Closing Bell - Closing Bell Overtime: Anthropic Co-Founder Talks Claude 2; Earnings Season Kicks Off With Financials 7/14/23

Episode Date: July 14, 2023

The Dow closed higher on the back of strength from UnitedHealth while the S&P 500 and Nasdaq both snapped four-day winning streaks. G Squared Private Wealth’s Victoria Greene and Wells Fargo’s Scott Wren break down the market action and look ahead to next week’s busy earnings. Intuit CEO Sasan Goodarzi talks its generative AI product and how the consumer is doing. Anthropic just launched its “Claude 2” AI chatbot; co-founder Daniela Amodei talks what makes its product different and how the FTC could impact the industry. Sunnova CEO John Berger talks his stock’s big move higher and solar demand amid rising rates and macro headwinds. Guideline CEO Kevin Busque on the company’s new 401k product and Hennessy Funds’ David Ellison looks ahead to next week’s bank earnings. 

Well, lost a lot on the S&P and NASDAQ. That's the scorecard on Wall Street, but winners stay all afternoon. Welcome to Closing Bell Overtime. I'm John Ford. Morgan Brennan has the day off. We've got a jam-packed show coming your way. We're going to talk to the CEO of Sanova, whose stock has climbed 20% just this week, far outpacing its sole arrivals. Plus, Intuit CEO Sasan Gidarsi is going to join us to talk about his read on small business and consumer spending, plus how his company is continuing to use AI to help its customers. And on the topic of AI, we will have a first on CNBC interview with the president and co-founder of Anthropic about the company's launch of its latest rival to chat GPT. Now, the Dow was higher on strength from UnitedHealth alone, while the S&P 500 and NASDAQ closed lower today.

All three solidly higher for the week, though. It's the S&P 500's best week in a month. Joining us now is G-Squared private wealth CIO and CNBC contributor, Victoria Green. Victoria, happy Friday. So, it sounds like you're kind of defensive here. I want to key in on the impact on earnings season. Given that we just touched 52-week highs on major averages, should investors, you think, expect a sell-the-news bias unless the news is as good as JPM's was?

Well, look at JPM. All I can think about is Shania Twain's song, That Don't Imp me much. It was a great quarter and it really didn't have a lot of lift on the stock. And then you had city or state street. And what we saw across the street is analysts were describing the earnings as unimpressive or it's okay. It was mediocre at best and the stocks really got punished. So I really feel there's a lot of risk out here. If you don't beat expectations and raise your guidance, even though JP Morgan did both of those things, they were up 20 basis points today. And so you're just not seeing the lift from the beach that you think you'd see.

And so I think that's where you saw some of the selling pressure come in. People are nervous, you know, that we don't just need good news to move this stock up. You need great news like a UnitedHealth that came in and really, you know, assuaged fears of the cost rising and what was happening with the trends and were able to make investors feel comfortable that Q2 was a little bit of a corner turning for their medical expense trends. So what does that mean for Netflix and IBM this coming week, which you own? Yeah. So Netflix, I actually have hopes they can impress us a lot next week. I think they're going to beat on subscriber growth. We're looking at like 1.85 million is technically what the street's looking for.

I think they're going to beat on this. Look, their password crackdown seems to have been working extremely well. They've avoided negative headlines, which was the biggest risk. And then they've been able to pick up subscribers or pick up subscribers into the households, new subscribers on the ad base tier. And I really think they're actually now also controlling costs. It's not just a spending spree. The streaming wars are starting to work its way out with some defined winners, which I think Netflix is truly going to be the winner. And over the next few years, you may see the streaming wars consolidate a little bit as people get tired

of paying for five or six different streaming services. And I think Netflix is best positioned to continue to pick up subscriber growth. Their pricing point is great. And then IBM, everybody forgets the original AI creator. They just launched Watson X. For me, it's a lot to be excited about. That company has turned it around the last few years, I think well positioned for AI and cheap for an AI stock. It is a very cheap at 14, 15 times multiple. Yeah. If Arvin can prove out that it's an AI stock, it is very cheap at 14, 15 times multiple. Yeah, if Arvind can prove out that it's an AI stock, given what's going on. Victoria, stick with us. We're going to talk more about the bank, specifically Citi's results. Our Leslie Picker spoke earlier to the CFO in his first broadcast interview.

She joins us now with highlights. Leslie? Hey, John. Citi CFO Mark Mason, in his CNBC debut debut today gave us a peek inside the C-suite's thinking amid the firm's strategic overhaul, regulatory pressure, and of course that economic uncertainty that's looming out there. The share is under pressure throughout the day despite a boost on guidance for net interest income, a profitability metric made up largely by loan making. Costs were up during the quarter, thanks in part to continued investments related to that turnaround. But Citi set aside a fairly small amount of

reserves to protect against deteriorating credit quality. So I asked Mason whether he thinks the recession is off the table at this point. Our base case calls for a mild recession at this point. We did have a good CPI print. I think the feds are likely going to want to see a couple of more months of that before taking significant actions in a different direction. But when I think about our consumer, I think about the corporate clients, they have very strong balance sheets and they've proven to be quite resilient through all of this. And so I think if there's any ever a chance for a soft landing on this, I think these indicators are certainly suggesting that. Corporate balance sheets may be strong, but economic uncertainty is proving to be even stronger.

And that's, of course, thwarting dealmaking. Citi reported a 24 percent drop in investment banking during the quarter on continued weakness in that overall market. John. Leslie, Citi, relative to certainly JP Morgan, other big banks, going through a bit of a tougher time, what's it going to take to convince investors that this one is worth believing in? Well, part of it has to do with just the overall expense outlook. And that was a big part of the analyst call, which lasted 90 minutes today, just really trying to get a sense of when these expenses start to pay off. And that was a big part of the analyst call, which lasted 90 minutes today, just really trying to get a sense of when these expenses start to pay off. And the problem is that,

you know, they're turning this business around. They're selling a lot of businesses in global markets. They're in the process of doing an IPO of the Mexican business. They're paying for costs associated with severance in certain Asian markets during the quarter. All of that adds up, not to mention investments in certain areas of risk control and things of that nature, technology, artificial intelligence, all sorts of investments which do boost the expense outlook. But analysts want to know, when does that ultimately get factored into revenue generation and growth from here? Yeah, well, good to see the CFO on CNBC on broadcast for the first time.

Leslie, thanks. Victoria Green still with us, along with Wells Fargo Investment Institute Senior Global Market Strategist Scott Wren now. Scott, defensive time, perhaps. What does that mean for fixed income if we're not much higher, but we are higher for longer? Well, I tell you, John, what we've been recommending that our clients do, particularly recently when the 10-year treasury was at 4%, anything 4% or higher, we want to be locking in long-term maturities. We're favorable on duration. So we've been encouraging the go further out on the curve but really in a more defensive stance in terms of what we think the equity market might do is we've

been parking cash in these short-term treasuries whether it's you know three months six months 12-month bills they yield you know as you well know well over five percent so right now we're in the parking cash mode. We think you should be fading this rally, especially from these levels. We look for a pullback here. You know, there's a lot of headwinds out there, whether it's, you know, the Fed's certainly not done hiking rates. You know, credit conditions are tighter. The money supply is contracting. The yield curves are inverted. But clearly this has been a pretty nice rally here. But we're not jumping on board, particularly at these levels. What should the target level in a portfolio for fixed income be? Because so many investors have been leaning toward equities, and that's been working straight up through not just the first half of this year, but the first half of this month? You know, it has worked. And if you take the kind of the traditional 60-40 stock portfolio,

you know, we're closer to 50-50. And you might throw a commodities exposure in there as well that changes it a little bit from that. But we're certainly underweight equities here. We're overweight fixed income. That's a position really that we want to play, you know, not for an extended period of time because we do anticipate this pullback. And as your previous guest said, you know, we're anticipating a recession too. Timing's been tough there, but we certainly think that it's going to come. And we're opportunistic. We want to be opportunistic. And we think we're going to get a pullback here and have a chance to put some of that money to work.

Okay, Victoria, what do you do with small caps today? The Russell did the worst of all, down 1%. Yeah, I like small caps here because I think they were left behind in the first half. Really, until June, nothing worked outside of the, I call them the elite eight because I throw Netflix in there. You know, when your breath was so terrible. June, obviously, we saw the market broaden out and we saw small caps get a lift. Yeah, they fell off today, but still on the week, they did quite well. And so I think if you look at where they're priced in, I'm a little less growthy, a little bit more value. You got to be careful about just if you just buy the index, you got to realize there are a lot of banks on that value side. So I think there's opportunities in the small caps. Again,

we're looking for things that aren't priced to perfection here. I keep hearing this rally called the Goldilocks rally. And so my concern is if we are now pricing in a rhino recession in name only, you know, what happens if the data does stumble a little bit, if inflation isn't just a downward trajectory and some of the what ifs come in here, because at this point, if it has truly been this Goldilocks rally and you need to be prepared to look a little bit outside of just the growth in the NASDAQ, unlikely it's going to run another 30 percent in the second half. Just statistically, it's unlikely. Yeah, I hear you on the nature of this rally. It's hard for investors to stay close to a market with bad breath. Victoria, Scott, thank you. Thanks, John. Let's bring in senior

markets commentator Michael Santoli at the New York Stock Exchange with a look at the NASDAQ 100 after a big week for that index. Mike? Yeah, John, taking a pause today, but really is sitting on a lot of gains compiled in a hurry. I like the three-year chart here against its 50-day moving average, just to show you how the index itself maybe got a little bit stretched relative to its slightly longer- trend. So this gap right here between the 50 day average and the price around nine percent or so you get only a couple of times in the past few years. Have you seen a similar gap? So August of last year was was one of those. The one that's interesting to me is right here. September 1st,

2020. Remember, during the pandemic, to most people surprised, the huge tech stocks were all anybody wanted to buy. And they did it in tremendous with tremendous urgency. And we had a five or six month rally right into Labor Day that year that really got things crazy, to be honest with you. It's like right before the Tesla split and Apple was soaring. So that also did lead to a bit of a correction of return to this 50 day average. It's not a prediction. Back here, we were more stretched than we are right now. But it's just one way of sizing up how far, how fast the index has come. And it's accelerated in the last couple of weeks, as you say. You're kind of scaring me, Mike, because those two moments that you circle, I believe, wasn't the second one where like the the S&P came within like a percentage point of breaking out of what would have been the bear market.

But then but then didn't. Are you saying that this moment now is like that and that crazy moment during the early part of the pandemic? I'm saying it's like that only in that respect. And I think that it's relevant to look at the differences, which is look at what the actual moving average was doing right there in August of last year. Right. It was declining and it just barely started to tilt positive in a tentative way when we got that big spike rally into the Jackson Hole meeting by the Fed last year. What do you have here? I mean, that's a much different story in terms of a longer term uptrend in place. It doesn't mean it can't curl lower,

but I do think that tells you something a little bit different about how we got there. Also, look how fast that spiked right there, as opposed to just kind of scaling up the wall. So look, I'm not actually a technical analyst. I've just kind of put pictures in front of some observations, but to me, there are distinctions. Oh, don't be so humble. Well, I don't know if that's humility or if that's just denying the status that some people consider to be a little bit of a voodoo artist. Yeah, I just draw circles on charts. Yeah, sure, Mike Santoli.

Thank you. Thank you. Up next, an exclusive interview with the CEO of $135 billion business software company, Intuit. We will ask for his read on spending, credit, the overall health of the economy. And later, we will talk to the CEO of solar company,

Sunova, about one potential under-the-radar driver of home solar adoption, as that stock comes off a very strong week of trading. Overtime's back in two. This week's economic data, giving hints that the economy might be cooling down. June CPI and PPI coming in below expectations, though today consumer sentiment soaring to its highest levels since September 2021. So is this good news for small and medium businesses? Joining us now is Sasan Ghadarzi, CEO of Intuit.

Sasan, good to see you. So you've got such a broad read on what's going on. I keep hearing that credit conditions aren't tightening as much as some expected. What are your SMB customers experiencing? You know, the way I would categorize things right now is it's stable. And maybe let me hit on a few things. You know, one, we actually see stability in employment with small businesses. In fact, this last month, hiring went up just a tad bit, which is the first time it's gone up in the last four to five months. Consumers are still spending, although they're spending less than they were about eight months ago. They're still spending quite strongly compared to pre-pandemic levels. And generally speaking, I would say that when we look at small businesses in our base, those that have been

around more than five years, their cash reserves, about 70% of them, cash reserves are actually stronger than they were before. So I would say net net, things are stable. Small businesses have been able to thrive in this economic environment. Of course, higher costs in general have impacted them, but they really continue to serve their customers and be able to grow. Now that's at the aggregate level. It's very different depending on the state, the country, and the industry. For instance, construction is starting to bounce back. Agriculture is strong, but we see hospitality is down a bit. And so it depends on if you're impacted by interest rates and the kind of business that you're in. But in aggregate,

it's stable. Now, what about the consumer? You've and the kind of business that you're in. But in aggregate, it's stable. Now, what about the consumer? You've got the Credit Karma business where you have insight there to consumers trading down somewhat. We heard that from Amazon with Prime Day having just happened this week and using buy now, pay later more. What does that reflect about the state of this consumer that's still employed, but perhaps savings levels have come down? Yeah, we do see the impact. You know, one, to start with, we have well over 100 million customers that we have insight into their lives based on the data that we see.

And I would say in the past eight months, credit scores are actually down about 13 points. The balance on credit cards is at some of the highest levels that we have seen, but particularly with folks that are in the credit band of 600 to 660, they have balances of about $9,000 per person. And that is one of the highest that we've seen in this band for a while. The great news is the job market is strong. Folks have jobs, but they're being far more particular in terms of where they spend. And you can see the strain. When you see credit scores go down by 13 points, that is a strain on the financials, timeliness of paying bills, what they're doing to take out loans. Net-net, it's still strong in context of past recessions, but consumers are feeling the

strain of the environment for sure. Now, with all this data you've got, you're training up proprietary AI models to deal with financial advice, among other things. You've been doing AI for a long time with TurboTax and other products. How is this different and how is it going to lead to increased revenue opportunities, profitability for Intuit? Well, first of all, John, I do believe with AI and particularly now with generative AI, it is some of the most exciting times that we will experience in humankind. And I feel very strongly that AI, since electricity and the Internet, it's in that rare air of the impact that it can have across the globe, across every single industry. And particularly what excites us is, you know, when we declared our strategy five years ago, data and AI was at the core of what we declared. In fact, our acquisitions of Credit Karma and MailChimp really contributed to the data pool that we have. And I think simply put, what we can now do with

the data and our AI investments, but particularly now in the last several years with the acceleration of investments in generative AI, we can ultimately be the assistant in the pocket of consumers and small businesses. As you can imagine, as a consumer or as a small business, it is a lonely world. They don't have the infrastructure around them like you and I do. They don't have the people that are doing the crunching of the numbers and giving them insights. And it's important for us to play that role. And I think these are just incredibly unique times for us to be able to provide insight to a small business, what they should do to be able to get more customers, to retain the customers they have, to sell more of their services.

I think this is a once-in-a-lifetime chance, an opportunity for all of us, particularly at Intuit. I know that you've continued to use people and software, so we'll talk more about how that shakes up. And we'll talk more about AI as well. Sasan Ghadarzi, thank you. And we'll talk about it not just with Sasan Ghadarzi. Up next, we're going to talk to the president of OpenAI competitor, Anthropic. Her first broadcast Business News interview since she co-founded the company about the launch of the latest version of Anthropic's Clawed chatbot. As we head to break, take a look at the biggest winners of the week in the S&P 500. Match Group leading the pack, followed by D.R. Horton, Domino's, MGM, and Align Technology. We'll be right back.

Welcome back to Overtime. Shares of UnitedHealth soaring today on the back of this morning's earnings report that topped expectations. The healthcare giant posting its best day in a year, giving the only real boost to the Dow. Michael Santoli joins us with a broader look at healthcare. Mike? Yeah, John, it's been a conspicuous laggard this year. A lot of folks came into the year favoring defensive areas like healthcare, staples. Neither one has really performed. You see here a couple of different components.

Health care providers, that's where UnitedHealth would be. So basically insurers and other health care delivery companies. Been among the weakest areas. Broad health care again, not doing much. This is a two-year look. Actually, the S&P outperforming both on the downside and the up from there. It has brought us to a point, though, where health care is trading at something of a valuation discount to the market, as well as to technology. And it would seem maybe like a mismatch comparison,

except historically, if you go back, you know, the 80s and 90s, tech and health care were both considered kind of growth sectors, long term winners in the economy. And you see right here, this is the technology forward price earnings ratio versus the S&P. So it's relative valuation. And this is health care. You see back here, you know, health care traded at a premium. This is a 10-year chart. Obviously, that's very much changed. Technology sector and the S&P naturally very much skewed by Apple, Microsoft, NVIDIA at this point.

But you see, it's really gone skyward. And not only at a premium, but health care has gone the other direction. So for the bottom fishers, for the contrarians, for people who feel as if maybe the long term health care story is being underappreciated, you have a little bit of an opening right here, John. Yeah, and you have that 7 percent pop from UnitedHealth today, adding all of the Dow's gain. And I can't help but notice it's still down for the year, year to date, which is quite unusual. I mean, it fits right in line with what you've been saying about how health care overall has been performing. Right, exactly. And, you know, it also points up

the idea that one of the, I think, the things that worked in health care's favor for a lot of years is that it's not intricately tied to every little move in the economy. It's not as much of a macro call. It seems like obviously spending more on health care as a country, as a world. But on the other hand, it also means it's not going to benefit when people start feeling much better about the overall economy. So it's it kind of moves based on its own factors. And this year has been tough. Pharma in particular is actually looking much cheaper than it has in the past. Maybe that's for good reason, but it's definitely there. I like the on the other hand in there.

It's always good to have one of those. Sorry, I'll send the royalty check. All right, thanks, Mike. Time for a CNBC News Update with Kate Rooney. Kate. Hey, John, here's your CNBC News Update. The suspect in a string of Long Island killings known as the Gilgo Beach murders pleading not guilty today to three counts of

first degree murder and three counts of second degree murder. The suspect, Rex Heuermann, was ordered to be held without bail. After the court appearance, his lawyer said the case is circumstantial and that his client was in tears as he insisted on his innocence. Delta Airlines workers are rallying at the Minneapolis-St. Paul airport in an effort to unionize 45,000 employees. Ramp, tower and cargo workers, plus flight attendants and mechanics are working on that union effort. Only 20 percent of Delta employees are unionized, the lowest percentage among major U.S. airlines. And Reverend Jesse Jackson is stepping down from the Rainbow Push Coalition. That's the Chicago-based civil rights organization he founded after working

with Reverend Martin Luther King Jr. The 81-year-old two-time presidential candidate has had some health challenges in recent years, including Parkinson's disease. His son, Congressman Jonathan Jackson, confirmed the retirement, saying his father's fight for civil rights will be his, quote, mark upon history. John, back over to you. Kate, thank you. AI has been a reliable supercharger for some stocks this year. Many names associated have soared higher, but the FTC could be hitting the brakes on the frenzy, opening investigation into open AI related to consumer privacy, as well as a data leak in March. Meanwhile, a new artificial

intelligence competitor announced this week, Elon Musk's XAI. He's live right now on Twitter Space's detail in that product. Our next guest also launched an AI product this week. Joining us now is Anthropic co-founder Daniela Amodei. Daniela, great to have you. Anthropic is all the talk in the AI ecosystem. First, tell us how Anthropic's approach is different and to what extent you're looking to partner with major enterprise companies like Intuit we just had on to spread AI in a responsible way. Hi, John. Thank you so much for having me here on the program. And so, you know, you might have heard we launched Cloud 2 this week. So, Cloud 2 is our next generation large language model, and it's now

available for businesses, really kind of very small to large businesses via our developer console, and individuals can also now play around with it at claude.ai. And really for Claude 2's release, one of the things that our business users are kind of making use of is using it to upload, you know, files up to 100,000 tokens. That's, you know, about the length of a short book. So if you have earnings reports or business memos or long Zoom transcriptions that you'd like to be summarized, Cloud2 is a great partner and tool for being able to do that. Okay, extensive, I don't know whether to call it a profile,

definitely deep dive in the New York Times in recent days about Anthropic and focusing in on how, I don't want to say doomsdayish, but very careful you guys are being about the potential negative effects of AI. For investors, to me, that translates into

how much should we believe that the hype about AI is going to have an immediate impact or a near-term impact on revenue growth and profits? What is it that AI right now can do that affects business operation in a significant way? And do you see any areas where its near-term potential is being overhyped? So I think really the way we think, you know, about Clawed 2 at Anthropic is it's kind of best conceptualized as this very helpful, polite, eager, you know, junior assistant. And so I would really think about this tool as something that you can use to save, you know, junior assistant. And so I would really think about this tool as something that you can use to save, you know, time and money and headache, especially on, you know, tasks that kind of, you know, a junior employee could do, right? So summarizing, you know, a lot of information,

right, over a large corpus of text. It can also be used for things like translation. It can be used for writing code or doing simple math problems. But really, I think that these tools, we're still sort of in the early days of seeing what they're going to be able to do. But we really do think there's a large amount of potential to be able to just help provide business value to customers today. You and your brother famously left OpenAI to start Anthropic, a different idea behind it. Elon Musk similarly was part of the beginning of OpenAI and is now doing something different. How is Anthropic's ethic around AI different from either of those? So really at Anthropic, you know, we have this sort of vision

of safety being kind of at the center of the research that we do. And, you know, we've published more than 15 safety research papers, which you can read about on our website at anthropic.com. And this kind of helpful, honest, and harmless framework has been really useful for us in thinking about how we want the models, you know, ideally to behave. And of course, you know, no model on the market today is 100% reliable. But really with Clawed 2, a lot of what we were aiming to do was, you know, make fundamental progress on, you know, issues around honesty and reliability, around, you know, harmlessness of the text that it outputs, and around helpfulness of really being able to answer questions that businesses

and consumers might have. Okay, so how do you feed Claude, right? And how do you make sure that personal information, privacy violating information is what the FTC seems to be concerned about these days doesn't end up being a part of it? So, you know, obviously these areas of, you know, data security and, you know, privacy are something that, you know, Anthropic, you know, really takes very seriously. And what I would say here is that obviously, you know, there's a lot of work that goes into, you know, how we train data and output it. But fundamentally, I think it's really important to recognize that unless we're given permission to output, to train on your data, or if you've violated our AUP, those are the only times when we would have the sort of opportunity or the right to use training data. Otherwise, it won't be something that we put into outputs.

And it's obviously an area that's evolving very quickly. And we're working with policymakers and industry groups to make sure that we're hitting kind of industry marks on. Okay. And finally, how big an issue is access to high-performing AI-ready chips? There's been a shortage there. We've heard about it certainly from NVIDIA, which is leading in that area,

but other companies as well that are trying to make some hay in AI, chip companies, there's not enough supply out there. To what degree is your funding having to go toward that? And to what degree is that going to ease up in the foreseeable future? So I think you're kind of hitting on this, you know, very important point, which is that it's just very capital intensive to kind of train these, you know, these larger models. And so, you know, we've been very lucky to be able to partner with GCP to, you know, be able to train these models and make sure that we have reliable and enough

capacity for our users. And of course, this is just an area that industry-wide is something that's evolving. Right. GCP, Google Cloud platform and investor in Anthropic as well. Daniela, thank you. Thanks so much for having me. Great to have you with us on Overtime. For much more on AI and the broader tech trade, do not miss a special edition of Tech Check tonight, 6 p.m. Eastern, right here on CNBC, featuring an interview with Kathy Wood and a lot more. Still ahead on Overtime, Sanova's CEO on a big week for that stock and what could drive more solar adoption moving forward. And take a look at a major mover that is sinking in the deep end today. Swimming pool supplies company Leslie's losing a third of

its value after warming of soft demand, cutting its fiscal year sales and earnings outlooks. The company also announcing a CFO transition. We'll be right back. Welcome back. Let's shed some light on the solar industry. Sinova shares are shining this week, up nearly 20 percent, outperforming the broader market and its peers. Joining us now is Sinova CEO John Berger. John, what's driving and going to continue to drive solar adoption when capital is harder to come by? Well, thanks for having me, John. You know, first, we've seen certainly in Texas, but over the last few weeks,

massive heat wave, a lot of weather. You can look at towards climate change, but certainly very tough weather on folks. And that was coupled with rotating blackouts. We even had some of those in Puerto Rico of recent. And so that reliability issue for a growing number of customers is continuing to escalate. Secondly, the utilities as monopolies have continued to raise rates despite deflation starting to take hold in the economy. A lot of electric vehicles are being purchased. Certainly, the price cuts there have led to dramatic adoption. So we have, as an operator, the home is the gas station, right? We're the gas station operator, if you will. And then the last is the overall equipment cost for solar and batteries is really in a deflationary moment right now. So it's

likely to bring in more and more demand from consumers as prices drop. And that's what I wonder, too. How much are prices dropping compared to it's just expensive to purchase this, get it installed, et cetera? I know that there are companies that allow financing, but financing these days, right, interest rates are up. So doesn't that affect the justification that you have to make for solar? Do you have to have an EV and think, okay, well, I'm going to be able to use more of this power in order to justify the expense? Well, absolutely. We're an energy as a service provider, John. So we do financing. We do loans,

the leases, the power purchases agreements. So you're spot on there. And the cost of capital, of course, has gone way up. But the other side of that, again, going back into the utilities, their power rates have gone way up and in many cases even further percentage-wise than what the cost of capital has. Secondly, that equipment coming down in cost. There's been a massive explosion in the number of manufacturers. And then on top of that, you're having the Inflation Reduction Act passed last year. That's starting to bring more manufacturing here in the United States. And then the European Union is also ramping up

manufacturing. So globally, you're producing a lot more batteries and solar panels and electric vehicles, and that's dropping the price of those materially. And so how closely tied would you say EV purchase and adoption is to solar demand? Because I don't imagine if somebody's getting solar that they're necessarily going to run out and buy an EV. But if you're looking to buy an EV, I imagine that has you thinking about solar. But some people say that there's not that close a link. There is a close link. There certainly is an overlap. And I think that makes sense. If you're looking to advance your needs and requirements in your home for solar and

batteries and have more reliability, cleaner power, cheaper power, then you're looking towards new technologies to do that, like from a firm like Sunova. You're also more inclined to look at new technologies in your car to drive around in and vice versa. So there is a high degree of overlap there. I wouldn't say one purchase decision means that you do the other right away, but we do find a high degree of overlap in consumers that are customers of ours typically do have electric vehicles. Are you limited by labor cost and availability right now? We are not. I continue to see an employment situation where, you know, candidly, the employer is becoming a little bit more in the driver's seat than the employee over the last three years, certainly in comparison. And we see that progression

continuing, particularly in the software, in high technology jobs. It's always important to get the best people. We certainly have them here, and those are always in high demand. But the availability of these really good folks, both in the United States and globally, it certainly keeps continuing to go up. And then overall, I would say the employment picture is certainly more balanced and leaning towards more on the employer side in terms of favorability than it has been the last couple of years. So that is really, frankly, not a concern at this point for us. Closing on a nice macro note, John, thank you. CEO of Sinova. Thanks for

having me, John. Still ahead, will next week's big bank earnings follow a similar pattern as today's with a pre-market pop, fading enthusiasm after the open. We will ask a top bank investor when Overtime returns. Up next, we're going to talk to the CEO of a personal finance platform that says it only wants customers to use its app for 10 minutes a month. And take a look at a trio of telecom movers, Nokia, Ericsson, and AT&T, all taking a leg lower today. Nokia cutting its sales guidance, while Ericsson noted a decline in North America equipment sales. And AT&T is falling on a

downgrade at J.P. Morgan, which cites pressure in its mobility and consumer wireless businesses. We'll be right back. Welcome back. Retirement Platform Guideline announcing this week a new mobile app to simplify the process of setting up and checking on retirement plans. Guideline offers 401k and IRA plans for small and medium businesses, has more than $9 billion in assets under management. CEO and founder Kevin Buskey joins us now. Before Guideline, I'll mention Kevin co-founded TaskRabbit, the gig worker marketplace that IKEA acquired in 2017. Kevin, so welcome, first of all, and then some big changes here,

including in giving a new tier and flexibility to customers. Tell me over the past few years, during the pandemic in particular, what's happened in small business, medium business, 401k adoption that led to this? Yeah, we launched guideline in 2016 for super small businesses. It's called the micro markets. And over the course of the last five to seven years, what we've seen specifically in the pandemic was high adoption. People were shifting away from office perks and into actually bringing on meaningful benefits to their employees. So we've seen that trend continue. And we have an 85% participation rate, which is the highest in the industry. And what we started noticing is people were- When you say 85%

participation rate, break that down a little bit. Because not everybody realizes that just because an employer offers a 401k, everybody doesn't use it. Why is that participation rate important and what are the benefits that accrue? Yeah, so we really believe that the only wrong decision inside of a 401k is to not participate, particularly when there's an employer match or some other incentive, including the tax benefits of being pre-taxed, etc. So that's really important is to have somebody participate, participate early, specifically when you work for a small business. Maybe you're right out of college in your 20s. Like that is the time to begin your process and investing in retirement.

And that can really benefit you down the line with compounding, et cetera. So that's really important for us. And previously, you know, even at my TaskRabbit experience, people would get those onboarding forms. They weren't digital. You had to fill out a bunch of things and then give it back to your processor. That just never happened. So for us, we built this mobile app, take people right through the process, go through a suitability flow, meet them where they are on the mobile device. And that's 35%, 33% of all the people we're onboarding are learning to participate in 401k in a mobile

experience. So that's why we launched the app. Interesting contrast here with Robinhood, which is talking lately about getting into retirement and was mobile first and trying to get people gamifying for a long time, trying to get people on it all the time. You say you only want people checking this 10 minutes a month. What are the differences here? I take it you're not into crypto or meme stocks at GuyLine either. No, we're not. Yeah, we're kind of the opposite of Robinhood, right? So we're investing long-term, super small, low fees, diversified portfolio. We really want people to onboard, trust the process, go through the suitability algorithm that we have embedded in the product, which categorizes your risk tolerance and your age and builds a trend line for you over retirement.

So that's really important for us. We don't want you in the app trying to gamify or trying to day trade or when a market movement happens, trying to adjust your portfolio. One of the great things about 401k is dollar cost averaging is built into the platform. So you're literally contributing to your 401k on your pay period, on your pay schedule. So every two weeks, every month, every one week, whatever it may be. And that's really important. And you're buying into the market over the course of the year. And that's really, really important. So we don't want you in the app. We don't want you making adjustments consistently. That's really important to us at Guideline. All right. Kevin Buskey, I think you and I met a year

or two into Guideline and a year or two into Fort Knox. Both started in 2016 and you were one of the early guests. So good to see your continued growth. Kevin Buskey. Thank you for having me then. Thank you for having me now. Yes. Appreciate it. With Guideline.

J.P. Morgan, Citi, and Wells Fargo kicking off earnings from the big banks today. Up next, a top analyst on what investors should expect when Bank of America, Morgan Stanley, Goldman Sachs, and many. Report results next week. Breaking news on the Jeffrey Epstein case and J.P. Morgan. Emily Wilkins has the details. Emily. Well, the U.S. Virgin Islands is seeking at least $190 million in civil penalties from J.P. Morgan, a legal filing today in a Manhattan federal court revealed. The US territory is suing over the bank's relationship with Jeffrey Epstein, who used JP Morgan as his main banking institution from 1998 to 2013. JP Morgan has denied the allegations, but last month did agree to pay $290 million to

settle a suit brought by a class of Epstein's victims over allegations that the nation's largest bank knowingly assisted in the sex trafficking operation. The hearing is set to go on trial October 23rd. We've reached out to J.P. Morgan, and we'll update you with any comment from the bank. All right. Emily, thank you. Bank earnings, the season kicking off today with J.P. Morgan, Wells Fargo, and Citigroup all topping estimates, but all fading throughout the session. We will get many more reports next week, including Bank of America, Morgan Stanley, and Goldman Sachs. Joining us now is Hennessy Funds Portfolio Manager David Ellison.

David, Goldman Sachs, Morgan Stanley in particular expected to suffer here, but how's Bank of America likely to do? Well, I think they're going to show you that margins are under pressure. Loan demand is okay. Credit's probably a little worse. So I think what you saw today was JP Morgan basically on steroids. They benefited from the First Republic acquisition. They benefited from a lot of cheap deposits that came in after the Silicon Valley blow up. But the other banks less so. So, you know, I think Wells Fargo was better than maybe people thought. You know, I think the real tell was State Street. You know, they basically told people deposit costs are rising. Of course, the stock did pretty poorly was State Street. You know, they basically told people deposit costs are rising.

Of course, the stock did pretty poorly in the end. I know people aren't talking about that one, but I think, yeah, go ahead. So what does it mean for the regionals, too? Because, of course, we've got those larger names, but also we're going to get more from the regionals. And I keep hearing about delinquency concerns from them and bigger commercial real estate exposure concerns from them. Maybe we get some insights about how the overall market is turning from the bigger banks and that reflects on the regionals? A little bit. I think what you're going to hear next week is margin pressure and credit deterioration, not earth shattering and certainly not life threatening, but it's going to

press on the earnings. I think the analysts are pretty conservative in terms of their estimates. But again, I think you saw the best of the bank earnings today. Next week is going to be less so. I don't I don't view that as in a sense a negative. This is the opportunity now we have. We have a difficult yield curve. We have is the opportunity now. We have a difficult yield curve. We have a difficult credit environment. We have a difficult loan growth environment. We have a difficult regulatory environment. These are all things that will be better a year and two years from now. So the opportunity is now. Is the bad news priced in to many of the regionals? I can't figure this out.

I mean, JP Morgan certainly is priced for doing well and it is doing well. But the regionals, I mean, the KRE is still under 45. Yeah, well, my sense is that, you know, next week the bank stocks are going to be weak because there's nothing really good to say. And that's going to be another, in my view, buying opportunity for people who are thinking, OK, in the next two years, again, I'm thinking the next two years out, the yield curve is going to correct. Credit's going to be resolved. The regulatory issues are going to be cleared up. The issues with deposit costs and all that stuff is going to go away. So we've got to leave it there. We've run out of show.

Thanks for joining us. We know what to look forward to. A lot of bank earnings. That'll do it for overtime. Fast Money starts right now.