Finance

Mark Hoffman told CNBC employees he is stepping down next month.
Hoffman has increased CNBC profitability in 16 of his 17 years running the business media division.
He first joined CNBC in 1997, became president in 2005 and then chairman in 2015.
KC Sullivan will return to CNBC to replace Hoffman as CNBC’s new president.

Mark Hoffman, Chairman of CNBC

Mark Hoffman, CNBC’s president since 2005 and chairman since 2015, announced Tuesday he will step down on Sept. 12.
Hoffman is leaving of his own accord. NBCUniversal hired Cesar Conde to oversee NBC News, MSNBC and CNBC in May 2020 to bring more centralized leadership to the group.

KC Sullivan will return to replace Hoffman as CNBC’s new president. Sullivan has spent the last two years as president and managing director of NBCUniversal’s global advertising and partnerships, based in London. Before that, he was president and managing director of CNBC International and CNBC’s chief financial officer.

Sullivan will return to the U.S. for his new role. Hoffman will stay on as a consultant through the transition, Conde wrote in a note to NBCUniversal employees.
“Mark has overseen the steady continued growth of CNBC as the world’s #1 business and money news brand,” Conde said. “No business news organization comes close to the reach and influence of CNBC, a true testament to Mark’s leadership.”
CNBC is one of NBCUniversal’s most consistently profitable assets, even as millions of Americans drop linear cable TV subscriptions each year. Hoffman, 65, has increased profitability at CNBC in 16 of his 17 years running the company. CNBC is set to grow its profitability again in 2022, according to a person familiar with the matter.
“We are in the business of business so it’s important to note we’ve never been more profitable, setting record after record in financial performance, year after year, as we maneuvered through economic cycles, exogenous events and the historic secular change that accompanied the information age,” Hoffman said in a note to CNBC employees.

Hoffman’s CNBC tenure

Hoffman first joined CNBC in 1997 before leaving in 2001 for a series of leadership positions at local TV stations. He returned to CNBC in 2005 and immediately pushed to acquire 50% equity interests in CNBC Europe and CNBC Asia from Dow Jones, as well as a 25% stake in CNBC World.
With financial control over its international properties, Hoffman expanded CNBC’s TV reach and turned his attention to growing CNBC’s digital business. CNBC.com has grown sixfold in the past six years, with unique monthly readership growing from about 30 million to nearly 200 million.

He’s focused on consistency on the cable network side, which still makes up the majority of CNBC’s revenue. Hoffman has renewed contracts for notable TV personalities including Jim Cramer, Joe Kernen, Becky Quick, David Faber, Carl Quintanilla and Andrew Ross Sorkin to maintain CNBC’s leadership as a trusted source of news, especially for wealthier Americans.
“Once defined as a moribund domestic cable channel that many thought would never fully recover from the dotcom bubble bursting, CNBC is today a global multimedia powerhouse, punching far above its weight, in the digital age,” Hoffman said.
While CNBC is no longer rated by Nielsen, CNBC TV has ranked No. 1 among all business news platforms for 29 consecutive years in reaching Americans who make more than $125,000 a year, according to Ipsos surveys.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

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Vehicles pass a Walmart store in Torrance, California, on Sunday, May 15, 2022.
Bing Guan | Bloomberg | Getty Images

Check out the companies making headlines in midday trading.
Walmart, Home Depot — The retailers’ shares rose about 5% each after both companies reported better-than-expected earnings for the most recent quarter. That lifted other retail stocks, which led market gains. Bath & Body Works jumped 6%. Target and Best Buy each added about 5%. Ross Stores, Lowe’s and TJX Companies climbed about 3% each.

Bed Bath & Beyond — The home retailer’s shares skyrocketed about 64%. At its highest, shares added more than 70% to touch an intraday high of $28.60 Tuesday amid multiple trading halts due to volatility. The rally came as retail traders active on social media piled into the stock, encouraged by news that GameStop chair Ryan Cohen placed another bet on the struggling retailer.
Nu Holdings — Shares of the Warren Buffett-backed digital banking company surged more than 23% after the firm reported quarterly revenue that rose 230% from a year earlier. Berkshire Hathaway owned $400 million of Nu Holdings shares at the end of the second quarter, unchanged from the prior quarter.
ZipRecruiter — Shares of ZipRecruiter slipped 5% even though it posted second-quarter results that were better than expected. The company said it sees employers pulling back on job postings. It also expects the labor market’s strength may weaken through the end of the year and lowered its full-year revenue outlook to reflect the economic backdrop.
Zoom Video — Shares of the video teleconferencing service fell about 5% after Citi downgraded the company, saying growing competition from Microsoft Teams could push the stock down 20%. The bank said Zoom has too many post-pandemic challenges in addition to rising competition, including macro-related weakness hitting businesses and margin risk.
Snowflake — The cloud computing company’s shares fell 5% after UBS downgraded them to neutral from buy amid mounting macro and competitive pressures. UBS also cited a slowdown in customer spending of cloud computing as well as rising competition.

ThredUp — The apparel reselling platform operator rallied more than 17% after the company reported better-than-expected quarterly revenue, as well as a 29% increase in active buyers.
Ally Financial — Shares of the home and auto lender jumped over 3% after a regulatory filing showed Warren Buffett’s Berkshire Hathaway more than tripled its position in the company’s last quarter. Berkshire held roughly 30 million shares of Ally, worth about $1 billion, at the end of June. The conglomerate initiated the bet in the first quarter.
Masimo — Shares of the medical technology developer jumped more than 6% after activist investor Politan Capital Management took a 9% stake in the company. Politan said it’s dedicated to improving Masimo’s stock price.
BHP Group — Shares of the Australian mining company rose more than 5% after BHP reported that its total profit for the 2022 fiscal year was $30.9 billion, compared to $11.3 billion in the prior year.
 — CNBC’s Yun Li, Carmen Reinicke and Jesse Pound contributed reporting.

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Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Tuesday’s key moments: We want growth without inflation WMT, HD earnings beats boost retailers Quick mentions: CTRA, DIS, WFC 1. We want growth without inflation Stocks were mixed Tuesday, with tech names keeping a lid on the Nasdaq as bond yields moved higher. The Dow Jones Industrial Average was up for its fifth straight session. West Texas Intermediate crude, the American oil benchmark, fell 2.5%, which bodes well for inflation. Jim Cramer has repeatedly said that he believes oil’s peak in June helped cool down inflation in July. While the market and economy have shown promising signs recently, Jim emphasized Tuesday: “We want growth without inflation. We don’t want oil to be too hot.” 2. WMT, HD earnings beats boost retailers Home Depot (HD) and Walmart (WMT) reported earnings beats before the bell on Tuesday, pushing other retailers’ stocks up, including Club holding Costco (COST). While we held positions in both Walmart and Costco earlier this year, we sold off the former after its warnings of excess inventory and the potential impact to its bottom line. Costco, on the other hand, has not faced the same kind of inventory issues. It’s also successfully raised prices for some items and held prices steady for others, all while maintaining strong sales. This week is chock-full of other retailers reporting earnings. See a list here . We’ll be watching each one as they reveal their financial results, and in turn, provide insights on consumers spending and inflation. 3. Quick mentions: CTRA, DIS, WFC We also have updates on some other Club names. Natural gas soared roughly 5% on Tuesday, spiking to its highest level since late July. This is good news for Club holding Coterra Energy (CTRA), which Jim calls “the best natural gas company in the country.” We have reviewed Dan Loeb’s recommendations on Disney (DIS), and we believe there’s nothing revelatory there. Cost cutting, for example, is something we’re sure the company already has on its radar. As for Loeb’s urging that Disney spin off ESPN, we believe that while that could be good for the company’s bottom-line in the short-term, having a live sports component to its streaming is crucial, especially since it helps differentiate its product from other services like Netflix (NFLX). Banks have been performing well recently, and we believe that the best ones to own right now are Bank of America (BAC) and Club holding Wells Fargo (WFC) for their large deposit bases. (Jim Cramer’s Charitable Trust is long CTRA, COST, DIS and WFC. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED. More

Check out the companies making headlines before the bell:
Home Depot (HD) – Home Depot reported a quarterly profit of $5.05 per share, 11 cents above estimates, with revenue and comparable store sales also topping Street forecasts. However, the number of customer transactions fell during the quarter. Home Depot moved between gains and losses in premarket trading.

Walmart (WMT) – Walmart rallied 3.4% in premarket trading after reporting better-than-expected top and bottom line results for the second quarter. Comparable store sales also beat estimates, and Walmart projects adjusted earnings will fall slightly less this year than previously thought.
Masimo (MASI) – Masimo gained 2.3% in premarket action after activist investor Politan Capital Management took a 9% stake in the medical technology company. Politan plans to push Masimo to take actions that improve its stock price.
Philips (PHG) – Philips shares were up 2.6% in the premarket after the Dutch health technology company announced that CEO Frans van Houten will leave that job on October 15. He’ll be replaced by Roy Jakobs, who currently heads the company’s Connected Care unit.
BHP (BHP) – BHP stock gained 3% in premarket action after the world’s biggest mining company reported its highest annual profit in 11 years. BHP’s results were boosted by higher prices for coal and other commodities.
Ally Financial (ALLY) – Ally Financial rallied 5.5% in premarket trading after Berkshire Hathaway’s latest 13F filings showed that Warren Buffett’s firm tripled its stake in the online banking company during the second quarter.

Nu Holdings (NU) – Nu Holdings shares leaped 13.5% in the premarket after the Warren Buffett-backed digital banking company reported quarterly revenue that more than doubled from a year earlier.
ThredUp (TDUP) – ThredUp gained 3.3% in premarket trading after the online apparel resale platform reported better-than-expected quarterly revenue and a 29% increase in active buyers.
ZipRecruiter (ZIP) – The online employment website operator posted second-quarter results that were better than expected on continued labor market growth. However, the stock slid 6.2% in the premarket after the company said employers were starting to pull back on job postings as the quarter came to a close.

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There may be no escape from recession.
The latest reports on housing and manufacturing, according to investor Peter Boockvar, suggest it’s rapidly spreading to other parts of the economy.

“People are not being sensitive enough to this economic slowdown and what it’s going to be mean for corporate earnings and profit margins,” the Bleakley Advisory Group chief investment officer told CNBC’s “Fast Money” on Monday.
The National Association of Home Builders/Wells Fargo Housing Market Index dropped into negative territory in August. This is the eight month in a row builder confidence fell. In a news release, NAHB chief economist Robert Dietz said, “Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession.”
Boockvar predicted a housing collapse almost exactly a year ago on CNBC’s “Trading Nation.” He warned the Federal Reserve was stoking another real estate price bubble that will wipe out home equity.
A long-time Fed critic, he expects the central bank to make a serious error as it raises interest rates and tightens monetary policy to battle inflation.

‘Dangerous territory’

“If you look at previous rate hiking cycles, it was lower and lower levels of a Fed funds rate that started to break things,” said Boockvar. “But each successive rate hiking cycle ended before the previous one because something broke. So, now we start getting into dangerous territory where things are at risk of breaking.”

There was a second discouraging economic report on Monday. The New York Fed’s Empire State Manufacturing Survey for August plunged by 42 points. It was tied to a collapse in new orders and shipments. Boockvar called it an “ugly report” in a note.
Yet the major indexes started the week in the green. The Dow saw its fourth positive day in a row. The S&P 500 and the tech-heavy Nasdaq closed higher for the third time in four sessions.
But Boockvar suggests the rally is on thin ice because it’s early in a downturn. He lists three stages of a bear market and suggests investors are in denial.

Arrows pointing outwards

“I can argue that we’re really just beginning… part number two where growth is slowing and we’re beginning to see the impact on earnings, particularly profit margins,” he said. “This has a ways to go to work through door number two.”
But Boockvar believes investors can still make money. In this environment, he recommends value names over momentum tech.
“Value is still going to well outperform growth,” said Boockvar, a CNBC contributor. “Valuations in growth stocks, even with these declines, are still rather expensive where there are still a lot of forgotten value names that already have low expectations embedded in them.”
He also likes commodity stocks, including precious metals, natural gas and oil.
“I’m still pretty bullish on commodities generally, acknowledging the pullback because of worries about the demand side,” Boockvar said. “But [I’m] still very bullish on the supply-side challenges.”
On Monday, WTI crude fell almost 3% to close at $89.41 a barrel — after hitting its lowest level since Feb. 3 earlier in the day.
Disclaimer

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Disney World celebrated its 50th anniversary in April 2022.
Aaronp/bauer-griffin | Gc Images | Getty Images

Check out the companies making headlines in midday trading Monday.
Poshmark — Shares of the secondhand fashion retailer jumped 17.46% after Barclays upgraded them to overweight from equal weight. The firm said it sees more than 40% potential upside for the stock, especially if consumers trade down in a recession.

Disney – Shares of the entertainment company gained 2.22% after Daniel Loeb’s Third Point took a new stake in the giant. In a letter to Disney CEO Bob Chapek, the activist investor said there is a strong case that sports network ESPN should be spun off. Loeb also called on Disney to accelerate integrating streamer Hulu.
Vroom – Shares of automotive sales platform Vroom shed 10.38% after JPMorgan said it’s time to sell the company, which has shed more than 80% this year so far. The firm took a bearish stance on the used car industry as well, seeing it struggling in a potential recession.
Unity, AppLovin – Unity Software fell 7.13% after the company announced that it was rejecting an unsolicited takeover offer from AppLovin. As part of the decision, Unity is continuing with its previously announced acquisition of ironSource. Shares of AppLovin dropped 7.63%.
Bed Bath & Beyond – Shares of Bed Bath and Beyond spiked 23.88% amid a continued meme stock trading frenzy that’s lifted shares of the retailer. So far in August, the stock is up nearly 180%.
Energy stocks – Energy names slumped with the price of oil, which fell Monday after China reported weak economic data. Valero shed %2.8, Marathon Oil slipped nearly 2.78% and Chevron slumped 1.9%.

Embecta — The diabetes-management company’s stock rallied 16.53% on the back of better-than-expected quarterly results. Embecta posted a profit of $1.07 per share, beating a StreetAccount estimate of 87 cents per share. The company’s revenue of $291 million also topped a forecast of $276.9 million.
Moderna – Shares of the biopharmaceutical company rose 3.2% after news Monday that the U.K. approved Moderna’s updated Covid-19 vaccine. The dual vaccine, which targets both the original virus and newer omicron variant, is expected to be available to adults as a booster in the fall.
Gilead Sciences – Gilead Sciences gained 5.16% after a trial showed that its drug Trodelvy significantly improved the overall survival rate of patients with metastatic breast cancer.
Illumina – Illumina surged 8.77%, rebounding after it slipped last week when it reported earnings that missed Wall Street’s expectations. The company reported quarterly results that missed on both profit and revenue and issued an outlook that disappointed analysts.
Seagen – Seagen slipped nearly 1% after the company announced an arbitrator had ruled in favor of Daiichi Sankyo, a Japanese pharmaceutical company, in an argument over drug technology.
— CNBC’s Michelle Fox, Yun Li, Jesse Pound and Tanaya Macheel contributed reporting.

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Vroom IPO at the Nasdaq site, June 9, 2020.
Source: Nasdaq

Check out the companies making headlines before the bell:
Poshmark — Shares spiked more than 5% after Barclays upgraded the online fashion retailer to overweight from equal weight. Poshmark will get a boost from the fast-growing second-hand clothing marketplace, especially if consumers trade down in a recession, Barclays said.

Vroom — Shares dropped more than 3% after JPMorgan downgraded the stock to underweight from neutral, saying that the online used car retailer will continue to see challenges amid a broader economic slowdown. Vroom has already plunged 80% this year.
Revolve — The stock fell more than 2% following a downgrade to underweight from equal weight from Barclays. The investment firm cited slowing revenue growth and tough comparisons at the clothing store company.
Green Plains — Green Plains declined more than 3% after Bank of America downgraded the stock to neutral from buy. The investment firm said the current valuation for the ethanol fuel producer is fair.
TaskUs — The outsourcing company for content moderation is facing near-term macro challenges, according to Morgan Stanley. The investment firm downgraded the stock to equal weight from overweight. Shares fell 3%.
Baidu, Alibaba, Pinduoduo — Shares of Chinese internet companies declined following weak economic data from China. Baidu, Alibaba and Pinduoduo each dropped more than 1%.

Comcast, Charter Communications — Shares of both broadband companies declined more than 1% following downgrades to neutral from Atlantic Equities. The firm cited worse-than-expected broadband results from both companies.
Dollar General — Shares of the discount retailer have fully priced in recession expectations, according to a Monday note from BMO Capital Markets. The firm downgraded Dollar General to market perform from outperform. The stock declined 1%.
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC.

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Risk-averse investors have a new option to make safer bets on Tesla. 
Innovator ETFs launched the Innovator Hedged TSLA Strategy ETF (TSLH) – among other defined outcome products – last month.

According to the ETF’s CEO Bruce Bond, it gives investors exposure to the stock while largely steering clear of volatility and valuation risks by design. It’s a buffered ETF using a risk reversal strategy to minimize downside while also putting a cap on gains.
“You buy TSLH, hedge Tesla, you get basically 10% on the upside, and you have a 10% floor,” Bond explained on CNBC’s “ETF Edge” last week. “Now what a floor is – that’s a max loss of 10%. If Tesla goes down 20%, you lose 10%. If it goes down 50%, you lose 10%.”
Treasury bills make up about 90% of the hedged fund “to construct a potential floor against significant losses on a quarterly basis,” Innovator ETFs reported in the ETF launch news release. “A call option spread on TSLA using FLEX options” makes up the remainder of the fund’s portfolio.
“The projected upside cap for the balance of the current calendar quarter (through September) is 8.70%,” the company also said. 
Its floor resets each calendar quarter but will never surpass 10%, Bond explained to CNBC, noting the ETF’s floor rested at 9.23% when it launched. 

The Innovator Hedged TSLA Strategy ETF is up 5% since its launch on July 26. Meanwhile, Tesla shares are up 12% in the same time period.
It’s not the first time Bond’s company launched an ETF using this risk reversal strategy.
Innovator ETFs started the Innovator Defined Wealth Shield ETF (BALT) last year that focusing the S&P 500 index.
But the strategy is under fire by the U.S. Securities and Exchange Commission.
SEC Chair Gary Gensler released a statement not long after addressing risks that may stem from “complex” exchange-traded products such as leveraged or inverse ETFs, emphasizing potential issues with their short-term nature.
“These ETPs, however, can pose risks even to sophisticated investors, and can potentially create system-wide risks by operating in unanticipated ways when markets experience volatility or stress conditions,” Gensler’s Oct. 2021 statement said,
Gensler proposed “potential rulemaking” to help protect individual investors. However, Bond defended Innovator ETFs’ products, suggesting buffers offer significant risk control value.
The SEC declined to provide a statement.

‘Just because it’s new does not mean it’s complex’

“I think FINRA [Financial Industry Regulatory Authority] is starting to realize that, and the SEC is starting to realize that,” he said. “Just because it’s new does not mean it’s complex.”
Bond thinks the defined wealth shield ETF could be enticing to investors looking to stay out of bonds. It implements options strategy, selling calls on the top end and placing put spreads at the bottom.
“They know rates are going up,” he said. “They’re pretty sure they’re going to lose money. They would rather link their low-risk money to the equity market with a 20% buffer against losses.”
Upside in the past year was rare because of market volatility, Bond added.
The ETF is up 0.7% since its launch on July 1, 2021.
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