Raphael Stevens

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    Stocks making the biggest moves midday: Global Payments, Moderna, Activision Blizzard and more

    Boxes containing the Moderna COVID-19 vaccine are prepared to be shipped at the McKesson distribution center in Olive Branch, Mississippi, December 20, 2020.
    Paul Sancya | Pool | Reuters

    Check out the companies making headlines in midday trading Monday.
    Global Payments — Shares of the company sank 9.2% despite a better-than-expected earnings report. The payments technology company reported adjusted quarterly profit of $2.07 per share, beating a Refinitiv forecast by 3 cents. Revenue also topped analyst forecasts. The company also issued full-year revenue guidance that was roughly in line with analyst expectations.

    Vertex Pharmaceuticals — The biotech company’s shares fell 4.1% after the Food and Drug Administration placed a study of Vertex’s treatment for type 1 diabetes on hold, after determining there is insufficient information to support dose escalation with the product.
    Moderna – Shares of Moderna jumped 5.7% after the company said its Covid-19 vaccine for children under 6 years old will be ready for review in June by a Food and Drug Administration panel. Moderna applied for emergency use authorization for the treatment last week.
    Moody’s Corp — The risk assessment firm dropped 4.9% after the company cut its full-year earnings guidance. The company now expects full-year earnings to range between $10.75 and $11.25 per share excluding items. Previous guidance projected between $12.40 and $12.90 per share. Analysts estimated $11.92, according to FactSet.
    Align Technology — Shares of the medical device maker jumped 6.5% after the company announced a $200 million accelerated stock repurchase program.
    EPAM Systems — Shares of the software company EPAM Systems gained 8.7% after Piper Sandler upgraded them to overweight from neutral, citing its program checks.

    Johnson Controls — Shares rose 2.8% after Bank of America initiated coverage of the HVAC producer with a buy rating. Johnson Controls International has 42% upside from here because of the trend toward decarbonization, specifically in the construction of smart buildings, according to Bank of America.
    Activision Blizzard — Shares of Activision Blizzard rose 3.3% after Warren Buffett said Berkshire Hathaway has been upping its stake in the video game publisher and owns about 9.5% as it bets that Microsoft will close its proposed acquisition of the company.
    Amazon — Amazon lost 3% before turning slightly positive, following sharp losses from last week, when it reported a big net loss for the most-recent quarter and a issued bleak financial forecast. Wedbush Securities also removed the stock from its Best Ideas list.
    — CNBC’s Sarah Min, Samantha Subin and Hannah Miao contributed reporting.

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    Chrysler parent Stellantis plans $2.8 billion overhaul of two Canadian factories to build EVs

    Stellantis will retool two Ontario assembly plants to build vehicles on new platforms that will allow it to offer fully electric versions of its upcoming models.
    The company also plans to add a battery lab to its Ontario-based research and development center.
    The retooled factories are to be up and running by 2025.

    Flag with the Stellantis logo on the front entrance to FCA’s Mirafiori plant on January 18, 2021 in Turin, Italy.
    Stefano Guidi | Getty Images

    Auto giant Stellantis will invest about $2.8 billion to overhaul two Canadian factories to build fully electric and hybrid vehicles, the company said on Monday, as part of its $35 billion global commitment to electrification and related initiatives.
    The revamp will allow the automaker to build such versions of several of its upcoming models using new “multi-energy” architectures. The company also will add a battery lab to its existing research and development facility in Windsor, Ontario, creating 650 new jobs.

    Retooling of the company’s Windsor assembly plant is expected to begin in 2023, with a revamp and modernization of a second plant in Brampton, Ontario, to follow the next year. Both revamped factories are to be up and running by 2025, Stellantis said.
    The investments announced on Monday are part of a broader electrification overhaul revealed earlier this year. Stellantis aims to sell 5 million EVs annually by 2030, a total that will include all of the vehicles it sells in Europe and half of the passenger cars and light-duty trucks it sells in North America.
    Most global automakers have announced similar investment plans as they move to compete in the EV market currently dominated by Tesla.
    Stellantis didn’t say which models the revamped factories will be building, though it did say it expects both plants to add a third shift after the overhauls, meaning they will be working nearly around the clock.
    Currently, the Windsor plant builds the Chrysler Pacifica, Pacifica Hybrid and Voyager minivans, while the Brampton factory makes the Chrysler 300 and Dodge Charger sedans and the Dodge Challenger coupe.
    Stellantis and Korean battery giant LG Energy Solution announced in March that they will together spend $4.1 billion to build a major EV battery factory in Windsor. That investment is expected to create 2,500 new jobs, the companies said at the time.

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    Starbucks union claims CEO Schultz violated labor law by 'threatening to withhold' benefits

    The union representing Starbucks baristas is taking aim at the coffee giant’s interim chief executive, Howard Schultz.
    The union alleges in a letter obtained by CNBC that Schultz’s recent comments about an improved benefits plan amounted to illegal threats and had a “chilling effect” on impending union votes.
    Starbucks defended the comments, saying it would need to respect the bargaining process to extend new benefits to unionized workers.

    The union representing Starbucks baristas is taking aim at the coffee giant’s interim chief executive, Howard Schultz, alleging his recent comments about an improved benefits plan amounted to illegal threats and had a “chilling effect” on impending union votes.
    The union, Starbucks Workers United, claims in an April 22 filing with the National Labor Relations Board that Starbucks, via Schultz’s comments, violated the National Labor Relations Act and asks the agency to issue a complaint in the union’s favor.

    Schultz last month told U.S. store leaders that the company was reviewing the coffee chain’s benefits program, but that the new benefits legally couldn’t be extended to stores that have voted to unionize without separately negotiated contracts for unionized workers. One of Schultz’s first moves as returning CEO was to suspend the company’s share buyback program to invest in benefits for workers.

    Starbucks Chairman and CEO Howard Schultz speaks at the Annual Meeting of Shareholders in Seattle, Washington on March 22, 2017.
    Jason Redmond | AFP | Getty Images

    In a letter from Starbucks Workers United’s counsel to the NLRB, obtained by CNBC, the union claims that Schultz’s comments “threatening to withhold” the benefits had an “immediate and profound chilling effect on organizing campaigns nationwide.”
    It offers workers to testify that Starbucks baristas read about the comments in media reports shortly before voting and some pulled support “last minute” as a result, costing a union win at one location in Virginia.
    The letter also claims the comments have been “parroted” by store managers and district managers, which has interfered with efforts to organize, or had a coercive effect.
    Starbucks defended the comments made by Schultz, saying it would need to respect the bargaining process to extend new benefits to unionized workers.

    “This is not a matter of Howard’s choice or opinion; this is the law. Any new benefit cannot be unilaterally given to stores that voted to unionize during collective bargaining. Howard remains focused on moving quickly to build the future of Starbucks with partners together, side-by-side,” Starbucks spokesman Reggie Borges said in a statement to CNBC.
    Starbucks Workers United has filed more than 80 claims against the company for allegedly violating federal labor law, most recently notching a win with the NLRB petitioning for injunctive relief and immediate reinstatement of three Starbucks workers who were dismissed after seeking to organize.
    Starbucks also last month filed its first charges against the union, claiming it intimidated partners and broke federal labor law.
    Starbucks Workers United statement to CNBC that Schultz’s comments around the benefits review are “just another desperate attempt to prevent Starbucks partners from exercising our right to have a union and the right to collective bargaining.”
    “This is an extension of other threats that Howard Schultz and their management team have been making. Hopefully at some point Howard recognizes you cannot have a ‘progressive company’ and be the poster child for union busting,” the union said.
    So far more than 200 cafes nationwide have petitioned the NLRB to vote on unionizing with Starbucks Workers United, and over 40 have voted in favor of organizing.
    Starbucks has maintained its position that its relationship with partners is best served without a union.

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    Nearly risk-free I bonds to deliver a record 9.62% interest for the next six months

    FA Playbook

    I bonds, an inflation-protected and nearly risk-free investment, will pay 9.62% through October 2022, the U.S. Department of the Treasury announced Monday.
    “It’s a milestone for I bonds,” said Ken Tumin, founder and editor of DepositAccounts.com.
    However, there are purchase limits, you can’t tap the money for one year and there’s a penalty for selling within five years.

    Marko Geber | DigitalVision | Getty Images

    If you’re eyeing ways to fight swelling prices, I bonds, an inflation-protected and nearly risk-free asset, may now be even more appealing.
    I bonds are paying a 9.62% annual rate through October 2022, the highest yield since being introduced in 1998, the U.S. Department of the Treasury announced Monday.

    The hike is based on the March consumer price index data, with annual inflation growing by 8.5%, the U.S. Department of Labor reported.

    More from FA Playbook:

    Here’s a look at other stories impacting the financial advisor business.

    “It’s a milestone for I bonds,” said Ken Tumin, founder and editor of DepositAccounts.com, who tracks these assets closely.
    I bonds, backed by the U.S. government, don’t lose value and earn monthly interest based on two parts, a fixed rate and a variable rate, changing every six months.
    While the variable rate is 9.62% through October 2022, the fixed rate remains at 0%, according to the Treasury.

    The I bond is a wonderful place for people to put the money they don’t need right now.

    Christopher Flis
    founder of Resilient Asset Management

    The fixed rate stays the same for the 30-year life of the bond, meaning someone who purchased I bonds with a higher fixed rate may beat inflation for at least six months, Tumin said.

    Although the fixed rate has been 0% since May 2020, it peaked at 3.6% for six months starting in May 2000. You can see a history of both rates here.

    How to buy I bonds

    There are only two ways to purchase these assets: online through TreasuryDirect, limited to $10,000 per calendar year for individuals or using your federal tax refund to buy an extra $5,000 in paper I bonds. There are redemption details for each one here.
    You may also buy more I bonds through businesses, trusts or estates. For example, a married couple with separate businesses may each purchase $10,000 per company, plus $10,000 each as individuals, totaling $40,000.

    Drawbacks of I bonds

    One of the downsides of I bonds is you can’t redeem them for at least one year, said certified financial planner George Gagliardi, founder of Coromandel Wealth Management in Lexington, Massachusetts. And if you cash them in within five years, you’ll lose the previous three months of interest directly before your sale.
    “I think it’s decent, but just like anything else, nothing is free,” he said. 
    Another possible drawback is lower future returns. The variable portion of I bond rates may adjust downward every six months, and you may prefer higher-paying assets elsewhere, Gagliardi said. But there’s only a one-year commitment with a three-month interest penalty if you decide to cash out early.

    Still, I bonds may be worth considering for assets beyond your emergency fund, said Christopher Flis, a CFP and founder of Resilient Asset Management in Memphis, Tennessee.
    “I think that the I bond is a wonderful place for people to put the money they don’t need right now,” he said, such as an alternative to a one-year certificate of deposit.
    As of May 2, the average savings account yield is under 1%, and most one-year CDs are paying less than 1.5%, according to DepositAccounts.
    “But I bonds aren’t a replacement for long-term funds,” Flis added. More

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    About 150,000 people in Ukraine are using SpaceX's Starlink internet service daily, government official says

    Elon Musk’s SpaceX continues to expand its Starlink satellite internet network in Ukraine.
    Ukraine digital minister Mykhailo Fedorov wrote in a tweet that “rough data” about Starlink shows that about 150,000 people in the country use the service each day.
    Starlink’s network of about 2,000 satellites in low Earth orbit is designed to deliver high-speed internet anywhere.

    A shipment of SpaceX’s Starlink satellite antennas, also known as terminals, arriving in Ukraine.
    Fedorov Mykhailo on Twitter

    Elon Musk’s SpaceX is continuing to expand its Starlink satellite internet network in besieged Ukraine, with a government official saying about 150,000 people in the country use the service each day.
    Digital minister Mykhailo Fedorov wrote in a tweet Monday that “rough data” about Starlink shows there are “around 150K” daily active users.

    “This is crucial support for Ukraine’s infrastructure and restoring the destroyed territories,” Fedorov said.
    Starlink’s network of about 2,000 satellites in low Earth orbit is designed to deliver high-speed internet anywhere. SpaceX said in March that there are about 250,000 total Starlink subscribers, which includes both consumers and enterprise customers.
    Notably, the daily active user count is different than the number of subscribers or Starlink terminals in Ukraine, as multiple users would be able to connect to each terminal.
    There are more than 10,000 Starlink terminals — also known as dishes or antenna — providing service to Ukraine, NBC News reported last week. They have come from a variety of sources. In April, the United States Agency for International Development told CNBC that “a range of stakeholders” contributed over $15 million worth in hardware and transportation services to deliver 5,000 Starlink terminals to Ukraine, with USAID directly procuring 1,333 terminals from SpaceX.
    Fedorov caught Musk’s attention via a tweet shortly after Russia invaded Ukraine, with the government official sending a plea for assistance after a suspected cyberattack disrupted previous satellite internet service while the Russian military targeted the country’s communications infrastructure.

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    Biden kicks off $3 billion plan to boost battery production for electric vehicles

    The Biden administration on Monday announced it will begin a $3.1 billion plan to boost domestic manufacturing of batteries, in a broader effort to shift the country away from gas-powered cars to electric vehicles.
    The funding will support grants aimed at building, retooling or expanding manufacturing of batteries and battery components, as well as establishing battery recycling facilities.
    The grants will be funded through President Joe Biden’s $1 trillion bipartisan infrastructure law, which includes more than $7 billion to bolster the country’s battery supply chain.

    U.S. President Joe Biden delivers remarks about climate change and protecting national forests on Earth Day at Seward Park in Seattle, Washington, April 22, 2022.
    Jonathan Ernst | Reuters

    The Biden administration on Monday announced it will begin a $3.1 billion plan to boost domestic manufacturing of batteries, in a broader effort to shift the country away from gas-powered cars to electric vehicles.
    The electrification of the transportation sector will be critical to mitigating human-caused climate change. The transportation sector is one of the largest contributors to U.S. greenhouse gas emissions, representing roughly one-third of emissions each year.

    The funding will support grants aimed at building, retooling or expanding manufacturing of batteries and battery components, as well as establishing battery recycling facilities, according to the Department of Energy. The grants will be funded through President Joe Biden’s $1 trillion bipartisan infrastructure law, which includes more than $7 billion to bolster the country’s battery supply chain.
    The move comes after the president in April invoked the Defense Production Act to encourage domestic production of minerals required to make batteries for EVs and long-term energy storage. That order could help companies receive federal funding for feasibility studies on projects that extract materials for EV production, such as lithium, nickel, cobalt, graphite and manganese.
    “These made-in-America batteries are going to help reduce emissions and create opportunities across the country,” White House National Climate Advisor Gina McCarthy said during a call with reporters on Monday.
    The White House, which has set a goal of 50% electric vehicle sales by 2030, is also working to construct a national network of EV charging stations and to create tax incentives for consumers who buy EVs. The administration has also pledged to replace its federal fleet of 600,000 cars and trucks to electric power by 2035.
    The U.S. is the world’s third-largest market for EVs, behind China and Europe. Just 4% of new cars sold in the U.S. last year were electric, according to market research company Canalys.
    “Positioning the United States front and center in meeting the growing demand for advanced batteries is how we boost our competitiveness and electrify our transportation system,” U.S. Secretary of Energy Jennifer M. Granholm said in a statement on Monday.

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    Goldman Sachs CEO David Solomon says in-person attendance tops 50% after return-to-office push

    In-person attendance at Goldman’s U.S. offices is between 50% and 60%, down from a pre-Covid figure of roughly 80%, Solomon told CNBC on Monday.
    “We want people to generally come together,” Solomon said. “It’s going to take some time, you know; behavior shifts take time generally, and I think over the course of the next couple years, our organization will generally come together.”

    Goldman Sachs CEO David Solomon’s campaign to summon more of his employees back to the office is a work in progress that could take years, he said.
    In-person attendance at U.S. offices is between 50% and 60%, down from a pre-Covid figure of roughly 80%, Solomon told CNBC’s David Faber on Monday. That figure is higher in European offices and 100% in Asian cities that aren’t on lockdown, Solomon added.

    “We want people to generally come together,” Solomon said. “It’s going to take some time, you know; behavior shifts take time generally, and I think over the course of the next couple years, our organization will generally come together.”
    Solomon has been one of Wall Street’s leading voices in trying to bring his people back to the office; he’s called the remote work era “an aberration” that he would correct as soon as possible.
    While rivals CEOs at JPMorgan Chase and Morgan Stanley have made similar comments, the ongoing push and pull at Goldman has gotten the most attention. Last year, the investment bank set up an array of food trucks outside its Manhattan headquarters and gave employees free meals to entice them to return.
    But the figures cited by Solomon are not much higher than the 50% attendance reported for the bank’s New York headquarters back in February, when the firm made a renewed push after the latest wave of Covid subsided.
    Fully half of the bank’s roughly 50,000-person workforce are in their 20s, Solomon said. He cited a McKinsey report stating that Gen-Z workers crave more mentorship, which presumably happens more in an office environment than in remote settings.

    Media reports last month cited Solomon’s efforts to have workers return five days a week, and subsequent reports indicated some junior bankers were unhappy with their attendance being tracked by management. However, a person with knowledge of the bank said those reports were overly simplistic, focused on a handful of hard-to-verify complaints and that employees have more flexibility than is portrayed.
    “You waged a public campaign, it would seem, to have people show up five days a week,” Faber said. “It feels like you lost.”
    Solomon said Monday that his campaign was “never as binary” as reports made it seem.
    “I have always had a view that’s been rooted in flexibility and taking care of our employees,” he said. “It’s been portrayed sometimes as much more dogmatic than it is.”

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    Citadel's flagship hedge fund rallied 7% in April during turmoil, brings 2022 returns to nearly 13%

    Ken Griffin, Founder and CEO, Citadel
    Mike Blake | Reuters

    Billionaire investor Ken Griffin’s hedge fund wowed the industry with big outperformance in April, overcoming a brutal market rout and extreme volatility.
    Citadel’s multistrategy flagship fund Wellington rallied 7.5% last month, bringing its year-to-date performance to 12.7%, according to a person familiar with the returns.

    Griffin’s other funds also outperformed significantly, with tactical trading and global fixed income funds up 3% each and its equity fund jumping more than 4% in April, the person said.

    Arrows pointing outwards

    The standout performance came as the overall market suffered a steep sell-off on concerns about the Federal Reserve’s aggressive tightening, Russia’s invasion of Ukraine as well as surging inflation at a 40-year-high. The S&P 500 lost 8.8% in April, its worst month since March 2020 at the onset of the Covid pandemic.
    Technology stocks were the epicenter of the April sell-off amid high interest rates and supply chain issues stemming from Covid-19. The Nasdaq Composite fell about 13.3% in April, its worst monthly performance since October 2008 in the throes of the financial crisis.
    All five core investment strategies at Citadel — equities, commodities, global fixed income and macro, credit, and quantitative strategies — registered gains last month and are in the green for 2022, the person said.
    Investors have been seeking downside protection amidst the volatility spike triggered by fears of inflation and rising rates as well as geopolitical tensions. The hedge fund industry attracted its largest inflows in seven years during the first quarter.
    Citadel’s asset under management exceeded $50 billion as of the start of May, the person said.

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