Dory Wiley, president and CEO of Commerce Street Holdings, joined Cheddar News to discuss Tuesday's trading as big tech is set to report earnings. This also followed First Republic Bank posting its latest results that prompted its stock to plummet after it said deposits fell.

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Analyst Breaks Downs Market Action Ahead of Big Tech Earnings

Joining me is Dori Wiley, president and CEO of the Investment Management Group, Commerce, Street Holdings do. Thanks so much for coming on the show. Definitely a different tone in the market today than what we have been seeing these past few weeks or so. What should investors make of it? Well, uh thanks for having me on today. Uh Mark Market got a little nervous today with uh what happened with the first Republic and, and rightfully so uh the banks are the plumbing and wiring of the economy and, and they affect uh financing in all areas of the economy. So uh made, made markets a little jittery and earnings have been a little skittish. And so the big driver, as you mentioned earlier is what is big tech gonna do this week? And we get a, we'll get a piece of that uh uh here with Microsoft and Google after hours. Yeah. So what is the expectation, Dorian and what should we be paying the most attention to as these companies report results in the big technology space? Well, big tech drives a lot, right? The top seven names drive 86 have driven 86% of the year to date performance of the S and P and so they're a huge portion of the market and they've had a big bounce back and done all of them have done really great. Uh, for the first part of this year in the first quarter, some people would argue it was a dead cat bounce from last year, but there's earnings there, they've been cutting back, they've been doing pretty good. The key thing is to watch their margins. Uh It's, it's all together fitting that these two uh behemoths that are coming up after hours here are gonna announce because they're locked in this A I search world going on. And so it's gonna be, it will be very interesting. But as big tech goes, so will the market for the rest of the next week or two? Yeah, I think that's a good point there, you know, semiconductors, obviously part of big technology as well dory and we had seen those stocks outperforming most of the year even kind of catching a bit in the immediate aftermath of the failure of Silicon Valley Bank and Signature Bank. How does this semiconductor sector fit into this narrative and the impact on stocks? Well, the the semiconductors are kind of leading now, I think that was part of the reason why we saw Microsoft fall off and big tech fall off today. Uh because Semicon conductors, you know, you know, fell off a little bit today, especially lamb research. They were down quite a bit my micron technologies as well. Both of those being superstars kind of in the sector. I, I really love uh lamb research personally myself. So I, I follow that and that's had a real nice bounce back over the last couple of months and correct it today. But that's the one I really watch is a leading indicator in the sector and big tech overall. OK. So of course, we're going to be talking big tech this next hour here on the show. Do, but I do want to go back to the banking sector and those results that we got from First Republic, a large regional bank yesterday, after the close stocked down close to 50% today, we on the broader financial space, what should we glean from those results? What do investors need to know? Well, we're a specialist in banks. So we watched that and if you were on the earnings call, it only lasted 15 minutes and they didn't take any questions and it was uh it almost as if, uh I mean, they just read a script and they were ready to get out of there. Uh Not very warming to investors and sure, I'm, I'm sure that was part of the panic. Uh But they, they don't, they don't have a lot of good news. You know, the bank is, is wholesale funded or, or non core funded at this point. Uh And so it's it's, uh, it's, it's just kind of holding steady and they're looking to sell Bloomberg, put out a report on Tuesday that they're looking to sell another 100 billion in assets, combination of loans and mortgages and whatnot, uh, to, to help shrink the bank and build up its capital, which is about all they can do. So, uh, it, it's sort of paralyzed right now for investors and for others, you know, like, hey, what's the contagion risk of this and other banks? Uh I I it, you know, everyone's acting, everyone's trying to shore up liquidity. Uh We've been on the phone all day with banks uh around the country working on strategies for all of the above. But for the most part, the underwriting banks has been very, very good. The liquidity features are pretty good. It's just whether they have a good hold of the deposits and whether we get good leadership out of the government to hold stability and the FDIC guarantees and the funding of those deposits. So joy, let me ask you quickly. It sounds like maybe it's kind of a wait and see approach on the banks, right? In terms of whether or not it's a buying opportunity. That is what would you recommend? No, not necessarily. Uh I've been recommending banks with high capital levels. Ok? And so there are some really good regional, but I'll give you an example of three uh uh P A Gladstone is just under 8% nice FID bank in Jersey. Uh There's uh uh connect one in New Jersey and New York as well. They're over 9% tangible capital. Uh and, and then another one I like is Provident Bank. Small Bank up in uh Boston uh at 12.6% tangible capital at the holding company. Those are big numbers just to give you an idea. JP Morgan's running at 6% tangible capital compared to all those banks. And they're nice, clean. Banks are all very good and so on and they've sold off very, very cheap. And, uh, so I think those are great buys and, and down markets where people are worried about banks run to the banks that have good underwriting and great high tangible capital ratios that they're holding up. All right, Dori Wiley President and CEO of Commerce, Street Holdings, Dory. Thank you.