Raphael Stevens

Elf complexion sponges arranged in Germantown, New York, July 17, 2023.
Gabby Jones | Bloomberg | Getty Images

Check out the companies making headlines after hours.
SolarEdge Technologies — The solar stock dropped 11% in extended trading. SolarEdge missed revenue expectations in its second quarter, posting $991 million compared to the expected $992 million from analysts polled by Refinitiv. The company beat earnings estimates, posting an adjusted $2.62 per share, better than the $2.52 per-share estimate.

Advanced Micro Devices — The chip stock jumped nearly 4% after Advanced Micro Devices reported better-than-expected quarterly results. AMD reported second-quarter adjusted earnings of 58 cents per share on revenue of $5.36 billion. Analysts polled by Refinitiv expected per-share earnings of 57 cents on revenue of $5.31 billion.
Freshworks — Freshworks advanced nearly 14% after reporting second-quarter earnings that exceeded expectations on the top and bottom lines. The software company reported adjusted earnings of 7 cents per share on revenue of $145 million. Analysts polled by Refinitiv had expected per-share earnings of 2 cents on revenue of $141 million.
Starbucks — Starbucks declined 1% after reporting a revenue miss. The coffee chain reported fiscal third-quarter revenue of $9.17 billion, lower than the $9.29 billion estimated by analysts polled by Refinitiv. Starbucks did post adjusted per-share earnings of $1.00, better than the 95 cent estimate.
Virgin Galactic — Virgin Galactic shares dipped 3% after the space tourism company posted a revenue miss in its second quarter. It reported revenue of $1.9 million, lower than the consensus estimate of $2.7 million, according to Refinitiv. It did beat on earnings expectations. Virgin Galactic posted a loss per share of 46 cents, better than the estimated loss of 51 cents per share.
Pinterest — Pinterest slipped 0.5% after the bell despite posting a top-and-bottom line beat. The image-sharing platform reported adjusted earnings of 21 cents a share on revenues of $708 million, per Refinitiv.

e.l.f. Beauty — The beauty stock surged 15% after e.l.f. Beauty topped analysts’ expectations in its most recent quarter. e.l.f. Beauty posted first-quarter adjusted earnings of $1.10 per share on revenue of $216 million. Analysts polled by Refinitiv had expected per-share earnings of 56 cents per share on revenue of $184 million.
Match Group — Shares surged 11% after Match Group exceeded analysts’ second-quarter expectations. The dating app company posted earnings of 48 cents per share on revenue of $830 million. Analysts polled by Refinitiv had expected per-share earnings of 45 cents on revenue of $811 million.
Devon Energy — The stock fell about 2% after Devon Energy missed revenue expectations in its second quarter. Devon Energy posted revenues of $3.45 billion, lower than the estimated $3.74 billion from analysts polled by Refinitiv. Earnings came in line with estimates. Devon reported adjusted earnings of $1.18 per share.
Frontier Group Holdings — Frontier Group rose more than 3% after reporting earnings that beat on the top and bottom lines. The airline company reported second-quarter adjusted earnings of 31 cents per share on revenue of $967 million. Analysts polled by Refinitiv expected per-share earnings of 28 cents on revenue of $966 million.
Electronic Arts — Electronic Arts slid 3.5% after its fiscal first-quarter revenue missed analysts’ expectations. The video game company reported $1.58 billion, lower than the consensus estimate of $1.59 billion, according to Refinitiv. It posted earnings per share of $1.47, topping the forecasted $1.02 per share.
Caesars Entertainment — Caesars Entertainment fell more than 2% in extended trading. The casino company reported second-quarter revenue of $2.88 billion, beating the estimate of $2.87 billion, according to Refinitiv. The earnings per share figure was not comparable.
— CNBC’s Samantha Subin contributed to this report. More

The Rivian name is shown on one of their new electric SUV vehicles in San Diego, U.S., December 16, 2022.
Mike Blake | Reuters

Check out the companies making headlines in midday trading.
Toyota Motor — Shares rose 2.1%, hitting a new 52-week high, after the company reported a revenue beat in the fiscal first quarter. Toyota posted operating income of 1.12 million yen ($7.84 billion), which was 94% higher than a year prior. Analysts polled by Refinitiv had expected 9.878 trillion yen.

related investing news

Coinbase – Shares of the crypto exchange dropped 4.5% after a federal judge said some crypto assets are securities regardless of the context in which they are sold. The opinion came from the same Manhattan federal court that handed down a controversial ruling in the Securities and Exchange’s suit against Ripple in July, which said the opposite in the case of Ripple’s XRP token and gave investors optimism that Coinbase might prevail in its own battle with the SEC.
ResMed — The health technology stock advanced 1.3% after RBC upgraded shares to outperform, citing an appealing risk-reward profile.
Gap, American Eagle— Shares of Gap were up 3.1% after Barclays upgraded the stock to overweight from equal weight. Analyst Adrienne Yih assigned a $13 price target to the company, which suggests shares could rally 26.2% from Monday’s close. Barclays also upgraded retailer American Eagle, which gained 4.2%.
DoorDash — Shares tumbled 4.6% ahead of the company’s quarterly earnings announcement Wednesday after the bell.
ZoomInfo Technologies – Shares tumbled almost 27% after the data company reported a weak revenue outlook for the third quarter in its financial update late Monday. ZoomInfo forecast $309 million to $312 million in revenue for the quarter. Analysts expect $326 million, according to Refinitiv. The company also missed revenue expectations for the most recent quarter.

JetBlue Airways – The airline saw shares fell more than 8% after it cut its 2023 outlook and warned of a potential loss in the current quarter, pointing to challenges from a shift toward international travel and the the end of its partnership with American Airlines in the Northeast. Earnings and revenue for the second quarter were in line with analysts’ estimates.
Zebra Technologies — The stock slid more than 17% after the company posted disappointing results for the second quarter. While earnings topped analyst estimates, revenue came below expectations. The company’s third-quarter earnings guidance of 60 cents to $1 also missed analyst estimates of $3.76 earnings per share from FactSet. 
Norwegian Cruise Line Holdings, Carnival — Shares of Norwegian Cruise Line plunged 12% Tuesday. While the company posted an earnings and revenue beat in the second quarter, its third-quarter guidance missed analyst estimates. Carnival’s shares also shed 5.7% in tandem.
Rockwell Automation — The industrial automation company’s stock fell 7.5% after a disappointing earnings report. The company reported $3.01 earnings per share and revenue of $2.24 billion. Analysts had estimated $3.18 earnings per share on $2.34 billion in revenue, according to FactSet. 
Monolithic Power Systems — The semiconductor-based electronics company’s stock lost 1.6% following its earnings announcement Monday after the bell. Despite reporting better-than-expected earnings and revenue in the second quarter, its third-quarter revenue guidance was lower than analysts were expecting.
Molson Coors Beverage — Shares fell 4.6l% after the brewing and beverage company reported mixed quarterly results before the bell. Its second-quarter revenue of $3.27 billion fell short of the $3.29 billion expected from analysts polled by StreetAccount. Adjusted earnings per share, however, topped expectations.
Leidos Holdings — The defense solutions company’s shares rallied 6.9% after its second-quarter results topped analyst estimates. The company posted $1.80 earnings per share on $3.84 billion in revenue. Analysts polled by FactSet had expected $1.57 earnings per share on $3.72 billion in revenue. 
Eaton Corporation — The power management company’s shares increased 6.6% after beating analyst expectations on both earnings and revenue in the second quarter. The company’s full-year earnings guidance also came above estimates. 
Global Payments — Shares jumped 9.5% following the company’s second-quarter earnings announcement. Global Payments reported $2.62 adjusted earnings per share on $2.2 billion in adjusted net revenue. Meanwhile, analysts had estimated $2.59 earnings per share on $2.19 billion in revenue, according to FactSet. 
— CNBC’s Alexander Harring, Yun Li, Pia Singh, Tanaya Macheel, Michelle Fox and Sarah Min contributed reporting More

Stockmarkets, the economist Paul Samuelson once quipped, have predicted nine out of the last five recessions. Today they stand accused of crying wolf yet again. Pessimism seized trading floors around the world in 2022, as asset prices plunged, consumers howled and recessions seemed all but inevitable. Yet so far Germany is the only big economy to have actually experienced one—and a mild one at that. In a growing number of countries, it is now easier to imagine a “soft landing”, in which central bankers succeed in quelling inflation without quashing growth. Markets, accordingly, have spent months in party mode. Taking the summer lull as a chance to reflect on the year so far, here are some of the things investors have learned.The Fed was serious…Interest-rate expectations began the year in an odd place. The Federal Reserve had spent the previous nine months tightening its monetary policy at the quickest pace since the 1980s. And yet investors remained stubbornly unconvinced of the central bank’s hawkishness. At the start of 2023, market prices implied that rates would peak below 5% in the first half of the year, then the Fed would start cutting. The central bank’s officials, in contrast, thought rates would finish the year above 5% and that cuts would not follow until 2024.The officials eventually prevailed. By continuing to raise rates even during a miniature banking crisis (see below), the Fed at last convinced investors it was serious about curbing inflation. The market now expects the Fed’s benchmark rate to finish the year at 5.4%, only marginally below the central bankers’ own median projection. That is a big win for a central bank whose earlier, flat-footed reaction to rising prices had damaged its credibility.…yet borrowers are mostly weathering the stormDuring the cheap-money years, the prospect of sharply higher borrowing costs sometimes seemed like the abominable snowman: terrifying but hard to believe in. The snowman’s arrival has thus been a double surprise. Higher interest rates have proved all-too-real but not-so-scary. Since the start of 2022, the average interest rate on an index of the riskiest (or “junk”) debt owed by American firms has risen from 4.4% to 8.1%. Few, though, have gone broke. The default rate for high-yield borrowers has risen over the past 12 months, but only to around 3%. That is much lower than in previous times of stress. After the global financial crisis of 2007-09, for instance, the default rate rose above 14%.This might just mean that the worst is yet to come. Many firms are still running down cash buffers built up during the pandemic and relying on dirt-cheap debt fixed before rates started rising. Yet there is reason for hope. Interest-coverage ratios for junk borrowers, which compare profits to interest costs, are close to their healthiest level in 20 years. Rising rates might make life more difficult for borrowers, but they have not yet made it dangerous.Not every bank failure means a return to 2008In the panic-stricken weeks that followed the implosion of Silicon Valley Bank, a mid-tier American lender, on March 10th, events started to feel horribly familiar. The collapse was followed by runs on other regional banks (Signature Bank and First Republic Bank also buckled) and, seemingly, by global contagion. Credit Suisse, a 167-year-old Swiss investment bank, was forced into a shotgun marriage with its long-time rival, ubs. At one point it looked as if Deutsche Bank, a German lender, was also teetering.Mercifully a full-blown financial crisis was averted. Since First Republic’s failure on May 1st, no more banks have fallen. Stockmarkets shrugged off the damage within a matter of weeks, although the kbw index of American banking shares is still down by about 20% since the start of March. Fears of a long-lasting credit crunch have not come true.Yet this happy outcome was far from costless. America’s bank failures were stemmed by a vast, improvised bail-out package from the Fed. One implication is that even mid-sized lenders are now deemed “too big to fail”. This could encourage such banks to indulge in reckless risk-taking, under the assumption that the central bank will patch them up if it goes wrong. The forced takeover of Credit Suisse (on which ubs shareholders were not given a vote) bypassed a painstakingly drawn-up “resolution” plan detailing how regulators are supposed to deal with a failing bank. Officials swear by such rules in peacetime, then forswear them in a crisis. One of the oldest problems in finance still lacks a widely accepted solution.Stock investors are betting big on big tech—againLast year was a humbling time for investors in America’s tech giants. These firms began 2022 looking positively unassailable: just five firms (Alphabet, Amazon, Apple, Microsoft and Tesla) made up nearly a quarter of the value of the s&p 500 index. But rising interest rates hobbled them. Over the course of the year the same five firms fell in value by 38%, while the rest of the index dropped by just 15%.Now the behemoths are back. Joined by two others, Meta and Nvidia, the “magnificent seven” dominated America’s stockmarket returns in the first half of this year. Their share prices soared so much that, by July, they accounted for more than 60% of the value of the nasdaq 100 index, prompting Nasdaq to scale back their weights to prevent the index from becoming top-heavy. This big tech boom reflects investors’ enormous enthusiasm for artificial intelligence, and their more recent conviction that the biggest firms are best placed to capitalise on it.An inverted yield curve does not spell immediate doomThe stockmarket rally means that it is now bond investors who find themselves predicting a recession that has yet to arrive. Yields on long-dated bonds typically exceed those on short-dated ones, compensating longer-term lenders for the greater risks they face. But since last October, the yield curve has been “inverted”: short-term rates have been above long-term ones (see chart). This is financial markets’ surest signal of impending recession. The thinking is roughly as follows. If short-term rates are high, it is presumably because the Fed has tightened monetary policy to slow the economy and curb inflation. And if long-term rates are low, it suggests the Fed will eventually succeed, inducing a recession that will require it to cut interest rates in the more distant future. This inversion (measured by the difference between ten-year and three-month Treasury yields) had only happened eight times previously in the past 50 years. Each occasion was followed by recession. Sure enough, when the latest inversion started in October, the s&p 500 reached a new low for the year.Since then, however, both the economy and the stockmarket have seemingly defied gravity. That hardly makes it time to relax: something else may yet break before inflation has fallen enough for the Fed to start cutting rates. But there is also a growing possibility that a seemingly foolproof indicator has misfired. In a year of surprises, that would be the best one of all. ■ More

Stockmarkets, the economist Paul Samuelson once quipped, have predicted nine out of the last five recessions. Today they stand accused of crying wolf yet again. Pessimism seized trading floors around the world in 2022, as asset prices plunged, consumers howled and recessions seemed all but inevitable. Yet so far Germany is the only big economy to have actually experienced one—and a mild one at that. In a growing number of countries, it is now easier to imagine a “soft landing”, in which central bankers succeed in quelling inflation without quashing growth. Markets, accordingly, have spent months in party mode. Taking the summer lull as a chance to reflect on the year so far, here are some of the things investors have learned.The Fed was serious…Interest-rate expectations began the year in an odd place. The Federal Reserve had spent the previous nine months tightening its monetary policy at the quickest pace since the 1980s. And yet investors remained stubbornly unconvinced of the central bank’s hawkishness. At the start of 2023, market prices implied that rates would peak below 5% in the first half of the year, then the Fed would start cutting. The central bank’s officials, in contrast, thought rates would finish the year above 5% and that cuts would not follow until 2024.The officials eventually prevailed. By continuing to raise rates even during a miniature banking crisis (see below), the Fed at last convinced investors it was serious about curbing inflation. The market now expects the Fed’s benchmark rate to finish the year at 5.4%, only marginally below the central bankers’ own median projection. That is a big win for a central bank whose earlier, flat-footed reaction to rising prices had damaged its credibility.…yet borrowers are mostly weathering the stormDuring the cheap-money years, the prospect of sharply higher borrowing costs sometimes seemed like the abominable snowman: terrifying but hard to believe in. The snowman’s arrival has thus been a double surprise. Higher interest rates have proved all-too-real but not-so-scary. Since the start of 2022, the average interest rate on an index of the riskiest (or “junk”) debt owed by American firms has risen from 4.4% to 8.1%. Few, though, have gone broke. The default rate for high-yield borrowers has risen over the past 12 months, but only to around 3%. That is much lower than in previous times of stress. After the global financial crisis of 2007-09, for instance, the default rate rose above 14%.This might just mean that the worst is yet to come. Many firms are still running down cash buffers built up during the pandemic and relying on dirt-cheap debt fixed before rates started rising. Yet there is reason for hope. Interest-coverage ratios for junk borrowers, which compare profits to interest costs, are close to their healthiest level in 20 years. Rising rates might make life more difficult for borrowers, but they have not yet made it dangerous.Not every bank failure means a return to 2008In the panic-stricken weeks that followed the implosion of Silicon Valley Bank, a mid-tier American lender, on March 10th, events started to feel horribly familiar. The collapse was followed by runs on other regional banks (Signature Bank and First Republic Bank also buckled) and, seemingly, by global contagion. Credit Suisse, a 167-year-old Swiss investment bank, was forced into a shotgun marriage with its long-time rival, ubs. At one point it looked as if Deutsche Bank, a German lender, was also teetering.Mercifully a full-blown financial crisis was averted. Since First Republic’s failure on May 1st, no more banks have fallen. Stockmarkets shrugged off the damage within a matter of weeks, although the kbw index of American banking shares is still down by about 20% since the start of March. Fears of a long-lasting credit crunch have not come true.Yet this happy outcome was far from costless. America’s bank failures were stemmed by a vast, improvised bail-out package from the Fed. One implication is that even mid-sized lenders are now deemed “too big to fail”. This could encourage such banks to indulge in reckless risk-taking, under the assumption that the central bank will patch them up if it goes wrong. The forced takeover of Credit Suisse (on which ubs shareholders were not given a vote) bypassed a painstakingly drawn-up “resolution” plan detailing how regulators are supposed to deal with a failing bank. Officials swear by such rules in peacetime, then forswear them in a crisis. One of the oldest problems in finance still lacks a widely accepted solution.Stock investors are betting big on big tech—againLast year was a humbling time for investors in America’s tech giants. These firms began 2022 looking positively unassailable: just five firms (Alphabet, Amazon, Apple, Microsoft and Tesla) made up nearly a quarter of the value of the s&p 500 index. But rising interest rates hobbled them. Over the course of the year the same five firms fell in value by 38%, while the rest of the index dropped by just 15%.Now the behemoths are back. Joined by two others, Meta and Nvidia, the “magnificent seven” dominated America’s stockmarket returns in the first half of this year. Their share prices soared so much that, by July, they accounted for more than 60% of the value of the nasdaq 100 index, prompting Nasdaq to scale back their weights to prevent the index from becoming top-heavy. This big tech boom reflects investors’ enormous enthusiasm for artificial intelligence, and their more recent conviction that the biggest firms are best placed to capitalise on it.An inverted yield curve does not spell immediate doomThe stockmarket rally means that it is now bond investors who find themselves predicting a recession that has yet to arrive. Yields on long-dated bonds typically exceed those on short-dated ones, compensating longer-term lenders for the greater risks they face. But since last October, the yield curve has been “inverted”: short-term rates have been above long-term ones (see chart). This is financial markets’ surest signal of impending recession. The thinking is roughly as follows. If short-term rates are high, it is presumably because the Fed has tightened monetary policy to slow the economy and curb inflation. And if long-term rates are low, it suggests the Fed will eventually succeed, inducing a recession that will require it to cut interest rates in the more distant future. This inversion (measured by the difference between ten-year and three-month Treasury yields) had only happened eight times previously in the past 50 years. Each occasion was followed by recession. Sure enough, when the latest inversion started in October, the s&p 500 reached a new low for the year.Since then, however, both the economy and the stockmarket have seemingly defied gravity. That hardly makes it time to relax: something else may yet break before inflation has fallen enough for the Fed to start cutting rates. But there is also a growing possibility that a seemingly foolproof indicator has misfired. In a year of surprises, that would be the best one of all. ■For more expert analysis of the biggest stories in economics, finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter. More