Raphael Stevens

Visitors are seen at Google Headquarters in Mountain View, California, United States on May 15, 2023.
Tayfun Coskun | Anadolu Agency | Getty Images

Check out the companies making headlines after the bell.
Alphabet — Shares of the Google parent jumped 7% as investors cheered better-than-expected second- quarter results, lifted by strong growth in cloud sales. The company posted earnings of $1.44 per share on $74.6 billion of revenue. Analysts called for earnings of $1.34 per share, adjusted, and revenue of $72.82 billion, per Refinitiv. Strong growth in cloud sales lifted results. The company also announced that Alphabet CFO Ruth Porat would become the president and chief investment officer.

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Snap — Snap tumbled 17% after reporting weak guidance for its current quarter. However, the company posted an adjusted loss of 2 cents a share, compared to consensus estimates of a 4 cent loss per share, per Refinitiv. Revenue came in at $1.07 billion, higher than the $1.05 billion expected by analysts.
Microsoft — The big technology stock slid about 1% after reporting slowing revenue growth in its cloud business in the fiscal fourth quarter. Still, the company posted earnings of $2.69 per share, compared to the $2.55 per share anticipated by analysts, per Refinitiv. Microsoft reported $56.19 billion in revenue, beating estimates of $55.47 billion.
Wells Fargo — Shares of the bank jumped 3% in extended trading after Wells Fargo announced a $30 billion share buyback program.
Texas Instruments — Texas Instruments fell 3.7%. The company said to expect between $1.68 and $1.92 in earnings per share for the current quarter, putting much of the range below the $1.91 consensus estimate of analysts polled by FactSet. Texas Instruments guided revenue for the quarter to come in between $4.36 billion and $4.74 billion, a range that includes analysts’ consensus estimate of $4.59 billion, per FactSet.
Intuitive Machines — The space exploration stock advanced 1% after the company was designated part of an award from NASA to assist in the development of lunar night technology.

Robert Half — Shares dropped 12.7% after the employment agency missed expectations for earnings. Management said the company was affected by clients’ elongated hiring cycles. The company posted $1 in earnings per share on $1.64 billion in revenue, while analysts polled by Refinitiv expected $1.14 per share in earnings and revenue of $1.69 billion.
Teladoc — The virtual health care stock rallied 6% following a better-than-expected earnings report. Teladoc said it lost 40 cents per share in its second quarter, beating analysts’ estimates for a 41 cent loss per share, per Refinitiv. The company also beat expectations for revenue, posting $652 million against a consensus estimate of $649 million. More

The Fed is widely expected on Wednesday to approve what would be the 11th interest rate increase since March 2022, taking the benchmark borrowing rate to its highest level since early 2001.
More pressing will be whether Federal Open Market Committee officials feel they’ve gone far enough.
Hiking more from here carries risks to an economy that many think is heading for at least a mild recession.

WASHINGTON, DC – JUNE 21: Federal Reserve Chairman Jerome Powell testifies before the House Committee on Financial Services June 21, 2023 in Washington, D.C. Powell testified on the Federal Reserve’s Semi-Annual Monetary Policy Report during the hearing.
Win Mcnamee | Getty Images News | Getty Images

Despite an improving inflation picture, the Federal Reserve is expected on Wednesday to approve what would be the 11th interest rate increase since March 2022.
Investors are hoping it will be the last one for a long time.

Markets are pricing in an absolute certainty that the Fed will approve a quarter percentage point hike that will take its benchmark borrowing rate to a target range of 5.25%-5.5%. That would push the upper boundary of the federal funds rate to its highest level since January 2001.
The more pressing matter will be whether Federal Open Market Committee officials feel they’ve gone far enough or if there’s still more work to do in the fight against pernicious inflation.
“The signal will probably be, yes, we’re hiking, but then we think we can sit here for a while and see,” said Kathy Jones, chief fixed income strategist at Charles Schwab. “But no promises. They can’t give up the option.”
Indeed, the Fed’s course is far less certain. Central bank policymakers almost unanimously believe inflation is too high, but hiking more from here carries risks to an economy that many think is heading for at least a mild recession.

‘The Fed should be done’

Jones is part of a growing market chorus that thinks the central bank has gone far enough. With the annual inflation rate declining to 3% in June — it was 9.1% a year ago — the danger is growing that the Fed could unnecessarily push the economy into contraction.

“The Fed should be done already,” Jones said. “They’re walking a difficult line here. To me, the decision would be, hey, we’ve done enough for now, and we can wait and see. But apparently the folks at the Fed think they need one more at least.”
In fact, Fed officials indicated strongly at their last meeting — the first one during this tightening cycle that didn’t see a rate increase — that they see at least two more hikes this year.
Since that meeting, policymakers have done little to dispel the likelihood of higher rates.

Markets, though, haven’t seemed to mind. Wall Street has been on a tear all year, with the Dow Jones Industrial Average jumping more than 5% over the past month alone. That could be because traders are ignoring the Fed’s rhetoric and pricing in just a 35% probability of another hike before the end of the year, according to CME Group’s FedWatch gauge of futures market pricing.
One key from the meeting will be whether Fed Chairman Jerome Powell indicates that, at the least, the FOMC will again skip a hike at its next meeting in September while it analyzes the impact the previous increases have had on the economy. Powell has said the Fed is not locked in to an every-other-meeting pattern of hikes, but he has indicated that a slower pace of hikes is likely.
“The hike that’s going to happen [Wednesday] is unnecessary, and probably the last couple were unnecessary,” said Luke Tilley, chief economist at Wilmington Trust Investment Advisors. “By the time we get to November, that’ll be even clearer.”

Repeating history

Fed policy, though, has been informed by a belief that when it comes to fighting inflation, it’s better to do too much than too little. The current bout of price increases was the most severe the U.S., and many other developed nations, has had to face since the early 1980s.
That last period also is behind a lot of the Fed thinking, with a particular focus on how policymakers then backed off the inflation fight too soon and ended up having an even worse problem.
“It’s easy for me to say that I think they’re going too much,” Tilley said. “But I’m also quick to say that if I was in their seats, I might be doing the same thing, because they really are playing a game of risk management.”
That game is familiar by now: Retreating from the inflation fight soon could lead to a repeat of the 1970s-early 1980s stagflation of high prices and weak growth, while going too far risks tipping the country into a recession.
Recent indicators are showing that credit conditions are tightening significantly, with higher interest rates and tougher lending standards substantial headwinds to future growth.
“Recently softer core inflation will be welcomed by Powell, but he is likely to want several more months of softer inflation data before confidently terminating the hiking cycle,” Citigroup economist Andrew Hollenhorst said in a client note. “In our view the U.S. economy is not headed toward a soft landing. After a summer of projected softer core inflation data, we see upside inflation risks reemerging in the fall.”
Likewise, Steven Blitz, chief U.S. economist at Globaldata.TSLombard, said a “dovish hike and talk of soft landings” at Wednesday’s meeting would be a mistake for the Fed.
“Planes land, economies do not. Economies are an ongoing dynamic process, and no recession will prove more problematic for the Fed than not,” Blitz wrote. “The economy is heading into recession, but if it is somehow avoided, then the disinflation of this moment will prove fleeting, so too the Fed’s confidence that they are at the end of this hiking cycle.” More

JPMorgan Chase executive Mary Callahan Erdoes sought advice for a $600 million tax issue from disgraced former financier Jeffrey Epstein in 2005, according to legal filings.
Erdoes “personally sought” help from Epstein to resolve the matter, according to a filing from the U.S. Virgin Islands.
The request from Erdoes was on behalf of someone else, but that information was redacted in the filing.

Mary Callahan Erdoes, chief executive officer of asset management at JPMorgan Chase & Co.
Simon Dawson | Bloomberg | Getty Images

JPMorgan Chase executive Mary Callahan Erdoes sought advice for a $600 million tax issue from disgraced former financier Jeffrey Epstein in 2005, legal filings alleged.
Erdoes, a veteran JPMorgan executive who became head of the bank’s asset and wealth management division in 2009, “personally sought” help from Epstein to resolve the massive tax issue, according to court documents the U.S. Virgin islands filed overnight.

The request from Erdoes was on behalf of someone else, but that information was redacted in the filing.
“It was simply a request for an introduction and it was well before Epstein was arrested or officially accused of any crimes,” a JPMorgan spokeswoman said Tuesday in a statement.
The new allegations about the bank’s yearslong relationship with Epstein came as part of the U.S. territory’s lawsuit accusing JPMorgan of facilitating the notorious ex-money manager’s sex trafficking operation. Epstein killed himself in August 2019 while in jail in Manhattan on child sex trafficking charges.
The USVI in court filings Monday night asked the court for partial summary judgment in its favor. JPMorgan also filed a motion for partial summary judgment overnight.
The territory alleged that Epstein was a “personal resource” for Erdoes and her former boss at JPMorgan, Jes Staley, and that the two bankers decided to keep Epstein as a client for years after he was accused of paying to have underaged girls brought to his home. In a deposition this year, Erdoes acknowledged that JPMorgan was aware of the accusations against Epstein by 2006.

The bank took years to decide to cut Epstein off, only doing so in 2013. JPMorgan agreed to pay $290 million to settle a lawsuit from Epstein’s victims, but the USVI suit has continued.
In 2008, after the Bernie Madoff ponzi scheme was uncovered, Erdoes allegedly asked Staley to reach out to Epstein “to get the scoop from down there,” according to USVI’s latest court filing.
On that, JPMorgan had this statement: “Jeffrey Epstein was in Florida where many of Madoff’s victims lived. If she had made any call at all, it would have been to reach out [to] Jes to see if Epstein had any more details about what was happening there.” More

Bull markets, according to John Templeton, “are born on pessimism, grow on scepticism, mature on optimism and die of euphoria”. The legendary Wall Street fund manager put this philosophy into practice in 1939. At a time when others were panicking about Europe’s descent into war, Templeton borrowed money to buy 100 of every share trading below $1 on the New York Stock Exchange. Within a few years he had booked a 400% profit and forged a template for future investors. Even in the 21st century, Templeton’s favoured moments of “maximum pessimism” present the very best buying opportunities. In March 2009 investors despaired over the future of capitalism; in March 2020, over a pandemic and shuttered businesses. Both times, the correct response was to close your eyes and buy stocks.It now looks like October 2022 should be added to the list. Pessimism was certainly rife. Central banks were raising interest rates at their fastest pace in decades. Inflation was hitting double digits in the euro zone and falling only slowly in America. Recession seemed just about nailed on. War had returned to Europe. China appeared trapped between lockdowns and soaring covid-19 deaths. Across the northern hemisphere, a cold winter threatened to send energy prices soaring again, turning a miserable downturn into a truly dangerous one. America’s s&p 500 index of leading shares was down by nearly one-quarter from its peak; Germany’s dax by more.True to form, it was an excellent time to buy. The s&p 500 has since risen by 28%. That puts it at its highest level in over a year, and within 5% of the all-time peak it reached at the start of 2022. Moreover, the rally’s progress has been positively Templetonian. Born on despair, it then advanced to the scepticism phase. Investors spent months betting that the Federal Reserve would not raise rates as high as its governors insisted they were prepared to lift them, while economists admonished their foolhardiness from the sidelines. All the time, with frequent reversals, stocks edged nervily upwards.For a few weeks, as first one then several American regional banks collapsed in the face of rising rates, it looked like the sceptics had won the day. Instead, it was time to proceed to the optimism phase. Hope of an ai-fuelled productivity boom displaced fears about growth and inflation as the main market narrative. Shares in big tech firms—deemed well-placed to capitalise on such a boom—duly rocketed.Now the party has spilled over into the rest of the market. You can see this by comparing America’s benchmark s&p 500 index (which weights companies by their market value and so is dominated by the biggest seven tech firms) with its “equal-weight” cousin (which treats each stock equally). From March to June, the tech-heavy benchmark index raced ahead while its cousin stagnated. Since June both have climbed, but the broader equal-weight index has done better. And they have both been trounced by the kbw index of bank stocks. What started as a narrowly led climb has broadened into a full-blown bull market.It is not just in stockmarket indices that the new mood is apparent. Bloomberg, a data provider, collects end-of-year forecasts for the s&p 500 from 23 Wall Street investment firms. Since the start of the year, 14 of these institutions have raised their forecasts; just one has lowered it. Retail investors, surveyed every week by the American Association of Individual Investors, are feeling their most bullish since November 2021. Even the long-moribund market for initial public offerings may be witnessing green shoots. On July 19th Oddity Tech, an ai beauty firm, sold $424m-worth of its shares by listing on the Nasdaq, a tech-focused exchange. Investors had placed orders for more than $10bn.If investors are to keep paying more and more for stocks, which they will have to do to keep the run going, they must believe at least one of three things. One is that earnings will rise. Another is that the alternatives, especially the yield on government bonds, will become less attractive. The third is that earnings are so unlikely to disappoint that it is worth coughing up more for stocks and accepting a lower return. This final belief is captured by a squeezed “equity risk premium”, which measures the excess expected return investors require in order to hold risky shares instead of safer bonds. This year it has plunged to its lowest since before the global financial crisis of 2007-09. The market, in other words, appears on the verge of euphoria. What would Templeton think of that? More

Jonathan Raa | Nurphoto | Getty Images

Check out the companies making headlines in midday trading.
3M – Shares of the chemical manufacturer rose 5.5% following the company’s latest earnings report. 3M posted $7.99 billion in revenue, beating analysts’ estimates of $7.87 billion, according to Refinitiv. The company also raised its full-year earnings guidance and reaffirmed its revenue guidance.

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Spotify — The music streaming platform tumbled 14% following weaker-than-expected revenue and guidance. Spotify reported revenue of €3.18 billion, below the consensus estimate of €3.21 billion from analysts polled by Refinitiv. Full-year revenue guidance was also softer than analysts forecasted. The results follow the company’s announcement that it will raise prices for premium subscription plans.
Alaska Air — Shares of Alaska Air shed 12%, even as the airline beat estimates on top and bottom lines for the second quarter. The airline reported $3 in adjusted earnings per share on $2.84 billion in revenue. Analysts surveyed by Refinitiv were expecting $2.70 in earnings per share on $2.77 billion in revenue. The airline’s full-year earnings guidance of $5.50 to $7.50 per share was roughly in-line with the average analyst estimate of $6.65, according to FactSet.
RTX – Shares of the defense contractor sank more than 12% after it disclosed an issue affecting a “significant portion” of its Pratt & Whitney engines that power Airbus A320neo models. Elsewhere, RTX reported second-quarter earnings that topped Wall Street expectations, posting $1.29 in adjusted earnings per share on $18.32 billion in revenue. Analysts polled by Refinitiv called for $1.18 in earnings per share and $17.68 billion in revenue.
F5 — Shares of the cloud software company rallied 5.7%. Late Monday, F5 posted a top- and bottom-line beat in its fiscal third quarter. The company reported adjusted earnings of $3.21 per share on revenue of $703 million. Analysts called for $2.86 in earnings per share and revenue of $699 million, according to Refinitiv.
NXP Semiconductors — Shares rose 4% following the chipmaker’s quarterly earnings announcement Monday after hours. NXP reported $3.43 in adjusted earnings per share on $3.3 billion in revenue. Analysts had estimated $3.29 earnings per share and revenue of $3.21 billion, according to Refinitiv. The company’s projected third-quarter earnings also topped analysts’ estimates. 

General Electric — Shares of the industrial giant popped more than 5% to hit a 52-week high after the company posted stronger-than-expected earnings for the second quarter. GE reported adjusted earnings of 68 cents per share on revenue of $16.7 billion. Analysts called for earnings of 46 cents per share on revenue of $15 billion, according to Refinitiv. GE also boosted its full-year profit guidance, saying it’s getting a boost from strong aerospace demand and record orders in its renewable energy business.
Whirlpool — Whirlpool slid more than 3% a day after reporting weaker-than-expected revenue in its second quarter. The home appliance company posted revenue of $4.79 billion, lower than the consensus estimate of $4.82 billion, according to Refinitiv. It did beat on earnings expectations, reporting adjusted earnings of $4.21 per share, higher than the $3.76 estimate.
Biogen — Shares of the biotech company declined 3.8% after its second-quarter earnings announcement. Biogen posted adjusted earnings of $4.02 per share on revenue of $2.46 billion. Analysts polled by Refinitiv anticipated earnings of $3.77 per share and revenue of $2.37 billion. Revenue for the biotech company was down 5% year over year. The company also announced it would slash about 1,000 jobs, or about 11% of its workforce, to cut costs ahead of the launch of its Alzheimer’s drug Leqembi. 
Progressive — The insurance company’s shares lost nearly 2% following a downgrade by Morgan Stanley to underweight from equal weight. The firm cited too many negative catalysts as its reason for the downgrade. 
MSCI — Shares gained 9% after the company’s second-quarter earnings and revenue came above analysts’ estimates. The investment research company posted $3.26 earnings per share, excluding items, on revenue of $621.2 million. Analysts polled by FactSet had expected $3.11 earnings per share on $602.5 million. 
General Motors — The automaker’s stock dipped about 4.5%. GM’s latest quarterly results included a surprise $792 million charge related to new commercial agreements with LG Electronics and LG Energy Solution. Separately, he company lifted its 2023 guidance for a second time this year. GM also reported a second-quarter beat on revenue, posting $44.75 billion compared to the $42.64 billion anticipated by analysts polled by Refinitiv.
UPS – Shares of UPS rose about 1% after the Teamsters union announced a tentative labor deal with the shipping giant on Tuesday.
Invesco — The investment management firm’s shares fell 5% after it posted adjusted earnings of 31 cents per share in the second quarter, while analysts polled by FactSet estimated 40 cents per share. President and CEO Andrew Schlossberg said the company would focus on simplifying its organizational model, strengthening its strategic focus, as well as aligning its expense base. 
Xerox – Shares of the workplace products and solutions provider gained more than 7% after the company raised its full-year operating margin and free cash flow guidance. Xerox now anticipates adjusted operating margin of 5.5% to 6%, compared to earlier guidance of 5% to 5.5%. It also calls for at least $600 million in cash flow, compared to its previous outlook of at least $500 million.
Packaging Corp of America — The packaging products company’s stock surged more than 10%, reaching a new 52-week high. In the second quarter, the company posted earnings of $2.31 per share, excluding items, beating analysts’ estimates of $1.93 per share, according to Refinitiv. The company cited lower operating costs from efficiency, as well as lower freight and logistics expenses. Its revenue of $1.95 billion, meanwhile, came below analysts’ estimates of $1.99 billion, according to FactSet.
Zscaler — Shares of the IT security company popped 4.5% after a BTIG upgrade to buy from neutral. “Our fieldwork leads us to believe that demand in the Secure Service Edge (SSE) has sustainably improved and that large projects which were put on hold in late 2022/early 2023 are starting to move forward again,” BTIG said in a note.
Sherwin-Williams – Shares added more than 3% after the company reported record revenue for the second quarter to $6.24 billion. Analysts called for $6.03 billion in revenue, according to FactSet. The company notched adjusted earnings per share of $3.29, while analysts estimated $2.70 per share.
— CNBC’s Yun Li, Samantha Subin, Sarah Min, Tanaya Macheel, Brian Evans and Alex Harring contributed reporting More