Finance

China’s Commerce Ministry on Wednesday said non-economic factors were growing and interfering with trade.
“Companies say some countries’ politicization of trade has forced orders and production to move out, damaging the economic interests of both suppliers and buyers,” an official said in Mandarin, via a CNBC translation.
The ministry also said its head has met with more than 20 visiting executives of foreign companies this year.

Workers load goods for export onto a crane at a port in Lianyungang, Jiangsu province, China June 7, 2019.

BEIJING — China’s Commerce Ministry on Wednesday said non-economic factors were growing and interfering with the country’s foreign trade which was facing an “extremely severe” situation in the second half of this year.
“Some countries’ forceful push for ‘decoupling,’ ‘severing [supply] chains’ and so-called ‘de-risking’ are human-made obstacles blocking normal commerce,” Li Xingqian, the head of the ministry’s external trade department, said in Mandarin, according to a CNBC translation. He was speaking to reporters at a press conference about the ministry’s work in the first half of the year.

China’s exports, a significant contributor to domestic growth, have plunged in recent months as global growth has slowed.
On Wednesday, Li noted the overall slowdown. He also said that since trade had risen during the three years of the Covid-19 pandemic, that had set a high base for this year’s figures.

Li also directly referenced calls for supply chain diversification.
“Companies say some countries’ politicization of trade has forced orders and production to move out, damaging the economic interests of both suppliers and buyers,” he said. He added the ministry would help businesses to cope with “unreasonable trade restrictions.”
The ministry did not say anything about its own recently announced export controls, set to take effect Aug. 1 on two key metals.

The U.S. is using export controls of its own in an effort to limit China’s development of high-end tech. Trade tensions between the U.S. and China have escalated over the last few years, prompting other countries to take action as well.
China, meanwhile, is looking to retain and attract foreign investment. Apple’s Tim Cook, Tesla’s Elon Musk and many other business leaders have traveled to China since it relaxed its border restrictions this year.
The Commerce Ministry said Wednesday that its minister, Wang Wentao, has met with more than 20 visiting executives of foreign companies this year. The ministry reiterated its efforts to establish regular roundtables with foreign businesses in China and address operational challenges.
Among other plans, the ministry said it would make changes to allow foreign investors to increase the size of their strategic investments in listed companies. More

Economists polled by Reuters had projected an annual rise in the headline consumer price index of 8.2%, following the hotter-than-expected 8.7% reading of May.
Core inflation — which excludes volatile energy, food, alcohol and tobacco prices — remained sticky at an annualized 6.9%, but fell from a 31-year high of 7.1% in May.

Skyline view of the City of London financial district.
Mike Kemp | In Pictures | Getty Images

LONDON — U.K. inflation cooled significantly in June, coming in below consensus expectations at 7.9% annually.
Economists polled by Reuters had projected an annual rise in the headline consumer price index of 8.2%, following May’s hotter-than-expected 8.7% reading, but annualized price rises continue to run well above the Bank of England’s 2% target.

On a monthly basis, headline CPI increased by 0.1%, below a consensus forecast of 0.4%. Core inflation — which excludes volatile energy, food, alcohol and tobacco prices — remained sticky at an annualized 6.9%, but fell from a 31-year high of 7.1% in May.
Falling prices for motor fuel made the largest downward contributions to the monthly change in the CPI annual rate, the Office for National Statistics said Wednesday. Food prices rose in June, but by less than in the same period of last year.
“There were no large offsetting upward contributions to the change in the rate,” the ONS added.
Sterling slid 0.6% against the dollar on Wednesday, hovering around $1.296 as of 7:50 a.m. London time.
Chief Secretary to the Treasury John Glen told CNBC on Wednesday that the larger-than-expected decline in the inflation rate was “very encouraging.”

“But there’s no complacency here in the Treasury,” he added. “We’re working closely in lockstep with the Bank of England as we try to halve it this year and get it down to its long term norm of 2%.”

The U.K. has endured persistently high inflation that both the government and the Bank of England have warned could become entrenched in the economy, as a cost-of-living crisis and a tight labor market fuel wage price increases.
Bank of England Governor Andrew Bailey and U.K. Finance Minister Jeremy Hunt told an audience in the City of London earlier this month that high wage settlements were harming their efforts to contain inflation.
The Organization for Economic Cooperation and Development last month projected that the U.K. will experience the highest level of inflation among all advanced economies this year, with a headline annual rate of 6.9%.
The Bank of England implemented a bumper 50-basis-point hike to interest rates last month, its 13th consecutive increase, as the Monetary Policy Committee struggles to quash demand and rein in inflation.
After the U.K. base rate went from 0.1% to 5% over the last 20 months, markets are narrowly pricing in another aggressive half-point hike to 5.5% at the MPC’s August meeting.
A ‘glimmer of light’
Although energy and fuel prices are taking headline inflation in the “right direction,” stubbornly high core inflation and food costs mean Wednesday’s print is unlikely to offer any “real relief to struggling households and businesses,” said Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales.
“June’s decline in inflation should be followed by a hefty fall in July, with lower energy bills – following the reduction in Ofgem’s energy price cap – likely to pull the headline rate below 7%,” Thiru said in a statement.
He added that core inflation should continue to trend downwards, as the lagged effects of the Bank of England’s monetary policy tightening and the government’s tax increases squeeze demand. He nevertheless warned this will come “at the expense of a notably weaker economy and higher unemployment.”
“While interest rates will probably rise again in August, focusing too much on current inflation data to set rates can lead to damaging policy mistakes given the long time lag between rate rises and their effect on the wider economy,” Thiru said.

Marcus Brookes, chief investment officer at Quilter Investors, said that the fall in CPI represented a “glimmer of light,” but “still leaves us wondering once again why the U.K. is such a drastic outlier” among major economies when it comes to inflation.
“Demand has withstood both inflation and the rise in rates, but cracks are appearing, and as more mortgage holders get exposed to the current rates, the economy is likely to be hit as a result.”
Brookes noted that this path to a likely recession next year may be necessary in order to get inflation back to target, with the Bank of England raising rates further and with fiscal tightening unlikely, as the government faces an election in 2024.
“Inflation should begin to come back down to more palatable levels soon, but as we have seen these forecasts are unpredictable,” he added.
“For investors, this means seeking shelter in quality companies that can navigate this difficult environment, while also considering U.K. fixed income investments, such as gilts, as these look at attractive prices right now as we head into a potentially difficult economic period.” More

Western Alliance Bank’s logo is seen on a smartphone.
Sopa Images | Lightrocket | Getty Images

Check out the companies making headlines after hours.
Interactive Brokers — Interactive Brokers slid 2.6% after the brokerage firm’s second-quarter earnings missed estimates. The firm reported adjusted earnings of $1.32 per share, weaker than consensus estimates of $1.40 per share, according to Refinitiv.

Carvana — The online auto retailer dropped more than 8% in extended trading. Carvana said Tuesday it will post second-quarter earnings results on Wednesday, moving the date of its report up from August 3.
Omnicom Group — Shares dropped more than 5% after Omnicom Group reported disappointing revenue. The global marketing company posted second-quarter revenue of $3.61 billion, lower than forecasts of $3.67 billion, according to consensus estimates from FactSet. It narrowly beat earnings expectations, posting adjusted earnings of $1.81 per share, higher than the consensus estimates of $1.80 per share.
J.B. Hunt Transport Services — J.B. Hunt Transport Services declined 1.1% after posting disappointing results. The transportation and logistics firm reported second-quarter earnings of $1.81 per share on revenue of $3.13 billion. Analysts polled by Refinitiv had expected per-share earnings of $1.92 on revenue of $3.31 billion.
Western Alliance Bancorp — The regional bank stock declined about 5% after Western Alliance posted second-quarter results. The company reported earnings of $1.96 per share, lower than the consensus estimate of $1.98 per share, according to Refinitiv. Revenue for the quarter came in at $669 million, topping the forecast of $652 million. The bank reported deposits rose in the quarter. More

A man passes by a location of financial broker Charles Schwab in New York, March 20, 2023.
Brendan McDermid | Reuters

Shares of brokerage firm Charles Schwab rose sharply Tuesday after the company’s second-quarter report topped expectations.
Schwab generated 75 cents in adjusted earnings per share on $4.66 billion in revenue. Analysts surveyed by Refinitiv estimated 71 cents per share on $4.61 billion of revenue.

related investing news

an hour ago

Shares jumped 12% Tuesday.

Stock chart icon

Shares of Schwab rose sharply on Tuesday.

Chief Financial Officer Peter Crawford said in the release that revenue, which fell 9% year over year, was hurt by customers reallocating their cash with higher rates. However, Crawford stated that “we observed a continued and substantial deceleration in the daily pace of cash outflows” in June and that the company expected client cash to start growing again by the end of the year.
CEO Walt Bettinger said on “Squawk on the Street” that “client cash realigning” is now down more than 80% from the first quarter.
“We were proactive going to clients, encouraging them to move their sweep cash into higher yielding balances, and that process began 15 or 16 months ago. They’ve largely done that,” Bettinger said. “And what’s interesting about June is that even as this cash realigning fell to the lowest level it’s been in many, many months, part of that was because clients are now moving back into the equity markets.”
Shares of Schwab entered Tuesday down nearly 30% for the year. The stock was hit hard during the regional banking crisis in March, as investors grew concerned about the value of the debt on Schwab’s balance sheet and potential deposit outflows. More

Pedestrians walk by a sign posted outside a Charles Schwab office in San Francisco, April 17, 2023.
Justin Sullivan | Getty Images

Check out the companies making headlines in midday trading.
Morgan Stanley — Shares of the James Gorman-led bank jumped more than 6% after the firm posted second-quarter earnings and revenue that topped analysts’ expectations. The results were helped by Morgan Stanley’s record revenue from wealth management.

related investing news

2 days ago

Bank of America — Bank of America shares rose more than 4% after the company reported second-quarter financial results. Earnings came in at 88 cents a share, although analysts estimated a profit of 84 cents per share, according to a Refinitiv estimate. The bank posted revenue of $25.33 billion fueled by a 14% jump in net interest income amid higher rates. Analysts anticipated revenue of $25.05 billion.
Charles Schwab — The brokerage stock popped 12.6% after reporting stronger-than-expected results for the second quarter. Charles Schwab reported adjusted earnings of 75 cents per share on $4.66 billion in revenue. Analysts surveyed by Refinitiv had expected EPS of 71 cents on $4.61 billion in revenue.
Microsoft — Microsoft shares jumped 4%. The software giant announced pricing for its artificial intelligence Copilot tool. Microsoft also announced an expanded partnership with Meta Platforms to make the social media company’s open-source large language model available on Azure and Windows.
Regional bank stocks — Regional bank stocks gained on Tuesday on the heels of a fresh batch of bank results, lifting the SPDR S&P Regional Banking ETF (KRE) more than 4%. Western Alliance popped more than 8% ahead of earnings after the bell. PacWest was up 5.8%, while FB Financial gained more than 6% and Zions Bancorporation rose 3.4%.
UnitedHealth — The health-insurance stock gained 3.3% after being upgraded to outperform from market perform by Bernstein. The firm said UnitedHealth is a “best-in-class” managed-care and value-based care company with an attractive valuation and “large runway of growth.”

Verizon, AT&T — Verizon rose 2.6%, reversing the recent downtrend in shares following a report that linked the companies to lead-encased cables and concerns from analysts. Elsewhere, AT&T lost about 0.6%.
Bank of New York Mellon — Shares rose more than 4% after Bank of New York Mellon reported second-quarter revenue and profit that beat Wall Street’s expectations.
Pinterest — Shares hit a high not seen since early 2022 intraday and rose 4%. Evercore ISI said improving advertising trends are creating an inflection point for the stock.
PNC Financial — Shares gained 2.5% after PNC Financial reported second-quarter earnings that topped Wall Street’s earnings expectations but came in slightly short on revenue. The financial services company reported earnings of $3.36 per share on revenue of $5.29 billion.
Prologis — The logistics real estate stock lost more than 3% after posting second-quarter results that fell short of Refinitiv revenue estimates. Prologis reported net income of $1.31 a share and rental revenue of $1.65 billion.
Novartis — U.S.-listed shares of Novartis jumped 4.6%. The Swiss pharmaceutical firm reported second-quarter earnings that topped estimates, according to StreetAccount. Novartis posted core earnings of $1.83 per share, better than the $1.70 estimate. It posted revenue of $13.62 billion, more than the consensus $13.23 billion. The company raised its full-year forecast. Its board of directors also approved a separation from its Sandoz division.
Masimo — Shares tumbled 20% after Masimo pre-announced second-quarter revenue that was weaker than consensus expectations, and lowered its full-year guidance. The medical-device maker said in its guidance that second-quarter revenue would come in at $453 million to $457 million, lower than expectations of $553.3 million, according to consensus estimates from FactSet. Stifel downgraded the stock to hold from buy after the pre-announcement, according to StreetAccount.
Lockheed Martin — The aerospace company gave back earlier gains that followed the release of its latest financial update. Lockheed Martin reported earnings of $6.73 that beat expectations of $6.45, according to FactSet, and revenue of $16.69 billion, compared with expectations of $15.92 billion. The stock finished nearly 3% lower.
— CNBC’s Tanaya Macheel, Sarah Min, Yun Li, Alex Harring and Michelle Fox contributed reporting. More

Walter “Walt” Bettinger, president and chief executive officer of Charles Schwab Corp., speaks during the 2015 Fortune Global Forum in San Francisco, California, on Tuesday, Nov. 3, 2015.
David Paul Morris | Bloomberg | Getty Images

Charles Schwab CEO Walt Bettinger said Tuesday that retail investors using his brokerage platform are showing signs of bullishness on the stock market.
Bettinger revealed that Schwab clients have been adding equity exposure in the past few months. The volume of buy orders on Schwab’s platform is 20% higher than sell orders, showing investor optimism about the market, he added.

related investing news

“What’s interesting about June is that, even as this cash realigning fell to the lowest level it’s been in many, many months, part of that was because clients are now moving back into the equity markets. So that’s a good thing,” Bettinger said on “Squawk on the Street.”
“It’s clients simply moving into something in cash that pays higher yield. They’re back in the market. And we saw in the aggregate for the second quarter, buys were about 20% higher than sells. Our clients are showing some optimism,” he added.
The S&P 500 has jumped more than 18% this year after scoring its best first half since 2019.
Shares of Schwab soared 12% Tuesday after its second-quarter report topped expectations. Schwab posted adjusted earnings per share of 75 cents on $4.66 billion in revenue. Analysts polled by Refinitiv estimated 71 cents per share on $4.61 billion of revenue.
The stock is still down more than 21% this year, even after Tuesday’s surge. Schwab shares sold off dramatically earlier this year during the regional banking crisis amid concerns about deposit outflows and its balance sheet.
— CNBC’s Jesse Pound contributed reporting. More

Here’s what the company reported: Earnings: $1.24 a share vs $1.15 per share Refinitiv estimate.
Revenue of $13.46 billion vs. expected $13.08 billion.

CEO of Morgan Stanley James Gorman speaks in New York, May 6, 2014.
Getty Images

Morgan Stanley on Tuesday posted second-quarter earnings and revenue that topped analysts’ expectations, helped by record wealth management results.
Here’s what the company reported:

Earnings: $1.24 a share vs $1.15 per share Refinitiv estimate
Revenue: $13.46 billion vs. expected $13.08 billion

related investing news

2 days ago

The bank said profit declined 13% to $2.18 billion, or $1.24 a share, on lower trading results from a year ago and a round of layoffs that triggered $308 million in severance costs. Revenue climbed 2% to $13.46 billion.
Under CEO James Gorman, Morgan Stanley’s reliance on wealth management has helped its steady earnings and boosted its valuation relative to peers. Gorman, who took over the firm in 2010, said in May he was preparing to step down within a year, setting off a succession race at the Wall Street powerhouse.
“The firm delivered solid results in a challenging market environment,” Gorman said in the earnings release. “The quarter started with macroeconomic uncertainties and subdued client activity, but ended with a more constructive tone.”
Despite lower market levels that caused some fees to dip from a year ago, second-quarter wealth management revenue rose 16% to $6.66 billion on higher interest income, exceeding the $6.5 billion estimate of analysts surveyed by FactSet. The division took in $90 billion in net new client assets.
The bank’s Wall Street division fared less well. The institutional securities business posted an 8% drop in revenue to $5.65 billion, driven by declines in trading. While equities trading generated $2.55 billion in revenue, topping the $2.37 billion FactSet estimate, fixed income produced $1.72 billion, which was well below the $1.99 billion estimate.

Investment banking revenue of $1.08 billion was roughly unchanged from a year ago and essentially matched analysts’ expectations.
Morgan Stanley shares are up slightly this year, compared with the about 20% decline of the KBW Bank Index.
On Friday, JPMorgan Chase, Citigroup and Wells Fargo each posted earnings that topped analysts’ expectations amid higher interest rates. Goldman Sachs wraps up big bank earnings Wednesday. More

A pedestrian walks by the Pinterest headquarters on April 09, 2019 in San Francisco.
Justin Sullivan | Getty Images

Check out the companies making the biggest moves before the bell:
Bank of America — Bank of America added 0.4% in the premarket after beating top and bottom line estimates for the second quarter. BofA’s results were helped by more profitable lending, boosted by higher interest rates.

related investing news

2 hours ago

Bank of N.Y. Mellon — The bank reported better-than-expected profit and revenue for the second quarter. Like BofA, Bank of N.Y. Mellon benefited from the impact of higher interest rates. However, the stock fell more than 1%
PNC Financial — PNC fell 2.7% in the premarket after posting lower-than-expected quarterly revenue, even as earnings beat forecasts. Deposits and net interest income both fell at PNC.
Verizon, AT&T — Verizon gained 1% in premarket trading, while AT&T rose 0.7%. Both have been tumbling in recent days, with AT&T hitting its lowest level since 1993 Monday and Verizon dipping to its lowest since 2010. Analysts have been concerned about potential liability from miles of lead-encased cables across the U.S.  
Masimo — Masimo plummeted 28% in the premarket after the medical device maker forecast lower than expected sales for its second quarter, as hospitals cut back on equipment spending amid increased personnel costs.
Novartis — Novartis jumped 2.9% in premarket action after the drug maker raised its full-year outlook on strong pharmaceutical sales. Novartis also said its planned spin-off of generic drug division Sandoz would take place early in the fourth quarter.

Pinterest — Pinterest rallied 3.3% in off-hours trading following an upgrade to “outperform” from “in-line” at Evercore ISI. Evercore said it sees digital ad spending stabilizing, with indications of a recovery in the second half of the year.
Norwegian Cruise Line — The cruise line operator’s stock slid 1.8% in premarket action after Truist downgraded the stock to a hold from a buy. The firm is bullish on cruise industry trends but notes the stock’s recent outperformance. More