Finance

Morgan Stanley plans to eliminate roughly 3,000 positions by the end of June, according to a person with knowledge of the plans.
That equates to roughly 5% of the New York-based bank’s workforce when excluding the financial advisors and support staff who will be spared in the cuts, the person said.
In recent weeks, big bank peers including Citigroup and Bank of America and smaller advisor Lazard have cut jobs or announced plans to do so.

The logo of Morgan Stanley is seen in New York 
Shannon Stapleton | Reuters

As Wall Street’s slump in IPOs and mergers deepens this year, top advisory firms including Morgan Stanley, Bank of America and Citigroup have turned to job cuts in recent weeks.
Morgan Stanley plans to eliminate roughly 3,000 positions by the end of June, according to a person with knowledge of the plans.

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That equates to roughly 5% of the New York-based bank’s workforce when excluding the financial advisors and support staff who will be spared in the cuts, the person said. The layoffs are expected to impact banking and trading staff the most, according to Bloomberg, which reported the moves earlier.
A historic boom in deals ignited by the pandemic was followed by a bust that began last year after the Federal Reserve started raising rates to hit the brakes on an overheating economy. The IPOs, debt issuance and mergers that feed Wall Street have all remain muted this year. For instance, IPO volumes are 74% lower than last year, according to Dealogic data.
For Morgan Stanley, the cuts show that Wall Street is wrangling with expenses as the slump drags on for longer than expected. The bank already cut about 2% of its workforce in December, CNBC reported.

Rising costs, falling revenue

Last month, analysts criticized Morgan Stanley for posting higher first-quarter costs while revenue declined. Expenses in the firm’s investment bank and wealth management division hurt profit margins in particular.
The bank’s moves aren’t isolated. The industry’s job cuts began in September, when Goldman Sachs reinstated a practice of culling those it perceives to be low performers. Nearly all the major Wall Street firms followed, and Goldman itself had to resort to another, deeper round of layoffs in January.

In recent weeks, big bank peers including Citigroup and Bank of America have cut a few hundred jobs each, relatively surgical cuts that should position the banks well when a rebound in deals finally arrives.
Last week, top boutique advisor Lazard said it planned to cut 10% of its workforce this year. The step was necessitated by restrained capital markets activity and wage inflation that pumped up salaries across banking.
“Candidly, things are not feeling as good as they were in December or January,” Chief Executive Ken Jacobs told Bloomberg. More

Vijay Ayyar, Luno’s vice president of corporate development and international, resigned from the firm after seven years working there, he told CNBC Tuesday.
Digital Currency Group-owned firm recently announced the closure of its operation in Singapore, where Ayyar is based.
However, Ayyar said the move was not related to its decision to exit Singapore.
His departure comes as Luno undergoes a major restructuring effort to contend with the lull in crypto markets.

DCG, Luno’s parent company, has been grappling with the ongoing fallout from last year’s plunge in token prices and the collapse of FTX.
Rafael Henrique | Sopa Images | Lightrocket via Getty Images

Vijay Ayyar, a senior executive at cryptocurrency exchange Luno and one of its earliest employees, is leaving the company.
Ayyar, who is Luno’s vice president of corporate development and international, resigned from the firm after seven years working there, he told CNBC Tuesday.

It comes after the company, which is owned by Digital Currency Group, announced the closure of its operation in Singapore, where Ayyar is based.
Ayyar said the move was not related to Luno’s decision to exit Singapore, however, and that he quit to join another company in the crypto and Web3 space. Ayyar did not disclose which company he is joining next.
“I’ll be leaving Luno after 7 years at the company,” Ayyar said in a WhatsApp message. “Given the time I’d spent at Luno, just seemed like it was time for another challenge.”
A Luno spokesperson confirmed Ayyar’s decision Tuesday.
“Vijay will be leaving after seven years,” the spokesperson said. “His role is a global one and isn’t tied to anything related to our Singapore closure. He’s leaving to pursue a new opportunity in the industry.”

Ayyar held a number of roles at Luno over the years. He was most recently tasked with building out the firm’s business-facing services, pitching Luno accounts to funds, fintech companies, and businesses wanting to use crypto.
Before that, Ayyar led Luno’s partnership efforts globally and helped the exchange launch in over 40 markets across Southeast Asia, Africa, Europe, and the U.S.
In addition to his corporate responsibilities at Luno, Ayyar also serves as something of a crypto market guru, providing frequent commentary to the press on moves in markets.
His departure comes as Luno undergoes a major restructuring effort to contend with the lull in crypto markets. Luno laid off 35% of its workforce in January, joining a host of other crypto exchanges that have cut jobs.
The company also lost its co-founder and chief technology officer, Timothy Stranex, in December.
In March, Luno announced its CEO Marcus Swanepoel was stepping down and would be replaced with Chief Operating Officer James Lanigan.
The company hired Canaccord Genuity, the investment bank, to court outside investors for the first time since it was taken over by DCG in 2020.
DCG, Luno’s parent company, has been grappling with the ongoing fallout from last year’s plunge in token prices, and the collapse of FTX, the controversial exchange whose failure in November sparked a series of bankruptcies in the industry.
WATCH: FTX’s collapse is shaking crypto to its core. The pain may not be over More

Travelers wait for an Uber rideshare vehicle at Los Angeles International Airport (LAX) on February 8, 2023 in Los Angeles, California.
Mario Tama | Getty Images

Check out the companies making the biggest moves in premarket trading:
Uber Technologies — Shares gained nearly 8% after reporting revenue of $8.82 billion for the first quarter, topping the $8.72 billion expected by analysts polled by Refinitiv. The ride sharing company also posted an adjusted 8 cents loss per share, less than the 9 cents expected by analysts.

Pfizer — Shares of the drug maker rose more than 1% in premarket trading after the company topped earnings and revenue expectations for the first quarter, according to Refinitiv, despite experiencing a 75% decline in sales of Covid vaccines from the same quarter a year ago.
Chegg — Chegg shares tumbled 42% in premarket trading after CEO Dan Rosensweig said he expects artificial intelligence is “having an impact on our new customer growth rate.” Chegg issued a weak second-quarter revenue outlook. Otherwise, the online education firm beat first-quarter expectations on the top and bottom lines. Following the results, Jefferies downgraded the stock to hold from buy.
Dupont de Nemours — The stock sank nearly 5% in the premarket after the company gave weak guidance for the second quarter, with both earnings per share and revenue forecasts coming in under Wall Street’s expectations. Dupont cited a delay in the electronics market’s recovery.
Arista Networks — Shares dropped 8.5% despite the company topping Wall Street’s expectations for the recent quarter on the top and bottom lines and sharing upbeat guidance. The decline came as Arista Networks said it expects moderating spending and slowing growth from its “cloud titans.”
Stryker — Shares dropped 3.3% after the medical technologies company warned that full-year sales and earnings per share will be unfavorably impacted if foreign exchange rates stay near their current levels. However, its adjusted earnings per share and revenue for the first quarter beat estimates, per Refinitiv.

NXP Semiconductors — Shares of the chip maker jumped about 5% after the company beat analysts’ expectations for first-quarter revenue and operating income. Revenue guidance for the second quarter was better than anticipated as well.
Dell Technologies — The stock added nearly 3% in the premarket after being upgraded by Morgan Stanley to overweight from equal weight. The Wall Street firm said it believes the personal computer market is forming a bottom.
Coinbase — Shares of the cryptocurrency exchange fell 1.4%, after a downgrade from Citigroup cited looming regulatory threats that could afflict the core business. The firm also noted potential legal action from the U.S. Securities and Exchange Commission over a March Wells notice as another headwind.
BP — U.S.-listed shares of the British energy giant slid about 5% after the company slowed share buybacks, announcing a further share buyback of $1.75 billion, after completing its previously announced $2.75 billion share buybacks in April. However, its first-quarter revenue beat analysts’ expectations, according to Refinitiv.
HSBC — The global bank saw its shares jump nearly 6% in premarket trading after it reported first-quarter earnings that beat consensus estimates. The company is also planning an up to $2 billion share buyback after its annual general meeting.
Marriott International — The hotel stock rose about 2% after Marriott beat estimates on the top and bottom lines for the first quarter. The company reported $2.09 in adjusted earnings per share on $5.62 billion of revenue. Analysts surveyed by Refinitiv had penciled in $1.84 in adjusted earnings per share on $5.41 billion in revenue. CEO Anthony Capuano said in a press release that the lifting of travel restrictions in Asia helped boost growth.
— CNBC’s Tanaya Macheel, Brian Evans, Samantha Subin, Jesse Pound and Sarah Min contributed reporting. More

JPMorgan won a weekend auction for the regional lender after it was seized, and will acquire nearly all of its deposits and a majority of assets.
“There may be another smaller one, but this pretty much resolves them all,” CEO Jamie Dimon said.
David Pierce, director of strategic initiatives at Utah-based GPS Capital Markets, told CNBC on Tuesday that the financial sector’s frailties may be more profound than the messaging from bankers and policymakers suggests.

Workers are seen inside of a First Republic Bank office on May 01, 2023 in San Francisco, California. 
Justin Sullivan | Getty Images

JPMorgan Chase CEO Jamie Dimon’s assertion that recent turmoil in the banking sector was effectively ended by the resolution of First Republic may be premature, one analyst suggested.
The Wall Street giant won a weekend auction for the embattled regional lender after it was seized by the California Department of Financial Protection and Innovation, and will acquire nearly all of its deposits and a majority of assets.

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First Republic’s demise marked the third of its kind among midsized banks since the sudden collapse of Silicon Valley Bank and Signature Bank in early March. This triggered a global crisis of confidence that eventually pushed Swiss stalwart Credit Suisse to the brink, prompting an emergency rescue by domestic rival UBS.
“There are only so many banks that were offsides this way,” Dimon told analysts in a call shortly after the First Republic deal was announced.
“There may be another smaller one, but this pretty much resolves them all,” Dimon said. “This part of the crisis is over.”
The recent financial instability has added another troubling consideration for central banks, which have been hiking interest rates aggressively to curb inflation, exposing some of the mismanaged positions held by certain banks that did not expect financial conditions to tighten so sharply.
The U.S. Federal Reserve will announce its latest monetary policy decision on Wednesday, and several of the central bank’s policymakers have reiterated their focus on dragging inflation back down to Earth even if it means tipping the economy into recession.

David Pierce, director of strategic initiatives at Utah-based GPS Capital Markets, told CNBC Tuesday that the financial sector’s frailties may be more profound than the messaging from bankers and policymakers suggests.
“If you listen to the political side of this, you would have them tell you that it really is a non-issue because it’s all covered through the FDIC insurance but money has to go into that and they’re insuring deposits well above what the insurance covers, and on the flipside of that you look at the deal that Jamie Dimon made, and they got a great deal in their purchase,” he told CNBC’s “Squawk Box Europe.”
The FDIC has estimated that the cost to its Deposit Insurance Fund of the First Republic collapse will be around $13 billion, considerably higher than the estimated $2.5 billion for Signature Bank but beneath the $20 billion estimate of resolving Silicon Valley Bank.
Pierce suggested that the sudden nature of the U.S. collapses and bailouts would indicate that the central bank and regulators may not have their fingers on the pulse with regards to ensuring smaller lenders have access to adequate money supply.
“It should not be happening in a vacuum like this and it makes me question a little bit why did they have to take them over and sell them over a weekend? Could they have funded them and given them additional capital, provided loans that would have gotten them through this hard time?” he said.

“Jamie Dimon comes out and says ‘this is it, this is the end of it, we’re all good now’ — I don’t think we can really say that yet, because we don’t know what other problems might be lurking, and obviously there are some things that are hidden, and a lot of this also comes down to there’s been some mismanagement of these banks.”
He added that the fallen banks have largely catered specifically to the tech sector, leaving them uniquely exposed to increases in interest rates having provided riskier loans to “pre-profit” companies.
However, recent Wall Street earnings showed that deposits in the aftermath have flowed heavily from smaller and mid-sized banks to the big, systemically large lenders, and Pierce suggested the two months of turmoil has “really reduced the capital in the marketplace, especially available to high-debt companies.”
The World Economic Forum’s Chief Economists Outlook, published Monday, showed chief economists by and large do not currently see large-scale systemic risk from the recent banking chaos, but they do think it will have some economic impact.
“Although the chief economists are broadly sanguine about the systemic implications of the recent financial disruption – 69% characterize it as isolated episodes rather than signs of systemic vulnerability – they point to potentially damaging knock-on effects,” the report said.

“These include a squeeze on the flow of credit to businesses and the prospect of significant disruption in property markets in particular.”
This assessment was echoed Monday by strategists at DBRS Morningstar.
“Overall, we expect limited immediate fallout from this failure, as the market was well aware of the issues adversely impacting First Republic Bank, who reported very weak results after the market closed on April 24th,” said John Mackerey, senior vice president of the Global Financial Institutions Group at DBRS Morningstar.
“Longer term, we expect further asset quality pressure as the rapid interest rate hikes cool the economy and negatively impact asset values, particularly in commercial real estate where retail and office properties are under pressure.” More

DBS reported a record revenue and net profit for the first quarter of 2023.
However, the bank expects net interest margins have peaked and will gradually decline.

Singapore’s largest lender DBS Group Holdings expects net interest income to taper off in the future, but the bank is confident that it can ride on other drivers going forward, such as a growth in loans and fee income.
On Tuesday, DBS reported record revenue and net profit for the first quarter. Revenue came in at 4.94 billion Singapore dollars ($3.7 billion), up 34% from a year ago, while net profit stood at SG$2.57 billion, a 43% jump compared with the same period the last year.

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DBS said this was due to “higher net interest margin, sustained business momentum and resilient asset quality.” Net interest margin, or NIM, rose 66 basis points year-on-year to 2.12%, compared with 1.46% in the first quarter of 2022.
Net interest income is a measurement comparing the interest income a firm generates from credit products like loans and mortgages, with the outgoing interest it pays out, such as to savings accounts or fixed deposits.
Speaking to CNBC’s “Capital Connection,” DBS CEO Piyush Gupta said NIM’s “have probably peaked at around these levels” — about 2.1% for February to April.
Despite saying there will limited upside from these levels, Gupta said he expects the pace of decline will be very gradual and not “falling off a cliff.” DBS guided for a full-year average of between 2.05% and 2.1% for NIM in 2023.

Geoff Howie, market strategist for equities at the Singapore Exchange, agreed with Gupta’s view, saying growth in NIM will become more difficult as interest rate hikes, especially from the U.S. Federal Reserve, start to taper off.

Speaking to CNBC’s “Street Signs Asia,” Howie said, “From a net interest margin perspective, how do you back up from say, 475 basis points of Fed funds hikes over 13 months or so?”
Rising rates generally boost bank earnings by allowing banks to raise rates on loans, while the interest costs to banks — like that paid on deposit accounts — can remain unchanged.
He noted that in 2022, net interest income jumped about 30% for Singapore’s three major banks, but as NIMs are “somewhat consolidating,” it will be difficult to continue this pace of growth.
Howie points out “you had nine consecutive quarters of quarter-on-quarter net interest income growth, that might be the end of it for some time, [and] we expect some consolidation in the net interest income.”

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In light of the results, the company’s board also declared a dividend of 42 Singapore cents per share for the first quarter, higher than the 36 cents in the same period a year ago.
Shares of DBS rose as much as 1.37% on Tuesday following the results.

Other growth drivers

While Gupta sees net interest income growth tapering off, he said the bank is still seeing “healthy business momentum.” He said growth forecasts for Asia are still “quite robust” despite the slowdown in the West.
He noted that “two quarters ago, everybody was fairly sure there will be a recession [in the West] , and now the jury’s out whether they might actually escape a recession. So we think that a slowdown is not going to be calamitous.”
Gupta said he continues see supportive fundamentals in Asia, saying “the demographics are good, infrastructure spending is going on, trade and intra-Asia trade continues to be robust, wealth management continues to be very strong”
As such, he said that these drivers are in place to help DBS continue to build a business “quite decently” going forward. More

A monitor displays Arista Networks Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Aug. 24, 2018.
Michael Nagle | Bloomberg | Getty Images

Check out the companies making headlines in after-hours trading.
Arista Networks — The cloud networking company slid 7% despite beating analysts’ expectations for the first quarter. Arista saw $1.43 in adjusted earnings per share in the quarter on $1.35 billion in revenue, while analysts polled by Refinitiv expected $1.34 per share on $1.31 billion. The company also gave second-quarter revenue guidance that was better than Wall Street expected.

Chegg – Shares of the educational tech company dropped more than 36% in after-hours trading after the company issued a weak outlook for second-quarter revenue. Separately, the company beat analysts’ expectations for adjusted earnings per share and revenue in the first quarter, according to Refinitiv.
Everest Re Group — Shares dropped 4.7% after the insurance company missed analyst expectations for its first quarter. The company said it saw $11.31 in after-tax operating income per share for the quarter, which is lower than the $12.53 per share consensus estimate of analysts polled by FactSet. The company recorded $3.29 billion in revenue, also below the analyst forecast of $3.37 billion.
Stryker — The medical technologies stock fell more than 4%. The company warned that if foreign exchange rates stay near their current levels, it expects full-year sales and per-share earnings will be “modestly unfavorably impacted.” Separately, the company posted beats on the top and bottom lines in the first quarter, according to Refinitiv.
NXP Semiconductors — Shares gained 3.9% after the company beat Wall Street expectations in the first quarter. The company posted $3.19 in adjusted earnings per share on $3.12 billion in revenue. Analysts polled by Refinitiv anticipated earnings of $3.02 per share and $3 billion in revenue.
Diamondback Energy — The oil and gas company lost 1.7% after its earnings for the first quarter came in lower than Wall Street expected. Diamondback reported $4.10 in earnings per share, less than the $4.33 consensus estimate of analysts polled by FactSet. But the company was able to eke out a narrow beat on revenue, posting $1.93 billion against the Street’s estimates of $1.92 billion.

MGM Resorts — The resort-and-casino company shed 0.2% on the back of strong first-quarter earnings. The company posted 44 cents in adjusted earnings per share, smashing the consensus estimate of 10 cents per share, according to Refinitiv. Revenue was also above expectations, with MGM recording $3.87 billion while analysts forecasted $3.59 billion.
— CNBC’s Darla Mercado and Scott Schnipper contributed reporting More

NEW YORK, NEW YORK – APRIL 24: A person walks past a First Republic bank branch in Manhattan on April 24, 2023 in New York City. The U.S. bank will reveal its latest financial results but concerns over small and medium-sized banks persist following the collapse of Silicon Valley Bank (SVB) in March. (Photo by Spencer Platt/Getty Images)
Spencer Platt | Getty Images News | Getty Images

Check out the companies making headlines in midday trading.
First Republic, JPMorgan Chase — First Republic shares and were halted after JPMorgan Chase acquired the ailing bank and most of its assets after regulators seized control. JPMorgan shares rose 2.1%.

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General Motors — The automaker gained 1.3% after Morgan Stanley upgraded General Motors to overweight from equal weight and called the stock oversold.
Norwegian Cruise Line — The cruise company jumped 8.9% after on better-than-expected quarterly results. Norwegian Cruise Line also boosted its full-year profit forecast amid strong travel demand.
Exxon Mobil — Shares shed 3.1% on the back of a Goldman Sachs downgrade to neutral from buy. The firm said the oil giant was less attractive after its multiyear run.
PacWest, Zions Bancorp. — Regional bank stocks were volatile on Monday as investors reacted to the seizure and sale of First Republic Bank over the weekend. Shares of PacWest fell nearly 1.1% after rising earlier in the session. Zions Bancorp. fell more than 3.7%, while Western Alliance dipped about 3%. The SPDR S&P Regional Bank ETF (KRE) was down 2.8%.
SoFi Technologies — The student loan refinancer fell more than 12.2% despite posting better-than-expected quarterly results. The company reported a loss of 5 cents per share and revenue of $460.16 million against  consensus estimates of 7 cents and $441 million, according to Refinitiv. However, management said on the company earnings call Monday that demand for loans originating from the fourth quarter would see a lower monetization level due to higher interest.

Comcast — The media stock gained 0.6% after Bank of America upgraded the media stock to buy from a neutral rating following its recent quarterly results. Analysts view Comcast as well positioned for a “strong turnaround.”
Teradata — The cloud database company jumped 6% after Guggenheim Partners upgraded the stock to buy from neutral. The Wall Street firm said Teradata is poised to outperform expectations for customer retention and grow revenue in its cloud sector. Its price target of $62 implies 60% upside.
On Semiconductor — On Semiconductor jumped 8.9% after beating first-quarter earnings and revenue expectations. The chip firm reported per-share earnings ex-items of $1.19, greater than consensus estimates of $1.08 per share, according to FactSet. It posted revenue of $1.96 billion, greater than the expected $1.92 billion.
Scotts Miracle-Gro — Shares rose 5.5% after Stifel upgraded Scotts Miracle-Gro to buy from hold and set an $80 price target, implying near-20% upside from Friday’s close. Stifel analyst W. Andrew Carter said the maker of consumer lawn, garden and pest control products has an “attractive near-term set-up for the shares with a margin recovery enabling outsized EPS growth.”
Global Payments — Global Payments shares tumbled 8.6% despite a revenue and earnings beat for the recent quarter as the payments technology company announced a new CEO effective June 1.
Logitech — Logitech shares gained 2.6% after Morgan Stanley upgraded the company to equal weight from underweight, citing a “more balanced catalyst path” ahead.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
— CNBC’s Sarah Min, Alexander Harring, Brian Evans, Jesse Pound and Yun Li contributed reporting More

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Bitcoin is under pressure as the Federal Reserve has indicated that rates could go higher than expected and after a major crypto-focused lender, Silvergate Capital, collapsed.
Jonathan Raa | Nurphoto | Getty Images

Cryptocurrencies took a dip on Monday to start the week and new month as investors bet the takeover of First Republic Bank could put an end to the financial crisis, which has been the biggest driver of this year’s bitcoin rally.
Bitcoin fell about 4.2% to 28,137.76 to start the week and new month, according to Coin Metrics. Ether lost 4% to 1,828.81.

On Monday regulators took possession of First Republic, making it the third U.S. bank failure this year and the biggest one since the 2008 financial crisis. JPMorgan Chase will acquire most of its deposits and assets.
Last week, the price of bitcoin rallied in the final week of April as troubles at the bank unfolded. Trading of the cryptocurrency has been choppy, however, as investors straddle the effects of the banking crisis on crypto with high inflation, Federal Reserve policy, a potential recession and an increasingly bearish narrative building around the U.S. dollar.
“It’s unclear whether the banking crisis narrative can continue to be a boon for bitcoin,” said Alex Thorn, head of firmwide research at Galaxy. “Overall, the market lacks clear positive near-term catalysts, with supply issues overhanging bitcoin … That being said, bitcoin accumulation by small addresses is outpacing issuance, and we expect Ethereum staking to increase, each of which provides a supportive supply narrative.”
“Outside of crypto-native factors, we expect a back-of-the-year macro environment to be characterized by tightening, recession, and an expanding multipolarity in the global economy, all of which can be supportive of gold and bitcoin,” he added.
Investors have been expecting a slowdown from bitcoin’s first-quarter rally, although cryptocurrency remains on its upward trend and has gained about 70% for the year, after finishing down more than 60%. April marked the first time in two years that bitcoin notched a fourth consecutive positive month.
“Bitcoin and ether started 2023 inorganically cheap, allowing for plenty of room to move higher off a low-base effect,” Thorn said. “A widening banking crisis became evident in March and the contrast with Bitcoin’s transparent and decentralized nature provided a further leg up for bitcoin, while Ethereum’s successful Shanghai upgrade provided a catalyst for ethereum.” More