IN 2016 JACK LEW, America’s then treasury secretary, reflected on how his country had, over decades, “refined our capacity to apply sanctions effectively”. But he also gave a warning: overuse “could undermine our leadership position within the global economy, and the effectiveness of our sanctions themselves”.Listen to this storyYour browser does not support the element.Enjoy more audio and podcasts on More
In this articleKSUThe bidding battle for railroad operator Kansas City Southern demonstrates that investors can still find undervalued stocks in the market, CNBC’s Jim Cramer said Wednesday.The “Mad Money” host said he understands those who are concerned about a generally frothy environment, pointing to the exploding interest in the cryptocurrency dogecoin, NFTs and SPACs in recent months.”But every time I start to worry about the craziness, we get a reminder that maybe stocks are a lot less expensive than you think, at least in terms of what other companies are willing to pay for the whole enterprise even if you won’t,” Cramer said.Just take a look at the competing bids for Kansas City Southern, he said.On Tuesday, Canadian National Railway announced its offer to acquire Kansas City Southern in a deal that valued the company at $325 per share.That’s higher than a proposed transaction unveiled late last month from rival Canadian Pacific, which said then it had a stock-and-cash deal to combine with Kansas City Southern that valued the Missouri-based firm at $275 per share.While Canadian Pacific has criticized Canadian Nation’s “unsolicited offer,” Cramer said the situation offers lessons for equity investors as they analyze the market.A Kansas City Southern (KSC) Railway locomotive passes through Knoche Yard in Kansas City, Missouri, on Tuesday, Jan. 7, 2020.Whitney Curtis | Bloomberg | Getty ImagesKansas City Southern, with its exposure to Mexico and the country’s auto industry, has a really important business that appears to have been overlooked, Cramer said.”The market clearly had this one completely wrong — otherwise you wouldn’t have gotten not one, but two huge takeover bids,” Cramer said. “That tells you Kansas City Southern was massively undervalued before the first offer from Canadian Pacific. And yeah, I think the other railroad operators have a better handle on what KSU is worth than Wall Street does.”It’s important to not extrapolate too much, Cramer cautioned. “That doesn’t mean every company is a bargain. Some of them are too big to be acquired, some of them are truly too expensive,” he said, while adding antitrust concerns will stand in the way of other deals.At the same time, he contended, “there are plenty of companies like Kansas City Southern out there.””This deal, you’ve got to think about it the next time you hear someone whining about how stocks are too pricey,” Cramer said. “Sometimes companies in the same industry are willing to pay a lot more for a stock than the market is. I regard that as a very encouraging sign, so don’t be discouraged when so many people insist on buying things that you think may have no value at all.”DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More
Market bull John Stoltzfus sees investment opportunities across the board as earnings season kicks into high gear.Stoltzfus, chief investment strategist at Oppenheimer Asset Management, considers trading activity a lot more sensible than critics think — particularly when it comes to 2020’s big winner.”We see technology as ubiquitous. It serves both the business community as well as the consumer in their private lives,” he told CNBC’s “Trading Nation” on Wednesday. “It is extremely dynamic right now.”Stoltzfus highlights tech’s role in the battle against Covid-19 as an example.”Just think all that happened related to the creation of vaccines that without modern technology would not have been capable in warp-speed time,” said Stoltzfus.He doubts rising interest rates will dramatically alter tech’s upward momentum this year. Stoltzfus expects the Federal Reserve’s easy-money policies, globalization and business competition will help keep rates at historical lows.”It [tech] is a counter-inflationary trend that is embraced both by business as well as shoppers,” said Stoltzfus, who has worked on Wall Street for almost four decades.As tech investors were licking their wounds in early March, Stoltzfus told “Trading Nation” the rollover was a major buying opportunity. Since that appearance, the tech-heavy Nasdaq is up more than 4%.Stoltzfus acknowledges tech is vulnerable to temporary pullbacks. He cites investor appetite to rebalance portfolios frequently. But he believes tech will be resilient due to the bullish backdrop and demand that justifies higher valuations.”Investors are willing to pay more for each dollar of projected growth going forward because interest rates are still so close to record lows,” he added. “Analysts have been ramping up their expectations in terms of projected earnings, and they’ve been doing it on good fundamental reasons.”Despite his optimism surrounding tech, Stoltzfus believes it’s crucial for long-term investors to be diversified and have a clear time horizon and the ability to be patient.”It pays to be diversified, owning both value and growth stocks,” said Stoltzfus. “Earnings are improving. Revenues are ticking higher. We have been proponents of a broad diversified approach to equities since September of last year.”In addition to tech, his favorite S&P 500 groups include consumer discretionary, financials and industrials.”Some of it has to do with the reopening of the economy,” Stoltzfus said. “Other just has to do with trends that are longer-term both cyclical as well as secular in nature.”Disclaimer More
The Revolut logo displayed on a smartphone and a PC screen.Pavlo Gonchar | SOPA Images | LightRocket via Getty ImagesLONDON — Revolut, an online banking start-up based in the U.K., is planning an expansion into India.The London-based company announced Thursday that it had tapped Paroma Chatterjee, a former executive for Indian start-ups Flipkart, Via.com and LendingKart, to lead its operations in the country.Revolut will invest about $25 million into the Indian market and aims to launch its app there by 2022, a spokesman for the firm told CNBC. The company, worth $5.5 billion in its most recent funding round, has raised more than $900 million from investors to date.”We’re looking forward to transforming the way people in India access and manage their money as we bring our products and services to more people around the world,” said Revolut CEO and co-founder Nik Storonsky.”India is a core market in our expansion strategy with a huge supply of talent, and we’re excited to tap into that talent pool to help Revolut go from strength to strength.”Revolut said it would hire 300 employees in India. It’s so far recruited heads of operations and legal and aims to fill a multitude of other roles in human resources, marketing and compliance.Global expansionWith a population of 1.3 billion people and growing acceptance of digital payments, India would be a huge market for Revolut.Founded in 2015, the company started out with a travel-focused service for cheap currency exchange transactions but has since rolled out further features including stock trading and cryptocurrencies.It’s one of several digital banks in Europe aiming to take on large incumbents with branchless banking. Others include U.K. peer Monzo, German rival N26 and U.S. start-up Chime.Revolut, which has already expanded into Asia in countries like Japan and Singapore, is hoping to tap into India’s fast-growing remittances market. The company is in talks with the Reserve Bank of India and a number of local banks to secure the licenses and partnerships required make the launch happen.An India launch would also see Revolut compete with SoftBank-backed fintech Paytm, which is used by many Indians to make payments by scanning QR codes.Revolut says its aim is to become a global bank, and even has ambitions to launch in China, a highly-competitive fintech market. The firm is reportedly in talks to raise fresh funds in a round that could value it as much as $15 billion, as it ramps up its international expansion strategy.The company has found mixed success in North America. It launched in the U.S. last year, has racked up 150,000 clients since and is now seeking a banking charter in the country.But Revolut subsequently announced in February that it would withdraw from Canada 18 months after initially trialling its service there.Revolut, which lost £106.5 million in 2019, recently told CNBC that it had managed to break even in November. The firm is expected to release its 2020 financial results before the end of spring. More
In this articleNFLXCNBC’s Jim Cramer came to Netflix’s defense Wednesday after shares of the streaming giant sold off on its first-quarter report.The stock plunged more than 7% since the report came out after Tuesday’s close, despite the company beating estimates on the top and bottom lines. Investors were disappointed by softer-than-expected subscriber growth and an uncertain future in the short term, Cramer noted.”After the incredible performance this company’s given us over the years, you’ve gotta remember that doubting Netflix has been a mistake every step of the way,” Cramer said on “Mad Money.”Netflix reported having 208 million paid subscribers at the end of March, a 14% increase from a year ago but short of the 210 million figure the company expected.Despite the dip in subscriber growth, CFO Spencer Neumann said on the conference call that “business remains healthy,” engagement is increasing and customer turnover is declining.”To me, that says ‘please, don’t panic’ … I think they’ll find a way to jumpstart new sign-ups with must-see content, whether they create it themselves or have to license it from someone else,” Cramer said. “In other words, I am giving Netflix credit for something that doesn’t exist yet, something that will make us feel compelled to subscribe despite all the competition.”Earlier Wednesday, Cramer said Netflix stock could potentially drop to $490 a share, though he remains bullish in the long run. Netflix shares finished at $508.90 on Wednesday, down 14% from their peak trade in January.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More
In this articleMRVLMarvell Technology officially completed its $10 billion acquisition of Inphi, expanding its reach in data centers and 5G network infrastructure.The deal closed on Wednesday, about one month after China approved the acquisition, Marvell CEO Matt Murphy told CNBC’s Jim Cramer.”We’re thrilled to have gotten approval from China back in March… I think ahead of a lot of people’s expectations,” Murphy said in an interview that aired Wednesday on “Mad Money.” “It’s a very clean deal and there was overwhelming support from all of our customers globally, including in China.”Marvell’s semiconductors compete with Broadcom’s products that run data through copper-based cables. Inphi’s chips transfer data over fiber-optic cables and its products are used by data-dependent companies like Amazon, Alphabet’s Google and Facebook.Murphy said the tie-up makes it more viable for growth in the key end markets of 5G, cloud and automotive.Marvell also shifted its domicile to Delaware, a state that offers tax advantages to corporations, from Bermuda as part of the acquisition.Dr. Ford Tamer, who served as president and chief executive officer of Inphi for almost 10 years, joins Marvell’s board as a director.Since the merger was announced in late October, Marvell shares have climbed 19% through Wednesday’s close.Disclosure: Cramer’s charitable trust owns shares of Marvell Technology, Amazon, Alphabet, Broadcom and Facebook.Questions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – InstagramQuestions, comments, suggestions for the “Mad Money” website? [email protected] More
In this articleCMGChipotle Mexican Grill is hanging on to recent gains in digital sales as its online orders overtook those made inside its restaurants for the first time.First-quarter earnings released Wednesday topped Wall Street’s estimates. Next quarter, Chipotle will face off against last year’s weakest quarter. That means same-store sales growth is expected to surge as much as 30%.Shares of the company were up less than 1% in extended trading.Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:Earnings per share: $5.36 adjusted vs. $4.89 expectedRevenue: $1.74 billion vs. $1.74 billion expectedChipotle reported fiscal first-quarter net income of $127.1 million, or $4.45 per share, up from $76.4 million, or $2.70 per share, a year earlier. Costs related to corporate restructuring, restaurant asset impairment and closures and Covid-19 dragged down earnings by 91 cents per share.Excluding those items, the company earned $5.36 per share, topping the $4.89 per share expected by analysts surveyed by Refinitiv.Net sales rose 23.4% to $1.74 billion, meeting expectations. Same-store sales climbed 17.2% compared with the same time a year ago and 21% from 2019 levels. The company credited new menu items, online orders and government stimulus checks, which put more spending money in consumers’ hands. During the quarter, Chipotle released cauliflower rice, which cost an extra $2, and quesadillas, a digital exclusive.CEO Brian Niccol said that about 1-in-10 customers ordered the quesadillas, helping the company see its highest number of new customers in March. Niccol also said that customers are treating the quesadillas as a new eating occasion.The successful March launch of quesadillas may have been a factor in Chipotle’s digital sales growth. Online orders more than doubled during the quarter and accounted for 50.1% of total sales.Digital pickup orders are more profitable for the company than delivery or in-person orders. CFO Jack Hartung said that the company raised delivery prices by 4% earlier in April to offset the higher cost of delivery. During the fourth quarter, it increased menu prices for delivery orders by an average of 13%.”We haven’t seen a large amount of resistance from that, so I think that customers understand that a premium convenience experience has a premium cost associated with it,” said Chief Technology Officer Curt Garner in an interview.At the same time, executives said that customers are returning to Chipotle’s dining rooms as economies reopen. Niccol said that dining room customers differ from those who order online, so they aren’t cannibalizing sales from each other.Chipotle opened 40 new locations in the quarter, more than half of which included drive-thru lanes to pick up digital orders. It closed five restaurants.The company declined to provide a sales growth outlook for the rest of 2021, citing the uncertainty caused by the pandemic. It expects to open about 200 new locations this year, assuming there are not significant delays related to the crisis. Niccol also said the company is planning several market tests for new menu items later this year. More
In this articleJPMJamie Dimon, CEO of JP Morgan Chase, appears on CNBC’s Squawk Box at the 2020 World Economic Forum in Davos, Switzerland on Jan. 22nd, 2020.Adam Galica | CNBCJPMorgan Chase CEO Jamie Dimon said Wednesday that “justice was served” after a jury found ex- Minneapolis police officer Derek Chauvin guilty on all three charges, including second-degree murder, for the killing of George Floyd.“Justice was served, it’s the beginning of a long path to fix some of these things,” Dimon said at the start of a JPMorgan event for clients with head of wealth management Kristin Lemkau.“We haven’t solved this racial inequality problem for hundreds of years, and in fact in some decades it’s gone backwards,” Dimon said. “We can acknowledge, in my view, that America is a shining light on a hill, it’s an unbelievable country” but that there are flaws that need addressing, he said.Dimon pointed to JPMorgan’s $30 billion commitment to help close America’s racial wealth gap, including $8 billion in mortgages to Black and Latino households. The firm’s wealth management division recently said it will hire 300 more Black or Latino advisors over the next five years.During the wide-ranging discussion, Dimon reiterated his bullish view on the economy and markets, but he acknowledged that markets had priced in a “goldilocks” scenario, and if inflation exceeded expectations or the Federal Reserve acts more aggressively to rein in support, a correction could occur.Another risk: there is “always a chance that we have another violent, deadly virus” that current vaccines don’t work against. In that scenario, “all bets are off.”Earlier this month, Dimon said that a U.S. economic boom fueled by deficit spending and effective vaccines could “easily run into 2023,” and that the strong economy may justify elevated valuations in the stock market.JPMorgan is pushing to capture more revenue from managing assets, and has seen record retail trading volumes and account sign-ups through its Chase app in the first quarter, according to a bank spokeswoman.Last week, JPMorgan exceeded expectations for first-quarter profit on strong trading results and the release of $5.2 billion it had previously set aside for loan losses.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
