Finance

An exterior view of a Bed Bath & Beyond store on February 7, 2023 in Clifton, New Jersey.
Kena Betancur | Corbis News | Getty Images

Check out the companies making headlines in midday trading.
Bed Bath & Beyond — Shares continued to slide in Friday’s session with a 28% tumble. On Thursday, the company once again warned that it may need to file for bankruptcy protection if its proposed $300 million stock offering fails. The retailer’s stock has lost nearly 40% of its share value this week.

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Digital World Acquisition — Shares of the SPAC linked to former President Donald Trump advanced 7.6%. On Thursday, a New York grand jury formally indicted Trump on charges related to “hush money” payments made before his 2016 campaign.
Nikola — Nikola shares sank 13.6% after the electric-truck maker announced plans for a $100 million secondary stock offering priced 20% below Thursday’s close.
Virgin Orbit — The satellite launch services provider dived 41.2% after announcing it will halt operations “for the foreseeable future” and eliminate about 90% of its workforce.
BlackBerry — BlackBerry popped 14% after the company posted a smaller per-share earnings and adjusted EBITDA loss than analysts polled by StreetAccount expected for the fourth quarter. The company’s revenue, however, missed analyst expectations.
Regional banks — Shares of closely followed regional bank stocks advanced, with the SPDR S&P Regional Banking ETF (KRE) up 1%. Metropolitan Bank led the index with a 33.6% jump. PacWest and Popular were also among top performers, adding more than 3% and 4%, respectively. Zions, on the other hand, was among the worst performers of the group with a 1.2% loss.

Ventas — The real-estate investing stock slid 1.5% after announcing it would take ownership of collateral supporting a nearly half-billion dollar loan.
Generac Holdings — The battery backup company dropped 3.5% following a downgrade to underperform from neutral by Bank of America. The firm said Generac’s fiscal year 2023 expectations could be out of reach.
Alphabet — The Google parent gained 2.8% after Piper Sandler reiterated its overweight rating on the stock. The firm said the company has undeniable market share but could see search revenues impacted by artificial intelligence.
Restaurant Brands — Shares of the parent company of Burger King rallied 2.9% after TD Cowen upgraded the stock to outperform from market perform. The Wall Street firm said it’s bullish on Restaurant Brands’ new chairman and CEO and the company’s potential to turn around the brand.
elf Beauty — The cosmetic company’s stock gained 4.4%, reaching a 52-week high. Shares jumped after Morgan Stanley said elf has nearly 20% upside. The analyst said the company has strong momentum on both near- and long-term growth and reiterated his overweight rating on the stock.
Mercadolibre — Shares rose 4.1% after Morgan Stanley named the Latin American e-commerce company a top pick. The firm said it sees multiple growth drivers ahead.
— CNBC’s Samantha Subin, Yun Li and Hakyung Kim contributed reporting More

A central theme at the Ambrosetti Forum was the potential for further instability in financial markets arising from problems in the banking sector.
The collapse of U.S.-based Silicon Valley Bank and of several other lenders in early March prompted fears of contagion, bolstered by the emergency rescue of Credit Suisse by Swiss rival UBS.

A cargo barge on the River Rhine near the European Central Bank (ECB) headquarters at sunset in the financial district in Frankfurt, Germany,
Bloomberg | Bloomberg | Getty Images

Europe learned its lessons after the financial crisis and is now in a strong position to weather further stress in its banking system, several economists and policymakers say.
A central theme at the Ambrosetti Forum in Italy on Thursday and Friday was the potential for further instability in financial markets, arising from problems in the banking sector — particularly against a backdrop of tightening financial conditions.

The collapse of U.S.-based Silicon Valley Bank and of several other regional lenders in early March prompted fears of contagion, furthered by the emergency rescue of Credit Suisse by Swiss rival UBS.
Policymakers on both sides of the Atlantic took decisive action and pledged further support if needed. Markets have staged something of a recovery this week.

Valerio De Molli, managing partner and CEO of The European House – Ambrosetti, told CNBC on the sidelines of the event on Thursday that “uncertainty and anxiety” would continue to plague markets this year.
“The more worrying factor is uncertainty in the banking industry, not so much about Europe — the ECB (European Central Bank) has done incredibly well, the European Commission also — the euro zone is stable and sound and profitable, also, but what could happen particularly in the United States is a mystery,” De Molli told CNBC’s Steve Sedgwick.
De Molli suggested that the collapse of SVB would likely be “the first of a series” of bank failures. However, he contended that “the lessons learned at a global level, but in Europe in particular” had enabled the euro zone to shore up the “financial robustness and stability” of its banking system, rendering a repeat of the 2008 financial crisis “impossible.”

The emphasis on “lessons learned” in Europe was echoed by George Papaconstantinou — professor and dean at the European University Institute and former Greek finance minister — who also expressed concerns about the U.S.

“We learned about the need to have fiscal and monetary policy working together, we learned that you need to be ahead of the markets and not five seconds behind, always, we learned about speed of response and the need for overwhelming response sometimes, so all of this is good,” Papaconstantinou told CNBC on Friday.
He added that the developments of SVB and Credit Suisse were down to “failures in risk management,” and, in the case of SVB, also owed to “policy failures in the U.S.”
He particularly cited former President Donald Trump’s raising of the threshold under which banks must undergo stress tests from $50 billion to $250 billion. This adjustment to the post-crisis Dodd-Frank legislation effectively meant that the fallen lender was not subject to a level of scrutiny that might have discovered its troubles earlier. The move of 2018 was part of a broad rollback of banking rules put in place in the aftermath of the crisis.
Although lauding the progress made in Europe, Papaconstantinou emphasized that it is too early to tell whether there is broader weakness in the banking system. He noted that there is no room for complacency from policymakers and regulators, many of whom have promised continued vigilance.

“We are in an environment where interest rates are rising, therefore bond prices are falling, and therefore it is quite likely that banks find themselves with a hole, because they have invested in longer term instruments, and that is a problem,” he said.
“We are in an environment of rising inflation, therefore a lot of the loans that they did on very low interest rates are problematic for them, so it is not a very comfortable environment. It is not an environment where we can sit back and say, ‘okay, this was just two blips, and we can continue as usual’. Not at all.”
‘Two-front war’
Spanish Economy Minister Nadia Calviño on Friday said that banks in Spain have even stronger solvency and liquidity positions than many of their European peers.
“We do not see any signs of stress in the Spanish market, other than the general volatility we see in financial markets these days,” she said, adding that the situation is now “totally different” from what it was in the run up to the European debt crisis in 2012.
“We learnt the lessons of the financial crisis, there’s been deep restructuring in this decade, and they are in a stronger position than in the past, obviously.”

Unenviably, central banks must fight a “two-front war” and simultaneously combat high inflation and instability in the financial sector, noted Gene Frieda, executive vice president and global strategist at Pimco.
“There is now something happening that is outside the Fed’s control in the banking sector, and we all have our views in terms of how bad that gets, but my own sense is that we’re not facing a banking crisis, that there will be some tightening in credit conditions, it will bring a recession forward. It’s not the end of the world, but it’s certainly not discounted in the equity market,” Frieda told CNBC on Friday.
“We’re still fighting inflation, but, at the same time, we’re fighting these uncertainties in the banking sector. All of the central banks will try to distinguish between the two and say, on the one hand, we can use certain policies to deal with the financial instability. On the other hand, we can use interest rates to fight inflation. But those two will get muddied, and I think, inevitably, financial instability will become the one that’s dominant.” More

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, March 28, 2023.
Brendan McDermid | Reuters

Wall Street investors believe the stock market is headed for losses after a positive first quarter, seeing cash as the best safe haven right now, according to the new CNBC Delivering Alpha investor survey.
We polled about 400 chief investment officers, equity strategists, portfolio managers and CNBC contributors who manage money about where they stood on the markets for the second quarter and forward. The survey was conducted over the past week. 

Nearly 70% of respondents said the S&P 500 could see declines ahead. Thirty-five percent of the investors believe the biggest risk to the market this year is a misstep by the Federal Reserve, while another 32% said persistent inflation poses the most pressing threat.

Arrows pointing outwards

The market has been particularly resilient so far even in the face of a banking crisis and continuous tightening from the Fed. The S&P 500 is on track to post a winning quarter, up more than 5%, after equities staged a big comeback with the government’s emergency rescue measures that helped stem the chaos in the banking industry.
“Economic concerns enveloping recession fears haven’t vanished as the yield curve still represents a counter to the market’s climb higher,” said Quincy Krosby, chief global strategist at LPL Financial. “But if the market can continue to edge higher in spite of a wall of worry that seems to climb higher with each new headline, it begs the question who’s right, and which side is more prescient.”

Arrows pointing outwards

The Fed enacted a quarter percentage point interest rate increase last week, while signaling one more rate hike coming this year. Many investors believe the central bank should reverse course immediately as more rate hikes will exacerbate banking problems and cause a severe economic slowdown. However, Fed Chairman Jerome Powell explicitly said rate cuts are not his base case.
DoubleLine Capital CEO Jeffrey Gundlach recently said the bond market is screaming that a recession is imminent, and he sees the Fed starting to lower interest rates “substantially” in the near future. Mike Wilson, Morgan Stanley’s chief investment officer, said this week that investors are still too optimistic about corporate earnings, and a severe deterioration is about to drag stocks lower.

With an overall bearish view on the market, 60% of the investors said cash is their safe haven right now. The recent banking turmoil has driven significant inflows into money market funds, which saw assets increase to a record of $5.2 trillion as of Wednesday, according to the Investment Company Institute.

Arrows pointing outwards

“Money market yields >4% are hard to resist ahead of a slowdown, and the ‘option value’ of cash keeps rising,” Jared Woodard, Bank of America’s Investment & ETF Strategist, said in a note.
Goldman Sachs’ head of asset allocation research Christian Mueller-Glissmann also set a preference for cash over equities around the world as he said the banking stress triggered a sharp risk appetite reversal. More

An exterior view of a Bed Bath & Beyond store on February 7, 2023 in Clifton, New Jersey. 
Kena Betancur | Corbis News | Getty Images

Check out the companies making headlines before the bell.
Bed Bath & Beyond – Bed Bath & Beyond shares dipped 2% before the bell, building on a more than 26% loss from Thursday’s session. The declines came after the company once again warned that it may need to file for bankruptcy protection if its proposed $300 million stock offering fails.

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Nikola – The electric truck maker fell 5% after it announced plans to raise $100 million through a secondary stock offering, or a private sale of stock if needed.
Virgin Orbit — Virgin Orbit shed nearly 43% after announcing that it would halt operations “for the foreseeable future” as it fails to secure funding. Virgin Orbit also said it will eliminate about 90% of its workforce.
Digital World Acquisition — The SPAC linked to former President Donald Trump surged as much as 19% in premarket trading on Friday. The lift comes after a New York grand jury formally indicted Trump on charges related to “hush money” payments made before his 2016 campaign for president.
BlackBerry — Shares fell about 2% after the software company posted fourth-quarter revenue that fell slightly short of consensus estimates. The company’s top line came in at $151 million, while analysts polled by StreetAccount had forecast revenue of $154 million.
Generac Holdings — The power systems provider fell 3.7% following a downgrade to underperform from neutral by Bank of America. The firm said Generac’s guidance for the 2023 fiscal year seems out of reach with its residential segment pressured.

Regional bank stocks — Some regional bank stocks that have been volatile in recent weeks rose Friday. Shares of First Republic gained 1.7%, while Zions Bancorporation, PacWest and KeyCorp added about 0.6% each. The SPDR S&P Regional Banking ETF inched 0.4% higher. UBS noted that bank borrowings from the Fed declined last week, a sign that liquidity issues may be under control following a difficult month for the broader sector.
— CNBC’s Alex Harring and Brian Evans contributed reporting More

Central banks around the world have hiked interest rates aggressively over the past year in a bid to rein in soaring inflation, after a decade of loose financial conditions.
“Part of the problem with QE was the fact that you’re basically nationalizing bond markets. Bond markets have a very very useful role to play when you’ve got inflation, which is they’re an early warning indicator,” HSBC Senior Economic Adviser Stephen King told CNBC’s Steve Sedgwick.

One Canada Square, at the heart of Canary Wharf financial district seen standing between the Citibank building and HSBC building on 14th October 2022 in London, United Kingdom.
Mike Kemp | In Pictures | Getty Images

The prolonged period of loose monetary policy after the global financial crisis equated to central banks “nationalizing bond markets,” and meant policymakers were slow off the mark in containing inflation over the past two years, according to HSBC Senior Economic Adviser Stephen King.
Central banks around the world have hiked interest rates aggressively over the past year in a bid to rein in soaring inflation, after a decade of loose financial conditions. The swift rise in interest rates has intensified concerns about a potential recession and exposed flaws in the banking system that have led to the collapse of several regional U.S. banks.

Speaking to CNBC at the Ambrosetti Forum in Italy on Friday, King said that while quantitative easing had benefited economies trying to recover from the 2008 financial crisis, its duration meant that governments were “probably far too relaxed about adding to government debt.”
“Part of the problem with QE was the fact that you’re basically nationalizing bond markets. Bond markets have a very very useful role to play when you’ve got inflation, which is they’re an early warning indicator,” King told CNBC’s Steve Sedgwick.

“It’s a bit like having an enemy bombing raid and you turn off your radar systems — you can’t see the bombers coming along, so effectively it’s the same thing, you nationalize the bond markets, bond markets can’t respond to initial increases in inflation, and by the time central banks spot it, it’s too late, which is exactly what I think has happened over the last two or three years.”
The U.S. Federal Reserve was slow off the mark in hiking interest rates, initially contending that spiking inflation was “transitory” and the result of a post-pandemic surge in demand and lingering supply chain bottlenecks.
“So effectively you’ve got a situation whereby they should have been raising interest rates much much sooner than they did, and when they finally got round to raising interest rates they didn’t really want to admit that they themselves had made an error,” King said.

He suggested that the “wobbles” in the financial system over the past month, which also included the emergency rescue of Credit Suisse by Swiss rival UBS, were arguably the consequence of a prolonged period of low rates and quantitative easing.
“What it encourages you to do is effectively raise funds very cheaply and invest in all kinds of assets that might be doing very well for a short period of time,” King said.
“But when you begin to recognize that you’ve got an inflation problem and start to raise rates very very rapidly as we’ve seen over the course of the last couple of years, then a lot of those financial bets begin to go rather badly wrong.” More

China’s small banks have problems — but they don’t carry the same risks as those exposed by the collapse of Silicon Valley Bank, said Zhu Min, vice president of the China Center for International Economic Exchanges, a state-backed think tank.
Issues at a handful of smaller Chinese banks have emerged in the last few years.
He pointed out that while those Chinese banks’ structure and operations were unclear, they did not pose systemic risks to the broader economy.

A Silicon Valley Bank office is seen in Tempe, Arizona, on March 14, 2023. – With hindsight, there were warning signs ahead of last week’s spectacular collapse of Silicon Valley Bank, missed not only by investors, but by bank regulators. Just why the oversight failed remained a hot question among banking experts, with some focusing on the weakness of US rules. (Photo by REBECCA NOBLE / AFP) (Photo by REBECCA NOBLE/AFP via Getty Images)
Rebecca Noble | Afp | Getty Images

BO’AO, China — China’s small banks have problems — but they don’t carry the same risks as those exposed by the collapse of Silicon Valley Bank, said Zhu Min, vice president of the China Center for International Economic Exchanges, a state-backed think tank.
Issues at a handful of smaller Chinese banks have emerged in the last few years.

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Baoshang Bank went bankrupt, while some rural banks in Henan province froze accounts, prompting protests by customers worried about their savings.
Those banks’ problems reflect local issues, Zhu said Wednesday. He pointed out that while those Chinese banks’ structure and operations were unclear, they did not pose systemic risks to the broader economy.
After the last three to four years of Chinese regulatory action, the situation has also improved, Zhu said.
China’s major banks — known as the big five — are owned by the central government and rank among the largest in the world.
On the other hand, SVB reflects a macro risk, Zhu said, noting the U.S. mid-sized lender had adequate capital and liquidity before it collapsed.

Macro risks present a much more worrisome problem, he explained. The banking crisis in the U.S. involved a structural risk from savers moving funds to take advantage of higher interest rates, Zhu pointed out.
The U.S. Federal Reserve has aggressively hiked interest rates in an attempt to ease decades-high inflation in the country. The U.S. dollar has strengthened against other currencies, while Treasury yields have risen to multi-year highs.

The current U.S. banking problem contrasts with the 2008 financial crisis that stemmed from Lehman Brothers’ exposure to mortgage-backed securities, he added.
Zhu, formerly deputy managing director of the International Monetary Fund, was speaking with reporters on the sidelines of the Boao Forum for Asia on Wednesday. The annual event hosted by China is sometimes considered Asia’s version of Davos.
The forum this year emphasized the need for cooperation amid global uncertainty — and highlighted China’s relative stability in its emergence from the pandemic.
China’s economy in 2022 grew by just 3%, the slowest pace in decades, as the real estate slump and Covid controls weighed on growth. The country ended its stringent zero-Covid policy late last year, and has been trying to attract foreign business investment.

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Consumption remains a clear weak spot in China’s economy, Zhu said. He expects advanced manufacturing and China’s push for reducing carbon emissions to remain growth drivers.
Private, non-state-owned companies have taken the lead in China’s so-called green transformation, Zhu said.
Chinese President Xi Jinping and new Premier Li Qiang have spoken repeatedly in the last few weeks about support for privately run businesses.
Xi has said he saw increased unity under the ruling Chinese Communist Party as necessary for building up the country.
New rules released this month give the party a more direct role in regulating China’s financial industry.
Zhu said he expects this overhaul to streamline financial oversight, and warned of a period of adjustment. However, he said that overall, it would make financial regulation more efficient and transparent in China.
Correction: This story has been updated to accurately reflect that China’s major banks are known as the big five. More

Previously, Andy Sieg was president of Merrill Lynch Wealth Management, a post he’s held for six years.
In his new position, he will be the head of Citi Global Wealth, reporting to Jane Fraser, CEO of Citi.
Sieg will begin his new role in September.

Scott Mlyn | CNBC

Andy Sieg, a veteran of Merrill Lynch, is parting ways with Bank of America to join Citigroup.
He will be the new head of Citi Global Wealth, reporting to Jane Fraser, the bank’s CEO. Sieg will begin his new role in September, as he is required to take a six-month leave before starting the new position, according to an announcement from Fraser.

“Growing Wealth is a core pillar of our strategy and will improve our business mix by adding more fee-based revenue and drive improved returns,” Fraser said in the announcement. “In my conversations with Andy, it is clear to him that our team is on a mission to transform Citi — and he is highly driven and motivated to play a central role in our firm’s leadership.”
Previously, Sieg was president of Merrill Lynch Wealth Management, a post he’s held for six years. He was also a member of Bank of America’s executive management team. The bank acquired Merrill during the throes of the great financial crisis.
Separately, Bank of America announced that Lindsay Hans and Eric Schimpf have been appointed presidents and co-heads of Merrill Wealth Management. They will report to Bank of America CEO Brian Moynihan.
-CNBC’s Hugh Son contributed reporting. More

A Bed Bath & Beyond store in the Brooklyn borough of New York, US, on Monday, Feb. 6, 2023. Bed Bath & Beyond Inc. said it would shutter another 87 stores in addition to the 150 closures it announced in August. Photographer: Stephanie Keith/Bloomberg via Getty Images
Stephanie Keith | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.
Bed Bath & Beyond – Shares of the home goods retailer dropped 26.2% after the company once again warned it may need to file for bankruptcy as it proposed a $300 million stock offering. The beleaguered company also said the loans it secured last year were downsized.

UBS — U.S. listed shares advanced 2%. The action comes a day after the bank announced Sergio Ermotti would return as CEO to oversee the takeover of Credit Suisse.
EVgo – The EV charging network operator surged 22.1% after the company reported fourth-quarter revenue that beat Wall Street estimates, according to Refinitiv. EVgo also highlighted strong year-over-year growth in network throughput.
Ford — The auto giant gained 2% after Morgan Stanley reiterated its overweight rating, saying the company should be able to show capital discipline.
Netflix — The streaming giant gained 1.9% in midday trading after Wells Fargo said it thinks the stock could rise 20% from here. Wells noted that the company’s “paid sharing efforts” give the stock exceptional upside, and is also “a key part of the long-term NFLX bull case.”
Zebra Technologies — Shares climbed more than 4.4% after Zebra Technologies announced a change in leadership. The mobile computing firm said it appointed Joe White as new chief product and solutions officer. Separately, TD Cowen initiated coverage of the stock as outperform.

Fluence Energy — Shares jumped 14.7% on an upgrade to buy from neutral by Goldman Sachs. The firm said the electric services provider should benefit from the Inflation Reduction Act.
Philip Morris — Shares rose 2% following an upgrade to overweight from neutral for the tobacco company by JPMorgan. The firm said shares are currently at an attractive price, while noting the company should be able to win market share over time.
Juniper Networks — The cloud computing network provider added 2% on the back of an upgrade to outperform from in line by Evercore ISI. The firm said the company should exceed expectations in both the near and long term.
Crocs — Shares rose 4.9% after B. Riley initiated coverage of the stock as a buy, saying the shoe company is underappreciated.
Interpublic Group of Companies — The advertising agency gained 3.2% following an upgrade to buy from neutral by Bank of America. The firm said the company is well positioned for challenges and described it as a reliable agency holding company.
Waste Management — Shares traded up 2.9% after TD Cowen initiated the solid waste company at outperform, saying the company and competitors offer steady earnings and cash flow.
Charles Schwab – Shares of Charles Schwab slid 5% after Morgan Stanley downgraded the financial services giant, citing an extended earnings recovery timeline that makes the risk-reward balance for shares appear less compelling
Carnival — Shares were up 2.7% as the cruise line stock continued to rally. Shares are up more than 10% for the week and have surged 26% in 2023. Earlier this week, Susquehanna upgraded Carnival to positive from neutral.
Paycom Software — Shares advanced 3.7% after D.A. Davidson upgraded Paycom Software to buy from neutral. While the Wall Street firm said growth is slowing for the payroll provider, the firm’s analyst Robert Simmons expects that there is “limited downside risk to estimates outside of a severe recession.”
— CNBC’s Sarah Min, Tanaya Macheel, Yun Li and Brian Evans contributed reporting More