Finance

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Check out the companies making headlines in after-hours trading.
Amazon — The e-commerce giant popped more than 7% in extended trading after posting strong second-quarter results and issuing upbeat revenue guidance for the current period. Amazon reported earnings of 65 cents a share, ahead of the 35 cents expected by analysts, per Refinitiv. Revenue rose 11% during the period and came in at $134.4 billion, ahead of the expected $131.5 billion.

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Apple — The big technology stock slid 1% as traders parsed the company’s latest financial report. Earnings per share for the fiscal third quarter came in at $1.26, above the $1.19 expected by analysts polled by Refinitiv. Revenue also came in higher than anticipated but was down about 1% on a year-over-year basis.
Booking Holdings — Shares of the online travel company advanced 9% in extended trading. For its second quarter, Booking Holdings reported adjusted earnings of $37.62 per share on revenue of $5.46 billion. Analysts polled by Refinitiv called for earnings of $28.90 per share on revenue of $5.17 billion. 
Fortinet — Shares of the cybersecurity stock tumbled 17% following a mixed second-quarter report and outlook. Fortinet posted 38 cents in adjusted earnings per share on $1.29 billion in revenue. Analysts polled by Refinitiv had expected 34 cents per share on $1.3 billion. Guidance for the current quarter was similarly mixed, with forecast earnings in line with expectations and revenue softer than Wall Street anticipated.
DraftKings — Shares of the digital gambling company popped 10% after DraftKings surpassed analysts’ estimates in the second quarter. DraftKings posted a loss of 17 cents per share on revenue of $875 million. Analysts called for a loss of 25 cents a share and $764 million in revenue, per Refinitiv.
Airbnb — Shares slid 1% after the company reported its second-quarter earnings. Airbnb posted 98 cents in earnings per share on revenue of $2.48 billion. Analysts had forecast 78 cents in earnings per share on $2.42 billion in revenue, according to Refinitiv. However, the company’s nights and experiences bookings missed expectations.

Coinbase — The crypto trading platform jumped 1% after posting second-quarter results. Coinbase posted a narrower-than-expected loss of 42 cents a share, while analysts polled by Refinitiv estimated a loss of 77 cents per share. Revenue also surpassed expectations, coming in at $708 million, versus analysts’ forecast for $633 million.
Dropbox — The online collaboration platform advanced 3% on the back of strong second-quarter earnings. Dropbox reported 51 cents in adjusted earnings per share, while analysts surveyed by Refinitiv anticipated 46 cents. Revenue came in at $623 million, ahead of the $614 million forecast.
Redfin — Redfin dropped 10% after issuing weaker-than-expected third-quarter revenue guidance. The company forecast third-quarter revenue between $265 million and $279 million, lower than the $288 million expected by analysts polled by Refinitiv. Meanwhile, the real estate company posted second-quarter revenue of $276 million, which came in line with estimates. Redfin reported a narrower-than-expected loss of 25 cents per share, better than the expected loss of 32 cents per share.
Corsair Gaming — The gaming stock slid 1% despite posting strong earnings and reiterating its full-year outlook. For the second quarter, earnings per share came in line with the consensus estimate from FactSet of 9 cents. Revenue beat expectations at $325.4 million compared with a $322.8 million forecast.
Sprout Social — The digital media stock dropped 11% after the company announced its acquisition of Tagger Media, a social intelligence and influencer marketing platform.
Square — Shares of the payments tech company dipped more than 4% in after-hours trading even after the firm reported second-quarter earnings and revenue above expectations. Square reported earnings of 39 cents per share, versus analysts’ 36 cents estimate per Refinitiv. Revenue of $5.53 billion also came in higher than the expectation of $5.10 billion.
— CNBC’s Darla Mercado, Hakyung Kim, Sarah Min, Samantha Subin and Yun Li contributed reporting. More

Who really bought the house next door? In America purchasers of residential property typically fall into two categories. First are the owner-occupiers, buying a home and hearth where they can live out their white-picket-fence American dreams. The rest are investors of various kinds. They may be flippers, looking to spruce up an old home and sell it on. They could be buy-to-let landlords acquiring a property to rent it out. Or they could be pure speculators, more interested in betting on prices than collecting rent.Owner-occupiers have traditionally dominated the market. For most of the decade to 2020 only a sixth of house purchases were made by investors, according to Redfin, a property platform. But their presence is growing. By 2022 the investor share was closer to a fifth. And their numbers may be far greater than reported, according to a recent working paper from the Federal Reserve Bank of Philadelphia, written by Ronel Elul, Aaron Payne and Sebastian Tilson. The reason is occupancy fraud. When applying for a mortgage, some buyers say they will live in the home they intend to purchase. But then they never move in. These phoney owner-occupiers are investors in disguise. Why might an investor indulge in this kind of masquerade? Their motives are easy enough to understand. Homeowners who live in their houses often get much better deals on their mortgages. The perks can include gentler interest rates, lower fees and smaller downpayments. To sniff out fraudulent borrowers, the researchers looked at three kinds of data. In a database of mortgage loans, they identified borrowers who said they planned to be owner-occupiers. Then they looked at those who have more than one “first lien” mortgage, ie the primary loan taken out on a property. (Mortgages for second homes or investment properties are classified differently.) Finally, they used address data gathered by credit bureaus to look for those who did not move within a year of obtaining a new mortgage. The authors define fraudulent borrowers as those who trip all three measures: they say they will move to the new property, they take out a second owner-occupier mortgage and then they never move. Once these disguised investors are added back in, the pool of mortgage-backed investors is 50% larger than commonly measured. That, in turn, suggests that total investors’ share of home purchases could be 20% higher than previously thought. This finding raises three potential concerns. First, it implies that investors are more influential in the market than they appear. People are wont to blame rootless speculators for America’s rapid house-price rises. A common rebuttal is to point out that investors still represent a relatively small share of purchases. But that defence is weakened if many speculators are going uncounted. Second, the research raises questions about financial regulation. Mortgage fraud is associated with all kinds of housing-market ills. America’s great property bubble of the 2000s, for example, became notorious for its mortgage mendacity. Brokers turned a blind eye to underwriting standards that required borrowers to show sufficient income or a secure job. Regulators have cracked down on most of this. But occupancy fraud seems hard to stamp out. According to the calculations by Mr Elul and his colleagues, it persists at the same rate today as it did in the early 2000s.The third problem is that disguised investors are typically not the best kind of borrowers. They are 75% more likely to default on their mortgages than declared investors. And they are more likely to default than true owner-occupiers, too. This makes sense. Investors driven to commit fraud are probably in greater need of the perks their deception allows. Compared with self-declared investors, they may be stretching themselves thin to afford the property they buy. Their downpayments are also likely to be smaller, giving them less skin in the game. Compared with genuine owner-occupiers, the phoney kind are also probably quicker to indulge in “strategic default”, walking away from a property when its value falls below the debts secured against it (a predicament known as negative equity). Genuine owner-occupiers are often more sentimentally attached to their homes, staying put within their white fences even when their equity turns red.The housing and mortgage markets are certainly in better shape than they were two decades ago, when the seeds of calamity were being sown. But it is hard to weed out all the bad actors and, therefore, all sources of fragility. House prices are still grinding slowly upwards in America. But if a downturn ever arrives, it may rip the mask off many speculators next door. They do not live in the homes they have bet on. Can they live with the bets they have made? ■ More

Southwest Airlines planes sit idle on the tarmac after Southwest Airlines flights resumed following the lifting of a brief nationwide stoppage caused by an internal technical issue, according to the U.S. Federal Aviation Authority, at Chicago Midway International Airport in Chicago, April 18, 2023.
Jim Vondruska | Reuters

Check out the companies making headlines in midday trading.
Roku — The streaming platform’s stock shed nearly 2% after Citi downgraded shares to neutral from buy. The firm said that Roku shares, which have jumped about 120% year to date, may have limited further upside.

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Simon Property Group — Shares dropped close to 6% after Simon Property Group reported a decline in funds from operations compared with a year ago. During the second quarter, funds from operations came in at $2.88 per diluted share, compared with $2.91 per diluted share in the year-ago period.
Southwest Airlines — Shares slipped 2.5% after Jefferies downgraded the air carrier to underperform from hold. The firm cited difficulty competing against premium providers.
Etsy — Stock in the e-commerce company plummeted nearly 12% after reporting quarterly results. Etsy disappointed investors Wednesday with lower forward guidance despite a second-quarter earnings beat.
Qualcomm — The chipmaker tumbled 9%. Qualcomm posted adjusted revenue of $8.44 billion, falling short of analysts’ estimates of $8.5 billion, per Refinitiv. The company also gave soft guidance and noted weak smartphone chip sales.
DoorDash — Shares of the food delivery company jumped almost 4% a day after the firm boosted its annual core profit forecast. DoorDash also reported revenue of $2.13 billion in the second quarter, beating analysts’ estimate of $2.06 billion, per Refinitiv. The company did post a bigger-than-expected loss last quarter, however.

Traeger — Stock in the grill maker soared 45% after an earnings beat following the closing bell Wednesday. Traeger reported adjusted earnings of 4 cents per share on $171.5 million in revenue, while analysts polled by FactSet had forecast a per-share loss of 2 cents and $154.9 million in revenue.
Clorox — Clorox stock added to earlier gains with a 9.5% jump in midday trading. The company beat on earnings and revenue a day earlier, reporting an adjusted $1.67 per share and $2.02 billion in revenue against analysts’ estimates of $1.18 per share and $1.88 billion in revenue, per Refinitiv.
PayPal — Shares lost 11.3% during Thursday’s midday trading session after the payments company posted earnings that were in line with analysts’ predictions Wednesday post-market. PayPal reported adjusted earnings of $1.16 per share, which was also estimated by analysts polled by Refinitiv. The company’s revenue beat the Street’s expectations, posting $7.29 billion compared with analysts’ estimates of $7.27 billion.
Sunrun — The solar stock added 10% in midday trading after reporting earnings. On Wednesday, the company reported earnings of 25 cents a share for the second quarter, while analysts forecast a loss of 13 cents a share, per Refinitiv.
Shopify — The e-commerce company fell 5% despite an earnings beat. On Wednesday, Shopify reported an adjusted 14 cents per share on $1.69 billion in revenue, while analysts polled by Refinitiv forecast 5 cents and $1.62 billion.
EVgo — Shares surged 21% a day after the charging network operator reported a big earnings beat. EVgo posted an 8 cent loss per share, versus the 27 cent loss expected, according to Refinitiv. Revenue was $50.6 million, topping the $29.6 million expected
Expedia — Stock in the online trip planner fell 17% after reporting a revenue miss for the second quarter. Expedia posted $3.36 billion in revenue, falling short of the $3.37 billion analysts expected, according to Refinitiv. The company issued soft guidance for the third quarter.
Cummins — Shares fell more than 8% after Cummins missed on earnings in its latest quarterly report. The engine manufacturer reported earnings of $5.18 per share, excluding items, and $8.64 billion in revenue. Analysts polled by FactSet called for earnings of $5.25 per share and $8.39 billion of revenue.
— CNBC’s Alex Harring, Yun Li, Michelle Fox, Hakyung Kim, Sarah Min and Pia Singh contributed reporting. More

Empty bottles of Moderna Covid-19 vaccine.
Fred Tanneau | AFP | Getty Images

Check out the companies making headlines before the market open.
Qualcomm — The chipmaker slipped 8.5%. after it posted $1.87 in adjusted earnings per share on $8.44 billion in revenue for the second quarter, while analysts polled by Refinitiv respectively anticipated $1.81 and $8.5 billion. Qualcomm also gave soft guidance and noted weak smartphone chip sales. Deutsche Bank downgraded shares to hold from buy following the report, while JPMorgan and UBS maintained their respective overweight and neutral ratings.

Moderna — Shares added 1.6% after the biotech company released its second-quarter results. Despite posting a quarterly loss and drop in revenue, Moderna raised its full-year outlook for its Covid vaccine, its only marketable product. 
Southwest Airlines — Shares of Southwest slid more than 3% after Jefferies downgraded the airline stock to underperform from hold. Jefferies said that low-cost airlines appear to be struggling relative to premium peers, citing a key revenue margin for Southwest that shrunk during the second quarter.
Albemarle —The energy stock added 5.4% following a mixed second-quarter report. Albemarle notably beat Wall Street expectations for earnings, reporting $7.33 per share excluding items against a consensus estimate of $4.44 compiled by Refinitiv. But revenue fell short at $2.37 billion on a $2.43 billion forecast. 
PayPal — Shares declined more than 8% after the company posted earnings that were in line with analysts’ predictions Wednesday post market. The payments company reported adjusted earnings of $1.16 per share, the same estimated by analysts polled by Refinitiv. Revenue came in higher than anticipated, with PayPal posting $7.29 billion, versus analysts’ estimates of $7.27 billion.
DoorDash — Shares jumped 3.5% after the company’s second-quarter results came above analyst estimates. The company reported its best-ever quarter for revenue and total orders. Management also cited improvements in expense management. 

Roku — The streaming platform’s stock shed 2% following a downgrade from Citi to neutral from buy. Citi said it would be moving to the sidelines, citing limited upside for shares. 
Clorox — The household good manufacturer’s shares jumped nearly 7% after posting an earnings and revenue beat in the second quarter. Clorox reported $1.67 earnings per share on $2.02 billion in revenue. Analysts had estimated $1.18 earnings per share on revenue of $1.88 billion, according to Refinitiv. The company also offered a strong full-year outlook. 
Etsy — Shares tumbled 9% after the company released its quarterly earnings Wednesday after the bell. Although its earnings and revenue topped analyst expectations, the company’s guidance for the third quarter was lighter than expected.
Qorvo — The stock rallied 6.8% after the company beat analyst expectations on top and bottom lines in the second quarter. Management said it expects September quarterly revenue to increase sequentially by more than 50%, “driven primarily by content gains” from Apple. 
Traeger — Shares jumped more than 24% following Traeger’s second-quarter earnings announcement Wednesday post-market. The company posted 4 cents earnings per share on $171.5 million in revenue. Analysts polled by FactSet had estimated a loss of 2 cents per share and $154.9 million in revenue. The company also raised its full-year revenue and earnings guidance. 
Unity Software — The software company surged about 5% after Unity exceeded analysts’ estimates for revenue in the second quarter. The company posted $533 million in revenue, while analysts polled by Refinitiv estimated $518 million.
DXC Technology — DXC Technology tumbled 24% after reporting earnings and revenue that missed estimates. The information technology firm reported adjusted earnings of 63 cents per share on revenue of $3.45 billion. Analysts polled by FactSet expected earnings of 82 cents per share on revenue of $3.56 billion. Separately, BMO Capital Markets downgraded the company to market perform from outperform following the results.
— CNBC’s Alex Harring, Sarah Min and Jesse Pound contributed reporting More

“Berkshire bought $10 billion in U.S. Treasurys last Monday. We bought $10 billion in Treasurys this Monday. And the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month” T-bills, Buffett told CNBC’s Becky Quick.
“There are some things people shouldn’t worry about,” he said. “This is one.”

Warren Buffett tours the floor ahead of the Berkshire Hathaway Annual Shareholder’s Meeting in Omaha, NE.
David A. Grogan | CNBC

Warren Buffett shrugged off Fitch’s U.S. credit rating downgrade, noting it doesn’t change what his conglomerate, Berkshire Hathaway, is doing at the moment.
“Berkshire bought $10 billion in U.S. Treasurys last Monday. We bought $10 billion in Treasurys this Monday. And the only question for next Monday is whether we will buy $10 billion in 3-month or 6-month”  T-bills, Buffett told CNBC’s Becky Quick on Thursday.

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“There are some things people shouldn’t worry about,” he said. “This is one.”
On Tuesday, Fitch lowered its long-term foreign currency issuer default rating for the U.S. to AA+ from AAA. The ratings firm cited “expected fiscal deterioration over the next three years,” growing debt and an erosion of governance.
The downgrade sparked a sell-off in U.S. stocks. The S&P 500 fell 1.4% on Wednesday.
Buffett noted these concerns are valid, and the Oracle of Omaha said he doesn’t agree with everything the federal government is doing. That said, it’s not enough to change his views on U.S. Treasurys and the dollar.
“The dollar is the reserve currency of the world, and everybody knows it,” Buffett said. More

Source: Finance – cnbc.com More

American inflation has left its mark across the country’s economy and the world’s financial markets. It has also reared its head between the Golden Arches. Since 1986 The Economist has tracked the price of a McDonald’s Big Mac around the world as a light-hearted guide to the fair value of currencies. Our index shows that the median price of the burger in its home market rose to $5.58 in July, an increase of over 4% since January and 8.3% compared with a year earlier. That is the beefiest rate of American McFlation recorded in our index since July 2012.Compared with the rest of the world, however, Americans have escaped lightly. From January to July the price of a Big Mac has risen more than twice as fast in the euro zone and Britain, and nearly four times as fast in Canada (see chart). What does this mean for the fair value of currencies? According to the theory of purchasing-power parity, a currency’s fundamental value reflects the amount of goods and services it can buy, including burgers. If the price of the Big Mac rises, the currency can buy fewer of them. Its fair value has therefore declined. Since the price of burgers is rising even faster in Europe, Japan and Canada than in America, their currencies’ purchasing power is dropping faster than the dollar’s. That is bringing their fair values closer into line with their market values. In January the fair value of the euro, judged by its burger-buying power, was $1.10. That is because €10 could purchase as many Big Macs in Europe as $11 could buy in America. But on the foreign-exchange markets, €10 cost only $10.90. By this measure, the euro looked cheap and the dollar expensive. That is no longer the case. Thanks to the rise in Big Mac prices in Europe and a small fall in the dollar, the fair value of the euro is now $1.06, less than its market exchange rate. The euro now looks overvalued against the dollar for the first time in two years. America’s currency is still expensive relative to the British pound and the Canadian dollar, but there is no longer much in it. In fact the euro, the Canadian dollar and the pound now all trade within 5% of the dollar value suggested by the Big Mac index. The greenback looked too expensive to begin with, so America’s weakening exchange rate and its milder inflation, relative to elsewhere, has brought the currency pairs and the fundamentals closer together.Why had the dollar risen so high? The explanation may lie in another currency-market conjecture: that of “uncovered interest parity”. It says that exchange rates should move to equalise, across borders, the returns to buying safe assets like government bonds. When interest rates rise—as they did more dramatically in America last year than in many rich countries—a currency should first jump, before gradually weakening over time. Bond investors receive a high rate of interest, but suffer a gradual capital loss on the currency. Perhaps that process is now playing out.This theory also helps explain one of the Big Mac index’s biggest misses this year: its prediction that a dollar should buy only 81 Japanese yen. In fact it buys 142. That suggests the yen is spectacularly cheap, undervalued by 43% against the greenback. The gap is likely to persist until the Bank of Japan feels the need to raise interest rates closer into line with America’s. That day may not be as far off as investors seem to assume. Last month the central bank unexpectedly tweaked its monetary policy. And even Japan is not immune to McFlation. A Big Mac there costs 9.8% more than it did six months ago. ■ More

Most young people are ultimately getting jobs, but ones that might not pay the best or match their area of study, according to CNBC interviews with six students and recent graduates.
The primary reason for high youth unemployment is insufficient demand from businesses, said Zhang Chenggang, director of a research center for new employment forms at the Capital University of Economics and Business in Beijing.
Youth unemployment has remained persistently high over the last three years, while the overall jobless rate for people in cities has officially stayed far lower, near 5%.

The unemployment rate for young people ages 16 to 24 in China has soared to record highs above 20% in May and April.
Kevin Frayer | Getty Images News | Getty Images

BEIJING — Ask young people about the Chinese job market, and the frequent answer is things are more difficult this year.
Most people are ultimately getting jobs, but ones that might not pay the best or match their area of study, according to CNBC interviews with six students and recent graduates. Many requested anonymity since youth unemployment can be a sensitive topic in China, especially for those in the middle of a job search or just starting a career.

The job market can be so tough that one student from a top university told CNBC his classmates are sending out at least 100 resumes, if not more.
“Some classmates have sent out more than 200,” the student said, noting he felt fortunate having applied to 80 positions before getting three job offers. He just graduated from Shanghai Jiao Tong University and is set to start work at Huawei later this summer. Shanghai Jiao Tong University is ranked third in China, and 89th globally, according to U.S. News and World Report rankings.

The unemployment rate for China’s young people ages 16 to 24 climbed to a new record high in June of 21.3%.
The primary reason for high youth unemployment is insufficient demand from businesses, said Zhang Chenggang, director of a research center for new employment forms at the Capital University of Economics and Business in Beijing.
Businesses aren’t certain about the future right now, making them reluctant to hire young workers — who typically need to be trained, regardless of the education system, Zhang said.

Youth unemployment has remained persistently high over the last three years, while the overall jobless rate for people in cities has officially stayed far lower, near 5%.
In the U.S., the unemployment rate for people ages 16 to 24 hit a high of 27.4% in April 2020, before falling to near 7% this year, according to U.S. Bureau of Labor Statistics data.
One 2023 graduate in China said her class missed out on job opportunities because large internet companies were only looking for current students (not graduates) to begin internships that might turn into jobs. In contrast, she said that when she was still a student, the pandemic was still ongoing and she had not heard of such opportunities.
“I feel like our employment [situation] is much harder,” she said in Mandarin, translated by CNBC.

Slowing growth

China’s economic rebound from the pandemic has slowed in recent months. Exports have fallen steadily. The massive real estate sector has yet to turn around.
Hiring plans have fallen, according to a monthly survey of mostly non-state-owned businesses run by alumni of the Beijing-based Cheung Kong Graduate School of Business. The CKGSB recruitment index fell to 54.2 in June, continuing a drop from 64.6 in April.
A similar business survey for May by Caixin found a slight increase in the service sector’s demand for workers. But manufacturers’ hiring plans fell to the lowest since February 2020.

Competition everywhere

Even in the government-supported, popular industry of semiconductors, the job search is getting harder.
The “hot” period of expansion has passed and the industry is in a period of settling, said Zimri Sun, who is starting his job search this summer ahead of graduating from his master’s program next year. That’s according to a CNBC translation of his Mandarin-language remarks.
Sun is studying information and communication engineering at Shanghai Jiao Tong University. He said he’s confident he will find a job, but knows the process will be hard.
For some fields, the pandemic and regulatory changes have eliminated many of the jobs once popular among young people in China — while the annual graduating class has swelled to record highs. The class of 2023 had nearly 11.6 million students, according to official estimates.

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Zhang expects the unemployment rate for young people to drop toward the end of the year, after the summer graduation season.
He noted that since many families in China have become more affluent, more young people can also afford to take their time to prepare for higher education exams and find a job with work-life balance.
For some, the situation may even prompt inaction.
“Every year people say it’s hard to find a job. This year, people are more relaxed,” another 2023 graduate said, noting recent world events have demonstrated the futility of planning. That’s according to a CNBC translation of the Mandarin.

Taking more time for tests

In a broader search for job stability, a record 7.7 million people took the civil service exam in China this year. More than 4.7 million people registered for an annual postgraduate studies exam in December, a new record, according to state media.
When Sirui Jiang was about to graduate last year, she said she applied for another master’s program as she’d rather pursue that than a job she didn’t want.
“These years are really challenging, especially for the newly graduated students, because we don’t have experience and it’s quite hard for us to find jobs not only in China but all over the world,” she said.
Jiang, who studied abroad in Europe, said she focused on making her resumes show why she was a fit for a company — something she said students didn’t always do well.
She now works remotely from her hometown in China as a sci-tech engagement coordinator at GFI Consultancy, a Shanghai-based firm focused on the alternative protein industry.
— CNBC’s Yulia Jiang contributed to this report. More