Prepared is the market for a hike . Financials are the only sector still in the red so far this year. Were going to talk to barclays banking analyst about where theres some opportunity. And our new Digital Series binge launches today. We talk to marquee names in the world of media for an inside look at whats driving our binge culture. Well give you an inside look at what to expect. First up investors focused on speech today set for fed chair janet yell. How the future impact Interest Rate decisions if you listen to some today maybe the chop in the data doesnt necessarily dissuade them from a june move. No, not one month at least doesnt dissuade them. I think the question has to arise exactly how much more data are we going to get before the july meeting that would actually give you assurance that it isnt the beginning of a trend. The fact that markets took it in stride relatively speaking, at least the stock market really just held in there, buying panic and treasuries of course. They really priced out june, largely priced out a july move. I do think i wonder if yellen takes that opportunity of fair markets to say, hey, lets keep our eye on the likelihood or possibility at least of more to come. I mean, i dont think she has a great incentive to sound exce excessively dovish after fridays number because the markets arent really kind of throwing a panic about them. Some suggested on friday it was more about fears that oil would cause some sort of surprise pop. You dont want to get too out there. No, you dont. The fact the dollar repriced lower immediately, but again is firmed up today. So i dont think youve seen the markets get really unhinged by that one number. But obviously raises a lot of questions about the ultimate path. I mean, theyre still talking about multiple rate increases 2017 and into 2018. The market just doesnt want to hear that. 116 over the last three months, in other words jobs added certainly lower. I mean, the idea that things are slowing has to be part of the conversation here. Absolutely. If i were to guess, janet yellen, who never has problems pointing out continued labor market slack, right . Thats been kind of one of her talking points forever, is going to say, well, we expect at this point in the cycle to down shift, a lot of people trying to parse exactly how much of this is just worker shortage on some level contributing to it. Right. People revisiting productivity again, wondering whether weve started to see resurgence in some way because its not been keeping pace. Absolutely. I think what makes people, investors a little uneasy is the fact that its been this unorthodox cycle so that the fed didnt get started until the cycle was already far along. We already had created 12 or 14 million jobs. Thats the key criticism of course is where were they when we were doing over 200 or 220 a month and they didnt move, a year ago this time for example, right . Yeah. I get you on that, for sure. Meanwhile, brexit two new polls showing leave with the lead, 4341 on one, 4541 on the other. People worry about liquidity vacuum ahead of the 23rd. Exactly. The suspense is not going to go away it looks like, so therefore you wonder exactly how markets decided maybe people get to the sidelines and see how this thing shakes out. All that said, the ftse made up of mostly multinational conglomerates, if its a stay everybody rushes back in, what do you do . Thats the question. Whats the price youre going to be buying the ftse at the day after its a leave . We dont really know. I think thats one of those questions and is it really a reassuring thing that the uk is in this position of being that close of deciding . You know, its one of those things half the people are going to be disappointed if its that close a vote on the day after. Mike, you know, when people say to you though in terms of the market at this point that valuations are fairly high, earnings and revenue from the last earnings season didnt look particularly good. We didnt see a great deal of growth. Weve got Profit Margins falling at least to a certain extent and Economic Growth with the prospect being 2 or less, lets call it. What does that mean as we head into a summer by the way where were going to have a president ial election coming in a few months . Yeah, i think what that means is nobody perceives that theres upside risk to this market. Kind of wheres it going to come from. And i do think that you see the kinds of stocks that are supporting the market, and theyre kind of, you know, bonds in disguise. Just on friday again utilities break out one more time. Even though really nobody on the street has a kind word to say about utility valuations. Its one of those things where, you know, sideways makes so much sense to people. But sideways with maybe a little bit of Downside Risk because of those things that you mentioned that are not really scriptable. Yeah. One area of course that has not been doing particularly well, and didnt on friday are banks. China bounced back after suffering what was the worst single decline, i think, in a month on friday. The big jobs miss of course further dampened rate hike expectations. In fact, financials remain the only negative performer in the s p 500 this year. Were now joined by jason goldberg, senior banking analyst at barclays. Jason, people had been hoping wed start to see some interest in interest margin. Where do the banks stand right now in your opinion . Certainly. I think if youre looking at our Economic Forecast continues to have one rate hike in this years numbers and two rate hikes next year. So while margins have, you know, you saw an increase in q1 after decembers hike, seeing more this quarter but still room for margins to expand in the latter part of this year into next year. Weve seen margins contract over the next several years so ability to hire would benefit results. What about the larger picture this idea theres going to be even more Equity Capital needed by what i think 2018 . And that the banks are never going to be able to reach double digit r. O. E. Again given that they look more and more like utilities . A couple points. One, several big banks actually are at double digit r. O. E. , wells fargo, j. P. Morgan, u. S. Bankco bankcorp, theyre already there. Certainly late last week fed governor talked about increasing the stress test requirements on one hand, on the other hand they talked about making modification to the exam which actually make it the little easier. The stress test probably gets a little easier and netnet we dont think its dramatic difference looking out. You know, jason, you anticipate that most of the banks that you cover are going to be able to raise dividends to a significant degree, theyre going to be permitted to, but even if that not as necessarily dramatically as for example they were paying out dividends before the crisis, so i guess what does it leave investors with in terms of expectations for cash return, if thats one way that youre going to be paid to own bank stocks if in fact the Growth Profile doesnt look great . At the end of the month well get the stress test results for the banks. And we think payout ratios and totality will get back to precrisis levels which is around 80 . Which to your point Going Forward more skewed where it was historically more even between dividend and buyback. When we look at coverage we see several banks having dividend yields over 3 . Wells fargo, j. P. Morgan, bbnt we put in that camp, we think the group as a whole could buy back over the next 12 months than the prior months and we think theres a decent return story here and provide support to whenever the fed may raise rates. The political environment and the banks seem to keep getting hit, on both sides by the way. Do you think that is going to figure it all into sort of investors perceptions of their future profitability . Certainly theres a lot of rhetoric out there with the election ongoing. The group certainly has taken on a whole lot of increased Capital Requirements and regulatory requirements. Although we think were coming towards a tail end of that cycle where 80 to 90 through implementing the dodd frank act, governor talked late thursday about the final change, we think, to ccar. I think once those are behind us well know what the new rules are and banks will continue to adapt and play to the new rules. On the Capital Markets front for the banks i tend to focus on, it was not a good quarter the last reported quarter, certainly not in fixed income for virtually any of them, are things improving at all on that front . Or are we seeing more of the same . Good point. We think trading revenues in the Second Quarter can be up 5 to 15 year on year and table to moderately higher typically trading revenues fall from q1 to q2. From an Investment Banking fee standpoint uf seen a pickup in things like ipo and high yield issuance and even in m a where youve seen a lot of deals fall away whether to regulatory concerns or inversions going away, even chatter around m a has picked up as well. So we think trading revenue is improving q2 and hopefully pipelines improve back half and Investment Banking fees. We may see it. Of course we have actually seen some ipos and mention 3. 25 billion junk deal from dell today as well. Thank you as always, jason. Jason goldberg, senior banking analyst at barclays. Meanwhile, walmart rising in the premarket. Jeffries upgrading from hold to buy citing what it calls broadly improved store conditions that should lead to stronger sales. Price target goes from 60 to 82. Actually give ten reasons to own among them better execution, thoughtful price cutting and Institutional Ownership that they say has sort of come out over the years. Yeah, thats actually an interesting one. None of those ten list of reasons to own walmart are necessarily kind of new edgy calls, but i think its interesting to note walmart does arguably seem underowned. Of course the Walton Family because of stock buybacks has gotten ownership back above 50 , so thats one of the reasons maybe institutions its just not that big in their benchmarks anymore. I think 82 is a price target is now the highest priced target on the street. It really argues that, you know, walmarts going to trade at a premium multiple, i think he has it up to Something Like an 18 times 2017 numbers. I mean, its probably a little bit aggressive, but stock traded in the high 80s or close to 90 at the beginning of last year. I think a lot of macro has to go your way for it to come through. But its interesting what walmart was rolling out all last week about kind of their new logistical approach and all the things theyre trying at least has gotten some friendly hearing. Yeah, i mean, hes talking about Inventory Management and u. S. Store momentum driving the bottom line, speaking to your macro points. Without a doubt. And i think its interesting, you also have this barrons bullish story going in one direction and walmart trying to make its grocery business a little higher and kind of meeting in the middle there. So its really a slog. I think thats the takeaway for all these retailers is theres no real magic to it. But at least, you know, it seems like the street is finding a reason to buy, you know, kind of a relatively decent steady dividend stock. Speaking of the dividend, whenever you mention the Walton Family always think about their Quarterly Dividend payments. Theyre quite high. Yes. Yes. It keeps a few of them in the forefront. Yes, it does indeed at a 2 2. 82 dividend yield. Bills to pay. Its true. A number of drug makers move on worout of the worlds bigges research. And Foster FriessBacking Trump in this years president ial market. Nasdaq coming off the first drop in eight sessions about 1 from break even for the year. More squawk on the street from post nine in a minute. Plain to y you recommend synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. So we dont have to wad to get clean. T charmin ultra soft gets you clean without the wasteful wadding. It has comfort cushions you can see that are softer. And more absorbent, and you can use up to 4 times less. Enjoy the go with charmin. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. Pharma Companies Making news, worlds Biggest Research conference. Our meg terrell is live. Good morning, meg. Thats right. Im immunotherapy. One drug was used to treat president jimmy carter. We talked with Merck Research labs doctor about how it works. Take a listen. The overwhelming topic of discussion is immunotherapy. In essence releases the brakes on immune system and permits the system to seek out and destroy tumors. Observed in the case of jimmy carter. What were seeing at this meeting is it seems to be active across a very, very broad range of tumors. Now, merck is competing with bristolmyers well roche ands a trasen ka is also competing in the space. We talked with ceo pascal this morning about how it plans to compete through combination therapies, take a listen. We do combination and we are going to be first actually in term of getting approval. Of course medication has to work. And that has been the big question, is it going to work . Is it going to work better . But those data give us, you know, good reason to believe it will work. Now, other stocks to watch include johnson and johnson, people pleased with some of its myloma people saying those data are underwhelming and cowen downgraded abbvie this morning. Ariad doesnt seem to boost its stock too much this morning. On halftime report, that will be a great interview. Thanks so much, meg terrell. Always a big deal but this comes on the heels of a big fat New York Times piece of essentially the golden age of research we live in. The payoff seeming out of reach but these new approaches seeming to give more avenues. Its interesting because so much pharma when it comes to the stocks has been consumed with Financial Engineering and inversion and this kind of turns peoples focus to the longterm growth story and what theyre there for, right . Yes, the actual hard work is what theyre intended to do. When we come back this morning, art cashins going to help us kick off this week with the markets as we talk down to the opening bell. Also ahead today simon hobbs at the nyu hospitality conference. Good morning, simon. Hey, good morning to you, carl, yes, the largest Investment Conference overshadowed somewhat by news percentage occupancy contracted in the First Quarter of the year. Big deals going down. Well talk to those locked in namely of course marriott Ceo Arne Sorenson and also ahead in the show talk to hilton which continues to transform itself with a 10 billion spinoff, now we know the name park Hotel Resorts and 69 hotels within that. More after this break on cnbc. What are you doing . Getting faster. Huh . Detecting threats faster, responding faster, recovering faster. When your securitys built in not just bolted on, and you protect the data and not just the perimeter, you get faster. Wow, speed kills. Systems open to all, but closed to intruders. Trusted by 8 of 10 of the Worlds Largest banks. It takesbut stealing itd work to eaonly took a few days. Female announcer protect your money. Find out if youre dealing with a registered investment professional at investor. Gov. Before you invest, investor. Gov. mamost of the show. We missed woman and theres no way to restart it. jon bon jovi with directv there is. You see, weve got the power to turn back time so lets restart the show that started at nine and while were at it, lets give you back your do and give her back the guy she liked before you hey, thats the power to turn back time. vo get the ultimate allincluded bundle. Call 1800directv. Well, the lawsuits and countersuits continue in the fight between Sumner Redstone and his former trustees including Philippe Dauman and abrams, a ceo of company mr. Redstone controls. On friday lawyers representing mr. Redstone filed a lawsuit in Massachusetts Court saying mr. Abrams and mr. Dauman were motivated by selfinterest in asking that court to deny their challenge to be reinstated as trustees on that Irrevocable Trust that will control the stake in national amusements, which then holds 80 of stakes in cbs and viacom. The probate and family court where they originally filed suit to be reinstated as trustees saying mr. Redstone was under the undue influence of his daughter, shari. Mr. Abrams and mr. Dauman file yet again in support of their motion for expedited discovery in trial and request for an immediate hearing saying that the medical report that was submitted on friday by mr. Redstones attorneys from a dr. Spar, a psychiatrist, they claim was a onesided uncross examined and distorted view of mr. Redstones mental condition. By the way, it is worth reading that report from dr. Spar. And of course as ive said previously, a lot of this back and forth while very important to the future of viacom and conceivably cbs is simply the run up to what will be the real battle when mr. Redstone and his daughter shari conceivably submit directors to replace the current board and oust mr. Dauman as the companys ceo. When thats coming i cant tell you, but i can tell you that effort continues to be underway. And i would finally end with something from dr. Spars report where he said of his m