More stories

  • in

    Senate bill would expand unemployment benefits and pay $250 a week to gig workers

    Senate Finance Committee Chairman Ron Wyden, D-Ore., speaks at a Senate Finance Committee hearing at the U.S. Capitol on Feb. 25, 2021.Tasos Katopodis | Getty Images News | Getty ImagesA Senate bill introduced Wednesday would broadly reform the U.S. unemployment system, seeking to plug gaps in the safety net for jobless Americans in response to the Covid pandemic and put states on a more equal footing.The legislation would raise the amount and duration of unemployment benefits, and expand the pool of workers who qualify for aid.It’s sponsored by Sens. Ron Wyden, D-Ore., chair of the Finance Committee, and Michael Bennet, D-Colo.More from Personal Finance:Here’s how Americans are using their $1,400 stimulus checksCollege internships are back and pay even more than beforeNew $3,000 child tax credit to start payments in July, IRS saysThe bill, the Unemployment Insurance Modernization Act, would also make the self-employed, gig workers, new graduates and others a permanent fixture of the unemployment safety net.Such workers, who are typically ineligible for state aid, would qualify for a $250 weekly Jobseeker Allowance benefit, paid by the federal government for up to six months and indexed annually for inflation.Zoom In IconArrows pointing outwardsThe amount and length may increase during times of high unemployment. Similarly, state benefits would also be more responsive to economic downturns and rising joblessness.It makes other tweaks, too. For example, states wouldn’t be able to deny jobless aid to workers who quit their job for “compelling” reasons, like the loss of childcare or unusual risks to health or safety, and irregular work schedules — all of which have come into play during the pandemic.’Broken’ system”Our unemployment insurance system is broken, and it’s been broken for decades,” Wyden said. “As we’ve seen the last year, it’s much harder for the unemployment system to work in a crisis when it’s been neglected and sabotaged.”Millions of Americans turned to the program in record numbers a year ago as states took measures to contain the coronavirus outbreak.Lawmakers took unprecedented — though temporary — steps to increase benefit amount and duration via the CARES Act and other rounds of relief legislation. The Pandemic Unemployment Assistance program, for example, offered aid to millions of workers like the self-employed who wouldn’t have otherwise collected.This [legislation] would narrow the differences between states and create a more stable floor for this benefit.Andrew Stettnersenior fellow at the Century FoundationBut it’s unclear whether Republicans would back such a permanent expansion, which was created in the 1930s during the Great Depression.The $1.9 trillion American Rescue Plan, which extended assistance through Labor Day and raised it by $300 a week, didn’t get a single Republican vote. Critics of offering more jobless aid have argued that it could incentivize people to stay at home and hold back the economic recovery.More than 18 million people are still collecting benefits, according to the Labor Department.State differencesWorkers’ experience has varied greatly between states, which have broad leeway to set their own unemployment rules and standards.Massachusetts, for example, paid $500 a week in benefits to the average worker in February, the most of any state, according to the Labor Department. Louisiana, by contrast, paid $193 a week, the least.Workers in seven states also collect aid for less than six months, the typical duration, according to the Center on Budget and Policy Priorities. (Others temporarily raised them due to the pandemic.)Differences among states aren’t necessarily guided by cost of living, experts said. Many states, especially in the South, cut taxes that fund unemployment benefits after the Great Recession and cut aid as a result.”There’s a huge difference,” Andrew Stettner, a senior fellow at the Century Foundation, said. “This [legislation] would narrow the differences between states and create a more stable floor for this benefit.”The bill would require states to offer at least 26 weeks of benefits. Benefits would also replace 75% of a worker’s average pre-layoff wages (up from roughly half right now), up to a state’s maximum weekly benefit.The federal government would pay another $25 a week per dependent.A state’s maximum weekly benefit would also increase, to at least two-thirds of its average weekly wage.Louisiana, for example, currently caps benefits at about $250 a week. The legislation would cause that to more than double, to about $541, according to an analysis of Labor Department data on the state’s average wages in Q4 2020.The federal government would also fully replace lost wages for workers during public health emergencies or other major disasters.Extended benefitsWorkers currently get extended benefits during times of high unemployment.The legislation would change rules to trigger those extended benefits more quickly during recessions and would set a longer time frame for that aid, Stettner said.Most states pay a maximum 13 weeks of extended benefits; the bill would quadruple that, to up to 52 extra weeks, when the unemployment rate exceeds 8.5%.WATCH: Senate votes to advance anti-Asian hate crimes bill More

  • in

    Jamie Dimon says U.S. consumers are 'coiled, ready to go' with $2 trillion more in checking accounts

    Jamie Dimon, chief executive officer of JPMorgan Chase & Co., gestures while speaking during a Bloomberg Television interview at the JPMorgan Global Markets Conference in Paris, France, on Thursday, March 14, 2019.Christopher Morin | Bloomberg | Getty ImagesGovernment stimulus programs aimed at reducing suffering during the coronavirus pandemic have left consumers flush with savings – and that bodes well for the economic recovery under way, according to JPMorgan Chase CEO Jamie Dimon.One of the sole areas of weakness in JPMorgan’s first quarter earnings report was muted loan demand, as everyone from credit card borrowers to multinational corporations paid down their debts, the bank said Wednesday.Total loans at the bank slipped 4% from a year earlier to $1 trillion, even as deposits held at JPMorgan jumped 24% to $2.28 trillion. While that would normally be a bearish sign in a weakening economy, in this case, it just means that consumers will be laden with cash as vaccines allow for a broader reopening, Dimon said Wednesday during a call with reporters.”What happened is, the consumer has so much money, they’re paying down their credit card loans, which is good,” Dimon said. “Their balance sheet is in excellent, outstanding shape – coiled, ready to go and they’re starting to spend money. Consumers have $2 trillion in more cash in their checking accounts than they had before Covid.”Many Americans have received three rounds of stimulus checks and enhanced unemployment benefits since the pandemic began, helping forestall a wave of defaults that had been expected last year. They’ve been saving roughly 30% of their stimulus checks from each round, and recently have been plowing more money into debt repayment, CFO Jennifer Piepszak said.Consumer spending on debit and credit cards has returned to pre-pandemic levels, according to Piepszak, despite lower spending for travel and entertainment. Those categories should rebound as more people become vaccinated, helping an overall recovery in loan demand in the second half of 2021, she said.  The government stimulus, along with improving employment rates and the arrival of vaccines early this year, were cited as reasons that banks have begun to release some of the tens of billions of dollars in loan loss reserves they set aside last year. JPMorgan released $5.2 billion in reserves in the first quarter, the biggest sign yet that the U.S. banking industry is now expecting to have fewer loan losses than it had feared.A similar thing happened for businesses, Dimon said. Large companies were able to retire bank loans after raising money in the equity or fixed income markets, while smaller companies took advantage of the government’s Paycheck Protection Program.”We think [companies] have something like $2 trillion of excess cash in balance sheets,” Dimon said. “When they raise money in public markets, they can pay down loans to banks. This is not bad news about loan demand, this is actually good news.”JPMorgan managed to soak up about 20% of all the new deposits flowing into banks in the past year, according to Mike Mayo, a veteran bank analyst with Wells Fargo. However, that has made it a victim of its own success, in some ways.The influx of deposits – without places to deploy them – is adding pressure to JPMorgan’s efforts to remain within its international regulatory constraints. The firm is nearing limits for leverage as temporary Federal Reserve exemptions expire, managers warned, forcing the bank to raise more capital.”When a bank is leverage-constrained, this lowers the marginal value of any deposit,” Piepszak told analysts during a conference call. “Regulators should consider whether requiring banks to hold additional capital for further deposit growth is the right outcome.”The dynamic meant that JPMorgan’s ratio of loans to deposits dropped to 44% in the first quarter, compared with 57% a year ago. “There’s definitely a deposit conundrum at JPMorgan,” Mayo said. “To build a franchise to gather deposits and not to be able to fully monetize the value of those deposits is not optimal.”Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

  • in

    Stocks making the biggest moves after the bell: Dell, Coinbase, American Eagle & more

    In this articleCOSTDELLCOINAEODell CEO Michael Dell delivers a keynote address during the 2013 Oracle Open World conference on September 25, 2013 in San Francisco, California.Justin Sullivan | Getty ImagesCheck out the companies making headlines after the bell on Wednesday:American Eagle — The teen apparel retailer’s stock rose 4% after the company said it expects fiscal first-quarter sales to top $1 billion. That’s about $100 million above analyst expectations.Coinbase — Shares of the cryptocurrency exchange ticked up 2% after its first day of trading. In its market debut, Coinbase hit a high of $429.54 per share before closing at $328.28 per share. Dell — Shares of the computer manufacturer popped 8% after the company announced it will spin off 81% of its VMware stake, forming two standalone publicly traded companies. VMware will distribute a special cash dividend of $11.5 billion to $12 billion to shareholders.Costco — Costco shares rose slightly after the company increased its quarterly dividend to 79 cents per share from 70 cents per share, an increase of 12.9%. More

  • in

    Stocks making the biggest moves midday: Goldman Sachs, Bed Bath & Beyond, Moderna and more

    American flags in front of Goldman Sachs Group Inc. headquarters in New York, on Friday, March 5, 2021.Michael Nagle | Bloomberg | Getty ImagesCheck out the companies making headlines in midday trading.Goldman Sachs — Shares of the New York bank popped 2.3% in midday trading after the company posted first-quarter per-share earnings of $18.60—crushing the $10.22 estimate of analysts surveyed by Refinitiv—and revenue of $17.7 billion, more than doubled what it posted one year ago. As of the latest reading, Goldman shares are on pace for their best day since January.Coinbase — On its first day of trading, Coinbase rose 31.3% to trade around $420 per share. Coinbase shares opened at $381 on the Nasdaq Wednesday morning, giving the cryptocurrency exchange an initial market cap of $99.6 billion on a fully-diluted basis.Bed Bath & Beyond – Shares of the big-box retailer tumbled 12.2% after the company reported a double-digit decline in fiscal fourth-quarter sales. Its earnings per share came in at 40 cents adjusted, versus 31 cents expected by Refinitiv. Ongoing store closures and divestments as part of a bigger turnaround plan continued to weigh on Bed Bath & Beyond’s results.Wells Fargo — The bank stock jumped 5.6% on Wednesday after Wells Fargo reported better-than-expected first quarter results and the company’s management expressed optimism about a pickup in commercial loans. The bank reported $1.05 in earnings per share and $18.06 billion in revenue. Analysts surveyed by Refinitiv were looking for 70 cents per share and $17.5 billion in revenue.Moderna —Shares of the drug maker popped 6.9% after Moderna said its Covid-19 vaccine was more than 90% effective at protecting against the virus six months after a person’s second shot. The data was based on more than 900 cases of the virus.JetBlue – The airline’s share price advanced 0.3% following a bullish call from JPMorgan. The firm double upgraded the stock from an underweight rating to overweight, citing cost control measures and an attractive valuation. JPMorgan also raised its price target on the airline to $25 from $15. The new target is 20% above where shares closed on Tuesday.Harley-Davidson — Shares of the motorcycle company rose 1.1% but closed lower after Bank of America initiated coverage on the stock with a buy rating and said it sees “accelerating brand momentum.” The firm said it is bullish about the prospect of “adventure touring” in Harley-Davidson’s future.Snap – Snap gained 2% but closed lower after Wedbush assumed coverage on the company with an outperform rating. The firm said Snap has an innovative platform with a young audience, and pointed to opportunity in augmented reality and social commerce. Wedbush’s 12-month target price of $75 suggests a 20% rally from Tuesday’s closing price.Occidental Petroleum — Shares of the the hydrocarbon exploration company rallied 5.2% after MKM partners upgraded Occidental Petroleum to buy from neutral. The Wall Street firm said investors should take advantage of the pullback in shares.Discovery — Shares of the media company dropped 5% after CNBC reported that Credit Suisse is still unloading its position in the wake of Archegos Capital Management’s chaos. According to people familiar with the matter, the bank was selling 19 million shares of Discovery’s class A stock on Tuesday.JPMorgan – Shares of JPMorgan dipped 1.9% even after the bank reported profit and revenue that exceeded analysts’ expectations on robust trading results. The strong result was also helped by a $5.2 billion benefit from releasing money it had previously set aside for loan losses that didn’t develop. The bank posted first-quarter profit of $14.3 billion, or $4.50 a share including a $1.28 per share benefit from the reserve release, higher than the $3.10 per share expected by analysts surveyed by Refinitiv. The stock has risen more than 20% in 2021.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now— with reporting from CNBC’s Yun Li, Jesse Pound, Tom Franck and Pippa Stevens. More

  • in

    Gary Gensler confirmed by Senate to lead the SEC, Wall Street's top regulator

    Gary Gensler, chairman of the Commodity Futures Trading Commission (CFTC), speaks during a Senate Banking Committee hearing in Washington, D.C., U.S., on Tuesday, July 30, 2013.Andrew Harrer | Bloomberg | Getty ImagesGary Gensler will lead the Securities and Exchange Commission after the Senate voted 53-45 on Wednesday to confirm his nomination to head the nation’s top financial regulator.Gensler, chosen for the role by President Joe Biden, will now play a key part in enforcing and drafting the rules that govern Wall Street, investors and a wide range of other financial entities.Now, with the SEC commissioners possessing a 3-2 Democratic majority, Gensler will likely have a long to-do list after he settles in to his new job.Progressives expect the 63-year-old to follow through on his promises to look into a range of topics, including digital currencies, the GameStop trading mania and how corporate America prioritizes environmental, social and governance issues.Gensler, a former Goldman Sachs executive, is perhaps best known in Washington for his unyielding work at the Commodity Futures Trading Commission, where he devised the regulatory framework for the multitrillion-dollar derivatives market.CNBC PoliticsRead more of CNBC’s politics coverage:Biden plans to withdraw U.S. forces from Afghanistan by Sept. 11, missing May deadlineHundreds of corporations, business leaders, celebs sign statement against voting restrictionsGas tax is not being considered in Biden’s infrastructure plan, White House saysDemocrats and Republicans alike asked Gensler in March whether he would scrutinize payment for order flow and game-like tactics used by brokerages to entice customers to their platforms. Both subjects received attention on Capitol Hill this year after January’s wild trading in GameStop, AMC Entertainment and other stocks.Gensler also noted potential problems with the current structure of payment for order flow, a common practice on Wall Street whereby trading firms, such as Citadel Securities, pay companies to send them their customers’ orders for execution.Questioned in March how the SEC should regulate bitcoin and other digital assets, Gensler replied that the responsibility could fall across the government depending on how assets such as bitcoin are classified. One of his earliest and most-anticipated decisions as head of the SEC will be whether to allow the creation of a bitcoin exchange-traded fund.Sen. Sherrod Brown, chairman of the Senate Banking Committee, was quick to offer praise for Gensler following the vote.”Mr. Gensler will lead the SEC at a time when it’s become more and more obvious to most people that the stock market is detached from the reality of working families’ lives,” the Ohio Democrat said in a statement. “Mr. Gensler will bring the SEC’s focus back to the people who make this country work and push to ensure that markets are a way for families to save and invest … not a game for hedge fund managers where workers always lose.”Sen. Pat Toomey, the ranking member on the Banking committee, offered an explanation on why he opposed Gensler’s nomination.”I’m concerned he will cause the SEC to use its regulatory powers to advance a liberal social agenda focused on issues such as global warming, political spending disclosures, and racial inequality and diversity,” the Pennsylvania Republican said in a statement.”Nothing Mr. Gensler said at his hearing—or since—has alleviated my concerns,” he added.Toomey in March asked for Gensler’s thoughts on Nasdaq’s push to increase diversity on corporate boards.Republicans have decried a recent plan submitted by the exchange operator to the SEC that would require the thousands of companies listed on its stock exchange to include women, racial minorities and LGBT individuals on their boards.Gensler replied by touting the benefits of diversity more broadly and among the ranks at the SEC. More

  • in

    As Coinbase debuts, Powell calls cryptocurrencies 'vehicles for speculation'

    Federal Reserve Chair Jerome Powell holds a news conference following the Federal Reserve’s two-day Federal Open Market Committee Meeting in Washington, July 31, 2019.Sarah Silbiger | ReutersCryptocurrencies are largely for making bets on price increases and haven’t reached the status of payment mechanisms, Federal Reserve Chairman Jerome Powell said Wednesday.”They’re really vehicles for speculation,” the central bank leader told The Economic Club of New York in a virtual interview with David Rubenstein, co-founder of the Carlyle Group. “They’re not really being actively used as payments.”Powell compared crypto to gold.”For thousands of years, human beings have given gold a special value that it doesn’t have” as an industrial metal, he said.The comments came the same day Coinbase went public in a direct listing on the Nasdaq, an exchange that is weighted with tech companies.Coinbase is the predominant exchange for trading bitcoin and other cryptocurrencies. It opened at $381 a share, well above its $250 reference price. The company said it generated $1.8 billion in revenue for the first quarter amid wild price gains for bitcoin, ethereum and other crypto names.Powell’s predecessor at the Fed, Janet Yellen, is now Treasury secretary. In February, she told CNBC that she views bitcoin as “a highly speculative asset” and said it is not “widely used as a transmission mechanism” and is an “extremely inefficient way of conducting transactions.”Along with a brief chat about crypto, the Powell interview encompassed a variety of subjects, much of it familiar ground for the Fed leader.One revelation was that Powell has yet to meet with President Joe Biden.Fed watchers have been speculating as to whether Biden will give Powell another term as chair when the current one expires in 2022. Asked in a CBS “60 Minutes” interview that aired Sunday on whether he wants another term, Powell demurred, saying he’s focused on “doing the best job I can.”Powell, who was appointed Fed chairman — and harshly criticized — by then-President Donald Trump, said he has had no contact with Biden since the latter became president nearly three months ago.Asked if he’s ever met Biden, Powell said, “I think I’ve shaken his hand, but I have not really met him and talked to him.”Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More

  • in

    Bitcoin and ether rally to fresh record highs ahead of landmark Coinbase listing

    In this articleCOINThe Coinbase logo shown on a smartphone.Chris Delmas | AFP via Getty ImagesLONDON — Bitcoin and other cryptocurrencies surged to new heights Wednesday, with traders awaiting Coinbase’s highly anticipated stock market debut.The world’s most valuable digital coin rallied to an all-time high of $64,841 Wednesday morning, according to data from Coin Metrics. The price of ether, the second-biggest token by market value, briefly touched the $2,400 level for the first time ever.As of 8:30 a.m. ET, bitcoin was trading around $64,248, up 2.2%, while ether rose about 4.5%, to $2,390. Other bitcoin alternatives also climbed, with XRP up 0.5% to reach $1.81 and cardano hitting a new price record of $1.56.Coinbase, the largest crypto exchange in the United States, is set to go public through a landmark direct listing Wednesday that could value the company at as much as $100 billion. The Nasdaq gave Coinbase a reference price of $250 a share, which would value the company at about $65.3 billion on a fully diluted basis.Coinbase is the largest cryptocurrency company to go public. It’s the world’s second-largest digital asset exchange by trading volume, according to CoinMarketCap, and has been credited with bringing crypto into the mainstream with its easy-to-use app. The company posted an estimated $1.8 billion of revenue in the first quarter of 2021 as the value of bitcoin and other tokens skyrocketed.The firm’s listing has led to renewed excitement in the crypto market, with some investors labeling it as a “watershed” moment for the industry. Analysts say the Coinbase debut shows crypto has matured a great deal in the last two to three years — but it’s still in its infancy and remains clouded by price volatility and regulatory uncertainty.Bitcoin’s comeback — it has more than doubled in price in 2021 — has been marked by big bets from mainstream investors, with Tesla investing $1.5 billion in the token earlier this year and Wall Street giants like Goldman Sachs and Morgan Stanley looking to offer their wealthy clients some exposure to crypto.Bitcoin bulls see it as a kind of “digital gold” that is uncorrelated with other assets and can serve as a hedge against rising inflation. However, skeptics say the digital asset is still highly speculative and view it as one of the biggest market bubbles in history. More

  • in

    Wells Fargo earnings top estimates on $1.05 billion release of loan loss reserves

    In this articleWFCWells Fargo CEO Charles Scharf listens during the Milken Institute Global Conference in Beverly Hills, Calif., on April 30, 2019.Kyle Grillot | Bloomberg | Getty ImagesWells Fargo reported earnings and revenue that beat expectations for its first-quarter on Wednesday.Here’s how the results stacked up to Wall Street estimates.Earnings: $1.05 in earnings per share versus 70 cents a share expected, according to Refinitiv.Revenue: $18.06 billion versus $17.5 billion expected.Wells Fargo results were helped by a net benefit of $1.05 billion from reserve releases. Banks bulked up their credit loss reserves last year as the pandemic pulled the U.S. economy into a sharp recession, but the financial firms have started to release those reserves as the recovery takes shape.CEO Charlie Scharf, who took over in late 2019, is running a company that is still recovering from the aftermath of its 2016 fake accounts scandal.”Our results for the quarter, which included a $1.6 billion pre-tax reduction in the allowance for credit losses, reflected an improving U.S. economy, continued focus on our strategic priorities, and ongoing support for our customers and our communities,” Scharf said in the earnings release. “Charge-offs are at historic lows and we are making changes to improve our operations and efficiency, but low interest rates and tepid loan demand continued to be a headwind for us in the quarter.”Wells Fargo also reported a net interest margin of 2.05% and an efficiency ratio of 77% for the quarter. Analysts were expecting 2.10% and 78%, respectively, according to FactSet.Analysts will be keen to hear about any progress the bank is making in appeasing regulators, especially regarding a Federal Reserve order that caps the bank’s asset growth, on the earnings call on Wednesday morning.Of the six biggest U.S. banks, Wells Fargo has the smallest Wall Street trading and investment banking operations, areas that have been on fire in recent months thanks to a red-hot IPO market and unprecedented Fed support.Last year, Wells Fargo was the only bank among the six biggest U.S. lenders to be forced to cut its dividend after the annual Federal Reserve stress test. The firm also posted its first quarterly loss since the financial crisis and announced it was cutting billions of dollars in expenses.  Wells Fargo shares have climbed 33% this year, exceeding the 25% gain of the KBW Bank Index. The bank’s stock was down slightly in premarket trading after releasing its results.This story is developing. Please check back for updates.Enjoyed this article?For exclusive stock picks, investment ideas and CNBC global livestreamSign up for CNBC ProStart your free trial now More