Regional Bank Stress & Schwab’s Record Quarter 10/17/25

Summary

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Squawk Pod – Regional Bank Stress & Schwab’s Record Quarter (10/17/25)

Episode Overview

On the October 17, 2025 episode of Squawk Pod, CNBC’s Joe Kernan, Becky Quick, and Andrew Ross Sorkin tackle this week’s mounting concerns around the stability of regional banks following exposure to bad loans and recent bankruptcies. The team breaks down the market’s volatile reaction, worries over credit—especially in the opaque private credit market—and the broader ripple effects on U.S. and European financial sectors. Charles Schwab CEO Rick Wurster joins to discuss Schwab’s record quarter, shifts in investor demographics, the meaning behind strong retail flows, and how Schwab views modern portfolio strategy amid all the angst. The episode also surveys a weak economic sentiment, looks at the Ray Ban-Meta smart glasses boom, and provides an exclusive update on U.S.-China trade talks.

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Key Discussion Points & Insights

1. Regional Bank Stress Shakes Global Markets

• Backdrop:
  • Ongoing concerns about the credit markets, particularly related to bad loans at mid-sized U.S. banks, have led to significant declines in regional bank stocks.
  • Notable regional banks such as Zions and Western Alliance were hit due to their involvement in loans tainted by alleged fraud. The broader market remains jittery, watching for cracks in credit quality. (02:22–05:00)
• Market Impact:
  • “The VIX has doubled in the last three weeks. It’s almost 30…and you got treasuries yields falling.” – Joe Kernan (03:10)
  • The S&P Regional Banking ETF (KRE) fell over 6%, marking its fourth consecutive week of declines.
  • Cumulative loss of over $100 billion in market value across 74 major U.S. banks in recent days.
  • “The bankruptcies of two auto industry related companies this year have also raised concerns about loose lending practices, especially in the opaque private credit market.” – Joe Kernan (04:30)
• International Effects:
  • European banks also took a hit, with some major institutions dropping by up to 7%, yet year-to-date, they’re still up 40%. (06:34)

2. Credit Market Cracks & Private Credit Fears

• Detailed Reporting:
  • Leslie Picker highlights that every bank with a loan book was in the red Thursday, singling out losses and legal fallout at Zions and Western Alliance.
  • “Credit concerns...very much front and center. Regional banks plummeting. Alternative asset managers, PL Jefferies, tanked once again...” – Leslie Picker (07:51)
  • Exposure for individual banks is relatively small (under 2% of tangible common equity), yet market sentiment is on edge, watching for contagion.
  • Clarification: “Bank of California has minimal exposure but it’s senior in the capital structure...not Bank of America.” – Leslie Picker (09:53)
• Analyst Viewpoint:
  • No apparent signs of a systemic, broad-based issue—though volatility and high-yield credit spreads are being monitored closely. (19:08–19:49)

3. Schwab’s Record Quarter & CEO Rick Wurster Interview

(12:31–22:35)

Schwab Smashes Records:

• Schwab announced record Q3 profits: $2.36 billion, up 27% year-over-year, client assets hit an all-time high at $11.59 trillion, and over a million new brokerage accounts for the fourth consecutive quarter.
• Demographics Shift:
  • “Schwab is pretty hip...We’re actually the most followed financial services company on YouTube, which often surprises people. And we’re winning with the young investor—a third of our new households are Gen Zers under the age of 28.” – Rick Wurster (15:34)
• Competitive Landscape:
  • Schwab remains dominant in retail trading (7.4 million daily average trades, beating Robinhood and Morgan Stanley).
  • “Everyone’s coming after us because we are the leader and there isn’t a close second...we win by delivering the broadest experience in the industry.” – Rick Wurster (14:56)

Client Behavior & Portfolio Strategies:

• “Active traders have been buying dips, selling the rips. Long-term investors—when they call—we talk about diversification, not trying to time the market.” – Rick Wurster (16:30)
• Schwab encourages balancing concentrated stock positions, using strategies like options and exchange funds to avoid significant tax hits (21:22).
• Notable Stat: Top 10 stocks are now 38% of the S&P, more than double from 10–15 years ago—driving conversations around the need to diversify.

Alternatives, Crypto, and Bonds:

• Schwab sees huge interest in crypto ETFs and private assets; 20% of all U.S. crypto ETF assets held by Schwab clients; visits to their crypto site are up 90% YoY (17:43).
• Bonds are “cool again,” as rates drop, with increased client interest (17:21).

Credit Risk Perspective:

• Schwab’s exposure to credit risk is limited: “We only lend to our clients and we only lend against their assets...We’re not seeing the indicators that would suggest this is a broad base credit issue yet.” – Rick Wurster (19:08)
• Conversation closes with Schwab’s golf culture and anecdotes about founder Chuck Schwab’s athletic achievements for a lighter touch. (22:01–24:22)

4. Ray Ban-Meta Smart Glasses Partnership Pays Off

(26:16–28:12)

• EssilorLuxottica (Ray Ban parent) reported an 11.7% jump in sales, driven in part by demand for their collaboration with Meta on smart glasses.
• Andrew Ross Sorkin offers personal insight: “It is a game changer. I’ve got a pair… You can record all kinds of stuff, hands free…the big thing is using it as a video camera.” (26:47–27:59)

5. Economic Sentiment – All America Economic Survey

(28:12–36:37)

• Steve Liesman delivers new polling data showing Americans’ outlook on the economy is increasingly negative:
  • President Trump’s overall approval dropped to 44%, with economic approval falling 3 points to 42%.
  • “It’s the economic approval that fell…to 42%. Disapproval rising…to 55%.” – Steve Liesman (29:23)
  • Only 24% are optimistic about the economy, while 57% are pessimistic (30:55).
  • Key pain points cited: jobs, inflation, cost of living, and tariffs.
• Liesman contends, “I see the economy as not that bad…that's not the case when you talk to average Americans. They're down on jobs and inflation and they really dislike these tariffs.” (32:14)
• Discussion includes assessments of the labor market’s hidden weaknesses and disparities in sentiment among income groups, as well as skepticism around the broader implications of polling results.

6. Washington Watch: U.S.–China Trade Talks

(37:31–40:57)

• Eamon Javers breaks news that Treasury Secretary Scott Bessant and China’s Vice Premier Huo Li Fang will speak by phone, signaling a potential thaw in tense trade negotiations (37:38).
• “We don’t know what the content of that call is going to be…but the fact of the call itself is notable…some kind of breakthrough could happen, or at least a platform where some kind of a breakthrough could happen.” – Eamon Javers (37:38–39:42)

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Notable Quotes & Memorable Moments

• On Banking Stress: “The bankruptcies of two auto industry related companies this year have also raised concerns about loose lending practices, especially in the opaque private credit market.” – Joe Kernan (04:30)
• On Schwab’s Youth Surge: “Turns out Schwab is pretty hip…We're actually the most followed financial services company on YouTube…” – Rick Wurster (15:34)
• On Portfolio Concentration Risks: “The top 10 stocks in the S&P today are 38% of the index. That's more than double where it was 10 or 15 years ago.” – Rick Wurster (16:55)
• Personal Touch: “Chuck [Schwab] is doing really well. 88. He called me last week...He said, well, I just played a great round of golf...I beat my age by 13 shots.” – Rick Wurster (22:03)
• On Economic Sentiment: “It’s not just athletes, not all Americans…approval dropped to 44% from 46%. Disapproval rose 1 point…” – Steve Liesman (28:33)
• On Innovation: “It is a game changer. I’ve got a pair [of Ray Ban Meta smart glasses]…you can't really tell.” – Andrew Ross Sorkin (26:44)

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Important Segment Timestamps

• Regional Bank Market Stress & Credit Issues – 01:04–10:42
• Leslie Picker: Breaking Down the Loan Exposure – 07:39–10:17
• Interview with Schwab CEO Rick Wurster – 12:31–22:35
• Ray Ban & Meta Smart Glasses Segment – 26:16–28:12
• CNBC/Steve Liesman Economic Sentiment Survey – 28:12–36:37
• Exclusive: U.S.–China Trade Call News – 37:31–40:57

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Tone & Takeaways

• The hosts strike a balance between urgent concern (regional bank issues, economic outlook) and confident reassurance (Schwab’s exceptional results and steady client behavior).
• The mood is watchful: “It is of interest and it is of notice...but we hope it doesn’t boil into something bigger.” – Andrew Ross Sorkin (10:22)
• There’s a distinct CNBC flavor—fast-paced, data-driven, and pragmatic, with conversational banter breaking into finance-world humor and relatable life (golf, tech gadgets).
• The episode captures both market anxiety (about credit and politics) and the forward-looking optimism of innovation and adaptation in financial services.

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Perfect episode for listeners seeking an up-to-the-minute scan of financial markets, banking health, investor behavior, and the intersection of politics, economics, and market technology.

Transcript

[Podcast Sponsor Announcer]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you get your podcasts.

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[Joe Kernan]

Bring in show music please.

[Becky Quick]

This is Squawk Pod and I'm CNBC producer Cameron Costa. On today's episode, zeroing in on the credit markets.

[Joe Kernan]

We've made a lot of bottoms in October and please don't pick your bottom or don't pick a bottom.

[Becky Quick]

Worries over bad loans at mid sized US banks are shaking up global stocks. CNBC's Leslie Picker reports the markets are.

[Leslie Picker]

Just overall on high alert about cracks in the credit markets and how Charles.

[Becky Quick]

Schwab is interpreting these concerns. The brokerage hit record revenue in the past quarter and CEO Rick Wurster says he's not worried about credit, at least not yet.

[Rick Wurster]

We're not seeing the indicators that would suggest this is a broad brace credit issue yet.

[Becky Quick]

Plus, the Ray Ban Meta partnership is paying off. And in Washington, Treasury Secretary Scott Besant is set to speak with his Chinese counterpart part to talk trade.

[Eamon Javers]

The question is, you know, whether that represents some kind of a breakthrough in these this flare up of tensions that we've seen over the past week, or at least maybe a platform where some kind of a breakthrough could happen.

[Becky Quick]

It's Friday, October 17th and Squawk Pod begins right now.

[Rick Wurster]

Stand Becky by in 3, 2, 1.

[Andrew Ross Sorkin]

Good Friday morning everybody. Welcome to Squawk Box right here on cnbc. We're live from the NASDAQ market site in Times Square. I'm Becky Jackie Quick along with Joe Kernan. Andrew is off today. Yesterday 10 of 11 sectors were down, but the biggest decliner was the financial sector. Only sector that closed higher yesterday was technology it was up by just over a tenth of a percent. But for the week, 10 of 11 sectors are higher. So again, a lot of back and flow, a lot of nervousness as you get into some of these numbers, particularly with what you're seeing from some of the banks. Big question is, and these are regional banks we're talking about, these aren't things that are necessarily key to their missions or key to what they're doing. Canary question is, right, if, if they've been a little too loose with their lending standards.

[Joe Kernan]

Canary in a coal mine. The VIX has doubled, Right.

[Andrew Ross Sorkin]

The highest level I think since April, maybe.

[Joe Kernan]

Look at the Vix. It's doubled in the last three weeks. It's almost 30. And it was down at 15 prior to that. And then you got this. Treasuries yields falling. Oil.

[Andrew Ross Sorkin]

Yeah. The 10 year below 4%, which Rick was talking about that yesterday. I think I was listening to him on the exchange with you. You were right, right at the exchange, right at the end of that show, getting of the next where he was talking about if you close at 4% below 4% today, that's something he would set up and notice. As a former trader himself.

[Joe Kernan]

Bitcoin was 125 like a week ago or something. Remember the big drop on Friday, 104. And it's volatile but. And people sell reason. It gets correlated that people sell what they have in times of.

[Andrew Ross Sorkin]

Because it's highly leveraged.

[Joe Kernan]

It's highly leveraged. And if you got it, you need money for other things.

[Andrew Ross Sorkin]

Margin calls.

[Joe Kernan]

Yeah. Or whether there's margin calls on it. I mean. 4%. Again today, shares of regional banks we talked about right at the top tumbled yesterday. Fears of exposure to bad loans. This all has to do with you watch the stock of Jefferies Co. Which down another 6%. Zions, Western alliance are among the hardest hit. Zions and Western alliance said yesterday that they were victims of fraud on loans to funds that invest in distressed commercial mortgages. The losses were relatively small, but the hit to sentiment led to selling on Wall Street, 74 of the biggest US banks shedding, if you added up, shed more than $100 billion in market value. But that's like, you know, if Nvidia goes down a point, it's like the same thing. The S and P regional, not quite Regional Bank ETF. The KRE fell by more than. Maybe it's not an exaggeration, 6%. It's now down four straight weeks and it's down six out of the last seven weeks. The bankruptcies of two auto industry related companies this year have also raised concerns about loose lending practices, especially in the opaque private credit market, which people are paying more attention to. So suddenly alternative asset management companies like Blue Owl Capital, Aries and Blackstone also fell in yesterday's session. And I don't know whether the government shutdown is really having any effect yet.

[Andrew Ross Sorkin]

But look, it's a little nerve wracking with no way of getting out of this that the two sides in the Senate aren't talking except for over the media airwaves. That's a little more concerning. I don't think that's the case.

[Joe Kernan]

I think Monday, Monday, it all changes. On Monday, Schumer had to look tough, you know, for all of his guests coming into the city for no, King, you know, doesn't want to be on the spot on Saturday that he folded.

[Andrew Ross Sorkin]

Again, although they are getting John Thune put through another vote yesterday and he lost ground with it with Angus King not voting on it. So if you're, if you're voting five, that five Democrats will peel off, you're going to the wrong.

[Joe Kernan]

Well, they will eventually. But it's a 24 page continuing resolution to fund the government. It's got nothing to do with any of this other stuff.

[Andrew Ross Sorkin]

No. And look, they've said, I think the Trump administration has dug in at this point that they're not going to negotiate.

[Joe Kernan]

No way until the bonds back. I wouldn't even open my mouth. I'd say, you know, but the longer.

[Andrew Ross Sorkin]

This goes on, the questions are, is this going to be material for the economy, for the broader economy? And those are the material for a.

[Joe Kernan]

Lot of people that.

[Andrew Ross Sorkin]

Absolutely. Who aren't getting paychecks right now.

[Joe Kernan]

Exactly right.

[Andrew Ross Sorkin]

Europe's largest banks are firmly in the red this morning across the board. You're seeing declines of three and a half to almost 7% with some of those major banks. Despite today's declines, Europe's Stoxx 600 bank index actually remains up more than 40% for the year to date.

[Joe Kernan]

You know, that's something to think about. It is down, it looks terrible. Up 40% year to date. Here's a look.

[Andrew Ross Sorkin]

Our banks have been pretty good year to date.

[Joe Kernan]

Right. So we've got to keep, we've got to remember that.

[Andrew Ross Sorkin]

And look, even with the concerns that you're seeing, all three of the major averages are less than 2% from all time highs.

[Joe Kernan]

So you know what the date is though?

[Andrew Ross Sorkin]

Vix is up. That's the biggest.

[Joe Kernan]

You know what the date is?

[Andrew Ross Sorkin]

Yes, it's October, late October what is it, the 17th?

[Joe Kernan]

Every bottom we've ever made. Happy Park.

[Andrew Ross Sorkin]

It's my niece's birthday today. Happy birthday.

[Joe Kernan]

But every bottom we've ever made seems like that's exaggerating. But we've made a lot of bottoms in October. And please don't pick your bottom or don't pick a bottom. The tech sector is also getting. Don't try to pick a bottom.

[Andrew Ross Sorkin]

Bank stocks in the United States and abroad are under pressure. Leslie Picker joins us right now to break down some of the catalysts for that. And Leslie, this has been a slow boil, but yesterday we heard a lot more.

[Leslie Picker]

Yeah, a slow boil indeed. Pretty much every company with a loan book was in the red on Thursday. Credit concerns very much front and center. Regional banks plummeting. Alternative asset managers. PL Jefferies tanked once again as its name has become increasingly synonymous with the first brand's bankruptcy credit concerns at Zions and Western alliance really the catalyst that spooked the entire sector. Zions revealing in a filing that it is pursuing a lawsuit and taking a provision of $60 million due to what it describes as a, quote, apparent misrepresentations and contractual defaults related to a borrower. Western alliance filed its own 8K as well, saying it doesn't need additional provision related to its exposure to the borrower, which it had sued back in August alleging fraud. The bank believes collateral coverage will cause it to avoid losses. But Western alliance also had exposure to first brands. So lots of questions circling this space. Bank of America, another name to watch. As analysts point out, it too has exposure to that same borrower, although its exposure is minimal and senior in the capital structure. Even though exposure for each of Zion's, Western alliance and bank of California stands at under 2% relative to their respective. Respective tangible common equity. The markets are just overall on high alert about cracks in the credit markets following the bankruptcies of two auto companies last month that sent private credit stocks roiling. And now you're seeing that spillover effect also in regional bank stocks. Several other regional names, including Regions, Truist, 5th 3rd Comerica, have reported earnings this morning, though with results viewed as largely positive. Guys.

[Andrew Ross Sorkin]

Hey, Leslie, just to clarify, no problems with bank of America. This is bank of California that you're specifying. We saw the charts that were here, but you said America. And just for anybody who was listening, let's clarify that. Bank of California, go through that a little bit again for us.

[Leslie Picker]

Correct. Bank of California, they have minimal exposure, but it's senior in the capital structure. So they're kind of part of that same borrower contingency, but nobody expects them to have any serious issues as it pertains to that. Not bank of America Bank. Bank of America did not have exposure to this one borrower that's going through litigation with three of those regional banks and likely some more.

[Andrew Ross Sorkin]

Okay, Leslie, thank you very much. I have the feeling we're going to be talking a lot more about this.

[Joe Kernan]

Let's hope not.

[Andrew Ross Sorkin]

Well, we'll talk about what we see, but we hope it doesn't boil into something bigger. But again, it is of interest and it is of notice. Yesterday the financials were the worst performer, 10 of 11 of those sectors down, but the financials were the worst performer out of the whole bunch. And it was a bad day. Leslie, thank you very much.

[Becky Quick]

Tease will be next Next on Squawk Pod what Charles Schwab is seeing with investor sentiment and the health of U.S. credit CEO Rick Worster joins us. Plus a breakout year for his company. Thanks Gen Z.

[Rick Wurster]

Turns out Schwab is pretty hip. We're on YouTube TikTok. We're actually the most followed financial services company on YouTube, which often surprises people.

[Andrew Ross Sorkin]

Foreign.

[Podcast Sponsor Announcer]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] Market Update podcast or find Schwab Market Update wherever you get your podcasts.

[AT&T Business Advertiser]

And now a next level moment from AT&T business. Say you've sent out a gigantic shipment of pillows and they need to be there in time for International Sleep day. You've got AT and T5G so you're fully confident, but the vendor isn't responding. And International Sleep Day is tomorrow. Luckily, AT&T5G lets you deal with any issues with ease. So the pillows will get delivered and everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device. Coverage not available everywhere. Learn [e-mail] 5G Network.

[Joe Kernan]

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[Andrew Ross Sorkin]

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[Becky Quick]

This is Squawk Pod with Joe Kernan and Becky Quick.

[Rick Wurster]

Here's Becky.

[Andrew Ross Sorkin]

All right, Charles Schwab reported record third quarter profits of $2.36 billion. Riding that surge in retail invest, revenue jumped 27% to 6.14 billion. That's also an all time high.

[Rick Wurster]

Schwab.

[Andrew Ross Sorkin]

Joining us right now for a look at what's ahead is Charles Schwab, president and CEO Rick Wurster. And Rick, thank you for coming into set to talk to us this morning.

[Rick Wurster]

It's an honor to be here. Thanks for having me.

[Joe Kernan]

You like what I do that you said?

[Rick Wurster]

I love when you do it. Because it's very hard to remember financial.

[Joe Kernan]

Services advertisements, the commercials. They do backflips. Try the Voyo one with the funny little red. But that is very distinctive because you.

[Rick Wurster]

Got that guy that's very memorable. He's a great actor.

[Steve Liesman]

Carl.

[Andrew Ross Sorkin]

Carl.

[Joe Kernan]

Yeah, he just. He does really bad. He's a. He's one of those financial analysts at a full service firm. And Schwab just undercuts him every step of the way. Right.

[Rick Wurster]

He gets a little frustrated with us.

[Andrew Ross Sorkin]

He does. Well, what if we're looking at the earnings things have. It's really been a banner quarter for you, not to mention a banner year to date so far. Let's run through some of these numbers on this. Total client assets up 17% over year over year to a record $11.59 trillion dollar daily average trades up 30% year over year. Every number you look at, you guys are kind of knocking it out of the park. But maybe one of the ones to really focus on is brokerage accounts. A million plus new brokerage accounts for the fourth consecutive total. That's a pretty big deal. What's happening? Why are these people coming in besides maybe the advertising?

[Rick Wurster]

I think they're coming in because we're delivering for our clients and we are clients. We don't make our clients make any tradeoffs. We have a great digital app like others, but they can also call in. And we took 7 million calls in the last quarter of clients asking questions like, hey, I watched Squawk Box this morning and people are talking about credit. What's the deal? Should I stay invested? We had hundreds of thousands of people walk into our branches in 400 communities across the country. So the fact that we're there for clients making a difference locally and helping them achieve their financial dreams, that's what's driving more and more clients to Schwab.

[Andrew Ross Sorkin]

It is hardcore fight right now between all the brokerages that are out there, whether it's Schwab, whether it's Robinhood, whether it's Morgan Stanley, you all are the number one in retail trading. No close second. I think you have 7.4 million daily average trades versus 4 million at Robinhood. Morgan Stanley has less than a million. But there is a war at this point to try and win these customers. What do you do in that fight?

[Rick Wurster]

Well, everyone's coming after us because we are the leader and there isn't a close second. And what we do to win the fight is show up every day and make sure we deliver for our customers, clients. And I think for traders, what we offer can't be matched. The benefit of what we do is we have a thousand former trading professionals that wake up every day and answer the phones for our clients. We put on 35 hours a week of live trading coaching for our newer investors and we have what we think is the best platform and thinkorswim, which we acquired from Ameritrade. So we, we win by delivering the broadest experience and the best experience in the industry and we're going to keep doing that.

[Andrew Ross Sorkin]

I was kind of surprised at the demographics you have that are coming in. It's younger than I would have anticipated.

[Rick Wurster]

It is younger. It turns out Schwab is pretty hip. We're on YouTube TikTok. We're actually the most followed financial services company on YouTube, which often surprises people. And we're winning with the young investor. A third of our new new, new to firm households are gen zers under the age of 28. And they're coming to Schwab because they want to engage in their financial life. They want to have a plan, they want guidance along the way, they want access to our research and education and we're providing all of that with which is why we're winning with the young investor.

[Andrew Ross Sorkin]

Your stock for the year to date I think is up about 26%. And by the way, that coincides with when you took over the company. So congrats on that.

[Rick Wurster]

Thank you.

[Andrew Ross Sorkin]

What are the hardest things about what you're working with right now though, with competition? That's tough up there. Right now you've got the market going in your favor. With all of the new highs that we've been hitting, how much is that at risk? If you get into some trouble, if you have these lower days, higher volatility days, what happens? You said you get calls from all these people. What are they asking about?

[Rick Wurster]

Right now we have 46 million client accounts. So we see a range of behaviors. We have a lot of active traders. Those active traders, they've been buying dips, selling the rips actually. And we have a lot of long term investors who when they call, we talk to them about diversification, we talk to them about not timing the market, but, but time in the market. One of the interesting things we've been talking to our clients about more recently is that the S and P is as concentrated as it's ever been.

[Andrew Ross Sorkin]

Does that concern you?

[Rick Wurster]

Well, we want to talk to our clients about the power of diversification. The top 10 stocks in the S&P today are 38% of the index. That's more than double where it was 10 or 15 years ago. And so the benefits of diversification and thinking about your portfolio are as important as they've ever been. And, and those are the kinds of things that we're talking to our clients about every day and trying to help them. Because we're in the outcomes business, we're trying to help our clients achieve their financial goals.

[Andrew Ross Sorkin]

Diversification into what, I guess becomes the question.

[Rick Wurster]

Well, you can buy a broader variety of indices, different stocks, bonds. Bonds are actually cool again, with rates coming down. Clients are more interested in actually owning bonds versus being in cash. So we're talking to clients about a variety of asset classes.

[Andrew Ross Sorkin]

You're adding new things too. I think crypto ETFs are on the lineup and you're looking to private assets.

[Rick Wurster]

Yes, we've been active in both. So in crypto, we do offer crypto ETFs, Bitcoin futures, closed end funds. In fact, our clients own 20% of all the crypto exchange traded products in our country. So they've been very active. We've seen visits to our crypto site go up 90% in the last year. It's a topic that's of high engagement. And for privates, we have made private investments available to our clients. We've done through, through third party managers like KKR and Apollo and folks like that. And we've also stood up a team of alternative experts. If you want to invest in alternatives at Schwab, you're going to need to talk to a professional, make sure they're right for you, and to make sure you find the right strategy for you.

[Andrew Ross Sorkin]

How much, how much demand is there for those alternatives? Like, has it been what you expected in terms of the demand going into it? Has it been stronger or less?

[Rick Wurster]

It's about what we expected. There's a lot of interest in privates. I think anything that can potentially offer some diversification to clients is of interest to them right now. And that's why privates are top of mind for many retail clients.

[Andrew Ross Sorkin]

Rick, let's talk about the credit issues that really roiled the financials yesterday. You're a bank as well as a brokerage, you see loans that are out there. What questions do you have from, from your retail traders? But also what do you see just in terms of how fragile any of this is? If there were bad loans that were being made as credit standards relaxed with good times.

[Rick Wurster]

A couple of thoughts. First, our bank was built for investors. We don't lend. We only lend to our clients and we only lend against their assets. So we know we have never really had a credit issue in the history of our firm. And when we're not lending to clients, we're investing in government backed securities. Now when I look outside at the industry to others that are making those loans, I don't think we're seeing anything yet that's systemic. You know, you don't see it in high yield spreads. Volatility is up a little bit. But we're not seeing the indicators that would suggest this is a broad brace credit issue yet. And also the economy I think is hanging in there. Unemployment is still relatively low. So it's hard to see at this moment being a systemic issue.

[Joe Kernan]

No, I was going to wait to the end of the interview. I have other, I have golf stuff to talk to him about so we could get all the substantive, all the substantive issues out of the way.

[Andrew Ross Sorkin]

How many calls did you get yesterday from clients who were wondering about what to make of these credit issues and the, the pressure on the financials? We're sitting right near all time highs for the major averages. But you do have little areas that feel like there are questions that maybe feel a little bubbly and there have been a lot of questions raised about those things. The pullback we saw last Friday, the pullback we saw yesterday again from near all time highs. But what do you get, what do you hear from your clients when that happens?

[Rick Wurster]

The big thing we hear is that clients wealth is higher than they expected to be at this point because markets are up so much and you know, we've ripped since April. We're up 35% off the April lows. And so a lot of clients are coming through our door saying gosh, I have more money than I thought I would have. How, how can you help me diversify that? Or how? I've got a really concentrated position. I've made more money in Nvidia or Broadcom or Tesla. How can you help me get out of that position without paying big taxes? Those are the kinds of questions that clients are asking us. We try to steer clients away from saying should I be all in or should I be all out? Those are really difficult decisions to make because one, you have to be right at the time you get out, and then you've got to get back in at the right time. It's really difficult. But we can help clients with a lot of. A lot of ways to protect their assets.

[Andrew Ross Sorkin]

What are ways that you tell them if they say, I'm really up in Nvidia, what do I do at this time of the year? Are you telling them to balance it off for tax purpose purposes against something else? Or what do you.

[Rick Wurster]

There's lots of strategies that they can take. They can collar it using options. We're offering Exchange trade exchange funds for clients, which allows you to exchange a concentrated position and get a diversified index back without any tax consequences. There's new long, short strategies that you can use to offset the gains in those positions so you can reduce the size of your position over time. There's lots of things we can and are doing for clients and our advisors, our 16,000 advisors that we support are doing for their clients. I'd say it's the hottest issue of the moment is what do I do with my big gain in some of these stocks that have really run.

[Andrew Ross Sorkin]

Those are some first class problems to have.

[Rick Wurster]

They are, yeah.

[Joe Kernan]

How's Chuck?

[Rick Wurster]

Chuck is doing really well. 88. He called me last week. Joe, you'll appreciate this. And he had a little, you know, a little spirit in his voice. And check. So, Chuck, what's happening? He said, well, I just played a great round of golf. And so I said, joe, the natural question. Did you beat your age? He said, yes, by 13 shots.

[Leslie Picker]

Wow.

[Andrew Ross Sorkin]

75.

[Rick Wurster]

He shot a 75 with two double bogeys.

[Andrew Ross Sorkin]

Charles Schwab.

[Rick Wurster]

Chuck Schwab. Yeah.

[Joe Kernan]

That's the only goal anyone needs to have in life. Because either you live old enough, if you're horrible, you live to 99 and shoot your age. Yeah, that's my name. If you're horrible, you live to 99. And if you shoot 75. When you're 75, you have a lot of time to play some golf. So you're going to. You're doing okay. But I wondered about it and you were captain at Villanova of the golf team.

[Rick Wurster]

Yeah. You wouldn't know it if you watched me golf.

[Joe Kernan]

I would joke, but what I was going to say is to, to all the Charles Robb shareholders, He's like a 25 now. So he does. You never play golf because you're in the office 18 hours, like working on, you know, trying to maximize profits. For sure.

[Rick Wurster]

The only time I go in the golf.

[Joe Kernan]

What is your handicap now? What?

[Rick Wurster]

I'm a five handed.

[Joe Kernan]

You're five?

[Podcast Sponsor Announcer]

Yeah.

[Rick Wurster]

But the only time I golf is I'm trying to get my 12 year old interested in it. So I take him out. And the main thing is to help him learn patience because you have to be incredibly patient to like the game of golf.

[Joe Kernan]

You do. And you have to be a bit of a masochist, I think. A good walk spoiled. Yeah. And you must get to play Pebble. And I guess, I mean, what Chuck did for pebble will last forever, I think. And those other guys that, you know, with the par 3 and everything else.

[Rick Wurster]

He'S the most generous man in the world. He's done so much for the game of golf. He's also, I think, done more for the financial services in the retail industry. Retail investing industry than anyone else in our country.

[Joe Kernan]

So when you got hired, did he know that you had been captain of Villanova or as you were.

[Rick Wurster]

I don't, I don't think that he knew I was a golfer. But as I was getting to know him, he took me out for a round of golf and I was incredibly nervous. Yeah. And I hadn't, I had, I hadn't been playing any golf. And the first eight holes I went four under par.

[Andrew Ross Sorkin]

Oh.

[Rick Wurster]

And he said to me on the walk to the ninth tee box, he goes, do you ever work, Rick?

[Andrew Ross Sorkin]

And that's when you started shanking.

[Rick Wurster]

I didn't play as well. The back night.

[Joe Kernan]

Words I've never said in my entire life. On the first eight holes, I was four under par. Yeah. I have never.

[Rick Wurster]

I had it going. I was lucky.

[Joe Kernan]

I have never said that, Rick.

[Andrew Ross Sorkin]

Well, Rick, we are very happy that you're here, impressed with the results that you put out and we hope you come back soon.

[Rick Wurster]

Well, thanks. I love your show. Thanks for having me on.

[Joe Kernan]

Thank you.

[Andrew Ross Sorkin]

Appreciate it. Rick Wurster.

[Becky Quick]

Still to come on squawk pod the rest of today's stories that got us squawking. Ray Ban Parent is reaping the benefits of its partnership with Meta.

[Joe Kernan]

You got smart glasses.

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

What do they do? You bought. Who are you, Sorkin?

[Andrew Ross Sorkin]

I bought them like a year and a half ago.

[Becky Quick]

And a check on the president's approval ratings from Steve Leisman.

[Steve Liesman]

Independents vote economics. It's that simple.

[Becky Quick]

Plus, a very special report from Washington.

[Eamon Javers]

D.C. i can report to you exclusively today.

[Becky Quick]

We'll be right back.

[Podcast Sponsor Announcer]

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed Daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and [e-mail] Market Update podcast or find Schwab Market Update wherever you get your podcasts.

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[Becky Quick]

You're listening to Squawk Pod from CNBC.

[Andrew Ross Sorkin]

Here's Becky up and Becky Shares of Essilore Luxottica are sharply higher. The French parent company of Ray ban reporting an 11.7% jump in sales in the most recent quarter. That company said a healthy amount of its revenue growth came from its partnership with Meta to sell smart glasses. The company now offers smart glasses under the Ray Ban and Oakley brands, and it's working on a Prada version as well. And I have to say, it is a game changer. I've got a pair of them. I would have never worn any of the earlier weirdo ones, but these are nice glasses and you can't really tell.

[Joe Kernan]

What do you mean you got smart glasses?

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

What do they do?

[Andrew Ross Sorkin]

They can. If you want to leave the video on, you can record all kinds of stuff.

[Joe Kernan]

Who are you, Sorkin?

[Andrew Ross Sorkin]

I bought them like a year and a half ago.

[Joe Kernan]

Because you got smart glasses.

[Andrew Ross Sorkin]

I do.

[Steve Liesman]

They're pretty cool.

[Andrew Ross Sorkin]

They're like regular Ray Bans. They look good.

[Joe Kernan]

Do you buy things that you order on the Internet? Have you done that?

[Andrew Ross Sorkin]

Yeah, I am the prequel.

[Joe Kernan]

I've done that.

[Andrew Ross Sorkin]

I'm the og. You are Shopper. I've been doing it so since the 1990s. I wrote an article for the Wall street journal back in 1998 where we ordered an entire Christmas online.

[Joe Kernan]

So which would you buy? Like designer type or what are the ones?

[Andrew Ross Sorkin]

It was Ray Ban. I have Ray Ban ones.

[Joe Kernan]

You have Ray Ban?

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

They're pretty cool. When do you wear them?

[Andrew Ross Sorkin]

Never. Almost never. But I do. I mean, they're cool in that if you want to do videotaping with the kids, you can do it with like hands free and you're running around, you're videotaping all that. And that's pretty neat. Like those are some cool glasses. You can also talk to them because they've got the, you know, like the.

[Joe Kernan]

Things right through them and say what? And they'll yeah.

[Andrew Ross Sorkin]

Hey, if you want to do hey Siri, look up some things.

[Joe Kernan]

Oh great. So you can now through your glasses get the most ridiculous answer from Siri in the book.

[Andrew Ross Sorkin]

My biggest thing is using it as a video camera. It's kind of cool to do like if you're running around through an apple orchard or something, you could do it.

[Joe Kernan]

Hands free with different apple.

[Andrew Ross Sorkin]

Yeah.

[Joe Kernan]

Everybody waits for Saturday during football season for the ncaa. Steve Liesman is here with the CNBC All America Economic survey is out and these guys. Steve Senior Economics, good to see you with a look at some of the athletes views on.

[Steve Liesman]

It's not just athletes, not all Americans.

[Joe Kernan]

Coaches as well because those are funny. Those are funny interviews. You got to admit when you go in and ask I did that once.

[Steve Liesman]

You know, when you after this one of the Super Bowls we talked to.

[Joe Kernan]

You go in and ask him what do you think of Jay Powell?

[Steve Liesman]

But this is what about.

[Joe Kernan]

What about quantitative easing? Like you ask them that they have.

[Steve Liesman]

Some good opinions on that.

[Joe Kernan]

Some of them really do come back and say I think that they've been way too.

[Steve Liesman]

You know, one of my monetary policy. We don't have time for this. One of my first investigative stories was talking to football players, NFL players about how they lose their money, why they, why they. And it was a interesting story about money management and how they decide to buy things and get.

[Joe Kernan]

So for the would you say 50th time we should point out this has nothing to do with.

[Steve Liesman]

This is a nationwide survey.

[Joe Kernan]

But how many times do you think is this maybe the 50th time that I.

[Andrew Ross Sorkin]

How many quarters have you done this?

[Steve Liesman]

That I've said 2007.

[Joe Kernan]

That I've used that tired joke.

[Steve Liesman]

We took a little break during 2009. We only did one survey because of.

[Andrew Ross Sorkin]

That's what I would say. How many quarters.

[Steve Liesman]

But it's a lot of quarters and I'm not sure the joke is. Is old Joe. Here's the results. Americans views on the economy turned more negative in the third quarter, deepening concerns about jobs and inflation on the outlook. And those sentiments along with the shutdown dragging down the President's overall approving approval ratings further into negative territory. The CNBC All America economic survey of 1,000 people nationwide finding that President Trump's overall approval dropped just modestly to 44% from 46%. Disapproval rose 1 point. But it's the economic approval that fell a more substantial 3 points to 42%. Disapproval rising 2 points to 55%. And this is continuing a second term trend where President Trump's economic approval is running below his overall approval. He's averaged a net minus 11 in the three surveys so far in the second term and that compares to plus 5 on net approval on the economy in his first term. Approval. Overall it's slightly less. Its overall approval is slightly less negative than the first term, but now it's below. Hold on a second, Becky. You're jumping the gun, but you are right as usual. Economic approval hurt by views on specific issues and overall sour views on the economy. Take a look. The President's Net approval is plus 5 on his handling of the southern border. That's his big issue there. And it's still, it's down, but still positive. Turned negative on deporting illegal immigrants. Improved a bit on foreign policy, but it's still negative. And it's turned substantially, Becky, more negative on tariffs. You can see there, the President remains deeply underwater on this issue. Inflation and the cost of living not doing well there. The percent of Americans optimistic now and optimistic about the future of the economy on average this year has risen to 24 from 17. But look at what's happened to pessimistic about the economy rising to 57% from 40% on average.

[Andrew Ross Sorkin]

So you're undecided.

[Steve Liesman]

Yeah, not, not many people undecided on that issue. When it comes to who will be blamed for the economic fall, the potential economic fall from the shutdown. 53% of the public blaming congressional Republicans on the president compared to 37% for congressional Democrats. That's a little wider than some of the other polls that have been out there. The survey has a margin of error of 3.1%. 40% of our respondents Republican, 38% Democrat. We do not solve for that result. In general, the President maintained overwhelming support of his party and equal opposition from Democrats. The key to the results is that independents are leaning really negative on the president. Minus 20, minus 30. Dems are minus 90. Republicans plus 90. So then you figure out where the independents are. They're minus 20 to minus 30 on some of these approval ratings here. I was surprised by these results. I'll tell you why. One is I don't see the economy as that bad.

[Joe Kernan]

No.

[Steve Liesman]

In the overall economic data, all time highs. We live in this milieu. We come in other than the last couple days and the stock market's up and everybody's buoyant. That's not the case when you talk to average Americans here. According to this poll, when it comes to the economy, they're down on jobs and they're down on inflation and they really dislike these tariffs.

[Andrew Ross Sorkin]

I was listening to a conversation with Christopher Waller yesterday and he made some really interesting points just about how the labor week market is probably much weaker than we anticipate. I know that we've talked around some of these issues, the feeling of participation being down, but because we are losing basically people in this country at this point, you know, zero immigration. If you look net net that if you were to keep it at those consistent levels, we'd probably be more at a 5% unemployment rate. And that might be something. That's why he thinks we need to cut rates, interest rates more quickly and is kind of sticking out for that. But if that's the case, it would help explain why people don't feel so good about this economy.

[Steve Liesman]

You hear a lot of comment from Fed officials about higher income people propelling the, the economy and consumption here, whereas low and middle income, I think they're feeling it.

[Andrew Ross Sorkin]

Look, we're grocery prices.

[Steve Liesman]

I guess the president's trying to bring us through a transition here that, that he has a very different idea of how the economy should be structured and global economy, global economy. And perhaps there are benefits down the road. But it looks like the transition here.

[Andrew Ross Sorkin]

And actually the government surplus numbers yesterday.

[Steve Liesman]

Were something I really, not really, they were less. There were some specific changes in there and September is a surplus month and you add the 20 billion or so or 30 billion of tariff numbers.

[Andrew Ross Sorkin]

Right, the tariff numbers helped with that.

[Joe Kernan]

But the only thing we're up 36% since the panic of the, the tariffs. It's, you know, maybe we're going down from here, maybe we're going down. The other thing is I think Trump will on any issue will never get above 40% basically with most polls. And it goes with the government shutdown. No one in their right mind doesn't realize that a continuing resolution that's being blocked in the Senate by Democrats is Republican. It's just if you do maybe mainstream media, you know, you hear enough of mainstream media party in power. But even that doesn't, doesn't explain. It's a 24 page thing that Schumer voted on the first time. He's got his own individual problems with aoc. Understand that, you know, well, and if you start talking about, you Start talking about people dying. And, you know, if you, oh, it's the Obama. If you don't. These hyped up super subsidies from the pandemic, which, you know, are really. It's not the Affordable Care act, it's the unaffordable Care Act. Something needs to be done because premiums are skyrocketing, not because of the expiration of subsidies. But, you know, no one ever went broke. And I won't finish that statement. But you can't figure out what's going on here. I mean, that's a sad. That's a sad poll number.

[Steve Liesman]

I will say this, that I wrote.

[Joe Kernan]

But I will say about polls. You remember the person in Iowa that had to resign after she took that poll? She had, she had Kamala up three points and she lost by four.

[Steve Liesman]

And, you know, we were within.

[Andrew Ross Sorkin]

Your answer is your, your poll sucks.

[Joe Kernan]

No, we only get a poll when.

[Steve Liesman]

We actually, when we go the national.

[Joe Kernan]

We go to the whole national election, we get a real poll and we make it. You know, November is going to be interesting in Virginia.

[Rick Wurster]

We'll see.

[Joe Kernan]

Virginia.

[Steve Liesman]

That's where I wanted to bring the conversation. New Jersey. I have to admit, I'm not sure how much these political polls at this juncture matter. And let me explain why. The key to what may or may not happen in Congress is the extent to which congressional Republicans break with the president. There is no.

[Andrew Ross Sorkin]

Or Democrats break with Chuck Schumer.

[Joe Kernan]

That will never happen.

[Steve Liesman]

Let me leave that to the side.

[Joe Kernan]

Or Hakeem, that's fair enough. They're the Borg Collective.

[Steve Liesman]

But you. Even while these numbers look like they're going away from the president. And now let me just add one addendum here, which is that the Republican pollster pointed out, Joe, that these numbers for the president may not be that bad, considering we're in the middle of a shutdown. That's an asterisk worth putting out there. But. But if I don't see in these polls, because of the popularity of the president within his own party and the fact that there are so few contested congressional districts, I'm not sure how much it matters at this point that public opinion is moving away from the president when it comes to these issues, because I don't know that there's a leverage.

[Joe Kernan]

There was a poll yesterday, the previous one, I think it was Fox News, but ciatarelli was down 8, down 4 in the most recent poll. That's almost within the margin of error. You know, you had down in Virginia, you had the Spamber, whatever her name is. Unable to disassociate from those comments about killing someone's kids at a debate. So I don't know whether Winsome Sears has a better chance. We had Youngkin on course, but he's going to say, yeah, she's, you know, Caesars is going to win, but he's obviously got a horse in that game. But it should be interesting. And then I would just say, watch Mike Mc Johnson. They're picking up seats in the midterm, but that might be.

[Steve Liesman]

Well, on the statewide things, not the congressional districts, but on the statewide things, that's where the independents are going to matter. Independents vote economics. It's that simple.

[Andrew Ross Sorkin]

Steve, thank you.

[Joe Kernan]

Eamon Javers has some news out of Washington and he's actually on the phone, so it must be important. Hey, Eamon.

[Eamon Javers]

Yeah. Good morning, Joe. I can report to you exclusively today that Treasury Secretary Scott Besant and Chinese Vice Premier Huo Li Fang are going to speak by phone to discuss the ongoing trade negotiations between the United States and China. I don't have any other details here on the timing of this phone call today, you know, the content of it or what the next steps will be, but the fact that they are going to have this phone conversation is notable because earlier in the week, the Treasury Secretary declined to say specifically at his press conference that he would be speaking to his Chinese counterpart. He said that the Chinese are in town for the IMF gatherings, that there are certain dialogues going back and forth, but he didn't say specifically that he and Huli Feng would be speaking. Now, we can report to you that they will be speaking on the phone today. And the question is, you know, whether that represents some kind of a breakthrough in these, this flare up of tensions that we've seen over the past week, or at least maybe a platform where some kind of a breakthrough could happen. Guys. So that's, that's what we've got.

[Joe Kernan]

Amen. It's, you know, the market was down. It's, it actually turned around. And we were pointing out that that was purely based on, I think, some of the stuff that President Trump said on, on an interview this morning about China. I guess my question is could we expect something really positive from this, from this conversation between Bessant and the vice premier. Amen. Because last weekend when the president said everything's going to be fine, Scott Bessant really chafed at that Journal piece that said that they're just watching the stock market and that they, you know, they base their comments on what's going on in the stock market. And again, you could say that once again, the president today said, no, it's not. Those big tariffs are not going to last. Should we believe that or should we attribute it to watching what the market's doing? Is there real progress?

[Eamon Javers]

We don't know. Like I said, I don't know what's going to happen in this call. The fact of the call itself I think is notable, which is why I'm calling it into you guys. But, you know, we don't know what the content of that call is going to be. And obviously Besson did bristle at that piece. You know, the US Side of course, doesn't want it to look as if the Chinese side has more leverage in this negotiation than they do. And that's sort of what that Wall Street Journal piece was suggesting earlier this week. So it is very hard to say. And I think ultimately no large breakthrough can come until the two top leaders meet face to face. And what we're told is that that meeting is still on later this month in Asia. So I don't think a Besant Li Fang call will be the final thing, but it's certainly something that would have to happen before the final thing. If you get that.

[Joe Kernan]

Yeah, they don't want to be also don't want to be seen as they're basing these, you know, major global trade, you know, that the stock market is going to cause them to waver or change what they want to accomplish long term. They certainly don't want it to look like that. But the market does respond. Amen. Anyway, thank you.

[Rick Wurster]

Yep.

[Joe Kernan]

Absolutely.

[Becky Quick]

That does it for us today on Squawk Pod. And that's it for the week. Thank you for spending your week with us. Squawk podcast is hosted by Joe Kernan, Becky Quick and Andrew Ross Sorkin. Weekday mornings on cnbc starting at 6am Eastern. The smartest takes and highlights from that TV show are right here on Squawk Pod. Make sure you follow us wherever you're listening now so you never miss an episode. We'll meet you right back here on Monday. Have a great fall weekend.

[Rick Wurster]

We are clear. Thanks, guys.

[Andrew Ross Sorkin]

Thank you so much.

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