Raphael Stevens

Loretta Mester, president and chief executive officer of the Federal Reserve Bank of Cleveland.David Paul Morris | Bloomberg | Getty ImagesMarch’s strong job gains weren’t enough to convince Cleveland Federal Reserve President Loretta Mester that it’s time to change monetary policy.The central bank official told CNBC on Monday that she welcomed news that nonfarm payrolls rose 916,000 for the month, thanks to a surge in leisure and hospitality jobs as well as a jump in government and construction hiring.But the Fed remains committed to keeping rates low until the employment picture brightens considerably, she added.”I’m thinking that we’ll see a very strong second half of the year, but we’re still far from our policy goals,” Mester said during a “Closing Bell” interview. “It was great to see that report. We need more of them coming our way.”In addition to the big jobs gain, the unemployment rate also fell to 6%, its lowest of the Covid-19 pandemic era.Still, the Fed remains tethered to ultra-loose policy until the jobs market gets back not only to full employment but also sees inclusive gains across income, racial and gender lines. Central bank officials also have pledged to tolerate inflation that runs somewhat above their long-range 2% goal if it’s in the interest of making the economy whole again.Parts of the financial markets have shown concern over potential inflationary effects from the Fed’s loose policy, as well as trillions in government stimulus spending.But Mester said she is largely unconcerned by this year’s run-up in government bond yields. The 10-year Treasury note most recently traded around 1.71%, near its highest level since before the pandemic.”I think the higher bond yields are quite understandable in the context of the improvement in the economic outlook. The increase has been an orderly increase,” Mester said. “So I’m not concerned at this point with the rise in yields. I don’t think there’s anything for the Fed to react to.” More

People walk outside the AMC Empire 25 movie theater in Times Square as the city continues the re-opening efforts following restrictions imposed to slow the spread of coronavirus on December 23, 2020 in New York City.Noam Galai | Getty ImagesCheck out the companies making headlines in midday trading.Tesla – The electric vehicle company’s stock price gained 4.4% after Tesla’s delivery numbers for the first quarter topped Street expectations. The Elon Musk-led company said it delivered a total of 184,800 vehicles, while analysts were looking for 168,000 deliveries. Wedbush upgraded Tesla following the print, saying it’s a “paradigm changer.”AMC Entertainment – Shares of the movie theater company jumped 13.5% after B. Riley Securities upgraded the stock to a buy rating. “‘Godzilla vs. Kong’ destroys lingering concerns around theatrical window importance and demonstrates a solid path to resurgence,” the firm wrote in a note to clients. B. Riley also lifted its target on the stock to $13, which is 39% above where shares closed on Thursday. Carnival, Norwegian and Royal Caribbean— Cruise operators Carnival and Norwegian gained 4.7% and 7.2%, respectively, after the Centers for Disease Control and Prevention updated its guidance for resuming U.S. cruise ship sailings. Norwegian specifically asked the CDC if it can resume cruises from U.S. ports starting July 4. Royal Caribbean added 2.9%.Charles Schwab — The brokerage firm rose 2.7% to a 52-week high after Goldman Sachs put the stock on its Conviction List ahead of its earnings on April 15. The firm said Schwab should beat expectations driven by higher net interest margin and trading driven by strong retail engagement. Goldman also hiked its 12-month price target on Schwab to $77 per share from $67 per share.Roblox — Shares of the online gaming platform jumped 5.1% after Goldman Sachs initiated coverage on the stock with a buy rating. The Wall Street firm said Roblox’s creation and monetization of content allows it to outsource game development costs to its creators while retaining the economic upside. Roblox went public via a direct listing last month.GameStop — Shares of the video game retailer were volatile on Monday, ending the day down 2.4%. The company’s stock price dropped as much as 14% earlier in the day. The weakness came after GameStop said it may sell up to $1 billion worth of additional shares following a historic Reddit-fueled short squeeze. The company said it intends to use the proceeds to further accelerate its e-commerce transformation and to strengthen its balance sheet.Trimble — Shares of the digital construction and agriculture company popped 3.7% after Cathie Wood’s Ark Innovation purchased 453,214 of its shares. Based on Thursday’s closing price of around $83 per share, Ark’s purchase was worth north of $37.6 million.Ford, General Motors — The legacy auto stocks rose on Monday after Wells Fargo initiated coverage of the companies at overweight. Ford popped 4.4%, while GM’s shares rose 5.6%. Wells Fargo said in a pair of notes that Ford and GM were both poised to be leaders in the next generation of vehicles and transportation.Pinterest — The photo-sharing stock rose 2.3% after The New York Times reported that the company was considering purchasing social media company VSCO.Planet Fitness — Shares of the fitness chain climbed 1.7% after the Wall Street Journal reported that it plans to open up to 100 new locations in the coming fiscal year, adding to its current total of more than 2,100. Chief finance officer Tom Fitzgerald told the newspaper that Planet Fitness will also invest in its app.— with reporting from CNBC’s Pippa Stevens, Yun Li, Jesse Pound and Tom Franck. More

Shares of GameStop pared their double-digit losses in volatile trading that occurred Monday morning after the video game retailer said it may sell up to $1 billion worth of additional shares following a historic Reddit-fueled short squeeze.GameStop closed down 2.4% to $186.95 a share. Earlier in the day, the company saw its shares drop as much as 14% after it announced a stock offering of up to 3.5 million shares. The company said it intends to use the proceeds to further accelerate its e-commerce transformation as well as for general corporate purposes and further strengthening its balance sheet. The offering is viewed as a way for the retailer to capitalize on its recent jaw-dropping rally prompted by a band of Reddit-obsessed retail traders who targeted heavily shorted stocks. GameStop surged 400% in a week in January to above $400 a share amid the massive short squeeze.At the beginning of the year, GameStop, a brick-and-mortar retailer, traded at less than $20 a share.Zoom In IconArrows pointing outwardsGameStop is in the middle of a technology and e-commerce transition led by activist investor and board member Ryan Cohen, who was Chewy’s co-founder. The company hired former Amazon and Google executive Jenna Owens as its new chief operating officer.In a separate release on Monday, GameStop said its total global sales increased about 11% for the first nine weeks of fiscal 2021 from the same period a year ago. For the five-week period ended April 2, total global sales grew 18% year over year, the company said.”The company has yet to show financial success in an industry that is rapidly shifting to digital,” Joseph Feldman, analyst at Telsey Advisory Group, said in a note Monday. “We continue to believe the current valuation far exceeds our rosy fundamental expectations and projected multi-year benefits from the strategic transformation.”Two weeks ago, the company reported worse-than-expected fourth-quarter results that missed on the top and bottom lines. However, GameStop said its e-commerce sales jumped 175% last quarter and accounted for more than a third of its sales in the period. More

fstop123 | Getty ImagesThe Consumer Financial Protection Bureau proposed a rule Monday to prevent a wave of foreclosures this fall, when certain Covid-era protections for homeowners are set to expire.The proposal, which would need final approval, generally prohibits mortgage servicers from initiating foreclosure proceedings against delinquent borrowers until after Dec. 31, 2021.The rule would apply to all mortgages, both federal and private, on a principal residence, CFPB officials said Monday.The Covid pandemic has led to a stark rise in housing insecurity amid mass unemployment and income loss, stressing homeowners’ ability to pay monthly mortgages.More from Personal Finance:New batch of $1,400 stimulus checks includes ‘plus-up’ paymentsThe pandemic has upended personal finance education in schoolsWhat to know about tax credits in the American Rescue PlanThe federal government let borrowers suspend payments as part of forbearance programs and placed a moratorium on foreclosures. Forbearance doesn’t forgive missed mortgage payments; it only defers them.Loans placed in forbearance program early in the pandemic will reach the end of their forbearance period in September or October, the CFPB said.As many as 1.7 million borrowers are expected to exit forbearance programs around that time and be at risk of foreclosure — a figure that dwarfs anything mortgage servicers have seen, CFPB Acting Director Dave Uejio said Monday.Such a foreclosure cliff would disproportionately impact Black, Hispanic, Native American, rural and low-income homeowners, the CFPB said.”The CFPB is worried about a prospective cliff in the future,” said Patricia McCoy, a professor at Boston College Law School and the CFPB’s former assistant director for mortgage markets.”At some point, the cliff will happen,” she added. “Forbearance will go away, the foreclosure moratorium will go away, and 1.7 million borrowers are at instant risk of foreclosure.”The consumer agency proposed establishing a “temporary Covid-19 emergency pre-foreclosure review period” during which mortgage servicers can’t make an initial notice of foreclosure. This period would last through 2021.This comes on top of existing protections that disallow such a notice or filing until a borrower’s loan obligation is more than 120 days delinquent. Many homeowners in forbearance are behind more than 120 days, said Diane Thompson, senior advisor to the acting director at the CFPB.I don’t think anyone has ever before seen this many mortgages in forbearance at one time that are expected to exit forbearance all at one time.Diane Thompsonsenior advisor to the CFPB acting directorThe proposal would give three months of breathing room for servicers to complete a “loss mitigation” review for borrowers, McCoy said.In such a review, mortgage servicers evaluate borrowers’ financial situation and whether it makes sense to restructure their mortgage for more affordable payments or ultimately foreclose.Modifying a mortgage could make sense if a delinquent homeowner who had lost their job has since regained employment at a lower pay scale and could afford monthly mortgage payments at a lower price point, McCoy said.That may increasingly apply to more homeowners if the job market continues to improve in coming months, she said.Loss-mitigation evaluations take time — and servicers may not be able to respond adequately without the proposed three-month review period, Thompson said.”I don’t think anyone has ever before seen this many mortgages in forbearance at one time that are expected to exit forbearance all at one time,” she said. “This could put an enormous strain on servicer capacity.”The proposal would also give some concessions to servicers. It would give servicers flexibility to offer certain streamlined loan modification options with less paperwork from borrowers if the restructuring meets certain conditions.The CFPB is also “seriously considering” and seeking comment on certain exemptions from the proposed pre-foreclosure review period if a servicer has completed a loss mitigation review and the borrower is not eligible for any non-foreclosure option.It’s also considering the exemption if the servicer has made certain efforts to contact the borrower and the borrower has not responded to the outreach.Public comments on the rule are due by May 10. More