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    State Street is cutting fees on 10 funds worth more than $70 billion combined

    Signage outside the State Street Corp. Global Advisors Global Advisors building in Boston, Massachusetts, U.S., on Tuesday, Jan. 18, 2022.
    Scott Eisen | Bloomberg | Getty Images

    Asset management giant State Street is reducing the fees investors pay for a group of core ETFs, the company announced Tuesday.
    The changes impact roughly half of the SPDR Portfolio ETF suite, including funds focused on U.S. stocks, foreign stocks and fixed income. Combined, the 10 funds hold about $77 billion in assets, according to FactSet. The changes take effect Aug. 1.

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    12 hours ago

    The biggest fund seeing an expense cut is the SPDR Portfolio S&P 500 ETF (SPLG), with roughly $20 billion in assets under management.

    SPDR ETF expense cuts

    Fund Ticker
    Category
    Previous total expense ratio
    New TER

    SPLG
    S&P 500
    0.03%
    0.02%

    SPMD
    S&P 400 mid cap
    0.05%
    0.03%

    SPSM
    S&P 600 small cap
    0.05%
    0.03%

    SPDW
    Developed world ex-US
    0.04%
    0.03%

    SPEU
    Europe
    0.09%
    0.07%

    SPEM
    Emerging markets
    0.11%
    0.07%

    SPTS
    Short term Treasury
    0.06%
    0.03%

    SPTI
    Intermediate term Treasury
    0.06%
    0.03%

    SPTL
    Long term Treasury
    0.06%
    0.03%

    SPHY
    High yield Bond
    0.10%
    0.05%

    Source: State Street Global Advisors

    “We look at the fees on a pretty consistent basis, and one of the things that we know is that as funds achieve scale it gives us extra room to be able to make [total expense ratio] reductions. And this has been a very successful lineup for us,” said Sue Thompson, head of SPDR Americas distribution at State Street Global Advisors.
    The portfolio suite of ETF is aimed at smaller investors focused on long-term ownership, Thompson said. The funds have lower per-share prices than similar funds, such as the SPDR S&P 500 Trust (SPY), which can make it easier for investors to build out a full portfolio when buying full shares of the funds.
    The SPY, which is used as a trading vehicle by many institutional investors, has an expense ratio of 0.0945% and trades around $450 per share. The SPLG will now have an expense ratio of just 0.02% and a per share price of close to $50.
    Fund costs have been trending lower in recent decades for all asset managers, as the ETF industry grows in size and pulls assets from higher cost mutual funds. Some firms even offer products with a sticker price of zero for the expense ratio, such as the BNY Mellon Large Cap Core Equity ETF (BKLC).

    Thompson said she does not see the SPDR fund expenses ever getting to zero “because of the real costs that are involved in running these funds,” but said the firm does plan to continue to share the savings from the scale of its products with customers.
    “When you look at where expense ratios were 15 years ago across the board to today, this has been a massive win for investors. It has been a massive win for smaller investors,” Thompson said. More

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    JetBlue cuts forecast on shift to international travel, end of American Airlines partnership

    JetBlue Airways slashed its 2023 outlook and warned of a potential loss in the current quarter.
    JetBlue forecast annual earnings per share of no more than 40 cents, down as much as $1.
    The airline said it is challenged by a shift toward international travel.

    A Jet Blue aircraft takes off from Long Beach Airport in Long Beach, CA.
    Tim Rue | Bloomberg | Getty Images

    JetBlue Airways slashed its 2023 outlook and warned of a potential loss in the current quarter as travelers opt for destinations abroad and the carrier grapples with the end of its partnership with American Airlines in the Northeast.
    JetBlue forecast adjusted earnings per share for the full year ranging from 5 cents to 40 cents, down from an earlier estimate for per-share earnings of as much as $1.

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    The New York-based carrier said it could post an adjusted loss of as much as 20 cents in the third quarter with revenue down 4% to 8% from the same period last year.
    The airline’s shares were down close to 5% in premarket trading after reporting second-quarter results.
    Here’s how the company performed in the period, compared with Wall Street expectations, according to Refinitiv consensus estimates:

    Adjusted earnings per share: 45 cents vs. 44 cents expected
    Revenue: $2.61 billion vs. $2.61 billion expected

    JetBlue reported net income of $138 million for the second quarter, or 41 cents a share, up from a net loss of $188 million, or 58 cents a share, a year earlier. Revenue rose 6.7% to $2.61 billion, roughly in line with analyst estimates.
    Airline executives this earnings season have noted a shift in demand toward long-haul international travel, which was hurt during the pandemic.

    That change along with increased capacity is driving down domestic airfare, as travelers opt for new destinations abroad, they said on recent earnings calls.
    JetBlue’s COO Joanna Geraghty said the shift is “pressuring demand for domestic travel during the peak summer travel period.
    “While we remain on track to deliver a profitable year and record revenue performance, we are taking action, including redeploying capacity to mitigate these current challenges and improve margins,” she said in an earnings release.
    Other challenges include the end of JetBlue’s alliance with American Airlines in New York-area airports and Boston after a judge ruled it anticompetitive and ordered them to scrap it. The partnership allowed the carriers to share passengers and revenue and coordinate routes. The two airlines stopped selling each other’s flights late last month.
    Geraghty also cited air traffic constraints in the Northeast. Both JetBlue and United Airlines said a shortage of air traffic controllers exacerbated flight disruptions resulting from thunderstorms in late June and July.
    About 46% of JetBlue’s flights arrived late from July 1 through July 30, according to FlightAware, with an average delay time of 85 minutes, higher than the national average of 28% of flights delayed for an average of 60 minutes. More

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    Planet lays off about 10% of workforce as satellite imagery company restructures

    Satellite-imagery and data-analysis company Planet is restructuring and laying off 117 employees.
    “This action was taken to increase the company’s focus on its high priority growth opportunities and operational efficiency, which the company believes will further support its long term strategy and path to profitability,” Planet wrote in a securities filing.
    Planet CEO Will Marshall, in a company-wide note, wrote that “I want to be clear that I am responsible for the decisions that led us here.”

    Traders work on the floor of the New York Stock Exchange (NYSE) on December 08, 2021 in New York City.
    Spencer Platt | Getty Images

    Satellite-imagery and data-analysis company Planet is restructuring and laying off 117 employees, it announced on Tuesday.
    The layoffs affect about 10% of Planet’s approximately 1,000 employees.

    “This action was taken to increase the company’s focus on its high priority growth opportunities and operational efficiency, which the company believes will further support its long term strategy and path to profitability,” Planet wrote in a securities filing.
    Planet CEO Will Marshall, in a company-wide note on Tuesday morning, wrote that “I want to be clear that I am responsible for the decisions that led us here.”
    “I know this has significant effects on the lives of our team and their families, and for that I am sorry. We do not make these changes lightly,” Marshall added.

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    Planet’s stock was little changed in premarket trading from its previous close of $3.75 a share. The stock is down about 15% year-to-date.
    Earlier this year, the company lowered its annual forecast, citing a “challenging macro environment.”

    Marshall noted that Planet’s expansion since the company went public in December 2021 “increased cost and complexity, which slowed us down in some regards.”
    “We are making changes to prioritize our attention on the highest ROI opportunities for our business and mission, while reinforcing our path to profitability, consistent with what we shared on our prior earnings call,” Marshall added. More

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    HSBC net profit more than doubles in the first half, announces $2 billion share buyback

    HSBC’s net profit more than doubled to $18.1 billion in the six months ended June, a sharp spike compared to the $9 billion in the same period a year before.
    The bank’s profit before tax rose 147% year-on-year to $21.7 billion, up from $8.78 billion in the first half of 2022.
    In light of the strong results, HSBC’s board approved a second interim dividend of $0.10 per share, and announced a further share buyback of up to $2 billion, which “we expect to commence shortly and complete within three months.”

    HSBC’s net profit more than doubled to $18.1 billion in the six months ended June, a sharp spike compared to the $9 billion in the same period a year before.
    The bank’s profit before tax rose 147% year-on-year to $21.7 billion, up from $8.78 billion in the first half of 2022.

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    This figure included a $2.1 billion reversal of an impairment relating to the planned sale of its retail banking operations in France, as well as a provisional gain of $1.5 billion on the acquisition of Silicon Valley Bank UK.
    In light of the strong results, HSBC’s board approved a second interim dividend of $0.10 per share, and announced a further share buyback of up to $2 billion, which “we expect to commence shortly and complete within three months.”

    An HSBC Holdings bank branch in Hong Kong on May 24, 2022. A Hong Kong-based trade platform launched by HSBC Holdings three years ago with much fanfare has shut down after failing to build a commercially viable business.
    Bertha Wang | Bloomberg | Getty Images

    Asked when the bank’s dividend might return to pre-pandemic levels, CEO Noel Quinn told CNBC’s “Capital Connection” that “if all goes to plan this year, we should be above our pre-pandemic dividend level.”
    HSBC paid out a total dividend of $0.51 in 2018, and $0.30 in 2019.
    For 2022, the bank has already declared two interim dividends of $0.10 each, bringing the total amount of dividends paid to $0.20. Quinn said that “our final interim dividend at the end of the year, will be the balance to get us to a 50% payout ratio.”

    In March, the U.K. arm of HSBC — Europe’s largest bank by assets — bought SVB U.K. for £1 ($1.21), in a deal that excludes the assets and liabilities of SVB U.K.’s parent company.
    Revenue increased by 50% year-on-year to $36.9 billion in the first half, which HSBC said was driven by higher net interest income across all its global businesses due to interest rate rises.

    My job is to diversify the revenue. And I believe we’re starting to show evidence of that and we will continue to invest for diversification of revenue.

    Noel Quinn
    CEO of HSBC Holdings

    Net interest income for the first half stood at $18.3 billion, 36% higher year-on-year, while net interest margin came in 46 basis points higher at 1.70%.
    The strong performance was due to strong revenue growth across all business lines and all product areas, the CEO said. “Certainly, there’s an element of interest rates in there. But there’s also good growth in our fee income and trading income.”

    Solid second quarter

    For the second quarter alone, HSBC beat analysts’ expectations to report an 89% jump in pre-tax profit in the second quarter.
    Pre-tax profit for the quarter ended in June was $8.77 billion, beating expectations of $7.96 billion.
    Net profit was $6.64 billion, beating the $6.35 billion expected in analysts’ estimates compiled by the bank, jumping 27% compared to the same period a year before.
    Total revenue for the second quarter came in at $16.71 billion, 38% higher than the $12.1 billion seen in the same period a year ago.
    HSBC’s Hong Kong-listed shares rose 1.23% after the announcement.

    Stock chart icon

    Here are other highlights of the bank’s financial report card:

    Net interest income came in at $9.3 billion in the second quarter, compared to $6.9 billion in the same period a year ago.
    Net interest margin, a measure of lending profitability, rose 43 basis points year on year to 1.72% in the second quarter of 2023.

    Moving forward, HSBC has also raised a key performance target, forecasting a near term return on tangible equity of 12%, compared to its previous target of 9.9%.
    In fact, Quinn said that in the next two years, HSBC is expecting a “mid-teens” return on tangible equity, adding that “this is a broad-based delivery of profit and return.”
    He sees future growth for HSBC coming from corporate banking, as well as international wealth and international retail banking for the affluent.
    “We’re investing in areas that will drive growth beyond the interest rate regime there exists today. My job is to diversify the revenue. And I believe we’re starting to show evidence of that and we will continue to invest for diversification of revenue.”
    Correction: This story has been updated to reflect that net interest margin rose 43 basis points in the second quarter of 2023. An earlier version misstated the year. More

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    Stocks making the biggest moves after hours: Yum China, Western Digital, ZoomInfo and more

    Pedestrians walk past Yum! Brands Shanghai, China
    Bloomberg | Getty

    Check out the companies making headlines in extended trading.
    Yum China — The restaurant franchiser’s shares fell 3.4% following its mixed second-quarter results. The company announced 47 cents in adjusted earnings per share on $2.65 billion in revenue. Analysts polled by Refinitiv had expected 46 cents earnings per share on $2.68 billion in revenue. Management noted that same-store sales across its restaurants still remained below pre-pandemic levels. 

    ZoomInfo Technologies – Shares shed 17% in extended trading after the company posted a weak outlook for third-quarter revenue. The data company anticipates $309 million to $312 million in revenue, while analysts called for $326 million, according to Refinitiv. ZoomInfo’s revenue in the latest quarter also missed expectations, coming in at $309 million, while analysts estimated $311 million.
    Western Digital — The data storage company’s stock gained 2% after a better-than-expected fiscal fourth quarter earnings report. Western Digital posted a loss of $1.98 per share on $2.67 billion in revenue. Analysts had estimated a loss of $2.01 per share on $2.53 billion in revenue, according to Refinitiv. 
    Arista Networks — Shares rose more than 11% after the company’s quarterly earnings topped analysts’ expectations. Arista reported adjusted earnings of $1.58 per share, versus consensus analyst estimates of $1.44 per share, according to Refinitiv. Revenue also came in higher than expected at $1.46 billion, compared to analyst expectations of $1.38 billion. 
    Lattice Semiconductor — The stock declined 2.6% after management noted that the company “is not immune to macroeconomic challenges” impacting the chip sector. Lattice reported second-quarter earnings of 52 cents per share, adjusted, on revenue of $190.1 million, while analysts polled by FactSet called for 51 cents in earnings per share on revenue of $188.2 million.
    Rambus — The stock tumbled more than 8% after the release of its second-quarter earnings. Rambus posted $120 million in revenue, versus analysts’ forecast for $133 million, according to Refinitiv. Licensing billings and product revenue also declined year over year. 

    Monolithic Power Systems — Shares lost 3.8% Monday in extended trading. The lower end of the semiconductor company’s revenue guidance for the third quarter came in below analysts’ estimates. Monolithic forecasts revenue of $464 million to $484 million for the third quarter, while analysts called for $473.4 million, per FactSet.
    SBA Communications — Shares of the real estate investment trust added more than 4%. The wireless infrastructure company reported second-quarter revenue of $678.5 million, while analysts called for $676.9 million. SBA also announced a newly signed master lease agreement with AT&T. More

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    Banks say conditions for loans to businesses and consumers will keep getting tougher

    The Fed’s closely watched Senior Loan Officer Opinion Survey, released Monday, showed that while credit conditions got stricter, demand declined as well.
    On the issue of consumer lending, banks “reported having tightened standards for credit card loans and other consumer loans,” the survey said.

    The U.S. Federal Reserve Building in Washington, D.C.
    Win Mcnamee | Reuters

    Lending conditions at U.S. banks are tight and likely to get tighter, according to a Federal Reserve survey released Monday.
    The Fed’s closely watched Senior Loan Officer Opinion Survey showed that while credit conditions got more strict, demand declined as well.

    Those results are important as economists who expect a recession believe that the most likely source will be from the banking system, which has had to respond to a series of 11 interest rate hikes as well as a momentary crisis in March when three midsize institutions failed.
    “Regarding banks’ outlook for the second half of 2023, banks reported expecting to further tighten standards on all loan categories,” the Fed said in a survey summary. “Banks most frequently cited a less favorable or more uncertain economic outlook and expected deterioration in collateral values and the credit quality of loans as reasons for expecting to tighten lending standards further over the remainder of 2023.”
    On the issue of consumer lending, banks “reported having tightened standards for credit card loans and other consumer loans, while a moderate net share reported having done so for auto loans.”
    Banks also said they are raising the minimum level for credit scores when giving personal loans and are lowering credit limits in the $1.9 trillion consumer-loan space.
    In the critical $2.76 trillion commercial and industrial lending segment, the survey noted that a “major” share of banks said they have seen lower demand for loans amid tightening standards across all business sizes.

    Commercial real estate also saw a large share of banks saying they have put more restrictions on standards along with weaker demand.
    Fed officials say they are aware of conditions in the banking sector, though they continue to raise interest rates to try to bring down inflation.
    At his-post meeting news conference last week, Fed Chair Jerome Powell said he expected the loan survey to be “consistent with what you would expect.”
    “You’ve got lending conditions tight and getting a little tighter, you’ve got weak demand, and you know, it gives a picture of a pretty tight credit conditions in the economy,” Powell said.
    The Fed hiked its key interest rate another quarter percentage point at the meeting, taking it to a target range of 5.25%-5.5%, the highest in more than 22 years. More

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    ‘Barbenheimer’ is a billion-dollar win for the global box office

    Combined, “Barbie” and “Oppenheimer” have grossed more than $1 billion globally.
    The two movies also showed extraordinary staying power in the second weekend at the domestic box office.
    “Barbie” could end up grossing more than $1 billion by itself, when all is said and done.

    Movie posters for Barbie and Oppenheimer are pictured outside of the Cinemark Somerdale 16 and XD in Somerdale, New Jersey, 2023.
    Hannah Beier | The Washington Post | Getty Images

    “Barbenheimer” remains red-hot at the box office.
    The combined force of Warner Bros.’ “Barbie” and Universal’s “Oppenheimer” has led to more than $1.1 billion in global ticket sales since July 21.

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    Domestically, “Barbenheimer” saw smaller-than-average second week ticket sales drops as millions of moviegoers headed to cinemas to catch the popular flicks. In fact, both films’ ticket sales fell just 43% from their opening weekends.
    Typically, blockbuster features will see ticket sales fall between 50% and 70% after the debut weekend. Second week numbers are often looked at by box office analysts as an indicator of whether a film will have longevity at the box office or will fizzle quickly. The smaller the drop, the better.
    “‘Barbenheimer’ will go down as one of the most notable and unforeseeable milestones in the history of cinema not just for what it means to the bottom-line box office dollars for the industry but also as a cultural event centered around moviegoing,” said Paul Dergarabedian, senior media analyst at Comscore.
    Over the weekend, “Barbie” added $93 million, bringing its domestic haul to $351 million. The Greta Gerwig and Mattel collaboration for Warner Bros. is nearing $800 million worldwide and could become the second billion-dollar film of 2023.
    Universal’s “Oppenheimer,” meanwhile, tallied another $46.7 million over the weekend. Its domestic gross now stands at $175 million. Globally, it’s generated $405 million.

    “For a domestic summer marketplace desperately in need of a box office boost, the July 21 simultaneous theatrical debuts of ‘Barbie’ and ‘Oppenheimer’ set off a chain reaction of overall box office that has infused the all-important season with nearly three quarters of a billion dollars of bonus cash,” Dergarabedian said.
    Heading into “Barbenheimer’s” first weekend, the summer box office, which runs from the first weekend in May through Labor Day, was down around 7% compared to 2022. Two weeks later, it’s up 9%, according to data from Comscore.
    Similarly, the confluence of these two films boosted the overall domestic box office compared with last year’s haul to this point. Prior to “Barbenheimer,” ticket sales were up 12%. Two weeks later, they were up 20%.
    The overall domestic box office still lags behind prepandemic levels by around 16%, however. And prospects for catching up are dwindling as studios have started to move big releases to next year as Hollywood digs in for drawn-out writers’ and actors’ strikes.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor of “Oppenheimer.” More

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    Stocks making the biggest moves midday: SoFi, ON Semiconductor, Disney, Sweetgreen and more

    Pedestrians walk by the SoFi Technologies headquarters on February 22, 2022 in San Francisco, California.
    Justin Sullivan | Getty Images

    Check out the companies making headlines in midday trading.
    SoFi Technologies – Shares of the fintech company popped 19.9% after it reported second-quarter results and lifted its full-year guidance. SoFi Technologies posted a narrower-than-expected loss of 6 cents a share on a GAAP basis. Analysts surveyed by FactSet had expected a 7-cent loss per share.

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    ON Semiconductor — The chipmaker’s shares jumped 2.5% after it posted an earnings and revenue beat for the second quarter. The company reported $1.33 earnings per share, excluding items, on $2.09 billion in revenue. Analysts polled by FactSet had estimated $1.21 earnings per share and $2.02 billion in revenue.
    Disney — Disney climbed 3.2% after the Financial Times reported that the entertainment giant brought back back former executives Kevin Mayer and Tom Staggs, both of whom were once considered potential successors to Bob Iger.
    New Relic — Shares jumped 13.4% after a private equity consortium announced it would take the software company private. The all-cash deal values the company at nearly $6.5 billion and offers $87 per share.
    Spero Therapeutics — Shares ascended 14.8% after the company announced it reached an agreement with the Food and Drug Administration to have a special protocol assessment in its phase 3 trial for a urinary tract infection drug.
    Sweetgreen — The salad chain’s shares jumped 6.9% Monday after an upgrade from Piper Sandler. The firm raised its rating on the stock to overweight from neutral, saying that the tide may be turning for the company.

    XPeng — The Chinese electric vehicle maker tumbled 10.6% following a downgrade from UBS to neutral from buy. UBS said the company’s near-term gains may now all be priced in after shares more than doubled in price this year.
    Hasbro — The toymaker rose 4.1% on the heels of Bank of America’s upgrade to buy from neutral. Bank of America said Hasbro could beat earnings expectations when it reports on Thursday, due in part to the success of its cards set tied to “Lord of the Rings.”
    GoodRx – The digital health-care platform’s shares surged about 36.9% after Cowen upgraded them to outperform, saying the company’s pharmacy benefit management partnerships – like Express Scripts and CVS Caremark – help generate a new revenue stream but also solidify the company’s position in the health-care ecosystem. Cowen raised its price target to reflect about 78% potential upside.
    Adobe — The software stock jumped 3.3% after Morgan Stanley upgraded the shares to overweight from equal weight. The Wall Street firm said while Adobe may have been “late to the party,” the company still stands to gain from artificial intelligence integration across its line of products. Morgan Stanley’s $660 price target represents nearly 25% upside.
    Chevron — The oil giant advanced 3% after Goldman Sachs upgraded the stock to buy from neutral. The firm said it sees a cash flow inflection for the company.
    New York Community Bancorp — Shares of the regional bank traded 1.5% higher after Deutsche Bank upgraded the stock to buy from hold, citing good execution.
    CSX — The railroad stock shed 1.4% after RBC downgraded shares to sector perform from outperform despite noting fluid operations and positive performance in recent quarters.
    Wayfair — Shares popped 6.5% after Piper Sandler upgraded Wayfair to overweight from neutral and raised its price target. The Wall Street firm said Wayfair is improving sales and taking back market share as the home furnishings industry stabilizes.
    Salesforce — The cloud company saw its shares dip 0.3% after Morgan Stanley downgraded the stock to equal weight from overweight. The Wall Street firm said Salesforce’s near-term catalysts, including margin expansion and price increases, are now in the “rear-view mirror.” The stock has gone up 68% this year.
    — CNBC’s Hakyung Kim, Yun Li, Sarah Min, Tanaya Macheel and Samantha Subin contributed reporting More