Finance

Shopping carts outside a Target store in the Queens borough of New York, US, on Saturday, May 13, 2023. Target Corp. is scheduled to release earnings figures on May 17. 
Bing Guan | Bloomberg | Getty Images

Check out the companies making headlines in premarket trading.
Tesla, General Motors — Both carmaker stocks were climbing in premarket trading, with gains of 5.7% and 5%, respectively. General Motors announced on Thursday plans to utilize Tesla’s electric vehicle charging network, and said its vehicles will also utilize Tesla’s North American Charging Standard port in its cars starting in 2025.

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3 hours ago

Corning — Shares of the glass materials maker added 3.2% after an upgrade from Morgan Stanley, which labeled the company’s business as “derisked.”
DocuSign – The e-signature provider’s stock rose about 5% premarket after the company reported earnings and revenue that beat analysts estimates for the fiscal quarter ended April 30, issued upbeat guidance and announced a handful of new service offerings and C-suite hires.
Adobe — Shares of the software company gained more than 3% after Wells Fargo upgraded the stock Friday morning to overweight, according to StreetAccount.
Target — The retail giant slipped 1.3% after Citi downgraded the stock over concerns that sales may have peaked.
Nio — Shares of the electric vehicle company dipped 2% in premarket trading after it reported that vehicle sales decreased 0.2% year over year. The company’s vehicle margin and net loss also worsened year over year.

Sonoma Pharmaceuticals — The company’s stock soared nearly 33% after announcing Thursday evening a new application for its intraoperative pulse lavage irrigation treatment that could replace IV bags in some surgical procedures. Sonoma said the treatment will be available in Europe this year and in the U.S. commercially in 2024.
— CNBC’s Tanaya Macheel and Jesse Pound contributed reporting. More

Swiss authorities brokered the controversial emergency rescue of Credit Suisse by UBS for 3 billion Swiss francs ($3.37 billion) over the course of a weekend in March.
Fabrice Coffrini | AFP | Getty Images

UBS and the Swiss government announced Friday that they had signed a loss protection agreement, which will come into effect once the takeover of Credit Suisse is completed.
The provisions will see the Swiss government cover losses of up to 9 billion Swiss francs ($10 billion) following UBS’ acquisition of its former rival. This is guaranteed on a “designated portfolio of Credit Suisse non-core assets,” once UBS incurs the first 5 billion Swiss francs in losses.

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“The priority for the federal government and UBS is to minimise potential losses and risks so that recourse to the federal guarantee is avoided to the greatest extent possible,” the Swiss government said in a statement.
The administration added that it had facilitated the deal to “safeguard financial stability and thus avert damage to the Swiss economy,” but had always agreed to guarantee a portion of losses due to UBS taking over a portfolio of assets that “do not fit its business and risk profile.”
In return, the agreement states that, after the takeover, UBS must support the development of Switzerland’s status as a financial centre. The bank has confirmed intentions to keep the headquarters of the merged group in Switzerland for the duration of the loss protection provisions.
“UBS will manage these assets in a prudent and diligent manner and intends to minimize any losses and maximize value realization on these assets,” UBS said.
UBS Group shares were down 0.2% at 10:00 a.m. London time.

‘Shotgun wedding’

Last month, the bank disclosed it anticipated a financial hit of around $17 billion as a result of acquiring its rival, in what has been described in some quarters as a “shotgun wedding” to stabilize the Swiss financial system.
The Swiss banking rivals agreed a $3.2 billion takeover deal at the start of spring, at a time of broader volatility in the banking sector that led to the collapse of three U.S. banks. Credit Suisse shares cratered through early March, with years of scandals, losses and alleged mismanagement coming to a head when its largest shareholder, the Saudi National Bank, said it was not able to provide any more cash to the bank because of regulatory restrictions.
The merger of the two banking juggernauts has been greeted with some controversy, enraging Credit Suisse shareholders and bondholders as well as raising competition concerns.
The bank expects the Credit Suisse acquisition to complete as early as June 12. More

China’s exports to the U.S. fell by 18% from a year ago in U.S. dollar terms in May. That’s according to official figures accessed through Wind Information. Exports to Southeast Asia also fell.
Southeast Asia can’t fully offset the loss from the U.S. market, said Bruce Pang, chief economist and head of research for Greater China at JLL.
Slowing global growth, especially in the U.S. and Southeast Asia, doesn’t bode well for the outlook on Chinese exports.

Pictured here is a cargo ship sailing from China’s Yantai port to Indonesia on April 23, 2023.
Future Publishing | Future Publishing | Getty Images

BEIJING — China can’t easily rely on its neighbors as export markets in a global slowdown, the latest trade data show.
Exports to the Association of Southeast Asia Nations have been growing. The 10-member bloc surpassed the European Union during the pandemic to become China’s largest trading partner on a regional basis.

Data showed that exports to Southeast Asia fell by 16% in May compared to a year ago, dragging down China’s overall exports.
Exports to the U.S. — China’s largest trading partner on a single-country basis — fell by 18% from a year ago in U.S. dollar terms in May. That’s according to official figures accessed through Wind Information.
At $42.48 billion, the U.S. exports in May were more than the $41.49 billion China exported to Southeast Asia that month, according to customs data.
Southeast Asia can’t fully offset the loss from the U.S. market, said Bruce Pang, chief economist and head of research for Greater China at JLL.
ASEAN is made up of 10 countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

The U.S. is one single market versus a grouping of 10 countries, Pang pointed out, adding that companies can also sell at higher profit margins in the U.S. market.

Trade has been a key driver of China’s growth, especially during the pandemic.
Exports still account for about 18% of the economy, although that’s well below the roughly 30% share it once had, Tao Wang, head of Asia economics and chief China economist at UBS Investment Bank, told reporters Monday.

Drag from the U.S.

Slowing global growth, especially in the U.S. and Southeast Asia, doesn’t bode well for the outlook on Chinese exports.
“We expect China’s exports will remain subdued, as we anticipate the US economy to enter recession in H2 while global destocking pressures continue to rise,” Lloyd Chan, senior economist at Oxford Economics, said in a note Wednesday.

Boosting trade with developing countries has gained urgency with the closing of the US market and the EU-China investment deal falling apart after the Ukraine war.

Jack Zhang
University of Kansas, assistant professor of political science

Businesses in the U.S. have also been working through high inventory that didn’t get sold in the second half of last year due to high inflation.
U.S. GDP is expected to slow from 2.1% in 2022 to 1.6% this year, according to the International Monetary Fund.

Southeast Asia also slowing

ASEAN’s GDP is set to slow to 4.6% growth this year, down from last year’s 5.7% pace, the IMF said in April, when it trimmed its forecast for the region’s GDP growth by 0.1 percentage points.
“The sizeable slump in May reaffirms our suspicion that China’s monthly export data to some ASEAN economies – particularly Vietnam, Singapore, Malaysia and Thailand — may be somewhat distorted,” Nomura economists said in a note Wednesday.
“Given the apparent plunge, exports to ASEAN has turned from a major driver to a drag, making a negative contribution of -2.4pp to headline growth in May.”
The U.S. and ASEAN each accounted for 15% of China’s total exports in May, according to CNBC calculations of Wind Information data.
On a year-to-date basis, the bloc has a slightly higher share, at 16% of China’s exports versus the United States’ 14% share, the data showed.
“Looking forward, [China’s] exports are likely to shrink further on a high base, the deepening global manufacturing downturn and intensifying trade sanctions from the West,” the Nomura analysts said.

Regional trade strategy

The export declines come as U.S.-China relations remain tense, and Beijing has sought to bolster trade with the developing countries in Asia Pacific.
“It’s 20-25% more expensive to sell lots of stuff to the US, particularly intermediate goods like machine parts,” Jack Zhang, assistant professor of political science at the University of Kansas, told CNBC in an email.
“Boosting trade with developing countries has gained urgency with the closing of the US market and the EU-China investment deal falling apart after the Ukraine war,” he said.

Read more about China from CNBC Pro

The 10-nation bloc — along with Japan, South Korea, Australia and New Zealand — signed a free trade agreement with China in 2020. The Regional Comprehensive Economic Partnership or RCEP is the largest such deal in the world.
Beijing has said it would also like to join another trade bloc — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The U.S. is not part of the CPTPP, while the U.K. announced a deal to join it in March.
RCEP has boosted China’s trade with ASEAN, as has the shift of some labor-intensive manufacturing to the region, Zhang said.
Meanwhile, he noted that “China has been ramping up negotiations for China-ASEAN FTA (CAFTA 3.0), it’s exploring FTAs with Mercusor in LatAm and the Gulf Cooperation Council (GCC).”
The Mercusor trade bloc includes Argentina, Brazil, Paraguay, and Uruguay.
— CNBC’s Clement Tan contributed to this report. More

Binance.US said its banking partners would “pause” their relationship with the exchange as soon as next week.
Binance’s banking transactions and its relationship to billionaire owner Changpeng Zhao have attracted immense scrutiny as both battle the Securities and Exchange Commission, which filed 13 charges against them earlier this week.
Zhao’s ownership over Binance subsidiaries has been the subject of concern for the SEC, which filed an emergency motion for a temporary restraining order to prevent asset flight.

SAN ANSELMO, CALIFORNIA – JUNE 06: In this photo illustration, the Binance logo is displayed on a screen on June 06, 2023 in San Anselmo, California. The Securities And Exchange Commission has filed lawsuits against cryptocurrency exchanges Coinbase and Binance for allegedly violating multiple securities laws. (Photo Illustration by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images

Binance.US customers will no longer be able to use U.S. dollars to buy crypto on the platform as early as June 13, hobbling the exchange’s ability to do business in the United States, after both payment and banking partners “signaled their intent to pause USD fiat channels,” the exchange said.
Binance announced the change late Thursday night on Twitter, and blamed the Securities and Exchange Commission’s “unjustified civil claims against our business.” The exchange said it had preemptively disabled customers’ ability to buy and deposit U.S. dollars.

Binance’s banking transactions are the center of immense scrutiny by the SEC, which filed a civil complaint against the exchange and its founder, Changpeng Zhao, alleging both violated U.S. securities laws.
Zhao’s influence over and ownership of the U.S. and international arms of Binance — an international network of offshore holding companies the SEC alleges have moved billions of dollars of assets between themselves — prompted the SEC to file an emergency motion for a temporary restraining order. That restraining order would have frozen U.S. dollars from the exchange anyway.
Customers won’t lose their money — those who haven’t withdrawn their money by the shutdown date could still theoretically convert it to a stablecoin such as tether, then withdraw that and convert it back to dollars elsewhere. But it suggests that Binance’s banking partners have decided the exchange is too risky a client to keep on, and that the revelations from the SEC case have grown too significant to ignore.
The exchange’s disclosed U.S. banking partners, which have included Axos Bank, Cross River Bank, and the failed Silvergate, Signature, and Silicon Valley Banks, processed billions of dollars in transactions for the U.S. exchange, according to documents Binance provided to the SEC. Multiple banking partners had already stopped serving Binance, and it wasn’t immediately clear which banking partners Binance retained. More

The DocuSign website on a laptop in Dobbs Ferry, New York, April 1, 2021.
Tiffany Hagler-Geard | Bloomberg | Getty Images

Check out the companies making headlines after hours.
DocuSign — DocuSign jumped 5.6% in extended trading after the electronic agreements firm beat analysts’ first-quarter expectations on the top and bottom lines. DocuSign posted first-quarter adjusted earnings of 72 cents per share, topping consensus estimates of 56 cents, according to Refinitiv. It reported revenue of $661 million, exceeding expectations of $642 million.

Vail Resorts — Shares fell 3.9% after Vail Resorts missed third-quarter earnings expectations. The mountain resort company posted earnings of $8.18 per share, while analysts polled by Refinitiv expected $8.84 per share. It reported revenue of $1.24 billion, lower than the estimate of $1.27 billion.
General Motors — General Motors advanced 3% after CEO Mary Barra and Tesla CEO Elon Musk said the automaker will join Ford Motor in partnering with Tesla to use the electric vehicle maker’s charging network in North America. Tesla shares also popped 3% in extended trading.
Comtech Telecommunications — Shares declined 2.8% after Comtech Telecommunications reported fiscal third-quarter earnings results. The satellite communications firm reported a GAAP loss of 33 cents per share, wider than the year-ago period when it posted a loss of 6 cents per share. It slightly beat on revenue expectations, reporting $136.3 million, compared with consensus estimates of $136 million, according to FactSet. More

NurPhoto | NurPhoto | Getty Images

Check out the companies making headlines in midday trading.
GameStop — The meme stock tumbled nearly 18% after the company fired CEO Matthew Furlong and appointed Ryan Cohen as executive chairman, effective immediately. The company didn’t provide a reason for the termination.

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Amazon — The e-commerce stock added 2.5% on the back of a bullish analyst call. Wells Fargo initiated coverage of Amazon with an overweight rating, saying shares could rally more than 30% as it transitions to its regional fulfillment model.
Carvana — Shares popped 56% after the online car seller issued an upbeat outlook for the second quarter. Carvana said it now expects non-GAAP total gross profit per unit to come in above $6,000 in the second quarter.
Signet Jewelers — Shares shed 10.7% after Signet Jewelers lowered its fiscal full-year outlook. The company cited increasing macroeconomic pressures weighing on the consumer.
Fisker — Shares dropped 7.7% after Wolfe Research on Thursday downgraded Fisker to underperform from peer perform. Analyst Rod Lache said he questions Fisker’s competitiveness, as the automaker attempts to build its business in “some of the most highly saturated industry segments.”
Warner Bros. Discovery — The media stock gained nearly 7%, building on a more than 6% gain in the previous session after the departure of CNN CEO Chris Licht.

Wynn Resorts, Las Vegas Sands — Shares of Wynn Resorts and Las Vegas Sands dipped 0.2% and 1.2%, respectively, following downgrades by Jefferies to hold from buy. The firm said a Macao recovery is already priced in.
T-Mobile — The telecommunications giant added 3% following an upgrade to outperform from peer perform by Wolfe Research. The firm said the stock’s recent underperformance opens a buying opportunity.
Adobe — Shares gained 5% after the company announced it is offering its artificial intelligence tool, Firefly, to large business customers. Adobe said it is already working with “hundreds” of companies to explore how Firefly can reduce costs and drive efficiencies.
HashiCorp — The software company saw its shares slide 25.9% after it posted a loss of 7 cents per share for the first quarter, though that was narrower than the 14-cent-per-share loss expected by FactSet analysts. The firm also reported a drop in net revenue retention, flagging a difficult macro backdrop and lengthening deal cycles and optimization.
Smartsheet — Smartsheet tanked more than 17.5% after the software company said billings came in at $215.5 million, falling short of a StreetAccount estimate of $217.1 million.
Oxford Industries — The apparel company, known for brands such as Lilly Pulitzer and Tommy Bahama, dropped nearly 6% after issuing disappointing second-quarter and full-year guidance.
Trip.com — The online travel company saw its stock jump 5.4% after the firm reported better-than-expected first-quarter results. Trip.com posted earnings per share of 43 cents, beating a StreetAccount estimate of 26 cents. Revenue of $1.29 billion also came above an expectation of $1.13 billion.
— CNBC’s Yun Li, Alex Harring, Sarah Min, Michelle Fox and Tanaya Macheel contributed reporting. More

Ask an Advisor

Millionaires have significantly raised their allocations to cash and cash-like investments over the past year, according to a new CNBC Millionaire Survey.
Higher interest rates make cash holdings a more attractive financial proposition, according to financial advisors.
However, the average investor who doesn’t need that money to build an emergency fund or to make a large short-term purchase likely hurts their long-term success by staying in cash, advisors said.

Simpleimages | Moment | Getty Images

Millionaires moved money out of stocks into cash and cash-like investments in the past year and may add to those allocations over the next 12 months, according to a new CNBC Millionaire Survey. But the average investor may not be wise to mirror the millionaires.
Much would depend on their circumstances and rationale for the shift, financial advisors said.

Higher interest rates make cash more attractive

Millionaires held 24% of their portfolio in cash as of spring 2023, up significantly from 16% in fall 2022 and 14% from spring 2022, according to the survey.
The poll considered cash and cash-like investments to include money market funds, checking and savings accounts, plus certificates of deposit. It surveyed 764 people with $1 million or more of investable assets and was conducted in April 2023.
A recent Capgemini Research Institute survey also found affluent investors are holding a record share of cash.

More from Ask an Advisor

Here are more FA Council perspectives on how to navigate this economy while building wealth.

On one hand, having more money in cash today isn’t necessarily a bad move due to higher interest rates, advisors said.
Cash-like accounts had been paying rock-bottom interest rates for much of the period since the 2008 financial crisis, meaning investors largely had to turn elsewhere for any hope of a return on investment.

But interest rates have been rising steadily since the Federal Reserve started raising its benchmark rate aggressively last year to tame high inflation.   
Today, cash-like accounts can yield investors up to roughly 5% or so, making it more attractive as an asset class, said Ted Jenkin, a certified financial planner based in Atlanta.

“Now investors have choice,” said Jenkin, founder of oXYGen Financial and a member of CNBC’s Advisor Council. However, with inflation currently running at an annual pace of about 5%, it ends up roughly being a net wash, he added.
However, not all accounts are necessarily paying competitive rates to consumers. For example, high-yield savings accounts offered by online banks typically offer much higher payouts on cash than a traditional savings account held at a brick-and-mortar bank.
Affluent investors may also have more money on the sidelines these days as they wait for other investment opportunities such as private equity and real estate to open, Jenkin added.

Why it’s not always smart to move more money to cash

However, for the average investor, “it’d be silly to wait in cash” instead of investing in a higher-return investment such as stocks if a household doesn’t need that money for at least five years, Jenkin said.
Yet, the CNBC millionaire survey suggests wealthy millennials shifted into cash more readily than older investors. That’s despite their relatively long investment time horizon and capacity to take more financial risk.
For example, 39% of millennial millionaires moved money from stocks to bonds or money market funds in the past two months, relative to 26% and 18% of investors from Gen X and the baby-boom generation, respectively, the survey said.
Further, 30% of millennials plan to do so within the next year, triple the share among older generations, the poll said.
Young investors may be nervous about the current economic climate and making a knee-jerk reaction by shifting to cash, said Carolyn McClanahan, a certified financial planner based in Jacksonville, Florida.

In fact, it appears millionaires are hoarding cash partly because they expect a weak stock market in 2023. This is akin to trying to guess what will happen in the future, which generally costs investors over the long term.
The average investor should try to temper the impulse to flee to safety if it isn’t driven by what’s best for their financial goals, said McClanahan, founder of Life Planning Partners and a member of CNBC’s Advisor Council.
Ultimately, stocks have historically outperformed more conservative holdings such as cash and bonds over the long term.
“If you’re 20, 30 years old, it’s not smart to keep your 401(k) in cash because you’re not going to be [touching] that,” McClanahan said.

When to boost cash holdings

But there are circumstances in which it may make sense to up one’s cash-like holdings, she said.
There are two things for households to consider when choosing an appropriate allocation to cash: How much they might need for costly purchases in the the next five years, and an emergency fund to cover unforeseen expenses, McClanahan said.

Cash is OK as long as you understand what your needs are.

Carolyn McClanahan
founder of Life Planning Partners

“If they need money in the short term for buying a home, having a baby, changing a career, it’s not a bad deal to keep more cash for that,” she added. “Cash is OK as long as you understand what your needs are.”
While cash is a good deal right now due to higher interest rates, it’s unclear how long they might last. If the Federal Reserve were to cut its benchmark interest rate in the future — which isn’t expected to happen this year — financial institutions would likely do so for consumer accounts too.
Consumers worried about that eventuality can lock in a guaranteed interest rate with short-term certificates of deposit with some of their cash allocation, McClanahan said. More

A GameStop location on 6th Avenue on March 23, 2021 in New York.
View Press | Corbis News | Getty Images

Check out the companies making the biggest moves in premarket trading:
GameStop — Shares plummeted nearly 21% in premarket trading. The company announced Wednesday the ousting of chief executive Matthew Furlong and said Ryan Cohen would take over as executive chairman.

Wynn Resorts, Las Vegas Sands — The casino operators both shed about 2% following a downgrade by Jeffries to hold from buy. The Wall Street firm said Macao’s recovery is already priced into the stocks.
Signet Jewelers — Shares tumbled nearly 11% after the jeweler provided second-quarter revenue and operating-income guidance that fell short of expectations. Signet also lowered its full-year earnings and revenue guidance to below expectations, citing increasing macro-economic pressures on consumers and a softer-than-expected Mother’s Day.
Lucid — Shares advanced about 2% after Lucid’s head of China operations Zhu Jiang said the electric vehicle maker is preparing to enter the Chinese market. Reuters, citing a person familiar with the matter, additionally reported the company is considering setting up production in China.
T-Mobile — Shares of the wireless provider added about 1% in premarket trading after Wolfe Research upgraded T-Mobile to outperform from peer perform. The investment firm said T-Mobile’s stock could rise more than 20% after underperforming year-to-date.
Adobe — The stock gained about 2% following the company’s announcement it will offer its artificial intelligence tool, Firefly, to large business customers. Firefly is available through the standalone Firefly app, Adobe Express and Creative Cloud.

HashiCorp – The stock sank more than 22%, a day after the company reported a first-quarter earnings miss and revenue beat. HashiCorp also announced targeted spending cuts and an 8% workforce reduction, citing the current customer and economic environment.
—CNBC’s Jesse Pound, Sarah Min and Brian Evans contributed reporting. More