Raphael Stevens

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    Market bull predicts calmer June but delivers a summer swoon warning

    Investors may get relief from volatility this month.According to CFRA Research’s Sam Stovall, Wall Street just entered a historically calm month.”June really is sort of a lackluster month in terms of average returns [and] in terms of frequency of advance,” the firm’s chief investment strategist told CNBC’s “Trading Nation” on Tuesday.But Stovall is urging investors to embrace the dullness. He warns June may set the market up for a July swoon.For the year, Stovall sees the “zigzag” pattern as the historical market trend most likely to repeat itself this year. His call is tied to the market’s very strong start to the year and jitters surrounding inflation.”What history says is that these strong starts are typically concluded with favorable finishes,” said Stovall. “In the meantime, however, we do go through a bit of volatility as the market adjusts — trying to figure out whether it should continue with the advance or start to pull back.”Stovall, who has been on Wall Street since 1985, is one of the market’s biggest bulls. His S&P 500 12-month rolling target of 4,620 implies a 10% gain from current levels and new record highs.”We use history. We use fundamentals. We even use technicals to come up with this number,” he said.Stovall sees a mixture of robust earnings and strong GDP growth as major bullish catalysts.”In the end, investors will conclude that equities remain the asset class of choice,” Stovall said.The S&P 500 was virtually flat on the first day of June trading, closing at 4,202.04. The index is up almost 12% so far this year.Disclaimer More

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    As oil demand picks up, OPEC’s discipline will be tested

    “THE DEMAND picture has shown clear signs of improvement.” So declared Abdulaziz bin Salman, the energy minister of Saudi Arabia, at a virtual gathering of the Organisation of the Petroleum Exporting Countries (OPEC) on June 1st. The cartel and its allies, chief among them Russia, have been squeezed badly by the covid-induced recession, which cut global demand for oil from nearly 100m barrels a day (bpd) in 2019 to 91m last year. In a frantic effort to prevent a price collapse, OPEC+, as the group calls itself, agreed to cut output in early 2020. The attempt failed to stop the price dipping below $30 a barrel (see chart).Now the cartel believes that oil demand is at last on a firm path to recovery. Ministers agreed to boost supply by roughly 450,000 bpd in July, part of its plan to restore nearly half of the output cuts made last year. Saudi Arabia, which boasts the lowest production costs and the most spare capacity in the cartel, and often acts as a swing producer, indicated it would also soon reverse a unilateral output cut of 1m bpd made earlier this year. In response, the price of the benchmark Brent crude shot above $70 a barrel on June 1st for the first time in two years. Several indicators confirm the view that oil demand, a proxy for economic growth, is taking off. Oil inventories, which shot up last year, are falling sharply. The International Energy Agency, an official body, estimates that global oil demand may recover to pre-pandemic levels within a year. In America, demand for petrol surged during the Memorial Day weekend at the end of May, a robust start to its summer “driving season”.OPEC’s celebrations may yet prove premature. One drag on prices could be Iran, where output has been curbed by American sanctions. Speculation that negotiations to revive a deal on Iran’s controversial nuclear programme might soon make progress proved unfounded. The delay means extra Iranian oil is not about to suddenly flood the market. But if a deal is somehow struck this summer, analysts reckon that Iranian exports could rise by 1m bpd or more by the end of the year.Furthermore, though tight inventories and high demand push up prices in the near term, those very same prices will tempt America’s shale-oil producers, currently restraining investment, to splash out. Saudi Arabia might also find it harder to keep OPEC disciplined, observes David Fyfe of Petroleum Argus, an industry journal. Members tend to adhere to agreed cuts when demand is collapsing, but rising prices encourage cheating. A bigger worry, says Paul Sheldon of S&P Global Platts, an analytics firm, is “an unexpected demand setback” in 2022. America and China are back to their gas-guzzling ways thanks to the spread of vaccines; Europe is not far behind. But energy demand in India and Latin America, where the pandemic still rages, remains fragile. Mr Fyfe points out that long-haul transportation is another source of weakness.The gravest threat to the cartel comes from technological change. There are widely divergent views on how quickly demand for the black stuff will give way to greener fuels, even among oil majors. But purveyors of petroleum will almost certainly find a carbon-constrained world tough going. Edward Morse of Citigroup, a bank, makes a subtler point about innovation. Oil may surge to $80 a barrel in the short term, but that is hardly the start of a “new secular bull run”: as the global cost of finding and developing oil has fallen by over half in the past five years to $10-15 per barrel, he reckons fair value for crude is $40-55. The “clumsy cartel”, as Morris Adelman, an energy economist, once dubbed OPEC, is in for a rocky ride.■ More

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    NY attorney general James demands Kodak CEO testify on alleged insider trading

    In this articleKODKWorkers at the KODAK billboard at Times Square, March 2004.Avalon | Hulton Archive | Getty ImagesThe New York Attorney General on Tuesday asked a court to force Kodak’s CEO to publicly testify amid an investigation over allegations of insider trading.The petition, filed with the New York County State Supreme Court, claims that chief executive Jim Continenza bought shares of his company’s stock while Kodak was in non-public talks with the White House over a loan worth hundreds of millions of dollars.The tentative loan, announced as the pandemic took hold, was intended to help Kodak pivot to chemical production to meet industry needs.”As millions of New Yorkers and Americans across this nation lost their jobs and were waiting for unemployment checks, Kodak’s CEO was using insider information to illegally trade company stock,” Attorney General Letitia James said in a statement.”We are asking the court to order Mr. Continenza to testify in open court, so the facts can be exposed before the American people,” the statement added.Specifically, the attorney general is focused on Continenza’s purchase of more than 46,000 Kodak shares early last summer. In July, trading activity picked up in shares of the company ahead of the public announcement of the loan.Following the announcement, the stock shot higher, gaining more than 300% during a single session.Kodak responded to the attorney general’s petition on Tuesday saying it had previously offered documents.”Prior to this filing, the Company repeatedly offered to make witnesses available and the Attorney General repeatedly declined. It is telling that she has now chosen to publicly seek this order asking for the very testimony in which she previously had no interest,” Kodak said in a statement.Kodak added that Continenza’s purchase took place when he was not in possession of material non-public information, and said that the purchase was part of a pre-approved trading accordance that met compliance standards. The company said this information was later verified by an independent investigation.Kodak’s stock advanced nearly 5.5% on Tuesday. Over the last year shares are up 187%.Become a smarter investor with CNBC Pro. Get stock picks, analyst calls, exclusive interviews and access to CNBC TV. Sign up to start a free trial today More

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    E-Waste, shell company linked to $100 million New Jersey deli, announces reverse merger

    In this articleHWINEWSTHometown Deli, Paulsboro, N.J.Mike Calia | CNBCE-Waste, a shell company linked to a nearly $100 million company that owns just one New Jersey deli, announced Tuesday it will enter into a reverse merger with a privately held electric vehicle corporation called EZRAider Global Inc.E-Waste, which itself has a sky-high market capitalization of $110 million despite having no business operations, had been marketed along with deli company Hometown International for such a reverse merger or similar transaction.”This demonstrates that there is a credible process in place for [E-Waste] to complete a merger with an appropriate private company,” said a person with knowledge of the situation who declined to be named. “The merger will be an efficient and robust manner for EZRAider to access the U.S. capital markets.”E-Waste’s mailing address is in a North Carolina office building and is the same address as a company connected to Peter Coker Sr., whose son, Peter Coker Jr., is chairman and CEO of Hometown International. The deli owner until recently held a $150,000 promissory note from E-Waste.EZRAider described itself in an April news release as a proprietary electric vehicle platform that comes in 2-, 4- and 6-wheel-drive options “when combined with the Ecart trailer.””It was originally developed in Israel for military troop mobility in the field and has since become available to governments and consumer markets in numerous countries, including the US,” EZRaider said in its release at the time.”When paired with accessories, EZRaider vehicles are competitive for a wide variety of uses including urban commuting & errands, agriculture, off-road work and adventure, search and rescue, fire, security, military, enhanced mobility for disabled persons, golf, tourism, hunting, fishing, camping, facilities maintenance, micro-deliveries and more.”In March, EZRaider Global Inc. said it had obtained a $50 million investment commitment from Luxembourg-based Global Emerging Markets Group to take the company public.A Securities and Exchange Commission filing by E-Waste on Tuesday noted GEM’s involvement in the reverse merger.CNBC in April detailed the fact that E-Waste before fall 2020 was registered at the Manhattan office of GEM Group. That article also noted that as of early 2020 four of the five biggest shareholders of E-Waste were, in order of size of shares held: the Valletta, Malta-based GEM Global Yield Fund LLC SCS, and three individuals whose address was that of something called GEM Advisors, located on Madison Avenue in New York.At the time, E-Waste’s president, treasurer and secretary was a man named Peter de Svastich, who is a managing director at the GEM Group.GEM, which had been E-Waste’s controlling shareholder, sold 6 million restricted shares of the company’s stock last year for $30,000 to Global Equity Limited — a Macau, China-based entity.Global Equity Limited is also the biggest single shareholder of record in Hometown International, the deli company.E-Waste’s filing Tuesday with the SEC detailed the series of transactions that will underlay its reverse merger with EZRaider.CNBC PoliticsRead more of CNBC’s politics coverage:Biden unveiling effort to narrow racial wealth gapSupreme Court rejects Johnson & Johnson’s appeal of $2.1 billion penaltyBig Pharma targeted Biden’s support for easing Covid vaccine patent protectionsThe company said another company, the privately held EZ Global, will acquire a limited liability company called EZ Raider LLC, which will include the rights to acquire a fourth company, based in Israel, called DS Raider Ltd.”EZ Global will enter into a reverse merger with E-Waste and a newly-formed acquisition subsidiary of E-Waste,” the SEC filing said.”All the outstanding shares of capital stock of EZ Global will be transferred to E-Waste in exchange for shares of E-Waste Common Stock.”The filing said that after the reverse merger, E-Waste will conduct a private placement offering of its securities on the terms described below to complete the acquisition of DS Israel by EZ Global.The transaction is expected to be completed on or before June 30.”Following the completion of all necessary business and legal due diligence after the execution of this Term Sheet, EZ Global will offer and sell a minimum of … $2,000,000.00 … and a maximum of …$3,000,000 … principal amount of EZ Global’s senior secured convertible notes,” the filing said. It added that those “will be sold to a limited number of sophisticated investors and/or non-US persons.”According to the filing, “GEM Global Yield Fund LLC SCS or its affiliate, agent, or assign (‘GEM’) has entered into a purchase agreement with EZ Global to purchase up to $50,000,000 of EZ Global’s issued and outstanding shares of registered and freely tradeable common stock issued pursuant to the Securities Act for a period of thirty-six months.”Both E-Waste and Hometown International, whose stock trades on the over-the-counter Pink market, disavowed weeks ago their preposterously high market capitalizations in SEC filings, which noted that their share price did not reflect the value of their businesses.Hometown International in mid-April drew widespread attention when hedge fund manager David Einhorn, in a client letter, noted that it recently had a more than $100 million market capitalization despite owning only the small deli in Paulsboro, New Jersey.Since then, CNBC has detailed how the tangled history of arrests, lawsuits and regulatory sanctions involving a number of people connected to Hometown and E-Waste, among them Coker Sr., his business partner, a lawyer involved in the creation of the deli company, and others.E-Waste’s former president, John Rollo, last month resigned from that post, which he had assumed after a career that included winning Grammy Awards as a music sound engineer and working as a patient transporter at a New Jersey hospital.Rollo was replaced by 31-year-old Elliot Mermel, a California resident whose business background includes founding a company that raised crickets as human food and a partnership in a cannabis-related business with Paul Pierce, the former Boston Celtics superstar basketball player.Shortly after Rollo quit, Hometown International’s shareholder fired the deli company CEO, Paul Morina, who is the principal and head wrestling coach at Paulsboro High School, and replaced him with Coker Jr.A person familiar with the situation confirmed to CNBC that the moves to replace the executives were part of ongoing housecleaning effort at both companies. The person insisted on anonymity in order to speak freely about the circumstances of the moves. More

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    World economic and health leaders call for $50 billion from wealthy nations to help stop Covid pandemic

    People wearing protective face masks wait to receive a dose of COVISHIELD, a coronavirus disease (COVID-19) vaccine manufactured by Serum Institute of India, at a vaccination centre in New Delhi, India, May 4, 2021.Adnan Abidi | ReutersGlobal economic and health leaders called on the world’s wealthier nations to provide $50 billion in funding to accelerate Covid-19 vaccine distribution across the planet and help end the pandemic.The heads of the International Monetary Fund, World Bank, World Health Organization and World Trade Organization said Tuesday that nations need to act before the virus has a chance to spread throughout unvaccinated countries and evolve into more dangerous new variants.The group, which published an op-ed in newspapers across the globe this week, said there was a two-track pandemic brewing with richer nations vaccinating large portions of their populations while poorer countries that have received less than 1% of the vaccines administered so far “being left behind.””Even as some affluent countries are already discussing the rollout of booster shots to their populations, the vast majority of people in developing countries — even front-line health workers — have still not received their first shot,” according to the op-ed signed by IMF Managing Director Kristalina Georgieva, WHO Director-General Tedros Adhanom Ghebreyesus, World Bank President David Malpass and WTO Director-General Ngozi Okonjo-Iweala.”By now it has become abundantly clear there will be no broad-based recovery without an end to the health crisis. Access to vaccination is key to both,” they wrote, noting that $50 billion will generate some $9 trillion in additional global output by 2025 by accelerating an end to the pandemic.The money would go toward increasing manufacturing capacity, supply and delivery, which would accelerate the equitable distribution of diagnostics, oxygen, treatments, medical supplies and vaccines.”Cooperation on trade is also needed to ensure free cross-border flows and increasing supplies of raw materials and finished vaccines,” they said.They said the money is “a relatively modest investment by governments in comparison to the trillions spent on national stimulus plans and lost trillions in foregone economic output.””WTO members can and should deliver on all three fronts,” Okonjo-Iweala said. The trade group currently has members from 159 countries around the world.The WHO said last week that Africa needs at least 20 million AstraZeneca Covid vaccine doses within the next six weeks to get the second round of shots to people who’ve already received the first. The continent has received only 1% of all of vaccines administered globally and needs another 200 million doses of any cleared Covid-19 vaccines to vaccinate 10% of the continent by September.”More than 700 million vaccine doses have been administered globally, but over 87% have gone to high income or upper middle-income countries, while low income countries have received just 0.2%,” the WHO’s director-general, Tedros Adhanom, said in a briefing last month.CNBC Health & Science Read CNBC’s latest coverage of the Covid pandemic:U.S. begins study testing mix-and-match Covid vaccine booster shots Moderna applies for full FDA approval of its Covid vaccine World economic leaders call for $50 billion from wealthy nations to help stop Covid pandemicMore than 50% of Americans have at least one Covid vaccine shot as U.S. cases fall further Vietnam detects hybrid of Indian and UK Covid-19 variants Many countries have had to rely on COVAX for their doses, a global collaboration of organizations like the WHO and UNICEF, to speed the production and delivery of Covid-19 vaccines across the world.The WHO and its COVAX partners hope to vaccinate 30% of the population in all countries by the end of 2021, if they get enough funding.”This can reach even 40% through other agreements and surge investment, and at least 60 percent by the first half of 2022,” the agency leaders said. More

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    Stocks making the biggest moves after hours: Zoom Video, Hewlett Packard Enterprise, Ambarella & more

    In this article.CRBQXHPEZoom founder Eric Yuan poses in front of the Nasdaq building as the screen shows the logo of the video-conferencing software company Zoom after the opening bell ceremony on April 18, 2019 in New York City.Kena Betancur | Getty ImagesCheck out the companies making headlines after the bell on Tuesday: Zoom Video — Shares of the video-messaging platform gained 2.7% after the company beat top- and bottom-line estimates during the first quarter. Zoom earned $1.32 per share on an adjusted basis, on revenue of $956 million. Analysts surveyed by Refinitiv were expecting the company to earn 99 cents per share on $906 million in revenue.Hewlett Packard Enterprise — Shares of HPE slid 2.1% despite the company’s second-quarter results exceeding expectations. HPE earned 46 cents per share during the period, excluding items, which was ahead of the 42-cent profit analysts surveyed by Refinitiv were expecting. Revenue came in at $6.7 billion, also ahead of the expected $6.62 billion.Ambarella — The camera equipment maker’s stock advanced 4.3% following the company’s first-quarter results. Ambarella earned 23 cents per share excluding items, and reported $70.1 million in revenue. According to estimates from FactSet, the Street was expecting 17 cents on $68.6 million in revenue.Scotts Miracle-Gro — Shares of the lawn company climbed less than 1% after the company raised its full-year guidance. In a statement, the company said the boosted outlook is mainly due to stronger growth in the U.S. More

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    U.S. air travel reaches pandemic high as peak season kicks off

    Travelers wait in line at a Transportation Security Administration (TSA) screening checkpoint at Orlando International Airport on the Friday before Memorial Day. As more and more people have received the COVID-19 vaccine, American Automobile Association (AAA) is predicting more than 37 million Americans will travel more than 50 miles this Memorial Day weekend, many for the first time since the pandemic began.Paul Hennessy | LightRocket | Getty ImagesAir traveler volumes hit the highest levels since before the coronavirus pandemic began during Memorial Day weekend, the latest sign of recovery for the sector.The Transportation Security Administration screened an average of 1.78 million people from Friday through Monday, hitting a peak of 1.96 million on Friday. Those volumes are more than six times higher than a year ago, but still 22% below Memorial Day weekend in 2019.The surge in travelers is pushing up the price of vacations, including airfare, hotel rates and car rental prices. Domestic leisure fares are near 2019 levels, airline executives have said.Zoom In IconArrows pointing outwardsSeveral airline stocks rose Tuesday after the TSA released the latest data. American Airlines and United Airlines each gained about 2%. Budget airlines Spirit and Allegiant each gained 3% while the S&P 500 fell less than 0.1%. More

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    Zoom will stay relevant despite the economy's massive reopening, two traders suggest

    In this articleZMOne of the ultimate stay-at-home plays is out with a second-quarter beat.Zoom Video earned $1.32 adjusted earnings per share versus the Refinitiv estimate of 99 cents. It earned $959 million in revenue compared with the $906 million estimate.Two traders think the information tech company will stay relevant as the economy continues its massive reopening and people restart their work commutes. However, that doesn’t mean it’s time to buy.”How are they going to monetize with such stiff competition? How are they going to monetize the future and what it looks like? What do the subscriptions look like?” Michael Bapis, managing director at Vios Advisors at Rockefeller Capital, said on CNBC’s “Trading Nation” on Tuesday. “I would also wait to see how they set up earnings for the next one, two quarters. So, I don’t think it’s something you need to jump into right now, but definitely video workplace is here to stay.”TradingAnalysis.com’s founder and CEO Todd Gordon is also optimistic on Zoom’s future. But he’s cautious near-term and wouldn’t buy shares at these levels.”Don’t sell it at this point. I think a reentry is possible. It’s a great company. They’ve got great customer service. They’ve got good margins,” said Gordon.Zoom shares are up more than 60% over the past 12 months. However, they’re off 20% over the past three months.Shares were down about 1% in after-hours trading Tuesday.One major factor Gordon is watching in Zoom’s quarterly report is small business attrition.”I think small businesses who can otherwise meet in person will start to drop off,” Gordon said.Disclaimer More