one-off transaction. chime members use us as the primary everyday account, direct deposit into the account which goes into our fdic-insured banks and they love us we are the most loved banking app, and we're consistently in the top handful of top downloaded banking apps. >> the whole system has been on edge since the implosion of silicon valley bank.

a gallup poll found the money they have in banks is not safe is that good for chime is that bad? have you seen an impact post svb? >> the trust levels that mainstream americans have in banks is extremely low i think that was part of the opportunity we pursued when we started the company over ten years ago now. we haven't seen much of a change as a result of the svb situation. we are -- we had a relationship with svb we still do. and we think highly of the people and really feel for the people that were affected by that but in terms of our consumer base, 99.9% of our consumer deposits are fdic insured. they're well below the $250,000 threshold, and that is also really good and productive for our two bank partners. it allows them to have really strong stability in terms of the deposit base they enjoy and use to run their business.

one of the elements of chime that makes us unique, i think, not only are we a great benefit to consumers who are avoiding fees, at the same time we're also helping small and mid sized banks having a very difficult time competing with the large banks who continue to get larger, and i think the last month has only further emphasized that. >> you mentioned you're not an ai company but are investing increasingly in ai and a chatbot. how will ai impact your business going forward? >> ai will affect every company and certainly as a technology company we're embracing it at the end of the day we're a human first company, so we have 24/7 customer service and try to always be super responsive to our members. ai is already helping us a lot in terms of making our agents more effective in diagnosing what problems consumers might have our engineers use it, generative

ai with the coding process, certainly in our risk and scoring models, but ultimately we need humans involved to make the final decisions because it is a regulated industry and we make sure we're playing by all the rules. disruptors such as chime need to make sure they, themselves, are not disrupted either by other rivals in the space, other finteches, or by the big banking giants what is your moat and how are you ensuring someone else isn't going to come and copy your business model >> the biggest difference versus other finteches, it's recurring, it's predictable, it's not really subject to highs and lows most of our members use chime for nondiscretionary spend, going out and shopping at target or amazon or subway and using it for everyday purchases the business has been very resilient. in terms of competition with the big banks, it's very difficult for them structurally to compete for the segment we aim to serve which is sort of mainstream,

middle and more lower income consumers. big banks do a pretty good job be with high income, high fico score folks who have big deposits, are credit worthy. for those who live paycheck to paycheck, the only way big banks can make it work is being punitive on fees because they have antiquated tech it costs a typical big bank $300 to $400 a year just in operating costs to support a single checking account that doesn't allow for good economics. we're a technology company, we operate at a low cost structure, we're really a payments business we're able to monetize relationships in an aligned way. the vast majority of our revenue comes from our network partners like visa when the card is used at the point of sale we earn money when our member uses us as their top of payment system >> we'll have to leave it there. we're out of time. we'll have to keep talking

chime was recently valued at $25 billion. we'll see if you make a move toward an ipo when the window opens up again chris britt, thank you for talking to us today. guys, back over to you >> all right, julia, thanks. our disruptor 50 coverage continues this afternoon >> with monarch tractor, the leader there will join us at 2:00 p.m. eastern time palantir shares are up 20% we'll explain after the break. ld bark-ery. oh, i can tell business is going through the “woof”. but seriously we need a reliable way to help keep everyone connected from wherever we go. well at at&t we'll help you find the right wireless plan for you. so, you can stay connected to all your drivers and stores on america's most reliable 5g network. that sounds just paw-fect. terrier-iffic i labra-dore you round of a-paws at&t 5g is fast, reliable and secure for your business.

what if you could make analyzing a big bank's data... no big deal? go on... well, what if you partner with ibm and red hat, use a hybrid cloud solution to connect data across multiple systems globally, then analyze all that data with watson. okay, but this needs to meet our... security standards? yup. compliance standards? mm-hmm. so they get the insights they need... yup. in real time... check. . ..to make quick decisions? check. aaaand check. that's the hybrid cloud solution ibm and a global bank created. what will you create? ibm. let's create.

your record label is taking off. but so is your sound engineer. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

shares of palantir surging up more than 20% ai part of the story there frank holland has more on the results. >> reporter: not only are the shares surging, palantir up today as investors really look to get into the ai trade emphasizing the company's competitive advantage when it comes to ai and decided demand for enterprises, specifically in insurance, manufacturing and supply chain companies saying they were really looking to improve margins, so looking back at the quarter overall commercial revenue up 15%. u.s. commercial revenue jumping 26%.

the ceo saying palantir is seeing surging demand across the board. he gave some very interesting color on just how intense the battle for an ai advantage really is. >> if you wield these technologies safely and securely, extract the value in the context of your own enterprise, you have a weapon that will allow to you win that will scare your >> palantir known for its work with the government. i spoke with karp about the regulatory impact on palantir's business, focused on a path forward with both human and government oversight analysts say that could be important if they face some pending regulation coming down the pipeline in that big data space also getting a poost from the palantir results mike, back over to you >> frank, thanks so much >> and speaking of ai, a new report out of the national

bureau of economic research lists the public companies most and least exposed to chatgpt starbucks, mcdonald's and dollar general are at the bottom three. maybe no surprise. this morning wendy's confirms it's turning to ai-powered chatbots for its drive-through orders >> all right intuit an interesting one. you can have the machine do your taxes for you. let's get over to scott and "the half." mike, thanks so much quk to "the halftime report. i'm scott wapner counting down to a slew of critical market events, those debt ceiling talks with the white house just hours away. the cpi tomorrow morning, key fed speaker literally in a matter of minutes. the investment committee debating the road ahead. joining me for the hour at post 9, josh brown, jenny harrington, joe terranova. everybody in the house let's check the markets here feels like we're kind of wait and see. debt ceiling talks and obviously th