As electric. One of teslas biggest goals straight ahead we start with the banks and the latest. Weve seen a flury of press conference from banks announcing plans for their dividends, one of those coming at a future date is wells fargo saying its third level will reduce from 51 cents a share, didnt mention what level it will reduce to, but that will come in with the announcement of july 14th earnings another company on the watch list for potential definitely dind watch is capital one with buffer of requirement of 5. 6 but no plan of what to do with its dividends in the press conference weve seen so far press release weve seen so far. Of the companies that have reaffirmed their dividends citi group Morgan Stanley golden Goldman Sachs bank of america. This based off the stress test last week. Jpmorgan have not issued a release yet. Not that weve seen, correct. Wells fargo started today up with an 8 yield so nobody thinks an 8 yield is what the ongoing yield is going to be for well to me theyre announcing to cut their dividend is not news in anyway at all. Once we know the dividend the stock will actually trade up so i like what jpmorgan is doing, hopefully its uneventful i think its reasonable so far with what weve seen it wouldnt shock me if when they have to resubmit plans for the next dividend if things are materially worse maybe the feds says nobody can do repurposes, and nobody can do dividends. That wouldnt shock me i dont know if the fed would do that but so far i think nothing dramatically has changed look at karen putting on her trader cap would you agree. I understand what shes looking at for sure. Karen knows, and we talk about it all the time, wells fargo has been awful stock for quite some time, a lot of itselfinflicts one would think the housing numbers should provide a tailif you just sort of tailwind if you connect the dots but it doesnt trade well i understand why you would want to dip your toe ahead of earnings in couple weeks but id much rather Say Something today definitely i think well notouch for me. In terms of the general banks, is it a sigh of relief the companies saying were going to reaffirm our dividend, et cetera, or if just the spector of resubmission later on is enough of an overhang to keep you away i really like what guy had to say. To answer your first question, i do think from posturing or publicity standpoint it definitely shows the banks are in a stronger position than fear i still think the name of the game here 100 is capital preservation and every option at our disposal should be used to make sure that we do not have a melt down like we had about a decade ago. Again, capital preservation being the number one thing i wouldnt be surprised to see dividends restricted a bit further. Mind you a lot of large banks came out early, voluntarily suspended by backs and curbed dividends here well im going to stay away from early on i think larger money center banks, jpmorgan and stronger Balance Sheets, those are the names id dip my toes in. Dont know if you heard this from morgan substantial stanley. Over lie im wondering if this is something that even the covid over lay, the fed is putting on the banks may not be enough to convince in vestors investors that theyre really being put under stress. If youre investing on banks youre investing on expectation of loan loss q1 numbers were conservative i dont think you need to specula speculate on the next numbers. Youre not investing in banks based on divs. If you remember about two years ago it was some of the bigmoney center banks were trying to fail their stress test because its a machine had you aggressive they can be with their Balance Sheet and no question the banks are under the thumb of the fed i wont get into, should they be, its their own faults, nationalizing the banks. We talk p with what the fed has done. If you invest in banks, banks made record profits around record issues attached to the pandemic everyone went as far as they could go on revolvers but we have that for bank going into q2 earnings nothing came out after the bell just like nothing came out that should have been surprising week and half ago when we got the numbers on the stress test you invest in banks because you believe theyre long Term Investor and that theyre healthier and the evaluations and relative ability to take risks are under valued our next test says every bank should suspend its dividend coming from director of volger a license, sheila, thanks for being with us. Tharngs for having me. Why dont you believe what the banks are telling us in terms of paying dividends we dont know were in a unprecedented situation, much tougher than previous stress tests, what they assumed in february. So i think its common sense to keep the capital and bank Balance Sheet that way can support positive taking. If it supports the real economy. Which is their function. I do think its really important to understand as part of the discussion that the fed has been providing capital, the fed and only regulators have been lowering capital minimum, which makes bank Balance Sheets more fragile. I understand some of that is necessary because banks do need to expand their capacity when you get into a situation like that but a better way to do that is to retain capital and keep the dividends on be the Balance Sheet, that expands capacity without weakening the bank im wrong and we get out of this just fine then later do a special definitely definitely dind and dividend should stay with the bank. What factors in. I think theres a lot of n certain uncertainty. First of all theres a lot of loans in c. A. R. E. S. Act that said if youre in forbearance you cant treat that as trouble gas which is fine but that means you dont get a higher capital charge as organize ordinarily would. Lot of the loans will be rehabilitated. Lot of them arent they did a lot of provisioning in the First Quarter but its not deducted against capital usually it is. These are all things that tend to inflate riskbased capital ratios the other thing that bothered me about lastweeks announcement was the Sensitivity Analysis only use riskebase ratios they have a lot of problems. Thats why as part of the postrate financial crisis reform we said we need a simple leverage ratio to back stop riskbased measures which can be unreliable and great financial crisis everyone said Mortgage Securities and derivatives were low risk but look what happened there. So theyre not using that any more to test the stress of the banks financial situation if you look at one of the most important biggest banks, even in the february analysis, you saw Goldman Sachs, dipping down to 3. 5 as par the of the most as part of the most adverse scenario thats about the point were dealing with now i do think there are a lot of questions in addition to Economic Uncertainty a lot of difficulty to figure how strong banks are. Keep the capital on the Balance Sheet. Im wrong do a special dividend. But we cant afford banks to get in trouble again, wed have a financial crisis that would be absolutely devastating for our economy. Thank you both for being on our show let me just ask as a bank shareholder, playing devils advocate, what if they just continue this incrementally allowing every quarter a reassessment of Bank Dividends and if it ends in a worst Case Scenario that could happen than the worse to happen they would have paid out onequarters dividend beyond ha they holiday bowl have a what they should have. And maintain the focu. Lets look at what happened in the First Quarter couple banks, wells and jpmorgan, distributed more than earn in capital. They were depleting their capital in the First Quarter were not going to get it back 30 billion in dividends with was divided up to public 145irshareholders that 30 billion on bank Balance Sheet could expand capacity by half trillion dollars, thats significant support for the real economy right now but that capital is gone. Its not coming back same time the fed is lowering capital standard to allow the banks to take on more leverage im a shareholder and sympathize with shareholders. I tried to make suggestions if banks think their shares are under valued, i think a lot of them do, pay a dividend in fines too, pay your shareholder more stock. They need cash can sell it in the secondary market or hold on with tremendous upside potential. You can do that without compromising your financial position to pay cash dividends now, even at 30 , its a lot of money, its just illadvised given the tremendous Economic Uncertainty we have and need we have for banks to keep functioning. Banks have a special deal that others dont have. They get deposit insurance and special asset to federal liquidity facilities a lot of the underwriting fees theyre getting right now is because of the fed, because of government intervention. I know shareholders want the profits to go to them but a lot of the profits are coming from Government Support not anything Bank Managers are doing. To say lets shoot it all out to shareholders when we dont know how serious this could be and whether the banks could be in trouble later in the year. I think its illadvised wait to pay it out until its warranted. Sheila, thanks for joining us we appreciate it sure thanks for having me sheila bair guy, its interesting note, hold off the dividends now, if shareholders believe in the strength of the bank theyll get it later on. I happen to agree with pretty much everything she said ill say this, i could be dead wrong, i think it will take a bank like jpmorgan who has clearly risen to the Upper Echelon given number of different things, least of which their valuation to make that decision because it will make air cover to the rest of the banks, the others will follow in kind. We have breaking news on bogey. Eing. Lets take a live picture of the boeing 737 coming back from the second of its certification flights. This was out in moses lake they flew out this morning and are now coming back. Conducting a i number of specific man urves part of specific maneuvers part of the arrangement with the faa that wants to see xyz and they go through all those maneuvers. You see the max coming in to land in boeing field they have two more days of certification flights and then take all of the data, theyre reporting all this on board and on the ground, they do analysis on the data and will be part of the final submission boeing will make for the max to be ungrounded boeings target for the max to be ungrounded is by late summer. It happens means we could potentially see commercial revenue flights for 737 max starting by november, december, some time in that time frame depending how long it takes airlines to get their pilots trained under the new procedures theres the max returning from its second certification flight of the day. Each flight is the m cast trigger snd. I would assume it is, but i dont know specifically. Look, thats the main feature theyre going to look at, to see if the software has been upgraded to the guidelines and specs the faa will look for. Whether they do it every flight or how on they do it we dont know but thats the main focus making sure the max is safe. Phil, thank you it does look like the plane has successfully land in washington. The stock up 14 in the regular session. Tim . Well, this is the kind of news boeing shareholders, which i am, want to see it doesnt get you past the faa. I think boeing mr. I think boeing will go out of their way to make sure to not get ahead of the faa Norwegian Air has cancelled and filed suit goodness boeing for damages. Filed suit against boeing for damage so a lot of work to do to clean up the industry. Management changes, i think the folks the at the helm hold those relationships especially at the chair mans level. Its something to watch. Doesnt change the dynamic demand for the industry. As covid19, the data were quoting, Morgan Stanley, whatever you look at, it doesnt bode well for quick return to air. But this was weighing down boeing well into this crisis this is a very, very day. Yeah when phil said november as revenuegenerated flights i was thinking who will be on the flight first you got the covid scare and in the back of your mind you think of the fatal crashes of theed 737 max maybe youre thinking im not going to be the first one on that plane. I couldnt say it any better. Aside from the Financial Dynamics boeing has to overcome along with the rest of the travel sector theres still real psychologicalical hurdles in terms of the tragedies that happened in march, i believe, and really retouching with their Customer Base. At thend of the day our life is the most precious asset we have and theyre going to have have to go on the Charm Offensive and work with the faa to ensure theyre up to quality standards. Absolutely. Weve got breaking news on hong kong. Kayla. Melissa, the Trump Administration is officially revoking the special trading status of hong kong. Commerce department out with release saying the preferential economic treatment of hong kong as excluded from certain tariffs and customers control is suspended in the wake of the security law beijing is moving forward with President Trump said he was instructing the administration to move forward to revoke the status but was unclear when it would be pursued but now official with this Commerce Department statement what remains to see if the u. S. Will push to remove hong kong as a member of World Trade Organization but as of today commerce is rescinding that special preferential trading treatment of hong kong back to you. Bottom line that capital flows into and out of Kong Hong Kong will be the same as for china, as restrictive thats what it appears to be at this moment the state commerce released is very short and doesnt go into great detail exactly how this will apply we are efforting more details from the white house and National Security council and state department as to how exactly this will be applied a lot are saying not much trade coming into the United States from hong kong but is a premier hub for operations and could challenge the location as head quarter because of that. Thank you, from washington, with the latest. We go to tim in another lifetime is known as ambassador because of specialties in international markets. When kayla was talking about this i was thinking about all of the companies that were seeking dualisting in hong kong or in United States and rush to get the deal done on the hong kong exchange, maybe before it closes off to outside companies. And guess what, this was a total boom to their market caps. It was actually a catalyst to a lot of the chinese e commerce names to go to significant alltime highs so this is a really difficult day. In terms of the gio politics, its important to make a stand. Its important to make a stand Trump Administration at times were not ready to make a clear stand but are ready to make a clear stand and its necessary for world to make a clear stand. What it means for the emerging markets trading with hong kong and here so far no damage. Again, getting that trading done on that side of the world, the Trading Volume in hong kong and Chinese Markets could dwarf trading here, i know its hard to believe, but at least in the namesle that have done that registration really important incident event meantime the stocks are near alltime high. Big rally on wall street as fed chief gears up to deliver remarks tomorrow we have details. Specifically to the House Financial Services committee in it you are not going to see a lot of fireworks in the prepared remashes fed chair jay powell will go through and reiterate the steps the fed is taking to combat the economic down turn due to covid virus. We know the steps taken. He made interesting remarks regarding current state of Economic Affairs he talks about this notion that many businesses are opening doors, hiring is picking up, spending is increasing, employment moving higher, were in a new phase sooner than expected, while the bounce back in Economic Activity is welcome it presents challenges needed to keep the virus in check. The path forward for the economy is extraordinary uncertainty and will depend in large part on our success in containing the virus. A full recovery is unlikely until people are confident it is safe to reengage in a broad range of activities. He goes on to talk about the extraordinary measures taking place and whether the fed has over stepped its bounds, in it he says the tools the Federal Reserve are using are for times of emergency such as what were living through now when Economic Conditions improve well put those tools back in the tool box those are some of the highlights a lot of this will go into reiterating the steps taken. Well listen for q a for any more news. Back to you. Thank you i listened to the feds comments about the economy id be depressed, except that the fed has extraordinary tools it continues to use. Yeah were just levitating on those tools. Thats been a good thing and i dont see that changing at all. Remember how down beat powell was a week or two ago. And that give some people comfort that things are bad so theyre still there. Thats been the right trade. Bad news is good news, wins the day again. Coming up, shares of micron on the move. Well bring you the results. And one airline up, the name and trade st