Finance

A Carvana used-car vending machine in Miami, May 11, 2022.
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Check out the companies making headlines in midday trading.
Carvana — Shares soared 40.2% after the used-car retailer reached a deal that will reduce its total outstanding debt more than $1.2 billion. The agreement will eliminate over 85% of its 2025 and 2027 unsecured note maturities and lower its required cash interest expense $430 million a year for the next two years.

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Goldman Sachs — The banking titan advanced 1% despite missing expectations of analysts polled by Refinitiv for earnings and revenue. Goldman said the profit miss was tied to write-downs in the commercial real estate business and the sale of lending unit GreenSky.
Joby Aviation — Shares sank more than 15.8% after JPMorgan downgraded the electric aircraft maker to underweight, calling its recent stock outperformance “largely overblown.”
Omnicom — Shares tumbled 10.4% after the marketing and communications company missed revenue expectations, reporting $3.61 billion in the second quarter against a forecast of $3.67 billion from analysts polled by FactSet. The company beat expectations for earnings expectations by one cent at $1.81 per share.
Elevance Health — The stock rose 4.4% after Elevance Health beat analysts’ expectations on the top and bottom lines in its second-quarter results. The health insurance provider reported adjusted earnings of $9.04 per share, better than consensus estimates of $8.78 per share, according to FactSet. Revenue came in at $43.38 billion, compared with the $41.64 billion forecast. Additionally, Elevance said medical enrollment rose by 938,000 members on a year-over-year basis. It also raised its full-year guidance, which also beat expectations.
Northern Trust — Northern Trust jumped 13.4% after reporting earnings. The regional bank posted earnings of $1.56 per share, a 16% drop from the same quarter in the prior year. It reported total revenue of about $1.8 billion, down 1% from the year-ago period.

Interactive Brokers — Shares slid 5% after the electronic broker missed earnings estimates. The firm posted adjusted earnings per share at $1.32 for the second quarter, under the consensus estimate of $1.40 per share from analysts polled by Refinitiv.
J.B. Hunt Transport Services — The transportation and logistics stock rose 3.8% despite a disappointing quarterly report. J.B. Hunt posted $1.81 in earnings per share on $3.13 billion, while analysts polled by Refinitiv estimated $1.92 in earnings per share and $3.31 billion in revenue.
Western Alliance Bancorporation — Shares of the regional bank rose 7.8%, erasing premarket losses following the bank’s mixed second-quarter earnings announcement Tuesday after the bell. The company announced earnings of $1.96 per share and $669 million in revenue. Analysts had estimated earnings of $1.98 per share and revenue of $652 million, according to Refinitiv. The bank also reported a rise in deposits during the quarter.
AT&T — The telecommunications stock climbed 8.5%. Shares have been under pressure in recent days following a Wall Street Journal investigation that found miles of lead cables in the U.S. AT&T said Tuesday that it has no plans to remove cables from Lake Tahoe. Argus downgraded the stock to buy from hold, citing concerns around the cables.
Qualcomm — Shares rose 2.8% after JPMorgan added the stock to its focus list and said it’s one of the firm’s best growth ideas.
Cisco — Shares of the enterprise technology company rose 1.3% after JPMorgan upgraded Cisco to overweight from neutral. The investment firm said a slowdown in demand for Cisco’s products is likely close to bottoming out.
Charles Schwab — The financial stock added 0.1% after JPMorgan added the stock to its focus list following its earnings report, citing improving fundamentals.
Amazon — The e-commerce giant traded 1.9% higher after Bank of America reiterated the stock as a buy, saying it’s optimistic on earnings.
ServiceNow — The software stock jumped 1% to hit a 52-week high after Bank of America reiterated the firm as a top pick. The Wall Street firm said its channel checks suggested healthy deal activity in the second quarter amid easing macro pressure.
— CNBC’s Samantha Subin, Hakyung Kim, Sarah Min, Jesse Pound, Michelle Fox and Yun Li contributed reporting. More

Goldman Sachs reported second quarter earnings of $3.08 a share vs. an expected $3.18 a share.
The bank also posted revenue of $10.9 billion, which came in just above estimates.
The company disclosed a $504 million impairment tied to GreenSky and $485 million in real estate writedowns.

Goldman Sachs on Wednesday posted profit below analysts’ expectations amid writedowns tied to commercial real estate and the sale of its GreenSky lending unit.
Here’s what the company reported:

Earnings: $3.08 a share vs. $3.18 a share Refinitiv estimate
Revenue: $10.9 billion, vs. $10.84 billion estimate

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Second-quarter profit fell 58% to $1.22 billion, or $3.08 a share, on steep declines in trading and investment banking and losses related to GreenSky and real estate, which sapped about $3.95 from per share earnings. Revenue fell 8% to $10.9 billion.
The company disclosed a $504 million impairment tied to GreenSky and $485 million in real estate writedowns. Those charges flowed through its operating expenses line, which grew 12% to $8.54 billion.
Shares of the bank dropped more than 1% in premarket trading.
Goldman CEO David Solomon faces a tough environment for his most important businesses as a slump in investment banking and trading activity drags on. On top of that, Goldman had warned investors of write-downs on commercial real estate and impairments tied to its planned sale of fintech unit GreenSky.
Unlike more diversified rivals, Goldman gets the majority of its revenue from volatile Wall Street activities, including trading and investment banking. That can lead to outsized returns during boom times and underperformance when markets don’t cooperate.

Exacerbating the situation, Solomon has spent the past few quarters retrenching from his ill-fated push into consumer banking, which has triggered expenses tied to shrinking the business.
“This quarter reflects continued strategic execution of our goals,” Solomon said in the earnings release. “I remain fully confident that continued execution will enable us to deliver on our through-the-cycle return targets and create significant value for shareholders.”
The bank put up a paltry 4.4% return on average tangible common shareholder equity in the quarter, a key performance metric. That is far below both its own target of at least 15% and competitors’ results including JPMorgan Chase and Morgan Stanley.
Trading and investment banking has been weak lately because of subdued activity and IPOs amid the Federal Reserve’s interest rate increases. But rival JPMorgan posted better-than-expected trading and banking results last week, saying that activity improved late in the quarter, and that raised hopes that Goldman might exceed expectations.
Fixed income trading revenue fell 26% to $2.71 billion, just under the $2.78 billion estimate of analysts surveyed by FactSet. Equities trading revenue was essentially unchanged from a year earlier at $2.97 billion, topping the $2.42 billion estimate.  
Investment banking fees fell 20% to $1.43 billion, just below the $1.49 billion estimate.
Asset and wealth management revenue fell 4% to $3.05 billion as the firm booked losses in equity investments and lower incentive fees.
Analysts will likely ask Solomon about updates to his plan to exit consumer banking. Goldman has reportedly been in discussions to offload its Apple Card business to American Express, but its unclear how far those talks have advanced.
Goldman shares have dipped nearly 2% this year before Wednesday, compared with the approximately 18% decline of the KBW Bank Index.
On Friday, JPMorgan, Citigroup and Wells Fargo each posted earnings that topped analysts’ expectations amid higher interest rates. Tuesday, Bank of America and Morgan Stanley also reported results that exceeded forecasts. More

A Carvana used-car vending machine displays vehicles in Miami, Dec. 9, 2022.
Joe Raedle | Getty Images

Check out the companies making headlines before the bell:
Carvana — Carvana jumped 16% after the online auto retailer reached a deal with noteholders to lower its total debt outstanding by more than $1.2 billion.

Interactive Brokers — Shares slid 5% after Interactive Brokers’ earnings missed estimates. The firm reported second-quarter adjusted earnings of $1.32 per share. That’s lower than analysts’ expectations of $1.40 per share, according to Refinitiv.
Omnicom — Omnicom dropped 6% after the global marketing company’s revenue missed estimates. Omnicom 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.
Goldman Sachs — The bank stock declined 0.3% after Goldman Sachs missed expectations in its second-quarter earnings. The company posted earnings of $3.08 a share, lower than the Refinitiv forecast of $3.18 per share. Goldman also reported revenue of $10.9 billion, which was more than the expected $10.84 billion.
Joby Aviation — The electric aircraft stock sank 6.3% in premarket trading after being downgraded by JPMorgan to underweight from neutral. The Wall Street firm said Joby’s recent rally is “largely overblown” and likely the result of short covering. Shares are up 200% year to date.
Cinemark — Shares fell 3.3% after JPMorgan downgraded the movie theatre chain to neutral from overweight, citing the impact of the actors strike in Hollywood. 

J.B. Hunt Transport Services — The transportation and logistics company declined 2.2% after posting disappointing quarterly results. J.B. Hunt 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 — Shares of the regional bank dipped 2.4% following the bank’s mixed second-quarter earnings results. The company posted earnings of $1.96 per share, and revenue of $669 million. Analysts polled by Refinitiv had estimated earnings of $1.98 per share and revenue of $652 million. The bank reported a rise in deposits during the quarter.
U.S. Bancorp — Shares of the large regional bank dipped 1% after US Bancorp reported its second-quarter results. The bank reported $1.12 in adjusted earnings per share on $7.14 billion of revenue. Analysts were expecting $1.12 in earnings per share on $7.16 billion of revenue, according to Refinitiv.
Nasdaq — Shares rose 0.3% after Nasdaq topped profit and sales expectations in its second-quarter results. Nasdaq posted adjusted earnings of 71 cents per share on revenue of $925 million. Analysts had expected per-share earnings of 66 cents on revenue of $914.9 million, per Refinitiv.
— CNBC’s Michelle Fox, Alex Harring, Hakyung Kim and Jesse Pound contributed reporting. More

Life Changes

Student loan payments and interest accrual have been paused since 2020 due to the pandemic. They’re set to resume in October and September, respectively.
Interest accumulation is a key difference between Direct Subsidized Loans and Direct Unsubsidized Loans.
The U.S. Department of Education pays interest on subsidized loans in some cases, like when borrowers are in school or defer their loan payments. That’s not true of unsubsidized loans.

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The looming end of a pandemic-era pause to student loan payments and interest puts a spotlight on a big difference between two types of debt: subsidized and unsubsidized loans.
Interest accrual is among the primary differences between the federal loans — also known as Stafford Loans — which are for the cost of higher education.

How interest accrues on subsidized, unsubsidized loans

Direct Subsidized Loans are available to undergraduate students who demonstrate a financial need.
They don’t accrue interest while a borrower is in school (at least half-time) or during a six-month grace period after leaving school. The loans also don’t accrue interest during deferment, a period when payments are postponed due to unemployment or economic hardship.
The U.S. Department of Education pays the interest on subsidized loans in these instances.

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Here’s a look at other stories offering a financial angle on important lifetime milestones.

However, that protection isn’t available for Direct Unsubsidized Loans, which are available to a broader group of borrowers (including graduate students) and are not based on financial need.
Interest on unsubsidized loans starts accruing immediately and borrowers are responsible for interest amassed during all periods — making this debt more expensive than subsidized loans.

In some cases — after a deferment, for example — unpaid interest on unsubsidized loans may “capitalize.” When this happens, unpaid interest is added to the loan’s principal balance; future interest is then calculated off that higher principal, thereby increasing future interest payments.

Borrowers can carry both subsidized and unsubsidized loans, which have different borrowing limits.
About 30.3 million borrowers had subsidized Stafford Loans as of March 31, with an average balance of $9,800, according to Education Department data. About 30.7 million people have an unsubsidized loan, with an average balance of about $19,000, according to the Education Department.
(The term Stafford Loan is an informal way of referring to Direct Subsidized Loans and Direct Unsubsidized Loans made via the Direct Loan Program. It also refers to subsidized or unsubsidized Federal Stafford Loans made via the Federal Family Education Loan, or FFEL, program.)

How the payment pause, interest waiver affected loans

The payment pause and interest waiver has been in place for more than three years, since the onset of the pandemic in 2020.
During that time, interest wasn’t accruing on any loans — meaning unsubsidized loans essentially became subsidized debt for some borrowers.
However, interest will start accumulating on borrowers’ debt again on Sept. 1, and monthly payments will resume in October.
The interest waiver cost the federal government about $5 billion a month.

Some financially strapped borrowers may now wonder if it’s a good idea to pursue deferment or forbearance as payments resume, said Mark Kantrowitz, a higher education expert. But “you’re effectively digging yourself into a deeper hole” by pursuing these avenues, Kantrowitz said, since interest will typically be accruing during deferral or forbearance.
(There are exceptions, such as if a subsidized loan is in deferment or if either type of loan is in deferment due to active medical treatment for cancer.)
Pursuing an income-driven repayment plan, which caps monthly payments, is generally a better option for borrowers, unless the financial difficulty is short term in nature, Kantrowitz said.
“In general, you don’t want to use deferment or forbearance if you’re capable of repaying the loan,” he said. More

Olalekan Jacob Ponle, a Nigerian cyber scammer who lived a profligate lifestyle on social media, was sentenced to eight years in federal prison for scamming businesses across the U.S.
Ponle will pay $8 million in restitution, having already surrendered 151 bitcoin to the U.S. government, and will also forfeit a variety of high-end cars and watches.
Ponle’s rendition from the UAE came in July 2020, despite the lack of any formal extradition treaty between the U.S. and the UAE.

Residential skyscraper buildings beyond luxury villas on the waterfront of the Palm Jumeirah in Dubai, United Arab Emirates, on Thursday, Jan. 19, 2023.
Christopher Pike | Bloomberg | Getty Images

A United Arab Emirates resident and Nigerian citizen was sentenced to 8 years in federal prison for orchestrating a multi-million dollar fraud scheme that victimized businesses across the U.S., Illinois federal prosecutors said.
Olaekan Jacob Ponle was extradited from the UAE into the custody of the Federal Bureau of Investigation in July 2020, where he remained until pleading guilty to a single wire fraud count earlier this year, the Justice Department said in a Tuesday press release.

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Ponle worked with a network of scammers to masquerade as corporate entities using phishing emails. The scammers duped employees into sending money on behalf of their “employers,” who were really scammers.
Ponle, better known as Woodberry, was a minor celebrity in his home country of Nigeria thanks to his profligate displays of wealth on social media.
Ponle relied on a network of “mules” to receive the funds and convert them into Bitcoin that he received. The Nigerian citizen used the proceeds of his scam to purchase ultra-high-end vehicles, including a Rolls Royce Cullinan and a Lamborghini Urus.
Ponle will forfeit those items, collectively valued at over $1 million, and pay more than $8 million in restitution to victim companies. Ponle had already forfeited 151 bitcoin, valued at over $4.5 million as of Wednesday.
Ponle was prosecuted despite the lack of an extradition treaty between the UAE and the United States. Federal officials at the DOJ’S Office of International Affairs worked with their UAE counterparties to secure Ponle’s rendition. More

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.
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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